Freddie Mac Serious Delinquencies Fall To Lowest Since June 2008 As Home Prices Grow At 5.87% YoY Clip

Freddie Mac reported that the Single-Family serious delinquency rate in February was at 0.98%, down from 0.99% in January.  Freddie’s rate is down from 1.26% in February 2016.  That is the lowest reading since June 2008.

Notice how tame serious delinquencies were during the housing/credit bubble. The US seems to be repeating the housing bubble in terms of house price growth and low serious delinquencies, but without the higher levels of mortgage originations to borrowers with credit scores less than 620.

Bear in mind, the Case-Shiller reading is for January and it is almost April. Be that as it may, home price growth is at 5.73% YoY versus wage growth at 2.3% YoY, over 2x. And yes, Seattle, Portland and Denver lead the nation in YoY growth in home prices. The slowest growing cities? New York City and Cleveland (the Shooting Guards JR Smith/Iman Shumpert effect having been traded from the Knicks to the Cavaliers).

It says here that when home prices are growing at two times wage growth it would mean we have a housing bubble … again.

 

 

 

New Home Sales Rise 6.1% MoM in February (Mostly In Midwest) Following -3.7% Decline in Existing Home Sales

New home sales rose by 6.1% in February, greater than expected.

The biggest winner? The Midwest! (Home of the Chicago Cubs, Cleveland Indians and … Pawnee Indiana!)

The growth in new home sales has lagged existing home sales since 2009.

But in terms of median price, median price for new home sales has been accelerating from median price for existing home sales since 2009.

Existing home sales? Down 3.7% MoM in February.

The Midwest includes Pawnee Indiana!

US 1-Unit Housing Starts Increase 6.47% In Febuary, Back To 1993 Levels (Despite 25% Increase In Population Since 1993)

According to the US Census Bureau, housing starts rose 2.96% in February.

However, 1-unit (detached) housing starts rose 6.47%, finally getting back to 1993 levels. However, the US population rose 25% from 1993 to 2015.

Of course, there is also multifamily housing which fell -7.69% in February. But the general trend in multifamily starts has been higher in recent years than before the financial crisis and housing bubble.

Housing starts in the West rose 35.71% in February while other regions were down. Authorizations (permits) showed the same pattern except for the Midwest which rose 25.38% with all other regions declining.

After all, with the Cleveland Cavaliers as the reigning NBA champions and the Cleveland Indians making it to the World Series (before losing to the Chicago Cubs), it is not surprising that housing permits are up in Ohio.

Oh wait. I forgot about the Cleveland Browns that won only one game last year. Perhaps they should change their name to the Cleveland Gremlins. 

 

 

SEC says Mexican Homebuilder Homex reported fake sales of more than 100,000 homes

The global credit and housing bubble of the last decade certainly helped destroy wide swatches of the US economy. And Mexico, as it turns out.

WASHINGTON (MarketWatch)The Securities and Exchange Commission said a Mexican homebuilder reported fake sales of more than 100,000 homes. Desarrolladora Homex S.A.B. de C.V. HOMEX, -17.78% inflated the number of homes sold during a three-year period by approximately 317% and overstated its revenue by 355%, or approximately $3.3 billion, the SEC said. Homex filed for the Mexican equivalent of bankruptcy protection in April 2014 and emerged in October 2015 under new equity ownership. Homex cooperated with the SEC investigation, the agency said, and neither admitted nor denied the findings.

Yes, the Mexican homebuilder enjoyed peak success during the peak of the housing bubble, peaking at almost 1,200 Pesos in June 2008.  Homex is now trading for a whopping 0.72 Pesos per share.

homex

And on the news of the SEC’s findings, HOMEX plunged even further.

homexid

Homex cooperated with the SEC investigation, the agency said, and neither admitted nor denied the findings.

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