Early Christmas Gift for #Housing Industry: #Economic Confidence at 9-Year High

Posted on in Economy, FHA, Government, GSE, Housing, Industry, Mortgages, TV Appearances


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December 21, 2016
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Early Christmas Gift for Housing Industry: Economic Confidence at 9-Year High

Here’s an early Christmas present for the Housing and Mortgage industries,  Americans’ confidence in the economy has hit a nine-year high.

Gallup’s U.S. Economic Confidence Index is up from the previous high, which was just recorded in both of the prior two weeks. The first positive double-digit index score since the inception of Gallup Daily tracking in 2008 reflects a stark change in Americans’ confidence in the U.S. economy from the negative views they expressed in most weeks over the past nine years.

Last month’s election of Donald Trump not only marked a change in the country’s political power structure but also significantly improved Republicans’ economic confidence — pushing the index into positive territory for the first time since March 2015.

Americans’ assessments of current conditions and their outlook for the economy are the most positive they have been in nine years. Thirty-one percent of Americans rated the economy as “excellent” or “good” last week, while 22% said it was “poor,” resulting in a current conditions score of +9.

The latest economic outlook is the result of 53% of Americans saying economic conditions in the country are “getting better,” and 42% saying they are “getting worse.”

DeRegulation: Two Republicans Look to Write the Next Dodd-Frank

Idaho Republican Sen. Mike Crapo is a rare dealmaker who has negotiated across the Capitol’s partisan divide. Texas GOP Rep. Jeb Hensarling’s record has been defined more by trying to cut government than cutting deals with Democrats.

The fate and shape of the sweeping financial deregulation promised by President-elect Donald Trump—and eagerly anticipated by investors pushing up bank stocks—hangs on these two lawmakers, the point men in their respective chambers on financial policy. Mr. Crapo needs to win over enough pro-regulation Democrats to steer a bill through the closely divided Senate, without losing House Republicans, led by Mr. Hensarling, hungry for a wholesale rollback of postcrisis rules they believe stifle the economy.

The two conservatives share a desire to attack the landmark 2010 law named for their liberal Democratic predecessors, Connecticut Sen. Chris Dodd and Massachusetts Rep. Barney Frank. But they may not agree on the means to do it, or just how far to go.

Mr. Hensarling, embarking on his third and final two-year term chairing the House Financial Services Committee, has subscribed to the academic journal of the libertarian Cato Institute since age 18, and he got his political start as an aide to Texas conservative Sen. Phil Gramm. A die-hard Beatles fan, he has peppered wonky speeches with references to Kanye West and the Dalai Lama.

Mr. Hensarling borrows a mantra from Margaret Thatcher: “First you win the debate, then you win the vote.” His staff pens strategies for congressional hearings with questions to cajole witnesses, such as Fed Chairwoman Janet Yellen, into statements that align with Mr. Hensarling’s agenda.

read more: http://www.wsj.com/articles/two-republicans-look-to-write-the-next-dodd-frank-1482164782

Red-Hot Housing Stocks May Be on Shaky Ground

Homebuilding stocks have been some of the hottest post-election trades, but there’s a chance that they could be standing on some shaky ground. While the homebuilders have surged more than 9 percent since the election thanks, in part, to strong earnings and an improving economic outlook, the stocks have retreated in the past week and a half. But the troubles have been building for the last few years, according to Oppenheimer technician Ari Wald, who describes “mixed signals” in the charts of the home construction ETF ITB.

“The lower relative highs over the past few years do indicate a more questionable long-term trend,” he said Monday on CNBC’s “Power Lunch.”

