Morning Briefing: Single-family starts at 10-year high

by Steve Randall17 Mar 2017
Single-family starts at 10-year high
The level of single-family home starts has risen to its highest level since 2007, figures from the HUD and US Census Bureau reveal.

Housing starts in February were up 3 per cent to 1.288 million units (seasonally adjusted annual rate) but for single-family homes there was a 6.5 per cent jump to 872,000 units. Multi-family starts fell 3.7 per cent to 416,000.

“The growth in the single-family arena is very encouraging, but may be partly attributable to unusually warm weather conditions throughout most of the country,” said NAHB Chief Economist Robert Dietz. “The modest drop in multifamily starts is in line with our forecast, which calls for this sector to continue to stabilize in 2017.”

The increase in housing starts was driven by a 35.7 per cent surge in the West while increases in the other three regions declined; 3.8 per cent in the South, 4.6 per cent in the Midwest, and 9.8 per cent in the Northeast.

There was a sharp drop in multifamily permits issued in February (down 21.6 per cent) while single-family permits were up slightly (3.1 per cent) to reach their highest level since 2007.

Mortgage rates rise following Fed
The Fed’s increase in interest rates has begun to see mortgage rates rise with banks and other lenders reacting quickly to the 0.25 per cent hike.

Freddie Mac’s weekly survey of mortgage rates shows that rates were already rising ahead of the Fed.

For the week ending March 16 an average 30-year FRM with an average 0.5 point was up to 4.30 per cent from 4.21 per cent a week earlier; the average 15-year FRM with an average 0.5 point was up to 3.50 per cent from 3.42 per cent; and the average 5-year ARM with an average 0.4 point was 3.28 per cent, up from 3.23 per cent a week earlier.

"As expected, the FOMC announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year,” said Sean Becketti, Freddie Mac’s chief economist. “Although our survey was conducted prior to the Fed's decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year mortgage rate 9 basis points to 4.30 percent this week.”

Becketti sees further increases ahead due to increasing inflation, continued gains in the labor market and the expectation for further interest rate hikes.

Black Knight launches new software for smaller, independent brokers
Regional and mid-market mortgage lenders and independent mortgage brokers can now access a new software solution from Black Knight.

The LoanSphere Empower Now system is based on the firm’s Empower loan origination system, incorporating its Data Hub and Motivity solutions.

“Historically, regional and mid-market lenders have selected an LOS to meet their immediate needs, knowing that they may eventually need a different solution to accommodate future growth. Then, as they expanded, these lenders had to migrate to a new system to meet the more robust requirements of their growing business and scalability needs,” said Jerry Halbrook, president of Black Knight’s Origination Technologies division.

He added that this new system is scalable as the business grows.

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