What I’m Reading
Putting This to Bed: In total, 1 million forbearance plans will expire between now and the end of 2021. There is a vocal contingent that has been predicting a wave of foreclosures for months. However, I am virtually certain that this won’t happen as almost all of the borrowers in these plans have significant equity. From Black Knight’s Mortgage Monitor report for July (emphasis mine):
Of borrowers still in plans as of mid-August, some 98% have at least 10% equity in their home – a drastically different dynamic than during the worst of the Great Recession, when more than 40% of all mortgage holders had less than 10% equity and 28% were fully underwater.
Even when adding 18 months of deferred principal, interest, taxes and insurance payments onto the total debt amount, only 7% of borrowers in forbearance have less than 10% equity in their home
Source: Black Knight
The Grass Isn’t Always Greener: When looked at on their own, the recent rise in US housing prices looks crazy. However, when viewed in the context of what is going on in the rest of the developed world, they actually look quite tame. A Wealth of Common Sense
No End in Sight: With record volumes of goods reaching the US in the midst of an already massive backlog, executives expect that supply chain issues will extend far into 2022. Wall Street Journal
Fuel on the Fire: California wild fires are creating additional upward pressure on the state’s rental market thanks to creation of more rental housing demand due to property loss. Globe Street
Shifting Gears: Residential construction continues to shift towards the suburbs and low cost markets. The trend is especially pronounced within the multifamily sector. Multifamily residential construction grew by 14.3% in small metro urban cores and 25.5% in small metro suburban areas in the latest quarter. In contrast, large metro core areas recorded a 0.5% year-over-year decline. NAHB
Chart of the Day
Hard to believe but real disposable income has actually outpaced housing price gains in the US over the past 45+ years. This has not been the case in other developed countries.
Source: A Wealth of Common Sense
WTF
Shocker: A man who twerked next to his SUV during a rainy traffic stop instead of cooperating with deputies was stunned with a Taser because Florida. Orlando Sentinel
Joy Ride: A 64 year old woman was arrested for DUI after she was spotted driving a golf cart on a freeway because Florida. Starting to think that drunk golf cart incidents involving residents of The Villages deserve their own section here. Villages News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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