WASHINGTON (MarketWatch) – Construction on new U.S. homes in June rose 6.9% to an annual rate of 760,000, the highest level since October 2008, but building permits fell slightly, the Commerce Department reported Wednesday. Housing starts in May were revised up to 711,000 from an original reading of 708,000. Economists surveyed by MarketWatch had expected housing starts to rise in June to an annual rate of 750,000 on a seasonally adjusted basis. Permits for new construction, viewed as a gauge of future demand, edged 3.7% lower to an annual rate of 755,000 from 784,000 in May. Permits for single-family homes, which account for three-quarters of the housing market, rose a scant 0.6% to an annual rate of 493,000 last month. More than half of the increase in housing starts in June involved buildings with five or more units.
Archive for July, 2012
By Jeffry Bartash
By: Diana Olick
CNBC Real Estate Reporter
Mortgage rates hit new lows and applications to refinance fell for the third straight week. It defies logic, unless of course you operate in today’s tight mortgage market.
It’s not just about the rate anymore. Negative equity, strict underwriting and big bank backlogs are keeping many borrowers from taking advantage of these incredibly low mortgage rates.
“If history is any lesson, the only thing that can really extend refi activity in a low rate environment is a loosening of underwriting standards to bring more borrowers into the market. And that is not likely to happen anytime soon,” said Guy Cecala of Inside Mortgage Finance.
Twice this year the market did see a surge in refinancing, all due to changes in government programs.
At the beginning of the year, Fannie Mae and Freddie Mac (still under government conservatorship), expanded the Home Affordable Refinance Program for borrowers who owe more on their mortgages than their homes are worth. The limit used to be 25 percent negative equity, but in January, that limit was lifted entirely.
Then in June, the FHA changed the rules on its streamline refi program for borrowers who already have FHA loans, dropping underwriting almost entirely. While both changes sparked temporary surges, they were not enough to serve the entire market.
“We are definitely running out of borrowers to refi even with mortgages rates at record lows. Most of the activity we have seen in recent months are the same borrowers who refinanced a year or so ago, refinancing again. While programs like HARP and FHA’s Streamlined Refi can provide a temporary surge in refis, they still only account for a relatively small share of borrowers,” Cecala noted.
Government-backed mortgages (Fannie Mae, Freddie Mac, Ginnie Mae) accounted for 58 percent of the $10.179 trillion U.S. mortgage market as of the end of March, 2012, according to data compiled by Inside Mortgage Finance.
Private-label mortgage-backed securities (MBS) investors held 10 percent and banks/other financial institutions held 32 percent. It’s that non-government, 42 percent of the market that is having the most trouble refinancing due to poor credit scores and negative equity. Lenders and investors are particularly risk-averse these days.
Thursday the Obama Administration will renew its push for a major refinancing program that would involve all loans, but it would need congressional approval. There are several proposals under consideration.
The “Responsible Homeowners Refinancing Act,” sponsored by Senators Barbara Boxer, D-Calif., and Robert Menendez, D-NJ, would expand the HARP program, extending streamlined refinancing for Fannie and Freddie borrowers and eliminating up-front fees and appraisal costs. Jaret Seiberg at Guggenheim Partners puts the odds of that passing at around 60 percent.
Seiberg is less optimistic about another bill that would allow non-agency mortgages refinance into FHA loans, regardless of negative equity. The bill would raise GSE (Fannie and Freddie) guarantee fees to offset its costs.
“MBS investors are likely in for a bumpy ride. As we believe Congress will not enact the legislation, there should not be any changes to prepayment rates. Yet the market is likely to react to every headline, which suggests significant volatility,” Seiberg wrote.
Still, the White House will hold a webcast Thursday with HUD Secretary Shaun Donovan, along with a consumer-friendly interactive refi website. This “Google+ Hangout” will be hosted by real estate website Zillow [Z 38.77 -0.10 (-0.26%) ], and Zillow’s CEO Spencer Rascoff will join in the conversation. Donovan and Rascoff will answer consumers’ questions, knowing full well that the answer to many will be, ‘Right now you don’t qualify for a refinance.’
VAIL—The newly renovated Osprey at Beaver Creek was named Best Resort in the Continental U.S. in Travel + Leisure’s annual reader survey released Friday.
Two additional Vail-area hotels — The Sebastian in Lionshead and Pines Lodge in Beaver Creek — were second and third on the prestigious list. Both the Osprey and Pines Lodge are RockResorts properties, the luxury lodging company owned by Vail Resorts.
“We are honored to have two of our RockResorts properties at the top of the Travel + Leisure 2012 World’s Best Awards readers’ survey,” Broomfield-based RockResorts CEO James O’Donnell said in a statement. “Our teams strive to ensure our guests have a true experience of a lifetime whether staying with us in our hotel properties or enjoying our iconic mountain resorts like Beaver Creek.”
The Osprey is a mere 26 feet from the Strawberry Park Express chair lift. It was recently renovated to reflect contemporary design and luxury amenities, including an award-winning gourmet tapas bar and restaurant. The intimate, 60-room Pines Lodge is located on the slopes at Beaver Creek Resort.
The Sebastian in the Vail Village dubs itself a boutique hotel with 100 rooms and seven suites. It is owned by Timbers Resorts, which also owns Dancing Bear in Aspen and One Timbers Place in Steamboat Springs.
This marks the first year for all three Vail-area hotels to appear on the magazine’s “Best” hotels list. Also appearing were the Ritz-Carlton Bachelor Gulch (No. 8), The Broadmoor in Colorado Springs (No. 22), Park Hyatt Beaver Creek Resort & Spa (No. 30), and the Four Seasons Resort in Vail (No. 33).
The survey ranks readers’ favorite hotels, cities, islands, cruise lines, airlines, car rental agencies, spas, safari outfitters and tour operators. Winners will be featured in the August online and print editions.
This year’s survey showed that the allure of the exotic and the new remains as strong as ever, according to Travel+Leisure Editor-in-Chief Nany Novogrod.
“Along with great service, our readers crave adventure and the outdoors, reflected in their selection of this year’s top three resorts in the Continental U.S., all located in Colorado mountain towns,” Novogrod said in a statement.
The survey among the magazine’s readers took place from Dec. 1, 2011 to March 31. Travel + Leisure covers culture, food, style and design, and has the largest audience among travel magazines.
On June 26, 2012, the Cordillera Golf Club filed for bankruptcy. A quote from the press release states that “We had hoped to avoid filing Chapter 11, but we were unsuccessful in reaching a mutually agreeable settlement with certain stakeholders in the community, said David Wilhelm, Chairman of the Club at Cordillera. The process will allow the Club to operate its ongoing business while it resolves the outstanding conflicts and prepare a plan of reorganization to emerge a healthier company.”
Click on the link below to see the full press release.
What does all this mean? I’m certainly not one to predict the ultimate outcome but I would be concerned about my Club membership fee and if I will ever see any value returned to me.
There were other documents included with the press release including a Q&A and Inquiry Guidelines. Click on the links below to see each of those documents.
This is such a sad situation. Three of the Clubs golf courses are closed and who knows what condition they will be in if and when they finally reopen. There are lots of questions regarding property values and how will this impact the real estate market in Cordillera. So far sales in 2012 are up compared to 2011. There were only 3 sales between 1/1/11 and 7/4/11. However, YTD there have been 8 sales. It will be interesting to see what happens to sales over the next few months. I talked to a fellow real estate broker who just had a client put a CVC property under contract the day before the bankruptcy announcement. The client was reconsidering their purchase in light of the announcement.
Stay tuned. Who knows how this will all turnout.