The ETF holds well-known names such as Pulte and Toll Brothers, both of which have seen fairly large drops in December along with construction company Lennar. Home Depot is also among the largest holdings and one of the only big stocks in the ETF that hasn’t seen a significant December decline.

read more: http://www.cnbc.com/2016/12/19/this-chart-shows-the-red-hot-housing-trade-may-be-on-shaky-ground.html

NYC’s Second Avenue Subway Will Boost Real Estate

After roughly a century of planning and false starts, the first Second Avenue Subway train will depart the Upper East Side at noon on Jan. 1, 2017, the governor and his MTA chairman announced Monday morning. ‘Deadlines matter. It is going to be an accomplishment for every New Yorker,’ Cuomo said at a press conference at the Museum of Modern Art. ‘We’re going to start with a New Year’s Eve party to celebrate and a ceremonial ride. This really is just the beginning, I believe, of a new period.’ The announcement’s setting was designed to underscore what Cuomo considers to be another key accomplishment in what he calls the subway’s imminent, ‘on-time’ opening: art installations by Chuck Close, Sarah Sze, Vik Muniz and Jean Shin. In a subsequent press release, Cuomo said the art installations, which will join an existing collection of permanent subway art, represent the ‘largest permanent public art installation in New York history.

read more: http://politico.pro/2gUFQE1

 NYC Building Sells for Triple 2013 Price

Three years after buying 125 West 25th Street as it neared foreclosure, Normandy Real Estate Partners has sold the Chelsea building for $150 million, the company announced in a press release. Buyer AFIAA, a Swiss pension fund, closed the whopping purchase last Friday, according to a spokeswoman for the seller. The 138,000-square-foot building between Avenue of the Americas and Seventh Avenue is anchored by the headquarters for Peloton Interactive, an indoor cycling company that occupies about 52,600 square feet. Normandy, Waterbridge Capital and NTT Urban Development bought the building in July 2013 for $54 million, property records indicate. The new owners saved the then-empty building from foreclosure, according to The Real Deal, which in September reported that the AFIAA deal was in contract.


Lux In Flux

Price halved for an apartment in the building Barbara Walters once lived,” by 6sqft’s Emily Nonko: “This opulent apartment has been patiently waiting to find a buyer. It first hit the market in early 2014 and the price was quietly dropped to $12.5 million by the end of the year. Now, it’s back two years later with a reduced ask – by nearly half! – of $6.295 million. This is a four-bedroom, five-bathroom pad with all the elegant bells and whistles at 555 Park Avenue, the prestigious Upper East Side building that Barbara Walters once called home.


One57 apartment sells for $13M below its ask,” by The Real Deal’s Miriam Hall: “Extell Development’s One57 has taken another hit. A 6,240-square-foot sponsor unit at the luxe condominium tower sold for $45.8 million, or roughly $7,343 per square foot, according to property records filed with NYC.


As further proof of the wild fluctuations in the luxury residential market this year, there were only 18 contracts signed at $4 million or more in Manhattan last week, down from two consecutive weeks of more than 30 such contracts, Olshan Realty reported in its weekly analysis. Read the report here:


More Single Women Buying Homes

The relationship status of homebuyers is shifting. In 1985, 81 percent of homebuyers were married couples. Today, that figure is closer to 66 percent, even though the number of unmarried couples buying homes has only barely grown. What accounts for the change? All the single ladies.

Some 17 percent of homebuyers are now single women, up from just 11 percent in 1981, according to a report from the National Association of Realtors (NAR). The proportion of home-buying single men, on the other hand, shrank over the same period from 10 percent to 7 percent today.

Some of this shift may be because more women are raising children on their own. According to a Pew Research Center analysis of census data, the number of households with a single mom has grown since 1960 from 1.9 million to 8.6 million in 2011; The number of single-father households also rose from 300,000 to 2.6 million during that time period—a greater increase proportionally, but still at much lower levels.

“A lot of people are facing rising rents and the possibility of higher interest rates and this could cause some insecurity with children at home,” Jessica Lauz, manager of member and consumer research at the NAR, tells Construction Dive. “Single women might be looking to lock in more favorable interest rates at the moment.”

