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☆ Mortgage demand down 9.4% for final week of 2023, despite recent drop in interest rates
▼ + stars: | 2024-01-03 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com time to read: +2 min

Mortgage demand ended 2023 on a sour note, despite a sharp drop in mortgage interest rates during December. Total application volume was down 9.4% for the week ended Dec. 29, compared with two weeks earlier, according to the Mortgage Bankers Association's seasonally adjusted index. The average rate on the 30-year fixed ended the year at 6.76%, lower than where it was two weeks ago, but higher than it was a week ago. The builders are a bright spot, especially because they can buy down mortgage rates, but new homes do come at a price premium. Mortgage rates started this week higher after also edging up on Friday.

Persons: Joel Kan, refinanced, Matthew Graham Organizations: Mortgage, Federal Reserve, Mortgage News Daily, Reserve, CNBC PRO Locations: Miami , Florida

Here are 6 signals investment bankers are watching as they pray for an M&A rebound in 2024. By contrast, activity from private equity firms "was off almost 40%," he said. In 2021, private equity firms transacted $1.5 trillion across 2,869 deals, according to Dealogic. Last year, private equity M&A made up 40% of total activity, according to Goldman Sachs. AI companies, many of which are only now being formed, need to mature, and the winners and losers need to come into focus, bankers said.

Persons: Wall, LSEG, Goldman Sachs, Vito Sperduto, Sperduto, we've, Stephan Feldgoise, Hess, Anthony J, Carfang, Cash, Goldman, Goldman's Feldgoise, Feldgoise, Mark Sorrell, I'm, Harold M, Lambert, Jerome Powell, Greg McBride, McBride, Jonathan Gray, dealmaking, Gray, Rob Chisholm, Chisholm Organizations: Fed, London Stock Exchange, Business, RBC Capital Markets, Conference Board, Conference, Federal, Goldman, Federal Reserve, Private, Bankers, DOJ, FTC, Federal Reserve Board, Bankrate, of Labor Statistics, Cisco, LSEG, Qatalyst Partners, Citi, & $ Locations: LSEG, Ukraine

A pedestrian carrying an umbrella walks along the River Thames in view of City of London skyline in London, Britain, July 31, 2023. Finance executives, consultants and headhunters interviewed by Reuters predict subdued deal flows, modest bonuses for most and heavy job cuts in 2024. "2023 will ultimately be one of the lowest corporate finance fee pools in modern history," said Fabrizio Campelli, head of Corporate Bank and Investment Bank at Deutsche Bank. JOB CUTSBanks have already turned to cost cuts to try to weather the downturn, which in a people-intensive business means job losses. And although some bankers expect a tough 2024, others sense an opportunity for European banks from the Basel Endgame.

Persons: Hollie Adams, Fabrizio Campelli, Banks, Ronan O'Kelly, Oliver Wyman, O'Kelly, Dominic Hook, Goldman Sachs, Vis Raghavan, JP Morgan, Morgan McKinley's, Stephane Rambosson, headhunter, Rambosson, Ana Botin, Morgan's Raghavan, there's, Oliver Wyman's O'Kelly, Deutsche's Campelli, Anousha Sakoui, Carolyn Cohn, Jesus Aguado, Alexander Smith Organizations: REUTERS, LONDON, Finance, Reuters, Corporate Bank, Investment Bank, Deutsche Bank, Organisation for Economic Cooperation, Development, Barclays, Lloyds, Challenger Metro Bank, UBS UBSG.S, Citi, Workers, Global Investment Banking, Employment, European Union, Santander, Global, Basel, Thomson Locations: City, London, Britain, Europe, Middle East, Africa, Ukraine, West, China, United States, India, Madrid

☆ Swedish property firms should cut debt, raise equity, Riksbank chief says
▼ + stars: | 2023-12-01 | by ( ) www.reuters.com time to read: +3 min

Commercial property companies ramped up borrowing when rates were low and some are now struggling to pay off or roll-over debt after eight interest rate hikes by the central bank. Thedeen said many companies in the commercial real estate sector needed to restructure their balance sheets. Even if rates have peaked, problems for the commercial real estate sector are not over. Short-dated debt and large refunding needs mean "the Swedish property sector has more risk" than in other European countries, Maria Gillholm, senior credit officer at Moody's, said. The commercial real estate sector triggered a financial crisis in Sweden in the early 1990s and authorities have said it is once again the biggest risk to financial stability.

