REUTERS
"Lower mortgage rates boost US home sales in February"
By Lucia Mutikani
March 21, 2023
Summary
* Existing home sales jump 14.5% in February
* Median house price falls 0.2% to $363,000 from year ago
* Supply increases 15.3% year-on-year to 980,000 units
WASHINGTON, March 21 (Reuters) - U.S. existing home sales rebounded more than expected in February as lower mortgage rates and the first year-on-year decrease in prices in 11 years pulled buyers back into the market, further evidence that the housing market was stabilizing at low levels.
The jump in sales of previously owned homes, which was reported by the National Association of Realtors on Tuesday, was the largest in more than 2-1/2 years and ended 12 straight monthly declines in sales, the longest such stretch since 1999.
The housing market has been the biggest casualty of the aggressive interest rate hikes delivered by the Federal Reserve in its battle to tame high inflation.
The surge in sales added to data on housing starts and homebuilder confidence in suggesting that the housing market was probably finding a floor.
"It's too early to declare the home sales recession over, but the decline in mortgage rates allowed buyers to dip their toes back in the market as did the cheaper prices," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Existing home sales, which are counted at the close of a contract, surged 14.5% to a seasonally adjusted annual rate of 4.58 million units last month.
February's sales likely reflected contracts signed a couple of months back.
Mortgage rates decreased from mid-November through early February before rising again.
Home sales could fall in March.
Last month, sales increased in all four regions, with the Midwest, West and the densely populated South posting double-digit growth.
The bulk of sales were concentrated in the $250,000-$500,000 price bracket.
Economists polled by Reuters had forecast home sales would rebound 5.0% to a rate of 4.20 million units.
Home resales, which account for a big chunk of U.S. housing sales, fell 22.6% on a year-on-year basis in February.
Residential investment has contracted for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.
The worst is likely over.
A survey last week showed the National Association of Home Builders/Wells Fargo Housing Market Index increased for a third straight month in March, though homebuilder sentiment remains depressed.
Single-family housing starts and building permits rebounded in February.
Mortgage rates, which in February resumed their upward trend, are falling again in tandem with a sharp decline in U.S. Treasury yields following the recent collapse of two U.S. regional banks that sparked fears of contagion in the banking sector.
But the outlook for the housing market remains unclear.
Despite financial market instability, the Fed is expected to raise interest rates by another quarter of a percentage point on Wednesday, according to CME Group's FedWatch tool.
Financial conditions have tightened, which could cause banks to become more strict in extending credit.
That could impact small businesses, who have been the main drivers of job growth, and prospective homebuyers.
"There is still the possibility that tightening lending standards imply that (mortgage) applications for purchase will not directly translate to actual purchases," said Veronica Clark, an economist at Citigroup in New York.
"An upcoming weakening in the labor market would also be a risk to stronger housing demand and prices."
U.S. stocks were trading higher.
The dollar fell against a basket of currencies.
U.S. Treasury prices fell.
SUPPLY STILL TIGHT
The median existing house price fell 0.2% from a year earlier to $363,000 in February.
That was the first annual price decline since February 2012.
Prices dropped on a year-on-year basis in the Northeast and West, the most expensive housing regions.
They continued to rise in the Midwest and South, which are generally considered more affordable.
The South experienced an influx of people during the COVID-19 pandemic as companies gave workers the flexibility to work from anywhere in the country.
Lawrence Yun, the NAR's chief economist, said there were "stronger sales gains in areas where home prices are decreasing."
There were 980,000 previously owned homes on the market last month, unchanged from January and an increase of 15.3% from a year ago.
At February's sales pace, it would take 2.6 months to exhaust the current inventory of existing homes, up from 1.7 months a year ago.
A four-to-seven-month supply is viewed as a healthy balance between supply and demand.
Given tight supply, a collapse in house prices is unlikely.
Properties typically remained on the market for 34 days last month, up from 33 days in January.
Fifty-seven percent of homes sold in February were on the market for less than a month.
First-time buyers accounted for 27% of sales, down from 29% a year ago.
All-cash sales made up 28% of transactions compared to 25% a year ago.
Individual investors or second-home buyers purchased 18% of homes, down from 19% last February.
Distressed sales, foreclosures and short sales represented only 2% of sales, little changed from a year ago.
"The data suggest that there is a bid underneath the market that may limit the decline in home prices unless mortgage rates rise sharply again, and encourage our belief that the eventual drop in home values will only be a moderate one," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/markets/us/us-e ... 023-03-21/
THE HOUSING MARKET
Re: THE HOUSING MARKET
REUTERS
"US housing market stabilizing as single-family homebuilding, permits surge"
By Lucia Mutikani
April 18, 2023
Summary
* Single-family housing starts increase 2.7% in March
* Single-family building permits jump 4.1%
* Overall housing starts fall 0.8%; permits drop 8.8%
WASHINGTON, April 18 (Reuters) - U.S. single-family homebuilding increased for a second straight month in March, while permits for future construction surged, offering some glimmers of hope for the depressed housing market ahead of the busy spring selling season.
The improvement in the single-family housing market segment, which was reported by the Commerce Department on Tuesday, likely reflected buyers taking advantage of a retreat in mortgage rates.
A survey on Monday showed falling mortgage rates and tight supply of previously owned houses were supporting the new home market.
"Mortgage rates have pulled back from the peaks in October/November, helping to provide a jolt to demand and sales activity," said Ben Ayers, a senior economist at Nationwide in Columbus, Ohio.
"But the environment remains challenging with high input and labor costs for builders and expensive financing options for buyers."
Single-family housing starts, which account for the bulk of homebuilding, rose 2.7% to a seasonally adjusted annual rate of 861,000 units last month.
Data for February was revised higher to show single-family homebuilding rising to a rate of 838,000 units instead of the previously reported pace of 830,000 units.
Single-family homebuilding increased 4.4% in the Northeast and soared 23.6% in the Midwest.
It advanced 4.8% in the densely populated South, but plunged 16.0% in the West.
Single-family housing starts dropped 27.7% on a year-on-year basis in March.
The Federal Reserve's aggressive interest rate hikes have pushed the housing market into recession, with residential investment contracting for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.
There are, however, signs the housing market is stabilizing at very depressed levels.
The National Association of Home Builders/Wells Fargo Housing Market index climbed to a seven-month high in April.
Mortgage rates have fallen from last year's highs, with the average rate on the popular 30-year fixed mortgage declining from a peak of 7.08% in early November to 6.27% last week, according to data from mortgage finance agency Freddie Mac.
Those rates have decreased in tandem with U.S. Treasury yields on hopes that the Fed would not continue raising borrowing costs beyond next month amid signs that the economy was slowing.
But the recent financial turmoil following the collapse of two regional banks could result in banks and mortgage lenders tightening underwriting standards.
"Tighter credit conditions would result in homebuilders having a harder time financing new projects, which would weigh on future construction activity," said Doug Duncan, chief economist at Fannie Mae.
Stocks on Wall Street were trading lower.
The dollar fell against a basket of currencies.
U.S. Treasury prices rose.
COMPLETIONS RISE
Starts for housing projects with five units or more decreased 6.7% to a rate of 542,000 units.
Multi-family housing construction remains underpinned by demand for rental accommodation.
But economists see limited scope for further gains, noting an increase in empty apartments.
The inventory of multi-family housing under construction is at record highs.