On average, single women homebuyers fetch an annual income of $55,300, as compared to $69,600 for single men buying homes. The ladies also tend to be older, with a median age of 50 to the unmarried man’s 47.

read more: http://www.curbed.com/2016/12/19/14000868/single-women-homebuyers?sf47493809=1

Still ahead


Existing Home Sales 10:00 AM ET


FHFA House Price Index 9:00 AM ET


New Home Sales 10:00 AM ET


Happy Chanukah


Merry Christmas

 The Collingwood Group wishes you a Merry Christmas, Happy Chanukah, a Joyous Kwanza and a prosperous New Year. 

 This is our final News Update of the year, we hope you find it useful, our publications resume on January 3rd.

 Best wishes and be safe.

The Trump Transition
Inside Word From @realDonaldTrump Economic Team Meeting

rood cnbc december-697494-edited.jpg

Collingwood Group Chairman Tim Rood met in New York with President Trump and his economic team including Treausry Secretary-designate Steven Mnuchin and Chief of Staff Reince Preibus.  Rood came away from the meeting impressed that the team wants to cut through red-tape and regulation to help fix housing and mortgage industry problems.  There was also talk of the future for Fannie Mae and Freddie Mac, public housing and more.

Many important business leaders were also in attendance  including that “My Pillow” guy.

 >CLICK HERE:   Collingwood’s Rood explained this and more in an appearance on CNBC Power Lunch 

It’s Time for an Office of National Housing Policy

by Collingwood Vice Chairman Brian Montgomery, former FHA Commissioner 

B.Montgomery_-_Head_Shot.jpgOn Jan. 20, 2017, four military aides will accompany the sitting president and vice president (and their successors) on a one-way motorcade to the U.S. Capitol. After the Oath of Office has been administered, a seamless handover of military power will occur, and the combined military command will report to President Donald Trump. Americans can be comforted by the near-perfect transfer of the commander-in-chief role from the outgoing, to the incoming president.

To the detriment of the nation’s homebuyers, no such unified and detailed plan involving our nation’s housing finance system currently exists. The Executive Office of the President should create a new office, aptly named the Office of National Housing Policy, to be tasked with developing a unified and collaborative approach to our nation’s housing policy, including homeownership and subsidized rental housing.

The prevailing view within the mortgage industry is there is little collaboration within the federal government in relation to housing policy and rules promulgation.

Despite the government controlling 90% of the residential mortgage market (and almost the entire subsidized rental market), the next president will inherit a tangled web of agencies that provide market liquidity, offer mortgage insurance and ensure regulatory oversight.

Roles and responsibilities of the current, disparate housing-related agencies are distinct and exist in silo-based structures. No unified command in our housing sector exists; to the contrary, one portion of the government heaps new rules onto the lending community, while others wait in the wings ready to pounce and prove their enforcement prowess.

To address competitive overlap amongst government entities this country could use a Housing Policy Czar — a person (and office) charged with developing, disseminating and enforcing a coordinated, collaborative housing policy and finance strategy that considers the capabilities and strengths of each independent agency.

The creation of policy experts known as “czars” with a singular focus began as far back as the Woodrow Wilson administration, but was greatly expanded during World War II under President Franklin D. Roosevelt (and subsequent presidents).

The ever-expanding regulatory burden has resulted in notable market contraction — with fewer small, community-based banks and fewer borrowers served — a predictable outcome. The government’s fragmented approach to regulatory reform and consumer protection in the aftermath of the housing crisis has today resulted in homebuyers with higher credit scores, who have higher income and are disproportionately white.

Rather than a well-synchronized plan for active warfare, the mortgage market battle plan offers a variety of competing, overlapping entities. Perhaps developing a well-coordinated “plan of attack” could start with the obvious intersection between the Federal Housing Administration and the government-sponsored enterprises.

At some level, the GSEs and FHA compete for the same customers with the ultimate risk either borne through Ginnie Mae, Fannie Mae or Freddie Mac, and at some level the private mortgage insurers. Yet, alignment of the capital standards, which would appropriately establish more appropriate pricing levels for the distinct entities to best serve their target consumer markets, doesn’t occur.

