Economic Perspectives - FHLBNY
December 11, 2019ECONOMIC PERSPECTIVESA REVIEW OF HOUSING STATISTICS AT THE END OF 2019Authored by Brian Jones, FHLBNY Financial EconomistHIGHLIGHTS:»Lower mortgage rates boosting home-purchase contract signings, closings will soon follow»Pickup in pending home sales in FHLBNY district since midyear hints at acceleration in local purchases»Declining mortgage rates have enhanced housing affordability across the nation»Higher prices continue to weigh on local affordability gauges»Stock of available dwellings remains near expansion low; home-building expansion subpar»»Inventory problem particularly acute in FHLBNY area, with available homes below year-ago levelsHome-price performance has varied widely across the FHLBNY district»Home prices continue to move higher, although the pace of growth has slowed»Home-builder sentiment near pre-crisis highs, yet single-family permits have lagged far behind»Mortgage performance improving nationally and across most of the FHLBNY districtLOWER MORTGAGE RATES BOOSTING HOME-PURCHASE CONTRACT SIGNINGS, CLOSINGS WILLSOON FOLLOWInterest rates on adjustable- and fixed-rate mortgage loans have fallen by over a percentage point from the highsset last November (see chart below, left). Combined with solid labor market conditions and solid income growth,reductions in mortgage rates have pushed pending home sales steadily higher over the course of 2019, pointing toa step-up in closings in the months ahead (see chart below, right).Exhibit 1: Mortgage Interest Rates (left); Pending & Existing Home Sales (right)Mortgage Interest RatesPending & Existing Home 75201431999 2001 2003 2005 2007 2009 2011 2013 2015 2017 201920155-Yr ARM2016201715-Yr Fixed2018201930-Yr FixedPending Home Sales (index 2001 100, left)Existing Home Sales (millions saar, right)Annual AveragesNote: Shaded areas denote recessions. Sources: Mortgage Bankers Association, National Association of Realtors.FHLBNY ECONOMIC PERSPECTIVES1
PICKUP IN PENDING HOME SALES IN FHLBNY DISTRICT SINCE MIDYEAR HINTS AT ACCELERATIONIN LOCAL PURCHASESExisting home sales in New York and New Jersey have been going essentially sideways over the past three years(see chart below, left). Stepped-up contract signings in the summer and early fall, however, hint that a breakoutmay soon be in the offing (see chart below, right). Indeed, since May contract signings have eclipsed closings by1,390 per month on average – the widest gap witnessed during the current economic expansion.Exhibit 2: Home Sales Activity in New York and New JerseyExisting Home SalesPending & Closed Home Sales in NY & NJ(seasonally adjusted)(seasonally 162017NY & NJNew Jersey20182019New YorkAnnual/YTD Avgs201220132014201520162017Pending Sales20182019Closed SalesSources: New York State Association of Realtors, NJ Realtors and FHLBNY seasonally adjusted estimates.DECLINING MORTGAGE RATES HAVE BOOSTED ENHANCED HOUSING AFFORDABILITYACROSS THE NATIONBuoyed by dramatic declines in mortgage interest rates since last November, housing affordability measures haveimproved from 13.4% in the West to 16.6% in the Northeast with an average nationwide increase of 15.5%through September (see chart below).Exhibit 3: Percentage of Median Family Income to Qualifying Income, Seasonally Adjusted2502302101901701501301109070501999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019United StatesNortheastMidwestSouthWestNote: Shaded areas denote recessions. Sources: National Association of Realtors, FHLBNY estimates.FHLBNY ECONOMIC PERSPECTIVES2
HIGHER PRICES CONTINUE TO WEIGH ON LOCAL AFFORDABILITY GAUGESData compiled by realtor associations in New York and New Jersey suggest that the improvement in housingaffordability in the Northeast over the past year has been concentrated in New England and perhapsPennsylvania, however. Unfortunately, steadily rising median home prices have continued to weigh on housingaffordability in both the Empire and Garden States (see charts below). Of particular note, housing has remainedmore affordable in New Jersey for almost five years running.Exhibit 4: Median Home Prices and Affordability in the FHLBNY DistrictNew York State Median Price & AffordabilityNew Jersey Median Price & Affordability(seasonally adjusted)(seasonally adjusted) 300,000180 330,000180 280,000160 320,000170140 260,000 310,000160 300,000150 240,000120 220,000100 200,00080 270,000 180,00060 260,0002012Median Price (scale left) 290,000140 