"There is a hint here that the baton is maybe being passed from rental construction to construction for home purchase," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
"None of this is to suggest a strong revival in housing activity, but it does support the view that the worst of the declines may be behind us for now."
With the decline in multi-family homebuilding offsetting the rise in single-family projects, overall housing starts fell 0.8% to a rate of 1.420 million units last month.
Economists polled by Reuters had forecast starts would fall to a rate of 1.40 million in March.
Single-family building permits jumped 4.1% to a rate of 818,000 units in March, a five-month high.
They rose in the Northeast, South and West, but were unchanged in the Midwest.
Permits for housing projects with five units or more plummeted 24.3% to a rate of 543,000 units.
Overall, building permits dropped 8.8% to a rate of 1.413 million units.
The number of houses approved for construction that are yet to be started declined 3.0% to 291,000 units.
The single-family homebuilding backlog fell 2.3% to 130,000 units, the lowest level since February 2021, while the completions rate for this segment rose 2.4% to a rate of 1.050 million units.
The inventory of single-family housing under construction fell 2.3% to a rate of 716,000 units, the lowest level since August 2021.
"The housing sector seems poised to have some new completed inventory in coming months," said Colin Johanson, an economist at Barclays in New York.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-s ... 023-04-18/
"US housing market stabilizing as single-family homebuilding, permits surge"
By Lucia Mutikani
April 18, 2023
Summary
* Single-family housing starts increase 2.7% in March
* Single-family building permits jump 4.1%
* Overall housing starts fall 0.8%; permits drop 8.8%
WASHINGTON, April 18 (Reuters) - U.S. single-family homebuilding increased for a second straight month in March, while permits for future construction surged, offering some glimmers of hope for the depressed housing market ahead of the busy spring selling season.
The improvement in the single-family housing market segment, which was reported by the Commerce Department on Tuesday, likely reflected buyers taking advantage of a retreat in mortgage rates.
A survey on Monday showed falling mortgage rates and tight supply of previously owned houses were supporting the new home market.
"Mortgage rates have pulled back from the peaks in October/November, helping to provide a jolt to demand and sales activity," said Ben Ayers, a senior economist at Nationwide in Columbus, Ohio.
"But the environment remains challenging with high input and labor costs for builders and expensive financing options for buyers."
Single-family housing starts, which account for the bulk of homebuilding, rose 2.7% to a seasonally adjusted annual rate of 861,000 units last month.
Data for February was revised higher to show single-family homebuilding rising to a rate of 838,000 units instead of the previously reported pace of 830,000 units.
Single-family homebuilding increased 4.4% in the Northeast and soared 23.6% in the Midwest.
It advanced 4.8% in the densely populated South, but plunged 16.0% in the West.
Single-family housing starts dropped 27.7% on a year-on-year basis in March.
The Federal Reserve's aggressive interest rate hikes have pushed the housing market into recession, with residential investment contracting for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.
There are, however, signs the housing market is stabilizing at very depressed levels.
The National Association of Home Builders/Wells Fargo Housing Market index climbed to a seven-month high in April.
Mortgage rates have fallen from last year's highs, with the average rate on the popular 30-year fixed mortgage declining from a peak of 7.08% in early November to 6.27% last week, according to data from mortgage finance agency Freddie Mac.
Those rates have decreased in tandem with U.S. Treasury yields on hopes that the Fed would not continue raising borrowing costs beyond next month amid signs that the economy was slowing.
But the recent financial turmoil following the collapse of two regional banks could result in banks and mortgage lenders tightening underwriting standards.
"Tighter credit conditions would result in homebuilders having a harder time financing new projects, which would weigh on future construction activity," said Doug Duncan, chief economist at Fannie Mae.
Stocks on Wall Street were trading lower.
The dollar fell against a basket of currencies.
U.S. Treasury prices rose.
COMPLETIONS RISE
Starts for housing projects with five units or more decreased 6.7% to a rate of 542,000 units.
Multi-family housing construction remains underpinned by demand for rental accommodation.
But economists see limited scope for further gains, noting an increase in empty apartments.
The inventory of multi-family housing under construction is at record highs.
"There is a hint here that the baton is maybe being passed from rental construction to construction for home purchase," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
"None of this is to suggest a strong revival in housing activity, but it does support the view that the worst of the declines may be behind us for now."
With the decline in multi-family homebuilding offsetting the rise in single-family projects, overall housing starts fell 0.8% to a rate of 1.420 million units last month.
Economists polled by Reuters had forecast starts would fall to a rate of 1.40 million in March.
Single-family building permits jumped 4.1% to a rate of 818,000 units in March, a five-month high.
They rose in the Northeast, South and West, but were unchanged in the Midwest.
Permits for housing projects with five units or more plummeted 24.3% to a rate of 543,000 units.
Overall, building permits dropped 8.8% to a rate of 1.413 million units.
The number of houses approved for construction that are yet to be started declined 3.0% to 291,000 units.
The single-family homebuilding backlog fell 2.3% to 130,000 units, the lowest level since February 2021, while the completions rate for this segment rose 2.4% to a rate of 1.050 million units.
The inventory of single-family housing under construction fell 2.3% to a rate of 716,000 units, the lowest level since August 2021.
"The housing sector seems poised to have some new completed inventory in coming months," said Colin Johanson, an economist at Barclays in New York.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-s ... 023-04-18/
Re: THE HOUSING MARKET
BUSINESS INSIDER
"The mayor of a rich New York suburb says wealthy communities 'are losing their minds' over Gov. Kathy Hochul's plan to increase housing"
Story by insider@insider.com (Eliza Relman)
April 12, 2023
* Gov. Kathy Hochul wants to address New York's severe housing shortage by building more housing.
* Affluent suburban communities around New York City are denouncing the proposal.
* The mayor of Bronxville, NY told Bloomberg some wealthy communities "are losing their minds."
New York Gov. Kathy Hochul wants to address her state's severe housing shortage by building more housing.
But many of the wealthiest suburban communities around New York City aren't having it.
Leaders and activists in towns and villages from Westchester to the Hamptons are denouncing Hochul's plan to boost the housing supply in New York City and its suburbs by 3% over the next decade.
Hochul's New York Housing Compact would start to address the state's skyrocketing home prices and rents, aiming to build 800,000 new units and creating density, particularly near train stations, over the next 10 years.
The mayor of Bronxville Village, an affluent town just north of New York City in Westchester County, recently told Bloomberg News that she's been communicating with 30 mayors of other small suburban communities in the state who oppose Hochul's plan.
She said communities on the Gold Coast of Long Island and in the ritzy Hamptons are freaking out about the potential for more housing.
"People in Nassau and Suffolk are losing their minds," Mayor Mary Marvin told Bloomberg.
"They call me up all the time, and by comparison I seem calm."
Critics say it's a top-down approach that doesn't give local communities enough control.
Some argue increasing density would overcrowd schools, burden infrastructure, and reduce tree canopy.
Proponents say it's the only way to begin to meet demand and create more affordable housing options.
In Bronxville, Hochul has proposed allowing up to 7,000 new units — three times the village's current housing stock of 2,500 homes — around its commuter rail station.
Marvin told Bloomberg that Hochul wouldn't have been elected last fall if she'd campaigned on her housing plan.
About 43% of Bronxville residents voted for Hochul's Republican opponent, Lee Zeldin, slightly below the 47% of New Yorkers who supported Zeldin statewide.
Both Suffolk and Nassau counties went for Zeldin by wide margins.
