Despite rising delinquency levels, borrower performance on the underlying mortgages in GSE credit-risk transfer securitizations is strong enough to warrant ratings upgrades to more than half of nearly 1,200 outstanding note classes.
Posted To: Mortgage Rate WatchMortgage rates enjoyed a pleasantly flat week despite some volatility in the underlying bond market. The day-to-day changes in Treasuries and Mortgage-Backed-Securities (MBS) were noticeable, but they all took place inside the range of values seen last Wednesday on Fed day. In other words, the bond market (which dictates rates) digested the Fed's message and is now waiting for the next shoe to drop. When it does, we're highly likely to see the current range give way to the next bout of strong momentum. The shoe in question is next week's economic data. After all, the Fed's message last week was that it was prepared to cut rates if the economic data justified it. Next week contains several of the most important economic reports in the monthly rotation, including the all-important jobs report...(read more)
Party in the back
We’ve already explored how prefab homes can offer a affordable, eco-friendly, stormproof, and down-right sexier alternative to traditional stick-built housing and we’re constantly updating our guide to the 5 best prefabs you can buy right now. But one of the most practical ways to upgrade your property with prefab is through a modern backyard shed.
Smaller than larger prefab homes and often not requiring a permit to build, the potential uses for these sleek dwellings can go way beyond simple storage or workshop space. Think streamlined office, yoga studio, writing retreat, guest house, music room, and so on.
Below, we’ve rounded up five rad prefab shed lines that you can order from right now. Estimated price ranges are provided, but they do not include costs associated with permits, shipping, foundation, and installation unless otherwise noted. Have a fab backyard shed or know a neighbor with one? Feel free to share stories or additional resources in the comments below.
Size: 80 to 196 square feet (example shown above is 168 square feet)
Cost: $5,800 to $19,000 for shell kits; $14,500 to $29,300 for turnkey installations
Key features: Steel transom windows, stairs to door, lap siding, pine tongue and groove ceiling cover, interior cedar beam; optional upgrades include side deck, bamboo flooring, additional windows
Size: 48 to 312 square feet
Cost: Starting around $10,000 for the smallest sheds, much more expensive for larger sheds.
Key features: fast assembly; available in eight, ten, or 12-foot depths with customizable lengths; pre-insulated walls and wood paneling; available in many color options and various window sizes
Size: 120 to 312 square feet
Cost: $9,000 and up (base costs)
Key features: Weatherproof wall panels, tapered roof rafters, double pane windows, fiberglass door, brushed aluminum trim and hardware, one-year warranty
Size: 120 to 126 square feet
Cost: $16,900 to $20,000 (installed)
Key features: Eichler slope roof, exposed beam ceiling, Eichler-style luan hardwood interior paneling, double-pane sliding windows, metal hinged door
Size: 64 to 336 square feet
Cost: $8,224 to $18,851
Key features: Insulated windows, prehung glass doors, two large picture windows, standing seam metal roof, many color options
With the largest segment of crafters between the ages of 18 and 34 — which also happens to be the age group buying homes — catering to crafters can be a smart way to market spaces.
Posted To: MBS CommentaryThings have been bright and sunny for the bond market without any troubling exceptions since mid-April. During that time we've only seen 10yr yields rise more than 6bps (close-to-close) 3 times. Today was one of them. We could say something like "the sun also sets," but that would be ignoring the fact that yields hit their lowest closing levels since Nov 2016 yesterday. And as it happens, the other 2 days with 6bps+ losses also followed strong trading days near long-term low yields. So the worst thing we can say for now is that the sun went behind a cloud. If things remain dark tomorrow, we'll ratchet up the level of concern accordingly. As far as underlying motivations for the weakness, there's no doubt that US/China trade headlines moved the needle in the overnight session...(read more)
It doesn’t matter if you’re owning or renting, buying or selling, or still sitting on the sidelines waiting to join the game. Just about everyone wants to know what’s going on in the housing market.
Because it’s a moving target. While plummeting prices can be a boon for buyers, they can throw sellers into a panic—and, in a worst-case scenario, plunge the world into a recession, as we saw when the housing bubble burst a decade ago. Meanwhile, a lack of new housing coming onto the market can lead to price spikes for both buyers and renters.
That current dearth of new construction is exacerbating a national housing shortage and leading to an increase in prices, according to the recently released annual State of the Nation’s Housing report from the Harvard University’s Joint Center for Housing Studies.
“The major takeaway is that the housing market is strong,” says Daniel McCue, senior research associate at the center. But “there’s a housing shortage brought on by several years of low levels of homebuilding. It’s led to increased competition, which has driven up home prices. And it’s led to [a lack of] housing affordability.”
Here are six key findings from the report.
Over the past two years, homeownership has been rising again, hitting 64.4% of U.S. households in 2018. The rate rose 0.5% from the previous year, resulting in an additional 1.6 million households who closed on properties.
That’s fantastic news. The homeownership rate had plummeted during the financial crisis as scores of foreclosures swept through the country. Now it’s back up to what it was from about 1985 through 1995, according to McCue.
“Homeownership had declined a lot,” he says. “So [for many buyers] it was finally having the money and the income to make this happen.”
The bump was primarily thanks to more millennials and young Gen Xers flooding the market. An additional 1.1 million of them closed on properties from 2016 to 2018.
“You have a bigger group of young adults getting older and reaching the ages where they are getting married, having children, and reaching the prime first-time home buyer [point],” McCue says.