Persons: Erik Thedeen, Jonas Ekstromer, Thedeen, It's, Riksbank, Moody's, Maria Gillholm, Simon Johnson, Terje Solsvik, Essi Lehto, Susan Fenton Organizations: TT, Agency, Rights, Moody's, Thomson Locations: Stockholm, Sweden, Swedish, Europe

☆ Mortgage demand from homebuyers gets a boost as interest rates continue to fall
▼ + stars: | 2023-11-29 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com time to read: +2 min

Mortgage rates fell last week for the fourth time in five weeks, and homebuyers appear to be responding. That left total mortgage application volume essentially flat last week, up just 0.3% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Mortgage applications to purchase a home rose 5% for the week but were still 19% lower than the same week one year ago. Mortgage rates are now 88 basis points higher than they were a year ago, but most current homeowners refinanced when rates were at record lows two years ago. "With rates already at two-month lows last week, the result is gentle descent to slightly lower two-month lows."

Persons: Joel Kan, Matthew Graham, Graham Organizations: Mortgage, Mortgage News, CNBC PRO Locations: refinance

☆ Barclays reveals 10 debt-laden global stocks at risk from higher interest rates
▼ + stars: | 2023-11-28 | by ( Ganesh Rao | ) www.cnbc.com time to read: +3 min

Barclays has identified the European stocks that are most at risk of taking a hit to profits over rising interest payments for debt over the next two years. During the coronavirus pandemic, central banks cut interest rates to historic lows, enabling companies to borrow debt at very favorable rates. The table below shows the 10 stocks Barclays expects to have the biggest increase in interest costs through to 2025. Since interest costs are integral to real estate business models, the impact on margins and profits could be much more severe, the bank's analysts said. The Barclays team is confident that while interest rates can hurt company bottom lines, there was "scant" evidence that showed there was systemic risk.

Persons: Fastighets Balder, Castellum, Vonovia, Matthew Joyce, Zoso Davies Organizations: Barclays, Premier, Whitbread, BASF, Dassault Systemes Locations: Swiss

☆ The looming office space real estate shortage. Yes, shortage
▼ + stars: | 2023-11-26 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +6 min

You read that right: amid a commercial real estate market across U.S. downtowns being described in apocalyptic terms, CoStar sees a shortage on the horizon, with one key caveat for top companies to bear in mind. CoStar's call of an upcoming office space shortage is predicated on a look at the current data on leasing and construction activity compared to recent market history. They have attracted over 175 million square feet of net new occupancy since the beginning of 2020, an average of 12.7 million square feet per quarter. "Modern, premium office space remains in demand, just as it has historically, even during difficult economic times," said Phil Mobley, national director of office analytics at CoStar Group. Less than 30 million square feet has broken ground in 2023, making this year the lowest for construction starts since 2011.

Persons: Visoot, downtowns, Phil Mobley, Google's, Mobley, Jeff Greene Organizations: CNBC, Google, City, Gas Co, Billionaire Locations: U.S, New, Los Angeles, West Palm Beach

☆ Why American consumers may finally slow their spending, in charts
▼ + stars: | 2023-11-26 | by ( Christopher Hickey | ) edition.cnn.com time to read: +5 min

Some experts think the combination of high housing costs, rising credit card debt and shrinking savings could mean the end of post-Covid splurges, maybe even as soon as this year’s holiday shopping season. Here are the pressures consumers are facing that could cause a spending slowdown. Keeping up with high prices not only has led to more credit card debt, but also more consumers are falling behind on the payments. Since the first quarter of 2022, the rate of newly serious delinquent credit card debt has risen roughly 90%. And that would mean Americans may be forced to finally pull back on their post-Covid spending spree.