Lawmakers in Albany are currently negotiating the state's budget and Democrats are fighting each other over the housing proposal, with some advocating for providing incentives rather than mandates to communities.
The housing crisis isn't limited to New York — cities and states across the country are grappling with an increasingly dire shortage of homes and sharply rising rent and mortgage costs.
Wealthier, lower density suburbs — even those with left-leaning politics — are often opposed to increasing housing in their communities.
This fight is playing out on a smaller scale just outside Washington, DC, in the affluent suburb of Arlington, Virginia, where county officials just voted to upzone its single-family neighborhoods, following a deeply contentious years-long debate.
The so-called "missing middle" policy will allow developers to build multi-family homes up to six units on lots that previously only allowed single-family homes.
https://www.msn.com/en-us/money/realest ... 563a&ei=44
"The mayor of a rich New York suburb says wealthy communities 'are losing their minds' over Gov. Kathy Hochul's plan to increase housing"
Story by insider@insider.com (Eliza Relman)
April 12, 2023
* Gov. Kathy Hochul wants to address New York's severe housing shortage by building more housing.
* Affluent suburban communities around New York City are denouncing the proposal.
* The mayor of Bronxville, NY told Bloomberg some wealthy communities "are losing their minds."
New York Gov. Kathy Hochul wants to address her state's severe housing shortage by building more housing.
But many of the wealthiest suburban communities around New York City aren't having it.
Leaders and activists in towns and villages from Westchester to the Hamptons are denouncing Hochul's plan to boost the housing supply in New York City and its suburbs by 3% over the next decade.
Hochul's New York Housing Compact would start to address the state's skyrocketing home prices and rents, aiming to build 800,000 new units and creating density, particularly near train stations, over the next 10 years.
The mayor of Bronxville Village, an affluent town just north of New York City in Westchester County, recently told Bloomberg News that she's been communicating with 30 mayors of other small suburban communities in the state who oppose Hochul's plan.
She said communities on the Gold Coast of Long Island and in the ritzy Hamptons are freaking out about the potential for more housing.
"People in Nassau and Suffolk are losing their minds," Mayor Mary Marvin told Bloomberg.
"They call me up all the time, and by comparison I seem calm."
Critics say it's a top-down approach that doesn't give local communities enough control.
Some argue increasing density would overcrowd schools, burden infrastructure, and reduce tree canopy.
Proponents say it's the only way to begin to meet demand and create more affordable housing options.
In Bronxville, Hochul has proposed allowing up to 7,000 new units — three times the village's current housing stock of 2,500 homes — around its commuter rail station.
Marvin told Bloomberg that Hochul wouldn't have been elected last fall if she'd campaigned on her housing plan.
About 43% of Bronxville residents voted for Hochul's Republican opponent, Lee Zeldin, slightly below the 47% of New Yorkers who supported Zeldin statewide.
Both Suffolk and Nassau counties went for Zeldin by wide margins.
Lawmakers in Albany are currently negotiating the state's budget and Democrats are fighting each other over the housing proposal, with some advocating for providing incentives rather than mandates to communities.
The housing crisis isn't limited to New York — cities and states across the country are grappling with an increasingly dire shortage of homes and sharply rising rent and mortgage costs.
Wealthier, lower density suburbs — even those with left-leaning politics — are often opposed to increasing housing in their communities.
This fight is playing out on a smaller scale just outside Washington, DC, in the affluent suburb of Arlington, Virginia, where county officials just voted to upzone its single-family neighborhoods, following a deeply contentious years-long debate.
The so-called "missing middle" policy will allow developers to build multi-family homes up to six units on lots that previously only allowed single-family homes.
https://www.msn.com/en-us/money/realest ... 563a&ei=44
Re: THE HOUSING MARKET
1945
"Joe Biden Wants You To Pay a ‘Fee’ To Give Loans to People with Bad Credit"
Story by John Rossomando
23 APRIL 2023
The Biden administration plans to force those with higher credit scores to subsidize loans for those with credit scores under 680.
The rule proposed by the Federal Housing Finance Agency is set to take effect May 1.
This rule aims to promote equity in the marketplace for minority, low income, and older buyers among others.
Joe Biden and His Plan
It would impose an additional $40 monthly fee on a $400,000 mortgage.
It will impact mortgages originating from privately owned banks across the country.
Under the new rule, borrowers with poorer credit and less money down would qualify for a better mortgage than they otherwise could have under existing rules.
Some borrowers could see the additional fee approach $100 per month depending on the size of their loan.
Borrowers who refinance their mortgages after May 1 and new borrowers will be impacted.
FHFA Director Sandra Thompson defended the change saying the “increase pricing support for purchase borrowers limited by income or by wealth" and come with “minimal,” claiming the rule would stabilize markets.
What the Experts Think
Fox Business’ Stuart Varney compared the rule change to the situation that existed prior to the 2007-2008 subprime mortgage crisis.
“It looks to me a bit like ’07 and ’08 when we were throwing money at people who could not repay their loans; I know it is on a smaller scale, but it looks similar to me,” Varney said.
Lenders do not like the change.
“The changes do not make sense."
"Penalizing borrowers with larger down payments and credit scores will not go over well,” Ian Wright, a senior loan officer at Bay Equity Home Loans in the San Francisco Bay Area, told The Washington Times.
“It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc."
"Confusing the borrower is never a good thing.”
Wright accused the rule makers of having little comprehension of the rulemaking process.
This rule change could add insult to injury.
This could be particularly true for buyers due to the Federal Reserve’s higher interest rates.
Strategic Wealth Partners CEO Mark Tepper told Fox Business’ Maria Bartiromo that the rule change was “Socialism for homeowners.”
“We mentioned the student loan issue."
"Cab drivers who never went to college are subsidizing that student loan debt, and in this situation, this Biden administration more and more often, they are making decisions to reward bad decisions,” Tepper said.
“There’s nothing in this rule that says it applies to first-time homebuyers."
"It applies to anybody borrowing money that's insured by FHA."
"It’s madness.”
Some worry that the FHFA rule change could slow the housing market further.
“We’re down from selling 6 million houses on an annualized basis to 4.4 (million)."
"So realtors are finding it really hard to make a living."
"But, you know, the supply of homes is still alarmingly low."
"And on the price side, homes are $100,000 more expensive today than they were in February of 2020."
"So we still have that affordability problem,” Mitch Roschelle, Madison Ventures+ managing director, told Fox Business.
David Stevens, a former head of the Mortgage Bankers Association who served as commissioner of the Federal Housing Administration during the Obama administration, warned that the Biden administration was confusing the issues.
“Why was this done?"
"The answer is simple, it was to try to narrow the gap in access to credit especially for minority home buyers who often have lower down payments and lower credit scores,” he wrote in a post on LinkedIn.
“The gap in homeownership opportunity is real."
"America is facing a severe shortage of affordable homes for sales combined with excessive demand causing an imbalance."
"But convoluting pricing and credit is not the way to solve this problem.”
John Rossomando was a senior analyst for Defense Policy and served as Senior Analyst for Counterterrorism at The Investigative Project on Terrorism for eight years. His work has been featured in numerous publications such as The American Thinker, Daily Wire, Red Alert Politics, CNSNews.com, The Daily Caller, Human Events, Newsmax, The American Spectator, TownHall.com, and Crisis Magazine. He also served as senior managing editor of The Bulletin, a 100,000-circulation daily newspaper in Philadelphia, and received the Pennsylvania Associated Press Managing Editors first-place award in 2008 for his reporting.
https://www.msn.com/en-us/money/realest ... 2ff0&ei=39
"Joe Biden Wants You To Pay a ‘Fee’ To Give Loans to People with Bad Credit"
Story by John Rossomando
23 APRIL 2023
The Biden administration plans to force those with higher credit scores to subsidize loans for those with credit scores under 680.
