Today is the 75th anniversary of the Japanese attack on the U.S. naval base at Pearl Harbor in Hawai’i where 2,403 Americans died and 1,178 were wounded. There are those that believe that ghosts still haunt “Pearl” but there modern day “ghost towns” in other parts of the U.S. where high vacancy rates, declining populations, and large numbers of vacant properties are creating blight. The list of 20 towns includes places in Kansas, Texas, Oklahoma, Alabama, Illinois, Michigan, New Jersey, Mississippi, and Pennsylvania, Florida, and Indiana.

"Pending" Home Sales, "Existing" Home Sales, and "New" Home Sales - take your pick. They all show something slightly different, and economists have their favorites. Housing and jobs play critical roles in the United States economy, thus the abundance of various statistics for each one. And trends are more informative than spot numbers every month. What have Existing Home Sales been doing during the last several months? Remember that the data reflect the number of homes that have previously been constructed (and therefore accounted for by the new home sales indicator) and are now being resold. And it is usually broken down by region.

Back around Easter U.S. Existing Home Sales rose to a 5.45 million seasonally adjusted annualized rate in April from March's 5.36 million (revised up from 5.33 million). The uptick in April was fueled by a 12.1% increase in home sales in the Midwest. That gain, and a 2.1% increase in home sales in the Northeast, offset existing home sales declines of 2.7% and 1.7%, respectively, in the South and West.

Back then the bulk of the total existing home sales increase was led by sales of existing condominiums and co-ops, which jumped 10.3% to a seasonally adjusted annual rate of 640K units. Single-family home sales were up just 0.6% to 4.81 mln, although they are up 6.2% year-over-year. The median price for all housing types in April was $232,500, up 6.3% y/y. The share of first-time buyers in April was 32% versus 30% in March and the same period a year ago. At the sales pace back then, unsold inventory sits at a 4.7-month supply, which is up from 4.4 months in March. Still, that is well below the 6.0-month supply typically seen during normal periods of buying and selling.

Skipping ahead to Memorial Day, Existing Home Sales rose 18% in May to 5.53 million. This was the highest pace since February 2007. The median house price was $239,700 up 4.7% YOY. Total housing inventory was at 2.15 million units, which represented a 4.7-month supply. Inventory was still tight. The first-time homebuyer accounted for 30% of all sales, a decrease from last month and last year. Days on market dropped to 32 days, a record.

When school let out in June they rose to a 5.57 million annual rate in June from 5.51 million in May (revised down from 5.53 million). While existing home sales in June were at a seasonally-adjusted annual rate of 5.57 million, their highest level since 2/07, sales remain 22% off the peak of mid-2005. A key reason; a low inventory that essentially hadn't budged since late 2011. And why might that be? A rise in the number of renter-occupied single-family homes (which aren't for sale) from 10.5 million in 2000 to 17.5 million!

We sailed through the summer, back when rates were low, and in August Existing Home Sales fell 0.9% as tight inventory depressed transactions. The median home price was just over $240,000 which was a 5.1% YOY increase. Housing inventory was down to just over 2 million homes, which is a 4.6-month supply. First time homebuyers accounted for 31% of sales. Strong job growth and low mortgage rates are pumping up demand, but builders remained reticent.

Passing Labor Day Existing Home Sales were +3.2% in Sept.  Existing-home sales rebounded strongly in September and were propelled by sales from first-time buyers reaching a 34 percent share, which is a high not seen in over four years, according to the NAR. All major regions saw an increase in closings last month, and distressed sales fell to a new low of 4 percent of the market, and the annualized pace hit 5.47% from a downward-revised pace of 5.3 million in August. The median home price was up 5.6% to $234,200. The first-time homebuyer represented 34% of all sales, which is a big improvement from the 30% - 32% range it had been stuck in for the past year. Inventory remains tight, however with about 2.05 million homes on the market, which represents a 4.5-month supply. A balanced market is closer to 6.5 months. 

In September, distressed sales (foreclosures and short sales) represented 4% of all sales, which is a post-crisis low. Days on market ticked up to 39 days from 36 in August. The increase in the first-time homebuyer was good news, and we may finally be seeing the pent-up demand that has been building over the past 10 years finally come to market. 

And then around Halloween Existing Home Sales rose 2% to a seasonally-adjusted run rate of 5.6 million in October, according to the NAR. September's numbers were revised upward to 5.49 million. October's number is 5.9% higher than a year ago, and the highest reading since February 2007. The median home price rose 6% to $232,200. Total housing inventory dipped to 2.02 million units, which represents a 4.3-month supply at current levels. (NAR considers 6.5 months' worth to be a balanced market.) Days on market ticked up to 41 days from 39 the month before. The first-time homebuyer accounted for 33% of all sales, which is up a couple percentage points from a year ago. Now, if we could just get housing starts up to catch up with the increase in sales we could have a real recovery on our hands. 

Shifting to the economy and rates, data in the last few weeks, for all its faults, continues to show economic conditions continue to improve. GDP was revised in the 3Q and is now estimated to have risen at a 3.2% annualized pace. While business investment was even weaker than originally reported, stronger consumer spending helped the economy to grow at the fastest pace in two years. Personal income in October rose a solid 0.6 percent; primed and ready for the holiday shopping season. Higher expected inflation, however, in the coming months will erode some of the income gains for households. The PCE deflator, the Fed's preferred gauge of inflation, rose 0.2 percent in October due to rising energy prices, pushing the year-over-year rate to 1.4 percent getting closer to the Fed's target of 2%.

