News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Diana Olick / CNBC / August 5, 2013
As mortgage rates rise and refinancings fall dramatically, banks are in search of new business. That, in turn, has them easing lending standards for some borrowers, according to a new monthly survey from the Mortgage Bankers Association.
Credit availability rose 2 percent in July and is up 3 percent from May, when interest rates began their climb, according to the MBA index.
“The increase was primarily driven by increases in product offerings that allow cash-out refinancing, and some increase in offerings for borrowers with higher LTVs, or lower credit scores,” according to
Robbie Whelan and Dawn Wotapka / The Wall Street Journal / July 15, 2013
The nation’s biggest publicly traded home builders are on a buying spree, snapping up small privately held companies who made it through the housing slump but now are struggling to find financing.
Big builders are seeing their profits healthy and their homes selling at higher prices. For their smaller, privately owned competitors, times remain tough.
What sets the big builders apart is access to capital. The bond market has been kind to big builders, which issued a record $8.1 billion in bonds last year. Bond issues are on pace to have one of the strongest years ever this year, accordingRead More
Prashant Gopal, Kathleen M. Howley & John Gittelsohn / Bloomberg/Businessweek / Jun 21, 2013
Derrick Bulaich locked in a home-loan rate of 4.6 percent last week, prompted by a surge in borrowing costs as investors speculated the Federal Reserve would pull back from bond buying. Bulaich, who said he wishes he’d acted sooner, still plans to complete the purchase today of the four-bedroom Sacramento home because values in the city remain 42 percent below their 2005 peak despite recent gains.
“I was hoping rates would come back down and then I realized they weren’t going to,” said Bulaich, 24, who works for a bank. “Homes are still affordable, so that takes some of the sting” outRead More
John Caulfield / MULTIFAMILY EXECUTIVE / June 20, 2013
Builders and developers benefit from rising competition among financing sources.
Banks are more readily opening their wallets again to provide debt financing for multifamily for-sale and rental projects. But some banks still view this space cautiously, as they see competition now coming from an expanding host of non-bank capital sources. Other banks, while eager lenders, nonetheless are watching for signs of overbuilding, particularly on the luxury side of the spectrum, and looking for clues of where rents might be headed.
“We are guardedly optimistic about this product type,”Read More
Mark Heschmeyer / CoStar / June 3, 2013
Early Recovery Benefiting Large Developers and Larger Regional Banks
With the continued strength of the housing sector, banks are again seeing growth in demand for construction and development (C&D) loans and are starting to respond in kind.
The total amount of C&D loans on banks books at the end of the first quarter declined from $203.7 billion at the end of 2012 to $201.6 billion, however, 42% of the nation’s banks reported increases in C&D loans, according to CoStar analysis of FDIC numbers.
There were other signs of improvement as well. Noncurrent real estate constructionRead More