280,000Affordability (scale right)1301202013201420152016Median Price (scale left)201720182019Affordability (scale right)Note: Shaded area denotes recession. Sources: New York State Realtors Association, NJ Realtors and FHLBNY estimates.STOCK OF AVAILABLE DWELLINGS REMAINS NEAR EXPANSION LOW; HOME-BUILDINGEXPANSION SUBPARRealtors across the country continue to cite a severe lack of available dwellings as a major factor holding backhome purchases nationwide. Indeed, at an estimated 1.714 million after seasonal adjustment, the stock ofhomes in October was 4.4% below the year-ago level and just 10,000 above the expansion low set in December2017 (see chart below, left). While solid labor market conditions, higher incomes and attractive financing termscontinue to underpin demand, builders have been slow to respond. With the exception of the South, currentlevels of single-family residential building permits across the country remain well below half of their priorexpansion peaks (see chart below, right).Exhibit 5: National Housing Stock (seasonally adjusted, left); Single-Family Building Permits (thousands saar, est:6003.082.56500Peak141291872503Oct49119521220% of Peak34.8%40.9%59.7%43.7%40030042.020010021.5Homes Available for Sale (millions, scale left)Months' Supply (scale 32015South20172019WestNote: Shaded areas denote recessions. Sources: Census Bureau, National Bureau of Economic Research, National Association of Realtors, FHLBNY estimates.FHLBNY ECONOMIC PERSPECTIVES3
INVENTORY PROBLEM PARTICULARLY ACUTE IN FHLBNY AREA, WITH AVAILABLE HOMES BELOWYEAR-AGO LEVELSAbstracting from month-to-month volatility, new residential building permits in New York and New Jersey havebeen trending higher since the spring. At a seasonally adjusted annual rate of 71,000 in October, the trailing 12month average across the two states stood at the highest level since May 2016. While clearly encouraging, thereported pickup has been entirely attributable to increased applications for multifamily construction. By contrast,core single-family permits have been little changed over the past six years (see chart below, left). Absent ameaningful pickup in new single-family construction, the number of homes available for sale in the Empire andGarden States continue to plumb new lows (see chart below, right).Exhibit 6: New York and New Jersey Building Permits (12-month avg thousands saar, left) and Housing Stock 0142015New York2016201720182019New JerseyNote: Shaded areas denote recessions. Sources: Census Bureau, New York Association of Realtors, NJ Realtors and FHLBNY estimates.HOME-PRICE PERFORMANCE HAS VARIED WIDELY ACROSS THE FHLBNY DISTRICTAkin to politics, all real estate markets are local, especially when considering home prices across the majority of theFHLBNY district (see chart below, left). Areas that suffered the steepest erosions in the wake of the financial crisis, haveseen nominal prices recover and in many cases reach new all-time highs, while those that dodged to housing-bubblebullet have seen quotes steadily rise over the course of the current economic expansion. The Buffalo-CheektowagaNiagara Falls area, in particular, stands out. Home prices in that portion of New York State were little changed duringthe Great Recession and now stand a hefty 48.7% above their cyclical trough. After adjusting for changes in consumercosts excluding shelter, the majority of metropolitan areas canvassed across New York and New Jersey have aconsiderable way to go before reaching prior-expansion peaks (see chart below, right).Exhibit 7: Local FHFA Purchase-Only Home Price Indexes325Nominal, Seasonally Adjusted, Q1 1991 100300230Real, Seasonally Adjusted, Q1 1991 01993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019Albany-Schenectady-Troy, NYNassau County-Suffolk County, NY (MSAD)Rochester, NYCamden, NJ (MSAD)Buffalo-Cheektowaga-Niagara Falls, NYNew York-Jersey City-White Plains, NY-NJ (MSAD)Syracuse, NYNewark, NJ-PA (MSAD)1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019Albany-Schenectady-Troy, NYNassau County-Suffolk County, NY (MSAD)Rochester, NYCamden, NJ (MSAD)Buffalo-Cheektowaga-Niagara Falls, NYNew York-Jersey City-White Plains, NY-NJ (MSAD)Syracuse, NYNewark, NJ-PA (MSAD)Notes: Shaded areas denote recessions. Sources: Federal Housing Finance Agency, Bureau of Labor Statistics, FHLBNY estimates.FHLBNY ECONOMIC PERSPECTIVES4