The bond market Tuesday was a snoozer. Rates hardly did anything aside from a little shuffling between coupons and maturities - barely noticeable to LOs or borrowers. I won't waste your time, other than to say that yesterday the 10-year note closed 2 ticks lower to yield 2.39%, and 5-year Treasuries and agency MBS prices were pretty much unchanged.

This morning we've had the MBA's application data for last week (a non-event at -.7%, refis -1%, purchases +4%). The October JOLTS and November Help-Wanted OnLine data will be released at 10AM ET. This morning the 10-year's yield is hovering around 2.37% with both 5-year Treasury and agency MBS prices better slightly than last night's close.

Events

There is a whole loan trading webinar today from 2-3PM ET.

Registration is now open for The Mortgage Collaborative's Winter Lender Member Conference, set to take place March 1-4, 2017 at the Omni Scottsdale Resort & Spa at Montelucia. The independent cooperative network's winter event will offer an interactive agenda featuring over 50 different breakout sessions, a heavy emphasis on peer-to-peer networking and exchange of best practices, and a sharp focus on the multitude of new technology and innovation options in the mortgage industry.  For more information about The Mortgage Collaborative or their Winter Lender Member Conference, contact Rich Swerbinsky.

Do you know that half of the US residential property equity is controlled by people 62 and older? That's $6 trillion in equity. If you're not familiar with the Home Equity Conversion Mortgage (HECM) product, you could be losing your most valuable retiree and senior customers. Attend a FREE session available only to people new to the reverse industry February 8 at UserCon 2017 in San Diego. 

While we're on the topic, in case you're interested in knowing the "who's who" in terms of reverse mortgage loan issuance, there is an interactive chart of issuance trends which boasts the tracking every loan, bond, and CMO ever created.

Jobs and Announcements

"Do you want to grow your business with a Top 10 lender who is one of the only wholesale lenders to offer the financial stability of being a highly profitable bank? MB Financial Bank was ranked #6 in 2015 Total Wholesale Volume by Scotsman Guide, but ranks even higher in the number of loans closed per Account Executive. MB is looking to expand its sales team with candidates that have a thorough knowledge of the mortgage lending process, excellent interpersonal skills, and an unparalleled customer service instinct and capability." MB is currently hiring Wholesale Account Executives in the following markets: CA (Los Angeles/Inland Empire, Sacramento and East Bay), CO (Denver), FL (Southern and Tampa/Sarasota), HA, IL (Chicago), KS, MI (Southeast), NV (Las Vegas), NJ (Southern), ND/SD, OH (Northeast), PA (Western), TN/KY, TX (San Antonio/Austin) and WI. Contact Mark Mazzenga (610-496-1277) with confidential inquiries. (MB Financial, Inc. is the Chicago-based holding company for MB Financial Bank, N.A., which has approximately $19 billion in assets. EEO/AA Employer. Equal Housing Lender. Member FDIC. NMLS#401467.)

Kansas-based Peoples Bank has an exciting opportunity for an experienced direct to consumer purchase loan manager in its Orange County, CA Sales Center. This person would have experience originating and managing a sales team to fund purchase loans in a call center environment from direct mail, internet, and telemarketed inbound leads. The ideal candidate would help lead the purchase sales efforts and can effectively recruit and train inbound purchase mortgage loan officers. Peoples Bank is a 144-year-old federally chartered bank that prides itself on an industry leading customer service experience. If interested, please forward resume to Jason Friend.

A Regional Retail Mortgage lender based in Orange County is searching for a Chief Financial Officer. The ideal candidate will have several years of experience in the mortgage banking industry with senior management experience. An advanced degree or CPA and/or CFO certification is desired, as is expert knowledge of cash management, including warehouse lines. The company serves the Western United States, servicing a billion-dollar retained portfolio, with strong capital reserves, and an expansive product portfolio. "Join an experienced, energetic management team in our plan to grow the company to $1 billion in annual loan origination volume over the next two years." Confidential inquiries and resumes should be sent to me at rchrisman@robchrisman.com; please specify opportunity.

Out of Cherry Hill, New Jersey, comes word from Kevin Crichton, President and COO of E Mortgage Management LLC (EMM) that the company has contributed funds to the Opens Doors Foundation of the Mortgage Bankers Association (MBA). "I am a strong believer in commitment and giving back to community. This contribution goes toward the Foundation's role in providing mortgage and rental assistance payment grants to parents or guardians with critically ill or injured children allowing them to spend precious moments together," said Crichton. As a member of the MBA, we believe that the foundation offers outstanding philanthropic activities focused on home and community support and that is why we chose to sponsor the cause. Its mission seeks to aid, nurture and empower people and communities by developing and supporting programs that promote and defend sustainable homes for American families. The most valuable initiative of the foundation is that its programs offer mortgage and rental assistance payment grants to parents and guardians with critically ill or injured children, allowing them to take unpaid leave from work and spend precious time together without jeopardizing their cherished homes. (emmloans.com is a private, direct-endorsed local lender, in business for over 12 years serving clients nationwide through its network of home loan agents. The company offers Fannie Mae, Freddie Mac, HARP, FHA, VA, USDA, and individual state programs, and has access to a portfolio of private investors, nationwide.)