Persons: “, ”, Erik Lundh, Freddie Mac, ” Lundh, Lundh, they’ve Organizations: Conference, Intercontinental Exchange, ICE, New York Federal Reserve, Social Security Administration, San Francisco Federal Reserve, SF Fed, New York Fed, Covid Locations: people’s

☆ I got a $20,000 grant to build a tiny home on my property. It was expensive to start, but I feel secure in my old age now.
▼ + stars: | 2023-11-25 | by ( Jordan Pandy | ) www.businessinsider.com time to read: +5 min

Jean Lowell, 75, needed a more accessible house and her daughter needed an affordable one. After getting a grant and refinancing her home, she built a $130,000 backyard tiny home to live in. Her daughter moved into the main home and Lowell is able to age in place on her property in Vermont. The other purpose was to try to provide a place for my husband and I to live at our old age. I feel secure in my old age now in a way that I did not before.

Persons: Jean Lowell, Lowell, —, I'd, didn't, Ray Tan Organizations: Service, Vermont Housing Locations: Vermont, Montpelier , Vermont, Montpelier

VA loan borrowers were given the option to put their mortgages in forbearance, meaning they could temporarily pause their mortgage payments. So on November 17, the VA announced a stopgap for distressed VA borrowers. Advertisement"This is good news for VA borrowers, especially those who may be struggling with their mortgage payments," says Christy Bunce, president of New American Funding. How to take advantage of the Refund Modification programDuring the pause, the VA is also offering its Refund Modification program. The VA says that borrowers struggling to make mortgage payments should visit the VA Housing Assistance website or call 877-827-3702 for help.

Persons: servicers, —, who's, it's, Christy Bunce, Bunce Organizations: Service, Department of Veterans Affairs, NPR, Veterans, New Locations: forbearance

☆ Canada's unprecedented housing crisis could be a warning sign for the US
▼ + stars: | 2023-11-22 | by ( Eliza Relman | ) www.businessinsider.com time to read: +7 min

The country is also almost certainly heading towards a recession — if it's not already in one — and the housing market is partly to blame, economists say. But immigration is just one of many factors at play — Canada's housing crisis far preceded the rise in immigration. Stillo believes Canada's housing bubble has been slowly "deflating" for the last 18 months, despite an upswing in prices earlier this year. But there isn't consensus on if and when Canada's housing bubble will burst — or even if there is a bubble. While housing prices have flattened recently as demand softens, he says they show no sign of significantly declining.

Persons: —, it's, Mosche Lander, haven't, Mike Moffat, Tony Stillo, Moffat, Lander, Stillo, they're Organizations: Service, Concordia University, Smart Prosperity, University of Ottawa, US, Oxford Economics, America, Bloomberg Locations: Canada, Canadian

☆ The housing market is historically unaffordable - but a record number of Americans now own their home without a mortgage
▼ + stars: | 2023-11-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

The share of US homes without a mortgage jumped five percentage points from 2012 to 2022 to a record near 40%, Bloomberg reported. Historically high mortgage rates and home prices have kept many Americans sidelined from the market. The share of homeowners that are mortgage-free surged 5% between 2012 and 2022, Bloomberg reported Friday, citing data from the Census Bureau, hitting a new record just below 40%. Construction is booming in these states, and the share of mortgage-free homes is high. West Virginia, meanwhile, has the largest share of mortgage-free homes, at about 53%, Bloomberg reported.