The rule proposed by the Federal Housing Finance Agency is set to take effect May 1.
This rule aims to promote equity in the marketplace for minority, low income, and older buyers among others.
Joe Biden and His Plan
It would impose an additional $40 monthly fee on a $400,000 mortgage.
It will impact mortgages originating from privately owned banks across the country.
Under the new rule, borrowers with poorer credit and less money down would qualify for a better mortgage than they otherwise could have under existing rules.
Some borrowers could see the additional fee approach $100 per month depending on the size of their loan.
Borrowers who refinance their mortgages after May 1 and new borrowers will be impacted.
FHFA Director Sandra Thompson defended the change saying the “increase pricing support for purchase borrowers limited by income or by wealth" and come with “minimal,” claiming the rule would stabilize markets.
What the Experts Think
Fox Business’ Stuart Varney compared the rule change to the situation that existed prior to the 2007-2008 subprime mortgage crisis.
“It looks to me a bit like ’07 and ’08 when we were throwing money at people who could not repay their loans; I know it is on a smaller scale, but it looks similar to me,” Varney said.
Lenders do not like the change.
“The changes do not make sense."
"Penalizing borrowers with larger down payments and credit scores will not go over well,” Ian Wright, a senior loan officer at Bay Equity Home Loans in the San Francisco Bay Area, told The Washington Times.
“It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc."
"Confusing the borrower is never a good thing.”
Wright accused the rule makers of having little comprehension of the rulemaking process.
This rule change could add insult to injury.
This could be particularly true for buyers due to the Federal Reserve’s higher interest rates.
Strategic Wealth Partners CEO Mark Tepper told Fox Business’ Maria Bartiromo that the rule change was “Socialism for homeowners.”
“We mentioned the student loan issue."
"Cab drivers who never went to college are subsidizing that student loan debt, and in this situation, this Biden administration more and more often, they are making decisions to reward bad decisions,” Tepper said.
“There’s nothing in this rule that says it applies to first-time homebuyers."
"It applies to anybody borrowing money that's insured by FHA."
"It’s madness.”
Some worry that the FHFA rule change could slow the housing market further.
“We’re down from selling 6 million houses on an annualized basis to 4.4 (million)."
"So realtors are finding it really hard to make a living."
"But, you know, the supply of homes is still alarmingly low."
"And on the price side, homes are $100,000 more expensive today than they were in February of 2020."
"So we still have that affordability problem,” Mitch Roschelle, Madison Ventures+ managing director, told Fox Business.
David Stevens, a former head of the Mortgage Bankers Association who served as commissioner of the Federal Housing Administration during the Obama administration, warned that the Biden administration was confusing the issues.
“Why was this done?"
"The answer is simple, it was to try to narrow the gap in access to credit especially for minority home buyers who often have lower down payments and lower credit scores,” he wrote in a post on LinkedIn.
“The gap in homeownership opportunity is real."
"America is facing a severe shortage of affordable homes for sales combined with excessive demand causing an imbalance."
"But convoluting pricing and credit is not the way to solve this problem.”
John Rossomando was a senior analyst for Defense Policy and served as Senior Analyst for Counterterrorism at The Investigative Project on Terrorism for eight years. His work has been featured in numerous publications such as The American Thinker, Daily Wire, Red Alert Politics, CNSNews.com, The Daily Caller, Human Events, Newsmax, The American Spectator, TownHall.com, and Crisis Magazine. He also served as senior managing editor of The Bulletin, a 100,000-circulation daily newspaper in Philadelphia, and received the Pennsylvania Associated Press Managing Editors first-place award in 2008 for his reporting.
https://www.msn.com/en-us/money/realest ... 2ff0&ei=39
Re: THE HOUSING MARKET
REUTERS
"US consumer confidence hits nine-month low; housing market bottoming out"
By Lucia Mutikani
APRIL 25, 2023
WASHINGTON (Reuters) - U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.
The consumer confidence survey from the Conference Board on Tuesday also suggested that Americans were getting ready to hunker down as dark clouds gather, with the share of them planning to buy major household appliances over the next six months falling to the lowest level since 2011.
Vacations were also not in the cards for many.
Consumers have shown resilience despite high inflation and a rise in interest rates, keeping the economy afloat, thanks to a strong labor market.
The tide could be turning as the effects of the Federal Reserve’s fastest rate hiking campaign since the 1980s to tame inflation begin to have a broader impact.
Consumers are also growing more sensitive to higher prices.
“Rates have been on the rise for over a year, and we’re seeing the effects,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
“Despite a still-tight jobs market, which is still a good thing, sticky inflation does have its consequences.”
The Conference Board said its consumer confidence index fell to 101.3, the lowest reading since July 2022, from 104.0 in March.
Economists polled by Reuters had expected the index to be unchanged at 104.0 in April.
The drop reflected a deterioration in expectations for consumers under 55 years and households earning $50,000 and over annually, suggesting a broadening in concerns about the economy beyond low income households.
Though consumers’ assessment of current conditions improved, their short-term outlook deteriorated.
The short-term outlook measure has dropped below the level associated with a recession in the next year in 13 of the last 14 months.
The risks of a downturn have risen following the collapse of two regional U.S. banks in March, which tightened credit conditions.
A looming fight to increase the federal government’s $31.4 trillion borrowing cap also poses a threat to the economy.
Consumers remained upbeat on the labor market, with the share of them viewing jobs as “plentiful” rising, while the proportion of those saying jobs were “hard to get” dipped.
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, rose to 37.3 from 36.5 in March, consistent with a tight labor market.
This measure correlates to the unemployment rate from the U.S. Labor Department.
The jobless rate was 3.5% in March.
U.S. stocks were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
BUYING PLANS WEAKEN
Consumers’ 12-month inflation expectations slipped to 6.2% from 6.3% last month.
The share of those planning to buy household appliances over the next six months dropped to 41%, the smallest since September 2011, from 44.8 in March.
The proportion planning to buy motor vehicles was the smallest in nine months.
The share of those planning to go on vacation was the smallest since last June.
Fewer consumers intended to purchase a home.
Some economists, however, cautioned against reading too much into the drop in buying plans.
“Take consumer purchase plans with a grain of salt,” said Tim Quinlan, a senior economist at Wells Fargo in Charlotte, North Carolina.
“This (drop in plans to take a vacation) stands in contrast to reports of record-long wait times for passport application processing and airline ticket bookings that are already close to filling up for the summer.”
That skepticism also extended to home purchase plans.
A separate report from the Commerce Department on Tuesday showed new home sales surged 9.6% to a seasonally adjusted annual rate of 683,000 units in March, the highest level since March 2022.
New home sales are counted at the signing of a contract, making them a leading indicator of the housing market, though they can be volatile on a month-to-month basis.
Buyers have been taking advantage of any dip in mortgage rates to purchase homes.
The average rate on the popular 30-year mortgage, which hit a peak of 7.03% in late 2022, was mostly lower in March, according to data from mortgage finance agency Freddie Mac.
