News

Despite a continuing surge in builder confidence, housing starts dropped 3.0 percent in November to 861,000 the Census Bureau and HUD reported jointly Wednesday. At the same time start activity for both September and October was revised lower. Applications for permits, according to the report, rose 3.6 percent to 899,000--the highest level since July 2008 as permit activity for October was revised slightly upward.

The National Credit Union Administration (NCUA) announced Monday it has filed suit against JPMorgan Securities and Bear Stearns over allegations of falsely representing the quality of mortgage-backed securities (MBS) sold to corporate credit unions. At $3.6 billion, the legal action is the largest suit ever filed by the NCUA. According to the agency, Bear Stearns (purchased in 2008 by JP Morgan) misrepresented the underwriting standards of loans in securities sold to U.S. Central, Western Corporate, Southwest Corporate, and Members United Corporate. The four credit unions became insolvent and were placed into NCUA conservatorship and liquidated.

After rising in the third quarter, overall economic growth is expected to decline this quarter and in early 2013, according to Fannie Mae. However, the GSE anticipates further strengthening in the housing market. Economists at Fannie Mae anticipate economic growth of less than 2 percent for the first half of 2013 followed by more accelerated growth for the remainder of the year. Fannie Mae anticipates a 7.5 percent rise in home sales over the course of 2013 after this year's 10.2 percent increase.

Foreclosure inventory in California continued its steady decline in November, according to data from ForeclosureRadar. The total number of preforeclosures, foreclosures scheduled for sale, and REOs fell 7.6 percent from October to November and declined by 31.8 percent from a year ago. ForeclosureRadar said, ""the significant decline in foreclosure inventory over the past year has contributed to what some are calling an 'inventory crisis' of total homes for sale."" The company attributes foreclosure cancellations as part of the reason for the decline.

According to RE/MAX's latest National Housing Report, prices rose both on a month-to-month and year-over-year basis. The median price for homes sold in November was 3.6 percent higher than October and 6.9 percent higher than November 2011. November is the 10th straight month to experience year-over-year price gains. Perhaps the biggest contributing factor the continued rise in prices is a dwindling inventory. The average number of homes for sale in November was about 8.0 percent lower than in October and 29.1 percent lower than the previous year.

On Monday, the CDPE hosted a webinar to discuss short sale updates through the government’s Home Affordable Foreclosure Alternatives Program (HAFA), which is part of the Making Home Affordable program. Laurie Maggiano, director of policy at Treasury's homeownership preservation office, and Alex Charfen, CEO of the Charfen Institute, led the conversation on the updates. The new policy changes for HAFA will take effect February 1, 2013, but servicers can begin implementing the changes earlier. One of the updates discussed during the webinar is the requirement for servicers to make a decision on a borrower's request for a HAFA short sale within 30 days.

Builder confidence continued to improve in December as the Housing Market Index (HMI) rose two points to 47, its highest level since April 2006, the National Association of Home Builders reported Tuesday. It was the eighth straight monthly increase in the index and matched economist expectations.

With fluctuations in rental and owner markets over the past few years, it can be difficult to determine whether one is better off renting or owning. In Manhattan, renting is currently the more financially viable option, according to a new study by the Federal Reserve Bank of New York.

The new year may bring with it new reforms for the Federal Housing Administration (FHA) as Congress considers a bill designed to bring the agency back to fiscal solvency. It was revealed in November that FHA's Mutual Mortgage Insurance (MMI) Fund--its protection against the cost of default claims--had fallen to a reserve ratio of -1.44 percent for fiscal year 2012. The agency is mandated by law to have a ratio of 2 percent. In response, Sen. Pat Toomey (R-Pennsylvania) has introduced an amendment to reduce the risk of what would be FHA's first-ever taxpayer bailout.

The housing market has managed to be one of the few areas in the economy that is ""essentially unshaken"" by fiscal cliff uncertainties, according to a commentary from the Wells Fargo Securities Economics Group. Based on recent moves from the Federal Reserve, the commentary further noted the Fed ""appears to be banking on a housing recovery."" Last week, the Fed announced plans to continue buying $45 billion in long-term securities amid the expiring Operation Twist. The Fed also maintained its pace of buying $40 billion in MBS. In addition to actions from the Fed, the housing market has gained support from other factors such as an improving unemployment rate, increasing home prices and sales, and decreasing foreclosures.