Persons: —, Holly Meyer Lucas Organizations: Bloomberg, Service, Census, Business Locations: Florida, Texas, South Florida . Texas, Arizona, West Virginia

☆ Private Debt Was Supposed to Collapse When Rates Rose. Instead It Is Everywhere.
▼ + stars: | 2023-11-13 | by ( Jon Sindreu | ) www.wsj.com time to read: 1 min

Private-equity firms such as Blackstone are increasingly expanding into private debt. Photo: Jose A. Alvarado Jr. for The Wall Street JournalWall Street’s doom-mongers spent years warning that private lenders would be the next bubble to burst when central banks tightened policy. Instead, the funds are becoming even more ubiquitous as companies scramble to refinance debt in a higher interest-rate environment. The Westport, Conn.-based company operates 450 veterinary clinics and hospitals across the U.S. and has been owned by private-equity giant KKR since 2018. It has been a successful acquisition, but the company is facing a wall of debt maturities that can only be refinanced at higher cost.

Persons: Blackstone, Jose A, Alvarado Jr, mongers Organizations: Wall, Care Centers, The, KKR, Blue Locations: The Westport, Conn

U.S. Federal Reserve officials are puzzling over why bond borrowing rates spiked lately even as Fed policy expectations have remained largely unchanged. Whether a resurfacing "term premium'" now demanded to buy and hold longer-term bonds, is responsible is central to the conundrum. Britain's brief budget and debt shock late last year and the way the Bank of England was forced to react was perhaps a taster. "Once current debt has been refinanced and the average interest on debt reflects the higher long rates, absent changes in policy, debt ratios will increase," Blanchard wrote. The opinions expressed here are those of the author, a columnist for Reutersby Mike Dolan Editing by Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.

Persons: Marcos Brindicci, Olivier Blanchard, Washington's, Blanchard, it's, Morgan Stanley, Mike Dolan, Marguerita Choy Organizations: REUTERS, . Federal Reserve, Bank of England, International Monetary Fund, Washington's Peterson Institute for International Economics, U.S, Congressional, Reuters, Thomson Locations: Buenos Aires, Argentina, United States, Europe

U.S. Federal Reserve officials are puzzling over why bond borrowing rates spiked lately even as Fed policy expectations have remained largely unchanged. Whether a resurfacing "term premium'" now demanded to buy and hold longer-term bonds, is responsible is central to the conundrum. Britain's brief budget and debt shock late last year and the way the Bank of England was forced to react was perhaps a taster. "Once current debt has been refinanced and the average interest on debt reflects the higher long rates, absent changes in policy, debt ratios will increase," Blanchard wrote. US debt costs soarRates minus Growth hits budget mathCBO's long-term debt projectionsDYSFUNCTION AND EXPLOSIONThere were tinges of optimism though.

“So many more people have credit cards now.”Wise says the main thing to watch for is how strapped consumers are in their overall financial condition. There are signs the consumer may still have a little left in the tank. And speaking of tanks, gas prices have been coming down, a move that will free up a little more money for consumers to spend. And this occurred while consumers repeatedly tell surveys they are feeling gloomy and pessimistic about the state of the economy. The pace of increase in consumer prices has fallen from around 9% annually in the summer of 2022 to under 4% now.

Persons: ”, Donghoon Lee, “, TransUnion, TrasnUnion, Charlie Wise, ” Wise, we’ve, ” Patrick De Haan, De Haan, Lisa Sturtevant, Goldman Sachs, Jan Hatzius, Joseph Brusuelas, Tuan Nyugen Organizations: Federal Reserve Bank of New York, New York Fed, TransUnion, “, MLS, Federal, ” Goldman, Adobe Locations: U.S, California

☆ Mortgage rates plunge and demand finally inches back
▼ + stars: | 2023-11-08 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com time to read: +1 min

Mortgage rates saw the biggest one-week drop in over a year last week, causing the first increase in mortgage demand in a month. Total mortgage application volume rose 2.5% last week, compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Mortgage rates are pretty close to where they were at this time last year, so there is not a lot of incentive to refinance. Mortgage rates started the week slightly higher, but this week holds fewer economic events or reports that would influence rates. Last week's combination of the Federal Reserve's pause on interest rates and a lower-than-expected monthly employment report was the perfect storm for the dramatic move lower in rates.