Signs that the housing market was stabilizing at lower levels were reinforced by other data on Tuesday showing single-family home prices increased in February after seven straight monthly declines.
The S&P CoreLogic Case-Shiller national home price index, covering all nine U.S. census divisions, rose 0.2% month-on-month in February after adjusting for seasonal fluctuations.
That followed a 0.2% fall in January.
“The housing markets continue to vary across regions and price tiers, but lower mortgage rates and low inventories have been helpful in providing the floor for prices in markets where prices seemed to have nosedived following mortgage rate surge,” said Selma Hepp, chief economist at CoreLogic.
“Home prices nationally have bottomed out.”
Reporting by Lucia Mutikani; additional reporting by Dan Burns; editing by Paul Simao and Chizu Nomiyama
https://www.reuters.com/article/usa-eco ... SL1N36R1FE
"US consumer confidence hits nine-month low; housing market bottoming out"
By Lucia Mutikani
APRIL 25, 2023
WASHINGTON (Reuters) - U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.
The consumer confidence survey from the Conference Board on Tuesday also suggested that Americans were getting ready to hunker down as dark clouds gather, with the share of them planning to buy major household appliances over the next six months falling to the lowest level since 2011.
Vacations were also not in the cards for many.
Consumers have shown resilience despite high inflation and a rise in interest rates, keeping the economy afloat, thanks to a strong labor market.
The tide could be turning as the effects of the Federal Reserve’s fastest rate hiking campaign since the 1980s to tame inflation begin to have a broader impact.
Consumers are also growing more sensitive to higher prices.
“Rates have been on the rise for over a year, and we’re seeing the effects,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
“Despite a still-tight jobs market, which is still a good thing, sticky inflation does have its consequences.”
The Conference Board said its consumer confidence index fell to 101.3, the lowest reading since July 2022, from 104.0 in March.
Economists polled by Reuters had expected the index to be unchanged at 104.0 in April.
The drop reflected a deterioration in expectations for consumers under 55 years and households earning $50,000 and over annually, suggesting a broadening in concerns about the economy beyond low income households.
Though consumers’ assessment of current conditions improved, their short-term outlook deteriorated.
The short-term outlook measure has dropped below the level associated with a recession in the next year in 13 of the last 14 months.
The risks of a downturn have risen following the collapse of two regional U.S. banks in March, which tightened credit conditions.
A looming fight to increase the federal government’s $31.4 trillion borrowing cap also poses a threat to the economy.
Consumers remained upbeat on the labor market, with the share of them viewing jobs as “plentiful” rising, while the proportion of those saying jobs were “hard to get” dipped.
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, rose to 37.3 from 36.5 in March, consistent with a tight labor market.
This measure correlates to the unemployment rate from the U.S. Labor Department.
The jobless rate was 3.5% in March.
U.S. stocks were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
BUYING PLANS WEAKEN
Consumers’ 12-month inflation expectations slipped to 6.2% from 6.3% last month.
The share of those planning to buy household appliances over the next six months dropped to 41%, the smallest since September 2011, from 44.8 in March.
The proportion planning to buy motor vehicles was the smallest in nine months.
The share of those planning to go on vacation was the smallest since last June.
Fewer consumers intended to purchase a home.
Some economists, however, cautioned against reading too much into the drop in buying plans.
“Take consumer purchase plans with a grain of salt,” said Tim Quinlan, a senior economist at Wells Fargo in Charlotte, North Carolina.
“This (drop in plans to take a vacation) stands in contrast to reports of record-long wait times for passport application processing and airline ticket bookings that are already close to filling up for the summer.”
That skepticism also extended to home purchase plans.
A separate report from the Commerce Department on Tuesday showed new home sales surged 9.6% to a seasonally adjusted annual rate of 683,000 units in March, the highest level since March 2022.
New home sales are counted at the signing of a contract, making them a leading indicator of the housing market, though they can be volatile on a month-to-month basis.
Buyers have been taking advantage of any dip in mortgage rates to purchase homes.
The average rate on the popular 30-year mortgage, which hit a peak of 7.03% in late 2022, was mostly lower in March, according to data from mortgage finance agency Freddie Mac.
Signs that the housing market was stabilizing at lower levels were reinforced by other data on Tuesday showing single-family home prices increased in February after seven straight monthly declines.
The S&P CoreLogic Case-Shiller national home price index, covering all nine U.S. census divisions, rose 0.2% month-on-month in February after adjusting for seasonal fluctuations.
That followed a 0.2% fall in January.
“The housing markets continue to vary across regions and price tiers, but lower mortgage rates and low inventories have been helpful in providing the floor for prices in markets where prices seemed to have nosedived following mortgage rate surge,” said Selma Hepp, chief economist at CoreLogic.
“Home prices nationally have bottomed out.”
Reporting by Lucia Mutikani; additional reporting by Dan Burns; editing by Paul Simao and Chizu Nomiyama
https://www.reuters.com/article/usa-eco ... SL1N36R1FE
Re: THE HOUSING MARKET
REUTERS
"US pending home sales slump unexpectedly in March"
Reuters
April 27, 2023
April 27 (Reuters) - Contracts to buy U.S. previously owned homes tumbled unexpectedly in March to snap a three-month rebound, raising a caution flag about what had appeared to be a nascent recovery in a housing market that has been clobbered by rising interest rates.
The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on signed contracts, fell 5.2% last month to 78.9, the lowest since December.
Economists polled by Reuters had forecast pending sales to have increased 0.5% in March, but the reported decline was larger than even the most pessimistic estimate in the survey.
"The lack of housing inventory is a major constraint to rising sales," said NAR Chief Economist Lawrence Yun.
"Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price."
"Limited housing supply is simply not meeting demand nationally."
The housing market has been the sector of the economy most visibly affected by the Federal Reserve's aggressive run of interest rate increases aimed at bringing down inflation, but 2023 had begun with some indications the worst may have passed.
That optimism was dented earlier this month when NAR reported that existing home sales slid 2.4% last month.
While some firming has continued in the much-smaller market for new homes, the pending homes data suggests the market's overall recovery is likely to be choppy.
Yun said sales should improve later in the year as he expects continued job growth and mortgage interest rates to fall to about 6% by year end from the current 6.55%.
Contract signings were lower in the Northeast, Midwest and West, while the South saw a fractional gain.
Reporting by Dan Burns; Editing by Andrea Ricci
https://www.reuters.com/markets/us/us-p ... 023-04-27/
"US pending home sales slump unexpectedly in March"
Reuters
April 27, 2023
April 27 (Reuters) - Contracts to buy U.S. previously owned homes tumbled unexpectedly in March to snap a three-month rebound, raising a caution flag about what had appeared to be a nascent recovery in a housing market that has been clobbered by rising interest rates.
The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on signed contracts, fell 5.2% last month to 78.9, the lowest since December.
Economists polled by Reuters had forecast pending sales to have increased 0.5% in March, but the reported decline was larger than even the most pessimistic estimate in the survey.
"The lack of housing inventory is a major constraint to rising sales," said NAR Chief Economist Lawrence Yun.
"Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price."
"Limited housing supply is simply not meeting demand nationally."
The housing market has been the sector of the economy most visibly affected by the Federal Reserve's aggressive run of interest rate increases aimed at bringing down inflation, but 2023 had begun with some indications the worst may have passed.
That optimism was dented earlier this month when NAR reported that existing home sales slid 2.4% last month.
While some firming has continued in the much-smaller market for new homes, the pending homes data suggests the market's overall recovery is likely to be choppy.
