The estimated amount of home equity that
could be tapped by homeowners as of
third-quarter 2018, down $140 billion
from the second quarter
Source: Black Knight
Mortgage-lender optimism is flagging
The profit outlook for mortgage lenders hit a five-year low in the fourth quarter of 2018
as companies were squeezed by fierce competition for a shrinking pool of borrowers,
according to Fannie Mae’s lender sentiment survey. The outlook declined for the ninth
consecutive quarter in the survey. Competition was the reason cited most often for the
pessimism. The second major cause was falling demand for mortgages, according to
Fannie. Optimism was at the lowest point since Fannie began the survey in 2014.
Survey: Most still think it is a good time to buy
In the final months of 2018, the majority of people still believed it was a good time to
buy a house, but fewer people thought so than a year earlier, the National Association of
Realtors (NAR) reported. Some 63 percent of the homeowners and renters who responded to NAR’s fourth-quarter 2018 survey said they thought it was a good time to buy,
down from 72 percent in fourth-quarter 2017. The survey was conducted via telephone
between this past October and December, and was based on 2,710 responses.
Home equity momentum is losing steam
Home equity levels rose across most of the U.S. in the third quarter of 2018, but the
pace slowed with the cooling off in home prices, according to CoreLogic. On average,
a homeowner with a mortgage gained 9. 4 percent in home equity over the 12 months
through this past September — representing a total dollar gain of $775.2 billion. The
average household equity gain through this period was $12,400. That also was the
slowest annual increase in two years. This past second quarter, for example, the annual
average equity gain for a homeowner was $16,000.
Decline in home flips reflects slowing housing market
The business of buying, fixing up and rapidly re-selling homes for a profit was down in
the U.S. on an annual basis for the third-consecutive quarter through September 2018,
according to Attom Data Solutions. Attom estimated total home flips at 45,901 in the
third quarter of 2018, the lowest level since the first quarter of 2015, a reflection of a
slowing housing market. This was the third-longest period of decline in home flipping
in recent times, according to Attom.
Loan delinquencies surge in disaster areas
Loan performance remained exceptionally strong on a nationwide basis across most of
the United States in the third quarter of 2018, but disaster-affected areas in California,
the Carolinas and Hawaii were seeing a spike in late payments, according to CoreLogic.
The effects of Hurricane Florence, in particular, were causing problems in the Carolinas.
Seven of the top eight metro areas that saw the biggest increase in overall delinquency
rates were in North Carolina and South Carolina, CoreLogic reported. n
By Victor Whitman
The annualized pace of single-family home
starts in November 2018, down 13 percent
year over year
Source: U.S. Census Bureau
The annual pace of existing-home sales
this past November, down 7 percent
compared to November 2017
Source: National Association of Realtors