Discussing the latest Existing home sales numbers from NAR, another bank gets a wrist slap, a bunch of positive economic news and more…
NAR just reported that 2016 was the best year for existing home sales in a decade. In December, existing sales decreased 2.8% from November. Existing home sales were only 0.7% higher than a year ago. Not very encouraging and NAR blames rising mortgage rates and tight inventory for the weak numbers.
Yesterday, the Consumer Financial Protection Bureau (CFPB) charged two units of the Wall Street mega bank, Citigroup, with insidious fraudulent acts against homeowners while it imposed a modest $28.8 million in relief and penalties. The penalty portion of $7.4 million is meaningless because this is a bank that serially breaks the law, laughs at its regulators, and, most outrageously, it was simultaneously engaging in heinous misdeeds against Americans while the U.S. government was using taxpayer money to bail out its failed business model of brazen financial frauds. The $7.4 million in fines also stands in contrast to the $14.9 billion that Citigroup reported as net income for 2016.
I wrote about this BS yesterday but this excellent article talks about this in more depth.
From the Richmand Fed:
Fifth District manufacturing activity strengthened in January, with continued growth in new shipments and the volume of new orders. Employment picked up, although increases in average manufacturing wages were less widespread than in December. The average workweek continued to grow, but increases were less prevalent in January than a month earlier. Growth in input prices moderated, while growth in prices of finished goods accelerated.
Good news and great way to start the new year. Lets hope it continues!
A tactic that helped define the height of homebuying madness in the U.S. in the years before the market collapsed is rearing its head again. Home flippers, who buy homes as a speculative bet on short-term price appreciation, accounted for 6.1 percent of U.S. home sales in 2016, according to Trulia, which defines a flip as a property sold twice in a 12-month period in arm’s-length transactions. That’s the highest share since 2006, when flips accounted for 7.3 percent of sales.
This article is talking about the number of homes being flipped across the entire U.S. but there is a decent amount of people flipping homes in our area. Nothing wrong with people flipping homes if they do quality work and understand the market they are working in.
Also from the Richmond Fed:
Service sector activity strengthened in January, according to the most recent survey by the Federal Reserve Bank of Richmond. Revenue increases were prevalent, particularly among retailers. Big-ticket sales remained robust, and shopper traffic increased. Retail inventories were little changed. Survey participants were upbeat about demand for their goods and services during the next six months.
Employment measures in the sector continued to improve. The number of employees rose modestly, while wage gains in the sector persisted.
On average, service sector prices moved up more rapidly than a month earlier, particularly in retail. Survey participants anticipated further acceleration in the six months ahead.
More positive news as we head into 2017!
Fannie Mae has agreed to backstop up to $1 billion in debt from the country’s largest owner of single-family rental homes, the first time the government-sponsored entity has agreed to guarantee the debt of an institutional owner of single-family houses. After the foreclosure crisis, the New York investment firm spent roughly $10 billion buying and fixing up houses to rent through Invitation Homes. Fannie Mae’s involvement is a sign that it believes homeownership will remain out of reach for many Americans and that Wall Street’s housing wager will be become a long-term business, not just an opportunistic trade made after the foreclosure crisis.
Sorry but this is wrong in my opinion. Fannie should work to help people become home owners NOT help Wall Street become a mega landlord.
Please also read Financialization of Rents Gets Taxpayer Guarantees
The Chemical Activity Barometer (CAB) started the year on a strong note, posting a monthly gain of 0.4 percent in January. This follows a 0.3 percent gain in December, November and October. All data is measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB was up 4.6 percent over this time last year. On an unadjusted basis the CAB climbed 0.3 percent in January, following a 0.5 percent gain in December.
The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators. In January all of the four core categories for the CAB improved and the diffusion index was stable at 65 percent. Production-related indicators were positive, with the housing report indicating accelerating activity and trends in construction-related resins, pigments and related performance chemistry generally improved. Other indicators, including equity prices, product prices, and inventory were also positive.
Yet another positive indicator for 2017!
The federal banking agencies today fined ServiceLink Holdings, LLC (ServiceLink Holdings), $65 million for improper actions by its predecessor company, Lender Processing Services, Inc. (LPS), which resulted in significant deficiencies in the foreclosure-related services that LPS provided to mortgage servicers.
Another day, another fine or settlement. During the S&L crisis, people went to prison. Today, things are quite different…