Yun said sales should improve later in the year as he expects continued job growth and mortgage interest rates to fall to about 6% by year end from the current 6.55%.
Contract signings were lower in the Northeast, Midwest and West, while the South saw a fractional gain.
Reporting by Dan Burns; Editing by Andrea Ricci
https://www.reuters.com/markets/us/us-p ... 023-04-27/
Re: THE HOUSING MARKET
FOX NEWS
"States revolt against Biden's 'disaster' mortgage redistribution rule to subside risky loans"
Story by Peter Kasperowicz
1 MAY 2023
FIRST ON FOX – State treasurers and other top finance officials from 27 states on Monday urged President Biden to end what they said was his "unconscionable" policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers, and warned Biden’s plan would be a "disaster."
Biden’s plan was outlined just a few weeks ago by the Federal Housing Agency (FHFA) and is set to take effect today.
The plan is aimed at helping lower-income borrowers afford their monthly mortgage payments – it would do so by forcing people with good credit scores to pay more each month for their mortgages, extra payments that would be credited to the loans of higher-risk borrowers.
The controversial policy has been attacked by both Republicans and Democrats, including President Obama’s former Federal Housing Administrator.
On Monday, financial officers from 27 states weighed in and said it was clear the policy was a mistake even before it takes effect.
"It is already clear that this new policy will be a disaster," they wrote in a letter led by Pennsylvania Treasurer Stacy Garrity that was sent to Biden and FHFA Director Sandra Thompson.
"It amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars."
"And – at a time when the real estate market has already slowed considerably due to high interest rates – it will further depress home sales."
"We urge you to take immediate action to end this unconscionable policy," they wrote.
The state finance officers blasted the plan for turning the normal system of home buying incentives "upside down" by hurting people who make sound financial decisions.
"Tthe policy will take money away from the people who played by the rules and did things right – including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment," they wrote.
"Incredibly, those who make down payments of 20 percent or more on their homes will pay the highest fees – one of the most backward incentives imaginable."
It noted that the forced extra payments will be used to hand out "better mortgage rates to people with lower credit ratings."
Others have said the plan would make it easier for people with shaky credit histories to afford more expensive mortgages, a move that could put more people at financial risk.
The state officials said that while expanding homeownership is a worthy goal, the forced subsidization of risky loans isn’t the way to do it.
"The right way to solve that problem is not to use the power of the federal government to penalize hardworking, middle-class American families by confiscating their money and using it as a handout," they wrote.
"The right way is to implement policies which will reduce inflation, cut energy costs and bring lower interest rates."
The letter was signed by treasurers, auditors, commissioners of revenue and other top officials from Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming.
https://www.msn.com/en-us/money/realest ... 600c3&ei=8
"States revolt against Biden's 'disaster' mortgage redistribution rule to subside risky loans"
Story by Peter Kasperowicz
1 MAY 2023
FIRST ON FOX – State treasurers and other top finance officials from 27 states on Monday urged President Biden to end what they said was his "unconscionable" policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers, and warned Biden’s plan would be a "disaster."
Biden’s plan was outlined just a few weeks ago by the Federal Housing Agency (FHFA) and is set to take effect today.
The plan is aimed at helping lower-income borrowers afford their monthly mortgage payments – it would do so by forcing people with good credit scores to pay more each month for their mortgages, extra payments that would be credited to the loans of higher-risk borrowers.
The controversial policy has been attacked by both Republicans and Democrats, including President Obama’s former Federal Housing Administrator.
On Monday, financial officers from 27 states weighed in and said it was clear the policy was a mistake even before it takes effect.
"It is already clear that this new policy will be a disaster," they wrote in a letter led by Pennsylvania Treasurer Stacy Garrity that was sent to Biden and FHFA Director Sandra Thompson.
"It amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars."
"And – at a time when the real estate market has already slowed considerably due to high interest rates – it will further depress home sales."
"We urge you to take immediate action to end this unconscionable policy," they wrote.
The state finance officers blasted the plan for turning the normal system of home buying incentives "upside down" by hurting people who make sound financial decisions.
"Tthe policy will take money away from the people who played by the rules and did things right – including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment," they wrote.
"Incredibly, those who make down payments of 20 percent or more on their homes will pay the highest fees – one of the most backward incentives imaginable."
It noted that the forced extra payments will be used to hand out "better mortgage rates to people with lower credit ratings."
Others have said the plan would make it easier for people with shaky credit histories to afford more expensive mortgages, a move that could put more people at financial risk.
The state officials said that while expanding homeownership is a worthy goal, the forced subsidization of risky loans isn’t the way to do it.
"The right way to solve that problem is not to use the power of the federal government to penalize hardworking, middle-class American families by confiscating their money and using it as a handout," they wrote.
"The right way is to implement policies which will reduce inflation, cut energy costs and bring lower interest rates."
The letter was signed by treasurers, auditors, commissioners of revenue and other top officials from Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming.
https://www.msn.com/en-us/money/realest ... 600c3&ei=8
Re: THE HOUSING MARKET
REUTERS
"New York Fed finds big slowdown in new mortgage creation in first quarter"
By Michael S. Derby
May 15, 2023
NEW YORK, May 15 (Reuters) - Americans' appetite for taking on new mortgages slowed substantially during the first quarter, data released by the New York Fed on Monday showed, amid a modest gain in overall household borrowing levels at the start of the year.
Overall household debt levels rose by 0.9% to $17.05 trillion during the first three months of the year, the bank said in its latest Quarterly Report on Household Debt and Credit, noting that overall debt levels are nearly $3 trillion higher than in 2019 before the onset of the coronavirus pandemic.
New York Fed researchers view overall debt levels as relatively healthy, with some pockets of nascent concern.
The data does not capture much in the way of an impact that may have ensued from banking sector stress that kicked off in March, the researchers said.
The central bank data showed how the sharply higher interest rate environment the Fed has been putting in place over the last year to lower high inflation has weighed on the housing market.
The bank said new mortgage debt created during the first quarter fell to the lowest level since 2014 at $324 billion, while overall mortgage debt for the quarter stood at $12.04 trillion, up $121 billion from the prior quarter.
That compares with $498 billion in mortgage originations in the final three months of 2022 and a peak of $1.218 trillion in new mortgages during the second quarter of 2021.
But even as the housing market has cooled down, its strong performance over the course of the recovery from the most acute phase of the pandemic has set up the economy for strength.
The bank said in its report that 14 million mortgages were refinanced between 2020 and 2021.
Five million borrowers extracted $430 billion in home equity during the period and 9 million refinanced without extracting equity, creating an aggregate $24 billion annual savings in housing costs.
While the end of low mortgage rates discourages people who already have a low mortgage rate from deciding to sell their house, bank economists said in a blog post accompanying the debt report that “the improved cash flow from the recent refinance boom will potentially provide significant support to future consumption.”
The New York Fed said in its report that delinquency rates on housing and student debt levels remains low, although delinquency rates from credit cards and auto loans increased, testing levels seen before the pandemic.
Reporting by Michael S. Derby; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/ny-f ... 023-05-15/
"New York Fed finds big slowdown in new mortgage creation in first quarter"
By Michael S. Derby
May 15, 2023
NEW YORK, May 15 (Reuters) - Americans' appetite for taking on new mortgages slowed substantially during the first quarter, data released by the New York Fed on Monday showed, amid a modest gain in overall household borrowing levels at the start of the year.
