The housing market received solid numbers in August. Housing Starts rose 4% in August from July to an annual rate of 1,615,000 units versus 1,560,000 expected. Housing Starts were up 17.4% year over year. However, single-family starts were down 2.8% monthly. Building Permits, a sign of future construction, rose 6% to 1,728,000 versus the 1,600,000 expected. Lumber prices have fallen dramatically from near $1,700 in May to $593 today but land and labor shortages, as well as higher supply costs, persist.
The number of loans in forbearance continues to decline, now down to 3%. The MBA says there are 1.5 million homeowners in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 5 basis points to 1.47%. Spokesperson Mike Fratantoni said, "20% of loans in forbearance are either new forbearance requests or re-entries. At this point, borrowers in forbearance extensions are exiting at a faster rate as they near - or reach - the expiration of their maximum forbearance term."
The MBA reports that mortgage applications for new home purchases in August fell 17% from a year ago. Monthly, applications were up 9% from July. Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting said, "While the new home construction market is a much smaller segment of the overall housing market, prospective buyers are increasingly turning to new homes because of the very low levels of existing homes for sale.