Home flipping has best year in a decade
The home-flipping market was hot in 2016, according to Attom Data Solutions. Flippers completed 193,009 home flips last year, which was up 3.1 percent year over year
and the most sales since 2006. The share of home flips in 2016 rose to 5. 7 percent of
all home sales, which exceeds the level recorded annually between 2000 and 2004.
The figures pale in comparison to the last boom in flipping, however. At its peak in
2005, there were 338,207 home flips in the markets that Attom Data Solutions tracks,
accounting for 8.2 percent of all sales.
Today’s home loans pose little default risk
Home loans originated at the end of 2016 were of the highest quality since 2001 and
posed little default risk, CoreLogic reported. Closed loans held a slightly lower default risk than a year earlier, reflecting the higher volume of refinances, which tend
to have lower loan-to-value and debt-to-income ratios, the company said. Credit risk
and fraud risk are expected to rise as mortgage rates rise and the market becomes
more purchase oriented.
FHA downpayment assistance draws more fire
The U.S. Department of Housing and Urban Development’s Office of Inspector General
(OIG) remains concerned about downpayment-assistance programs run by state housing-finance agencies that lock borrowers into higher rates. In an audit covering January
2012 through September 2015, the OIG identified 114,200 Federal Housing Administration (FHA) loans with a balance of more than $16.1 billion that received downpayment
assistance through a government agency. The OIG contends it is a violation of FHA
guidelines to lock borrowers into higher rates in return for downpayment assistance.
Home equity cash-outs climb
Home equity lines, second mortgages and cash-out refinances are on the rise again,
says Moody’s Investors Service. During the first nine months of 2016, borrowers
|extracted $70.8 billion through cash-out refinances, Moody’s reported, the most
since 2009 over the same period. Citing Equifax data, Moody’s also reported that new
home equity lines of credit (HELOCs) and closed-end home equity loans totaled almost
2.3 million in 2016, up 21 percent from two years earlier and the most since 2008.
Confidence in the housing market runs high
Consumer confidence in the U.S. housing market rose to a new high this past
February, according to Fannie Mae. In a monthly telephone survey, more consumers
expressed the view that it is a good time to buy or sell a home, Fannie Mae reported.
More Americans also expressed confidence that they would not lose their jobs. n
By Victor Whitman
The net gain per home loan originated for
nonbanks in fourth-quarter 2016, down
68 percent from the prior quarter
Source: Mortgage Bankers Association
The annual pace of single-family home starts
this past February, the highest level since
Source: U.S. Census Bureau
The estimated annual rate of existing-home
sales this past February, up 5. 4 percent year
Source: National Association of Realtors