Overall household debt levels rose by 0.9% to $17.05 trillion during the first three months of the year, the bank said in its latest Quarterly Report on Household Debt and Credit, noting that overall debt levels are nearly $3 trillion higher than in 2019 before the onset of the coronavirus pandemic.
New York Fed researchers view overall debt levels as relatively healthy, with some pockets of nascent concern.
The data does not capture much in the way of an impact that may have ensued from banking sector stress that kicked off in March, the researchers said.
The central bank data showed how the sharply higher interest rate environment the Fed has been putting in place over the last year to lower high inflation has weighed on the housing market.
The bank said new mortgage debt created during the first quarter fell to the lowest level since 2014 at $324 billion, while overall mortgage debt for the quarter stood at $12.04 trillion, up $121 billion from the prior quarter.
That compares with $498 billion in mortgage originations in the final three months of 2022 and a peak of $1.218 trillion in new mortgages during the second quarter of 2021.
But even as the housing market has cooled down, its strong performance over the course of the recovery from the most acute phase of the pandemic has set up the economy for strength.
The bank said in its report that 14 million mortgages were refinanced between 2020 and 2021.
Five million borrowers extracted $430 billion in home equity during the period and 9 million refinanced without extracting equity, creating an aggregate $24 billion annual savings in housing costs.
While the end of low mortgage rates discourages people who already have a low mortgage rate from deciding to sell their house, bank economists said in a blog post accompanying the debt report that “the improved cash flow from the recent refinance boom will potentially provide significant support to future consumption.”
The New York Fed said in its report that delinquency rates on housing and student debt levels remains low, although delinquency rates from credit cards and auto loans increased, testing levels seen before the pandemic.
Reporting by Michael S. Derby; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/ny-f ... 023-05-15/
Re: THE HOUSING MARKET
1945
"The Media Missed Joe Biden’s Greatest Mistake Yet"
Story by Harrison Kass
17 MAY 2023
I’m writing again about President Biden’s new mortgage rule, which adjusts fees based on a borrower’s credit score because I don’t think the rule is receiving sufficient media attention for being the moral and functional blunder that the rule is.
In case you missed it, earlier this month, a new Biden Administration Federal Housing Finance Agency (FHFA) rule went into effect that will require borrowers with better credit scores, and borrowers who make larger down payments to pay higher mortgage rates.
You read that correctly.
Borrowers with better credit scores, and borrowers who make larger down payments, will need to pay higher mortgage fees than borrowers with low credit scores, and borrowers who make lower down payments.
I can’t quite get over it.
The thing is so patently absurd.
Yet, there are other things happening, like Ukraine and the debt ceiling and the GOP primaries, and Biden’s discrete mortgage rule has already faded into media obscurity, despite the backlash the rule has caused.
So, I’ll do my part – to amplify the backlash.
Because I am deeply irritated, at both the unfairness and the fundamental impracticality of the new mortgage rules.
The new rule rewards bad behavior
If my harping against Biden’s new mortgage rule sounds like sour grapes that because it is sour grapes.
I’ve spent years living frugally.
Pinching pennies.
Only spending what I have.
Avoiding credit card debt.
Saving what I have in the hopes of gaining security and enhanced wealth through home ownership.
I’m a way off from buying a home.
But at least my credit rating is high – a simple reward for playing according to the rules, which, until Biden interceded, provided comfort in knowing that I would receive favorable mortgage rates one day.
I’m not alone.
Millions of Americans, across the socio-economic spectrum, have played according to the rules.
And now, the lot of us are going to be subsidizing the Americans who played it loose.
Who bought the Corvette they couldn’t afford.
Or blew paychecks on sports betting.
Or racked up credit card debt.
Under Biden’s new rule, the Americans with the bad credit rating are going to be earning the more favorable mortgage rating.
The crazy part is that credit rating (and down payments) alone determines the mortgage rate, meaning that a guy making seven figures a year, who happens to have bad credit, will get a better credit rating than the guy making 50k a year, who lived responsibly.
It’s sick stuff, rationalized as a means to encourage home buying, or close the racial home ownership-gap.
But that’s nonsense.
The new rule is as likely to discourage home buying (amongst those with good credit) as encourage home buying (amongst those with bad credit).
And of course, the rule operates based on credit rating, not race or ethnicity.
The real motive for the rule (in my best guess) is that it allows lenders to lend to whomever they want.
The new rule opens the doors for lenders to make deals with people who, otherwise, would not be able to secure a loan for buying a home because that person was deemed too risky.
But now, with the good credit borrower subsidizing the bad credit borrower, the bad credit borrower is suddenly less risky.
And did we learn nothing from 2008?
From the perils of allowing people to live beyond their means?
Biden’s new rule is a moral and functional blunder.
Harrison Kass is the Senior Editor at 19FortyFive. An attorney, pilot, guitarist, and minor pro hockey player, Harrison joined the US Air Force as a Pilot Trainee but was medically discharged. Harrison holds a BA from Lake Forest College, a JD from the University of Oregon, and an MA from New York University. Harrison listens to Dokken.
https://www.msn.com/en-us/money/news/th ... 89de&ei=34
"The Media Missed Joe Biden’s Greatest Mistake Yet"
Story by Harrison Kass
17 MAY 2023
I’m writing again about President Biden’s new mortgage rule, which adjusts fees based on a borrower’s credit score because I don’t think the rule is receiving sufficient media attention for being the moral and functional blunder that the rule is.
In case you missed it, earlier this month, a new Biden Administration Federal Housing Finance Agency (FHFA) rule went into effect that will require borrowers with better credit scores, and borrowers who make larger down payments to pay higher mortgage rates.
You read that correctly.
Borrowers with better credit scores, and borrowers who make larger down payments, will need to pay higher mortgage fees than borrowers with low credit scores, and borrowers who make lower down payments.
I can’t quite get over it.
The thing is so patently absurd.
Yet, there are other things happening, like Ukraine and the debt ceiling and the GOP primaries, and Biden’s discrete mortgage rule has already faded into media obscurity, despite the backlash the rule has caused.
So, I’ll do my part – to amplify the backlash.
Because I am deeply irritated, at both the unfairness and the fundamental impracticality of the new mortgage rules.
The new rule rewards bad behavior
If my harping against Biden’s new mortgage rule sounds like sour grapes that because it is sour grapes.
I’ve spent years living frugally.
Pinching pennies.
Only spending what I have.
Avoiding credit card debt.
Saving what I have in the hopes of gaining security and enhanced wealth through home ownership.
I’m a way off from buying a home.
But at least my credit rating is high – a simple reward for playing according to the rules, which, until Biden interceded, provided comfort in knowing that I would receive favorable mortgage rates one day.
I’m not alone.
Millions of Americans, across the socio-economic spectrum, have played according to the rules.
And now, the lot of us are going to be subsidizing the Americans who played it loose.
Who bought the Corvette they couldn’t afford.
Or blew paychecks on sports betting.
Or racked up credit card debt.
Under Biden’s new rule, the Americans with the bad credit rating are going to be earning the more favorable mortgage rating.
The crazy part is that credit rating (and down payments) alone determines the mortgage rate, meaning that a guy making seven figures a year, who happens to have bad credit, will get a better credit rating than the guy making 50k a year, who lived responsibly.
It’s sick stuff, rationalized as a means to encourage home buying, or close the racial home ownership-gap.
But that’s nonsense.