HOME PRICES CONTINUE TO MOVE HIGHER, ALTHOUGH THE PACE OF GROWTH HAS SLOWEDNominal home prices remain on uptrends nationally, regionally and across the states of New York and NewJersey, but the paces of appreciation have continued to slow (see charts below, left). Since the first quarter of 2018,the year-to-year growth of home prices across the nation has slowed from 7.2% to 4.9% this past summer. While asimilar deceleration was experienced across the Northeast, the slowdowns in New York and New Jersey weremore dramatic, with the year-to-year paces of price appreciation in the two areas of the FHLBNY district nowstanding at 3.4% and 3.3%, respectively. With home prices in many areas now well above their pre-GreatRecession levels in many areas, fears of yet another bubble in residential real estate have grown. Those concernsappear overblown in our region when inflation is taken into account (see charts below, right). Real home pricesnationally recently moved a touch above their fall 2006 high, but those in the Northeast, New York and NewJersey remain below their prior-expansion peaks. Indeed, inflation-adjusted home prices in the Garden State arestill a whopping 21.3% below the level recorded in the summer of 2008.Exhibit 8: FHFA Purchase-Only Home Price IndexesReal (Seasonally Adjusted, Q1 1991 - 100)Nominal (Seasonally Adjusted, Q1 1991 4011012010010090801993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019United StatesNew JerseyNew York801993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019Middle AtlanticUnited StatesNew YorkMiddle AtlanticReal (Percentage Change From a Year Ago)Nominal (Percentage Change From a Year Ago)161512108New Jersey5400-5-4-8-10-12-151993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019United StatesNew JerseyNew YorkMiddle Atlantic1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019United StatesNew JerseyNew YorkMiddle AtlanticNote: Shaded areas denote recessions. Sources: Federal Housing Finance Agency, Bureau of Labor Statistics and FHLBNY estimates.FHLBNY ECONOMIC PERSPECTIVES5
HOME-BUILDER SENTIMENT NEAR PRE-CRISIS HIGHS, YET SINGLE-FAMILY PERMITS HAVE LAGGEDFAR BEHINDBefore the 2007-08 financial crisis, there were fairly tight relationships between regional home-builder sentimentgauges and single-family building permits, with movements in the former series leading changes in the latter (seecharts below). Yet, while builder confidence measures have reached or surpassed previous expansion highs,increases in permit applications have been comparatively muted, particularly in the Northeast and the Midwest.Builders cite a variety of factors as constraints on new construction including building materials costs, lack ofskilled labor, a dearth of available lots and tight regulations.Exhibit 9: Regional Home-Builder Sentiment (Housing Market Index) & Single-Family Building 0Housing Market Index (left)Single-Family Permits (thous, saar, right)Housing Market Index (left)South80Single-Family Permits (thous, saar, Housing Market Index (left)Single-Family Permits (thous, saar, right)Housing Market Index (left)Single-Family Permits (thous, saar, right)Note: Shaded areas denote recession. Sources: Census Bureau, National Association of Home Builders.FHLBNY ECONOMIC PERSPECTIVES6
MORTGAGE PERFORMANCE IMPROVING NATIONALLY AND ACROSS MOST OF THE FHLBNY DISTRICTMortgage delinquency and foreclosure rates moved lower during the summer quarter (see charts below).According to national data compiled by the Mortgage Bankers Association, the countrywide delinquencyrate fell by 56 basis points (bps) to 3.97% – the lowest reading since the winter of 1995. Meanwhile, thepercentage of loans in foreclosure dipped by 6 bps to just 0.84% – a level not witnessed since the fall of 1985.Soundings for New York and New Jersey taken in September show further reductions in delinquencies andforeclosures from those tallied a year ago.Exhibit 10: National and Local Mortgage Delinquency RatesMortgage Delinquencies & Foreclosures(percentage of all loans outstanding)10.59.58.57.5Delinquencies: 3.97% - lowest since 1Q95Foreclosures: 0.84% - lowest since 011Foreclosure RateNational Mortgage Delinquency Rates5%4%201320152017Mortgage Delinquency Rates7%4.4%6.4%5.8%6%3.8%5%3%2.2%2%0.7%1%4.4%3.8% 4.0%3.1%0.3%2%0.5% ncy Rate2.0%1.5%1.3%1.0%1.6%1.4%0.7%0.5%0%0%30 DaysPast Due30-59 Days 60-89 Days 90-119 Days 120 DaysInPast DuePast DuePast DuePast Due ForeclosureSep-18Sep-19Sep-18Sep-19United States30 Days Past DueSep-18Sep-19New Jersey90 Days Past DueSep-18Sep-19New