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It’s a Beautiful Day in Housing

Phil Hall
Nov 17, 2016

The latest housing data is in, and the news is wonderful across the board!

Single-family housing starts in October were at a rate of 869,000, a 10.7 percent increase from the revised September figure of 785,000, according to data from the U.S. Census Bureau and U.S. Department of Housing & Urban Development (HUD). Even more remarkable are the level of privately-owned housing starts in October, which were at a seasonally adjusted annual rate of 1,323,000: They represented a 25.5 percent spike above the revised September estimate of 1,054,000 and were 23.3 percent above the October 2015 rate of 1,073,000.

Single-family authorizations in October were at a rate of 762,000, up 2.7 percent from the revised September figure of 742,000, while privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,229,000, which is 0.3 percent above the revised September rate of 1,225,000 and is 4.6 percent higher than the October 2015 estimate of 1,175,000. Single-family housing completions in October were at a rate of 749,000, up 3.9 percent from the revised September rate of 721,000, while privately-owned housing completions in October were at a seasonally adjusted annual rate of 1,055,000, up 5.5 percent from the revised September estimate of 1,000,000 and 7.2 percent above the October 2015 rate of 984,000.

Also on the rise were mortgage rates. Freddie Mac’s Primary Mortgage Market Survey (PMMS) found the 30-year fixed-rate mortgage (FRM) averaging 3.94 percent for the week ending Nov. 17, up from last week when it averaged 3.57 percent. The 15-year FRM this week averaged 3.14 percent, up from last week when it averaged 2.88 percent. And the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.07 percent this week, up from last week when it averaged 2.88 percent.

A separate tracking of mortgage rates by Bankrate.com recorded even greater gains: According to Bankrate.com’s data, the 30-year fixed FRM averaged 4.01 percent, up from 3.73 percent last week, while the 15-year FRM averaged 3.21 percent, up from 2.97 percent last week, and the five-year Treasury-indexed ARM averaged 3.39 percent, up from 3.15 percent last week.

As for existing homeowners, ATTOM Data Solutions reported that more than 13 million homeowners matched the definition of “equity rich” (loan-to-value ratio of 50 percent or lower) as of the end of the third quarter, representing 23.4 percent of all homeowners with a mortgage. This marks a year-over-year increase of more than 2.6 million homeowners. Among the largest metro areas, those with the highest share of equity rich homeowners were San Jose (55.7 percent), San Francisco (49.8 percent), Honolulu (39.3 percent), Los Angeles (38.2 percent) and Pittsburgh (34.5 percent).

Other metro areas in the top 10 for highest share of equity rich homeowners were Portland (33.1 percent), San Diego (33.0 percent); Oxnard-Thousand Oaks-Ventura, Calif. (32.7 percent); Seattle (31.5 percent); and Austin, Texas (31.0 percent).

“Close to one in every five U.S. homeowners with a mortgage is now equity rich thanks to a combination of rising home prices and lengthening homeownership tenures,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, the new parent company of RealtyTrac. “Median home prices increased on a year-over-year basis for the 18th consecutive quarter in the third quarter of 2016, and homeowners who sold in the third quarter had owned their home an average of 7.94 years—a new high in our data and substantially higher than the average homeownership tenure of 4.26 years [during the] pre-recession. As homeowners stay in their homes longer before moving up, they are amassing more home equity wealth.”

Still, there are many homeowners that are struggling: more than six million homeowners were seriously underwater at the end of the third quarter, which accounts for 10.8 percent of all homeowners with a mortgage. Nonetheless, that represents a decrease of more than 854,000 homeowners from a year ago. 

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