Persons: Joel Kan Organizations: Mortgage, U.S

REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing RightsLONDON, Nov 8 (Reuters) - If the notorious 'term premium' is evaporating again, then last month's bond rout may just have been a nightmare. "If that's coming from term premium and it's tightening, then we have got to take that into account." As Summers estimated this week, a term premium just back at 60-year averages would put it at 150bps - 130bps above current levels. Morgan Stanley estimates an additional near $1 trillion in gross debt sales from G7 governments are coming down the pike next year. Morgan Stanley chart on G7 debt sales in 2024Reuters GraphicsThe opinions expressed here are those of the author, a columnist for Reuters.

Persons: Dado Ruvic, Christopher Waller, Larry Summers, selloff, York Fed's, Jerome Powell, Austan Goolsbee, Lisa Cook, Summers, Morgan Stanley, Mike Dolan, Josie Kao Organizations: REUTERS, Federal Reserve, Treasury, Fed, ., The, NY, Reuters Graphics Reuters, Reuters, Chicago Fed, Congress, Thomson Locations: York, midyear, 150bps

☆ Buy these 12 high-quality stocks that are up to 42% below their fair market value as Fed rate hikes begin to hit the economy hard, according to Morningstar's chief strategist and economist
▼ + stars: | 2023-11-01 | by ( Laila Maidan | ) www.businessinsider.com time to read: +5 min

The firm estimates fair value based on its projection of a company's future cash flows and the predictability of those flows. The best opportunities are now in value stocks that are trading at about a 22% discount to fair value, Sekara noted. Currently, the real estate sector is the most undervalued sector, with REITs trading at a 26% discount to fair value, Sekara said. Finally, American Tower (AMT), which owns and operates wireless and broadcast communications infrastructure, trades at a 24% discount to fair value. Two other five-star stocks that remain significantly undervalued are AT&T and Verizon, trading at a 35% discount to fair value.

Persons: Morningstar's Preston Caldwell, Caldwell, Dave Sekara, Sekara, Wells Organizations: Treasury, Morningstar, Simon Property Group, Realty Trust, Communications, Verizon, Citigroup, PNC, US Bank

Speaking at this week's global finance meeting in Riyadh, HSBC boss Noel Quinn warned of a potential "tipping point on fiscal deficits" for a number of countries across the world. And some analysts fear the uncertainty of next year's funding crush is filtering out the steepening yield curve via the term premium. Term premium at highest in 8 yearsReuters GraphicsCBO long-term US debt and deficit projections'DOOM LOOP'? That's spooky enough, until you start to factor in the recent yield spike and or a return of the term premium to 60-year averages of 150 bp. Tipping point or not, there's a danger the market is starting crystallise the problem it fears most.

Persons: Sukree, Noel Quinn, it's, that's, Stephen Jen, Jen, Goldman Sachs, Jeremy Hunt, Mike Dolan Organizations: HSBC, New York Fed, Federal Reserve, Fed, JPMorgan, Treasury, CBO, Moody's, Reuters Graphics Reuters, Reuters, Thomson Locations: Kasikornbank, Bangkok, Riyadh, U.S, Washington, Europe, Italy

☆ 5 successful real-estate investors who started with as little as $5,000 in savings explain how they leveraged FHA loans to buy their first properties
▼ + stars: | 2023-10-21 | by ( Kathleen Elkins | ) www.businessinsider.com time to read: +8 min

Before writing off real estate as too expensive to invest in, you'll want to consider all of your options. Here's how it works and how you can use one to buy real estate and start building long-term wealth. How everyday people have leveraged FHA loans to buy property and build wealthBoston-based investor Karina Mejia used an FHA loan to buy her first property at age 22 . It's a joke but it is solid advice: Before you actually get married, you should each use your own FHA loan." You can get your foot in the door without too much upfront cash by using an FHA loan."