Of primary concern is to determine the future role of the GSEs since conservatorship is not a permanent state. Of equal importance would be a review of the impact of regulatory compliance on mortgage lenders which has pushed the cost of originating a mortgage loan in 2015 to $7,046 (up from $4,500 in 2008).

Of equal concern is the use of the False Claim Act by the Justice Department to punish FHA lenders for what were often administrative errors. The overreach of the FCA by the Department of Justice has driven FHA’s top producing lenders such as JPMorgan Chase, Bank of America and Citi Mortgage largely out of the nation’s flagship home buying program.

A prudent reassessment of Dodd-Frank, the future of the GSEs, fair housing, increasing homeownership rates and addressing rental housing demand all warrant a comprehensive strategy and definitive performance metrics. An independent ombudsman-type approach to housing policy, specifically denationalizing housing finance and promoting risk-sharing with the private sector, is needed and long overdue.

The objective of this approach would be to monitor systemic risk, reduce uncertainty, end competitive overlap and eliminate the duplication of efforts among agencies. The existing disjointed structure is antiquated and has not worked well.

Carson Conundrum

Reaction flooding in to President Elect Donald Trump’s choice, tapping Ben Carson as his nominee for Housing Secretary.

Collingwood Group Chairman Tim Rood on Fox Business’s Cavuto said, “Dr Carson is an intelligent, impassioned, and empathetic individual.”

tim carson.jpg

As for his lack of experience in the housing arena that may be a positive, Collingwood’s Rood says, “Sometimes the very best policy makers are those who listen; and sometimes, good leaders who are not steeped in the subject matter are better listeners than those who believe they have all the answers.”

>Click Here for Collingwood Chairman Tim Rood’s full interview on FBN’s Cavuto

B.Montgomery_-_Head_Shot.jpgCollingwood Group Deputy Chairman Brian Montgomery tells Westwood One’s First Light radio show, “There is little doubt President-elect Trump greatly admires and respects Dr. Ben Carson and felt strongly about him joining his Cabinet.

Having spent almost eight years in the Executive Office of the President, I speak from experience in saying a Cabinet Secretary who has the ear of the President is a positive for that agency and individual.  In this instance, I think Dr. Carson will be able to “elevate” the issue of Housing within the Trump Administration.  The fact Dr. Carson is a household name I believe will provide him a larger platform to articulate his vision for how best to help tackle any number of issues within the housing arena: shortage of affordable rental housing, the impact of new regulations which have constricted the mortgage market, and the growing senior population and how best to address their housing need.,”

sharga tv.jpg“Dr. Carson’s nomination is an indication of the tremendous respect that President-Elect Trump has developed for his former rival,” says Ten-X EVP Rick Sharga.Sharga adds “Dr. Carson has spoken out in the past about the need to revitalize many of the country’s urban areas, so it wouldn’t be a surprise if he focuses on doing that, and trying to find solutions to the growing problem of affordable housing. Since Dr. Carson has also discussed the unintended consequences of over-reaching government regulations, it’s possible we may also see some streamlining, or regulatory relief as well.”

By the way, Fannies’ stock price ended the day down 5 percent, Freddie’s is down 6 percent, and both were going even lower in after-hours trading

-“The Trump Effect” on Housing, The Collingwood Group Chairman Tim Rood on Fox Business’s Cavuto: https://www.youtube.com/watchtim chicago.jpg?v=TqPcoYyJuo

-Rood on the National Business Report  >CLICK HERE TO WATCH: https://youtu.be/nxQu7fxkyOg-Collingwood Group’ Chairm

-Collingwood’s Rood on Business First AM >CLICK HERE TO WATCH: https://youtu.be/6OKQyEQ-bpo

-Rood with the trifecta, a third television interview from the Chicago Board of Trade >CLICK HERE: https://www.youtube.com/watch?v=vU0MXC8vRRo


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Lou Giserman

Senior Media Consultant

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