The boost in homeownership was in spite of record-high home prices in many parts of the country and rising mortgage interest rates.
In 2012, the monthly median home payment was only $1,176, after adjusting for inflation, according to the report. But just six years later, it had jumped almost 51%, to $1,775 a month.
“The fact that homeownership is rising despite all of the affordability challenges that buyers are facing reflects how important homeownership is to the American dream,” says Chief Economist Danielle Hale of realtor.com®.
Simple math: If the number of homeowners is rising, it means that the number of renters is falling. The number of households renting the roofs over their heads fell by 110,000, to 43.2 million, from 2017 through 2018. That’s in stark contrast to the previous 12 years, when the number of tenants grew by nearly 850,000 households annually.
Increasing rents, going up 3.6% annually in 2018 compared with 3.8% in 2017, may have something to do with it.
“Rents are high and rising,” says Hale. But homeownership tends to be more of a fixed cost as folks know what their monthly mortgage will be. “Renters tend to pay more of their income toward housing than homeowners do.”
But here’s another shift: Renters are becoming wealthier. About a quarter of them now have household incomes of $75,000 or more. That means many are choosing not to become homeowners even though they could afford to do so.
But more middle-class renters, earning between $45,000 and $75,000 a year, are becoming cost-burdened. The percentage of these folks spending more than 30% of their income (which is considered the max folks should pay for housing) shot up from 13% in 2001 to 25% in 2018, according to McCue.
Even with record demand from prospective buyers, the rate of home construction slowed in 2018. Yes, the number of new, completed homes was up 2.8%, to 1.18 million units, from 2017 to 2018, but that growth rate is actually the lowest since 2012, when the recovery from the Great Recession kicked in.
“We’re eight years into the recovery, and we’re still only 75% back to normal rates of home building,” says McCue.
He blames the lack of building to increasing land prices, cumbersome local regulations, and a construction labor shortage that make building more difficult and expensive.
Still, building was more prevalent in some parts of the country than others. For example, home construction starts were up 7% in the West, where the population is growing, and 5% in the South, where land is more plentiful and cheap. But they fell just under 1% in the expensive Northeast, where there’s not as much land available to build on, and dropped 4% in the Midwest.
“Some of that is simply a reflection where people are moving,” says Hale.
Most first-time buyers don’t want—and can’t afford—a megamansion. They’re seeking smaller, more affordable single-family houses. But builders aren’t putting them up.
Just 22% of single-family homes clocked in at under 1,800 square feet, according to the report. That’s compared with 32% from 1999 through 2011.
That’s because it’s simply more profitable to put up bigger, more luxurious abodes and sell them for higher prices.
“It’s difficult for builders to build modest-sized, more affordable homes,” says McCue. But “there’s plenty of demand out there for these [homes].”
The lack of homes, the rising prices, and the crazy competition may be why the number of home sales is falling. After years of a white-hot, frenzied real estate market, 5.3 million existing (i.e., previously lived-in) residences were sold in 2018. That’s compared with 5.5 million in 2017.
“Home sales declined mainly at the end of 2018, when mortgage interest rates increased,” says McCue. Even the slightest interest rate increase can add quite a bit to a monthly mortgage payment.
But there are now more homes available for sale, even though they tend to be on the more expensive side. The number of homes for sale priced at under $200,000 has dropped, while more properties going for $750,000 or more are coming onto the market, says Hale.
“The biggest increase in inventory is in expensive homes for sale, where demand is the weakest,” she says.
Buyers shouldn’t get too excited. Home prices aren’t coming down—they’re just not increasing at such a fast pace. Home price appreciation went from 6.5% at the beginning of 2018 to just 4.6% at the end of the year, according to the S&P/Case-Shiller National Home Price Index.
The median home list price is $310,000, according to realtor.com.
“Home prices have gotten so high in so many areas that it was just unsustainable to keep rising at the rates that they had,” says McCue. “Home prices have far outpaced rises in income over the last five years.”
Roseview-PMRG Fund I, a discretionary fund managed by Roseview Investment Advisors, has sold Westshore Center, a Class A, 217,022-square-foot office building in the heart of the Westshore Business District in Tampa, Fla. America’s Capital Partners acquired the asset for $52 million, according to Hillsborough County public records. A Cushman & Wakefield Investment Sales team represented the seller in the transaction. The property last changed hands in 2015, when it was purchased for $40 million.
Situated at 1715 N. Westshore Blvd., Westshore Center is close to Interstate 275, just south of the International Plaza and Bay Street. Downtown Tampa is 5 miles east of the property, while Tampa International Airport is less than 4 miles north. The immediate area hosts many restaurants and shops as well as more than 5,000 hotel rooms.
Developed in 1984 on a 2.7-acre site, the nine-story building has 23,947-square-foot floorplates and offers 866 parking spaces. In 2015, the property underwent complete renovations worth $2.5 million. The updates feature modernized elevators, upgraded common areas and a new café. Westshore Center is currently 84 percent occupied, with a tenant roster including Reynold Smith & Hill, United Soccer Leagues and USI.
The Cushman & Wakefield Investment Sales Team of Vice Chairman Mike Davis, Executive Managing Director Rick Brugge and Associate Rick Colon represented the seller in the disposition. The same team arranged the sale of a four-building, Class A business park located 1 mile west of Westshore Center. That asset commanded a little over $53 million.]]>