Persons: Ludomir Wanot, witxh, Wanot, Karina Mejia, Sasha, It's, Mejia, Avery Heilbron, Heilbron, Jervais, Jim Resonable, That's Organizations: Federal Housing Association, Evergreen Housing, Ludomir, Seattle, Department of Veterans Affairs Locations: Seattle, Boston, Georgia, North Carolina, North Carolina , California

☆ The housing market was already painful, ugly and anxious. Now the 8% mortgage rate is back
▼ + stars: | 2023-10-21 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com time to read: +4 min

watch nowToday's housing market is a toxic mix of high mortgage rates, high prices, tight supply and strangely strong pent-up demand — and it's scaring off buyers and sellers alike. Now the popular 30-year fixed mortgage rate is at 8%, the highest in decades, making things even tougher. The result was record-low mortgage rates for two solid years. That, ironically, made the housing market even more expensive. They have little desire to trade the 3% rate they currently have for an 8% mortgage rate on a new purchase.

Persons: Matthew Graham, MND's Graham, He's, Lisa Resch, What's, Lawrence Yun, Yun Organizations: Mortgage News, Federal Reserve, National Association of Realtors, Compass, Washington , D.C, NAR, Buyers Locations: Washington ,, Florida, Tampa, Jacksonville, Orlando, Houston , Texas, Memphis , Tennessee, homebuilders, Horton

☆ Distressed commercial real estate debt hit $80 billion last quarter, the highest amount in a decade
▼ + stars: | 2023-10-19 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Distressed commercial real estate debt climbed to a 10-year high last quarter. Total distressed debt hit $80 billion, though there are $216 billion of potentially distressed properties. AdvertisementAdvertisementPressures are building on the commercial real estate sector, with distressed debt on commercial properties climbing to a 10-year record the past quarter. Distressed debt tied to office buildings took up the largest share at $32 billion, or 41% of the total distressed debt. That was followed by retail properties, with a sum $21 billion, and hotel properties, with $14 billion in distressed debt.

Persons: —, MSCI Organizations: Service, MSCI, Bloomberg

☆ U.S. mortgage application flow plunges to lowest since 1995
▼ + stars: | 2023-10-18 | by ( Dan Burns | ) www.reuters.com time to read: +2 min

The Mortgage Bankers Association's weekly index of mortgage application activity fell 6.9% in the week ended Oct. 13 to 166.9, the lowest since May 1995. Applications for loans to buy a home fell 5.6% to the lowest since February 1995 and applications to refinance an existing mortgage tumbled 9.9% to the lowest since January. Residential borrowing costs have risen roughly by half a percentage point since the beginning of September. Barring an about-face in the bond market that brings yields lower, borrowing costs look unlikely to pull back in the near term. In addition to high borrowing costs, sales are being restrained by very low inventory of homes on the market.

Persons: Sarah Silbiger, they've, Dan Burns, Chizu Organizations: REUTERS, Mortgage Bankers, Federal Reserve, National Association of Realtors, Reuters, ARM, Thomson Locations: Washington , U.S

Private credit players like HPS Investment Partners and Blue Owl Capital (OWL.N) have a workaround, but it could prompt a painful hangover. Cashed-up private credit funds offered sums previously unseen outside of traditional bank financing on riskier deals. Private credit assets swelled 460% to over $1.4 trillion between 2010 and the end of 2022, Preqin says. Reuters GraphicsThe attraction of “mezz” and similar exotic lending isn’t just that it helps private credit source new deals. In 2021, that dynamic meant private loans briefly became cheaper than liquid, tradable loans – flying in the face of financial orthodoxy.

Persons: –, Zendesk, Preqin, LSEG, HPS, Goldman, Blackstone, Angelo Gordon, dealmaking, George Hay, Oliver Taslic Organizations: Reuters, HPS Investment Partners, Owl, Blackstone, Apollo, Treasury, Private, Management, Partners, Reuters Graphics Reuters, Sabre, Companies, Wolf, ADC Therapeutics, Equity, Thomson Locations: EBITDA

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