Al’s Column

Nov. 18/25 2013; Volume 27/number 15

By FCNews staff

AFFORDABILITY DECLINES: Strengthening home prices and increased interest rates contributed to lower housing affordability in the third quarter, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). In all, 64.5% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $51,000, according to the U.S. Census. This is down from the 69.3% of homes sold that were affordable to median-income earners in the second quarter, and the biggest HOI decline since the second quarter of 2004. “Housing affordability is being negatively affected by a ‘perfect storm’ scenario,” observed NAHB chairman Rick Judson.
“With markets across the country recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor.”

FORECLOSURES DOWN: Fewer U.S. homes are completing the foreclosure process because investors are increasingly buying up the distressed properties at public auction, according to tracking firm RealtyTrac. Some 37,775 homes nationwide completed the foreclosure process in October, down 29% from a year ago.
Foreclosure starts also fell 34% from October 2012, the firm said.
This figure has been down nationally on an annual basis for 15 months in a row, while home repossessions have fallen annually for 11 straight months.
“We’re still firmly on the road back to normal foreclosure levels, but continue to see the problem persist in areas that had delays in the foreclosure process,” said Daren Blomquist, a vice president at RealtyTrac.

EMPLOYMENT GROWS: Construction employment hit a 50-month high in October, according to the Associated General Contractors of America (AGCA). The group analyzed government data and found that construction employers added 11,000 jobs in October, the fifth consecutive month of sector job gains.

In addition, the industry unemployment rate fell to 9%. Association officials said the new employment figures indicate there was little nationwide short-term impact from the federal government shutdown and cautioned that skilled worker shortages are likely to grow as the industry continues to expand. “After some very dramatic declines and years of sluggish growth, the construction industry is slowly adding jobs,” said Ken Simonson, the association’s chief economist. “The federal government shutdown did not appear to have undermined construction job growth in the short term, probably because it did not significantly impact projects that were already underway.”
Construction employment totaled 5,834,000 in October, an increase of 185,000 from a year earlier, and is now at the highest level since August 2009, AGCA reported.

FACING OBSTACLES: In a rare gathering of CEOs and senior executives from the biggest names in mortgage lending, realtors were told to expect market growth in 2014 and to prepare their buyers for transactions with heavy documentation requirements. NAR president Gary Thomas and CEO Dale Stinton moderated the discussion during the recent “Straight from the Top: Insights from Lending Leaders” session at the 2013 Realtors Conference and Expo, where the top mortgage industry executives expounded on new regulatory hurdles that could temporarily restrict lending to some buyers, but will likely even out over time. The Qualified Mortgage (QM), or ability-to-repay rule, will become effective in January 2014 and contains a number of underwriting standards that will constrict mortgage availability and deny credit to some first-time homebuyers, said Bill Emerson, CEO of Quicken Loans. The QM rule requires significant documentation from consumers to justify lenders’ underwriting decisions.

Must Read

Bostik takes home two Starnet Design Awards

Wauwatosa, Wis.—Bostik, Inc., a leader in specialty adhesives and installation systems for building construction, recently received two 2020 Starnet Design Awards. Each year, the...

NeoConnect Platform continues through fall

Chicago—NeoConnect, NeoCon's digital hub, will continue to connect the community by offering new content and resources through the fall. The hub brought the commercial...

Crossville launches Swatches wall tile collection

Crossville, Tenn.—Crossville has launched Swatches, a new ceramic wall tile collection notable for its extensive color options. The product development team created the vast spectrum...

Retail Recovery Across America: Lewis Floor & Home

https://youtu.be/V_0QuI0x8t8 In Part I of this episode of FCNews' Retail Recovery Across America series, FCNews publisher, Steven Feldman, sits down with Steven Lewis of Lewis...

NTCA names winners of Tom Ade Scholarship Awards

The National Tile Contractors Association (NTCA) recently announced its 2020 Tom Ade Scholarship Award winners for academic achievement. This year’s program featured one $5,000 Grand...

Taj Flooring names Sullivan director of marketing

Elgin, Ill.—TAJ Flooring, a leader in commercial-grade luxury vinyl flooring in the U.S., named Elizabeth Sullivan as director of marketing. In this position, Sullivan...
X