Morning Briefing: 7-year high for single-family starts

by Steve Randall17 Dec 2015
7-year high for single-family starts
Housing starts were up 10.5 per cent in November to a seasonally adjusted annual rate of 1.173 million units.  Data from the U.S. Department of Housing and Urban Development and the Commerce Department revealed that single-family production increased 7.6 per cent to a seasonally adjusted annual rate of 768,000 units, its highest reading since January 2008. Multifamily production rose 16.4 per cent to 405,000 units.

“As we close out the year, we can see that the housing sector has made headway in 2015, and we expect the recovery to continue at a modest pace” said David Crowe, chief economist of the National Association of Home Builders. 
25 million homes face this risk
Analysis of 64 million homes has found that 25 million of them are in zip codes with high or very high risk from manmade environmental hazards. The RealtyTrac study reveals that the media price of the 38 per cent of homes in those areas are 15 per cent lower than homes in low or very low risk zip codes. Median home prices in high risk and very high risk zip codes were still 1.8 per cent lower than they were 10 years ago on average, even while median home prices in low risk zip and very low risk zip codes were up 5.3 per cent from 10 years ago. Home price appreciation over the past year was also stronger in low and very low risk zip codes, up an average of 7.3 per cent from 2014 to 2015 compared to an average increase of 6.4 per cent in high risk and very high risk zip codes. Southern and central California and Northeast Ohio dominate the highest risk areas.
Mortgage applications down last week
Mortgage applications were down again for the week ending Dec 11 according to the Mortgage Bankers Association. Its Market Composite Index, decreased 1.1 per cent on a seasonally adjusted basis from one week earlier and decreased 2 per cent on an unadjusted basis.   The Refinance Index increased 1 per cent; the seasonally adjusted Purchase Index decreased 3 per cent; the unadjusted Purchase Index decreased 7 per cent.

The refinance share of mortgage activity increased to 60.7 per cent of total applications from 58.7 percent the previous week. ARM share decreased to 6.0 per cent; FHA share remained unchanged from 14.0 per cent; VA share increased to 11.2 per cent from 10.8 per cent; USDA share of total applications decreased to 0.6 per cent from 0.7 per cent the week prior.