The new rule is as likely to discourage home buying (amongst those with good credit) as encourage home buying (amongst those with bad credit).
And of course, the rule operates based on credit rating, not race or ethnicity.
The real motive for the rule (in my best guess) is that it allows lenders to lend to whomever they want.
The new rule opens the doors for lenders to make deals with people who, otherwise, would not be able to secure a loan for buying a home because that person was deemed too risky.
But now, with the good credit borrower subsidizing the bad credit borrower, the bad credit borrower is suddenly less risky.
And did we learn nothing from 2008?
From the perils of allowing people to live beyond their means?
Biden’s new rule is a moral and functional blunder.
Harrison Kass is the Senior Editor at 19FortyFive. An attorney, pilot, guitarist, and minor pro hockey player, Harrison joined the US Air Force as a Pilot Trainee but was medically discharged. Harrison holds a BA from Lake Forest College, a JD from the University of Oregon, and an MA from New York University. Harrison listens to Dokken.
https://www.msn.com/en-us/money/news/th ... 89de&ei=34
Re: THE HOUSING MARKET
REUTERS
"US weekly jobless claims fall; labor market defying recession fears"
By Lucia Mutikani
May 18, 2023
Summary
* Weekly jobless claims drop 22,000 to 242,000
* Continuing claims decrease 8,000 to 1.799 million
* Mid-Atlantic manufacturing shrinks further in May
* Existing home sales fall 3.4% in April
WASHINGTON, May 18 (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.
The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021.
That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."
"The labor market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13.
The drop was the largest since Nov. 20, 2021.
Economists polled by Reuters had forecast 254,000 for the latest week.
Unadjusted claims decreased 18,605 to 215,810 last week, with filings in Massachusetts plunging by 14,042.
Claims also fell considerably in Missouri and New Jersey, more than offsetting notable increases in Ohio and Illinois.
The labor market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s.
The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022.
Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.
"While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labor market conditions don't ease more significantly," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
On Wall Street, the S&P 500 and the Nasdaq Composite were up, but the Dow Jones Industrial Average was slightly down in early afternoon trading.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
HOUSING SLUMP CONTINUES
The jobless claims report covered the period when the government surveyed business establishments for the nonfarm payrolls portion of May's employment report.
Claims were little changed between the April and May survey weeks.
The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
The strength in the labor market is at odds with the Conference Board's Leading Economic Index (LEI), a gauge of future economic activity, which has been flagging a recession since last year.
The LEI fell 0.6% in April, posting its 13th straight monthly drop, the Conference Board said on Thursday.
The economy's resilience is also evident in solid consumer spending, which prompted Walmart on Thursday to raise its annual sales and profit targets.
"We expect consumer spending to hold up until we see labor market slack materially spread," said Shannon Seery, an economist at Wells Fargo in New York.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the lowest level since early March, the claims report showed.
The low so-called continuing claims suggest unemployed people are finding new work quickly.
Economists at Goldman Sachs speculated that the annual revision last month to the seasonal factor, the model that the government uses to strip out seasonal fluctuations from the data, could be distorting the continuing claims.
"We estimate that those distortions could exert a cumulative drag of up to 400,000 between April and September," Goldman Sachs said in a note.
The Fed's rate hikes have left the housing market mired in recession and manufacturing struggling, other reports showed on Thursday.
Existing home sales dropped 3.4% to a seasonally adjusted annual rate of 4.28 million units last month, the National Association of Realtors said.
The second straight monthly decline reflected tight inventory, with the NAR reporting prices rising in roughly half of the country, multiple offers and many homes being sold above list price.
Housing inventory is 44% below its pre-pandemic levels.
"The housing market will remain moribund until mortgage rates start to fall later this year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
With higher borrowing eroding demand for goods, factory activity in the mid-Atlantic region continued to slump in May, though the pace of contraction slowed from the prior month.
The Philadelphia Fed's general activity index improved to -10.4 this month from -31.3 in April.
A reading below zero indicates contraction in the region's manufacturing sector.
It was the ninth consecutive negative reading in the index, which covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
Though manufacturers were pessimistic about business conditions in the next six months, they planned to increase employment over that period.
"Re-shoring of supply chains, infrastructure projects and a stabilization in rates and demand could provide support to manufacturing activity over time," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in New York.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 023-05-18/
"US weekly jobless claims fall; labor market defying recession fears"
By Lucia Mutikani
May 18, 2023
Summary
* Weekly jobless claims drop 22,000 to 242,000
* Continuing claims decrease 8,000 to 1.799 million
* Mid-Atlantic manufacturing shrinks further in May
* Existing home sales fall 3.4% in April
WASHINGTON, May 18 (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.
The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021.
That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."
"The labor market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13.
The drop was the largest since Nov. 20, 2021.
Economists polled by Reuters had forecast 254,000 for the latest week.
Unadjusted claims decreased 18,605 to 215,810 last week, with filings in Massachusetts plunging by 14,042.
Claims also fell considerably in Missouri and New Jersey, more than offsetting notable increases in Ohio and Illinois.
The labor market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s.
The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022.
Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.
"While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labor market conditions don't ease more significantly," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
On Wall Street, the S&P 500 and the Nasdaq Composite were up, but the Dow Jones Industrial Average was slightly down in early afternoon trading.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
HOUSING SLUMP CONTINUES
The jobless claims report covered the period when the government surveyed business establishments for the nonfarm payrolls portion of May's employment report.
Claims were little changed between the April and May survey weeks.
The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
The strength in the labor market is at odds with the Conference Board's Leading Economic Index (LEI), a gauge of future economic activity, which has been flagging a recession since last year.
The LEI fell 0.6% in April, posting its 13th straight monthly drop, the Conference Board said on Thursday.
The economy's resilience is also evident in solid consumer spending, which prompted Walmart on Thursday to raise its annual sales and profit targets.
"We expect consumer spending to hold up until we see labor market slack materially spread," said Shannon Seery, an economist at Wells Fargo in New York.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the lowest level since early March, the claims report showed.
The low so-called continuing claims suggest unemployed people are finding new work quickly.
Economists at Goldman Sachs speculated that the annual revision last month to the seasonal factor, the model that the government uses to strip out seasonal fluctuations from the data, could be distorting the continuing claims.
"We estimate that those distortions could exert a cumulative drag of up to 400,000 between April and September," Goldman Sachs said in a note.
The Fed's rate hikes have left the housing market mired in recession and manufacturing struggling, other reports showed on Thursday.
Existing home sales dropped 3.4% to a seasonally adjusted annual rate of 4.28 million units last month, the National Association of Realtors said.
The second straight monthly decline reflected tight inventory, with the NAR reporting prices rising in roughly half of the country, multiple offers and many homes being sold above list price.
Housing inventory is 44% below its pre-pandemic levels.
"The housing market will remain moribund until mortgage rates start to fall later this year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
With higher borrowing eroding demand for goods, factory activity in the mid-Atlantic region continued to slump in May, though the pace of contraction slowed from the prior month.
The Philadelphia Fed's general activity index improved to -10.4 this month from -31.3 in April.
A reading below zero indicates contraction in the region's manufacturing sector.
It was the ninth consecutive negative reading in the index, which covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
Though manufacturers were pessimistic about business conditions in the next six months, they planned to increase employment over that period.
"Re-shoring of supply chains, infrastructure projects and a stabilization in rates and demand could provide support to manufacturing activity over time," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in New York.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 023-05-18/