YorkForeclosure RateNote: Shaded areas denote recessions. Sources: CoreLogic, Mortgage Bankers Association.QUESTIONS /COMMENTS?The Economic Perspectives newsletter is authored by the FHLBNY’s Financial Economist, Brian Jones.Contact your Relationship Manager at (212) 441-6700 to discuss the information shared in thisnewsletter and any potential business opportunities with the FHLBNY as your partner.The Federal Home Loan Bank of New York (“FHLBNY”) is providing this report for informational purposes only. This report should not be construed as an opinion, recommendation, or solicitation regarding the use ofany financial strategy and/or the purchase or sale of any financial instrument. The recipients of this report are advised to conduct their own independent due diligence and consult with financial advisors, accountants, andattorneys before making any investment, credit, or any other financial decisions. FHLBNY does not warrant the completeness or accuracy of this report. The past performance of any FHLBNY service or product should notbe viewed as a guarantee of future results. The information contained in this report, as well as the services and products provided by the FHLBNY, may change at any time without notice.FHLBNY ECONOMIC PERSPECTIVES7
Dec 11, 2019 · FHLBNY ECONOMIC PERSPECTIVES 5 . HOME PRICES CONTINUE TO MOVE HIGHER, ALTHOUGH THE PACE OF GROWTH HAS SLOWED . Nominal home prices remain on uptrends nationally, regionally and across the sta
Traditional, Command, Market 3. The former Soviet Union was an example of what kind of economic system? Command 4. Which economic system allows for the most individual freedom? Market 5. In which economic system does the government have the most control? Command 6. In which economic system do individuals do things based on customs & beliefs .File Size: 3MBPage Count: 55Explore furthertypes of economic systems worksheet answer key pdflaspalmasbr.comTypes Of Economic Systems Worksheet Pdf - worksheetnovenalunasolitaria.blogspot.c Types of Economic Systems Worksheet PDF Economic .www.scribd.comCommand, traditional, and market economiesdsfepf2015.weebly.comTypes of Economic Systems Worksheet.pdf - Name: Date .www.coursehero.comRecommended to you b
» Created FHLB CDFI Working Group & Task Force, Upcoming FHLBNY Webinar in April 2021 » Provided COVID-19, Earthquake and Hurricane Relief funds: Donated 1.5 million to Puerto Rico and USVI charities Offered 10 million in grants to homeowners and small businesses Announced 1 billion in Community and Economic
Program Guidelines and the Implementation Plan. Participation in the Homebuyer Dream Program may be suspended or debarred at any time at the sole . and password established for the Online Portal and must have completed a successful test file prior to submission of any HDP files to FHLBN
095 1 Year Swap - Constant Maturity 092 2 Year Swap - Constant Maturity 096 5 Year Swap - Constant Maturity 097 10 Year Swap - Constant Maturity 098 Fannie Mae - 30 Year 099 Federal Home Loan Bank of Boston 102 FHLMC - 15 Year 103 FHLMC - 30 Year 104 FNMA - 15 Year 105 FNMA - 30 Year 106 FNM
New Perspectives on Highway Investment and Economic Growth GREGORY L. THOMPSON, BOB WELLER, AND E. WALTER TERRIE In challenging the idea that highway investment leads to economic growth, it was hypothesized that both highway investment and economic growth
IoT Perspectives Economic perspectives –The economic perspectives of IoT offer two kinds of incentives – consumers and suppliers. consumers would benefit from IoT infrastructure in terms of time management (e.g. connecting home appliances to office premises), flexibility (e.g. anytime-anywhere service), security (e.g. door/vehicle-lock/unlock alarm to mobile handset), and
UNIT 3: PERSPECTIVES IN DEVELOPMENT UNIT STRUCTURE 3.1 Learning Objectives 3.2 Introduction 3.3 Concept of growth, development and maturation 3.4 Major Theoretical Perspectives 3.4.1 The Psychodynamic Perspective 3.4.2 The Humanistic Perspective 3.4.3 The Contextual Perspective 3.5 Influence of Nature and Nurture on Development
2nd Grade – Launching with . Voices in the Park by Anthony Browne (lead from the Third Voice) My First Tooth is Gone by student (student authored work from Common Core Student Work Samples) A Chair for my Mother by Vera B. William Moonlight on the River by Robert McCloskey One Morning in Maine by Robert McCloskey, Roach by Kathy (student authored work from www.readingandwritingproject.com .
