The Norris Group Blog

Today’s News Synopsis:

Home equity delinquencies increased to 4.3 percent of all accounts. Many construction companies reported an increase in profit during the 4th quarter of 2009. REIS Inc. reports that U.S. apartment vacancies rose to 8 percent last quarter. According to Freddie Mac, mortgage rates decreased to 5.09 percent from last week.

In The News:

Housing Wire – “Lennar Posts Quarterly Profit, Expects $320M Tax Refund” (1-7-09)

“Miami-based homebuilder Lennar (LEN: 15.70 +14.60%) reported net earnings of $35.6m, $0.19 per share, for its fiscal year fourth quarter that ended Nov. 30 and said it will receive a tax refund of $320m as a result of legislation that temporarily allowed companies to recoup losses from taxes paid in profitable years.”

Housing Wire – “Invesco Mortgage Capital Planning Another Share Sale” (1-7-09)

“Seeing a growing appetite for deals from investors, Invesco Mortgage Capital (IVR: 22.37 -2.10%), a real estate investment trust (REIT), plans to offer 7m shares of its common stock for sale in order to fund the acquisition of residential and commercial mortgage-backed securities (RMBS and CMBS) and leveraged mortgage loans.”

Housing Wire – “Delinquency Grows in Home Equity Loans, Lines of Credit: ABA” (1-7-09)

“Housing-related loans continued to show stress. Home equity loan delinquencies hit another record in the quarter, jumping 29 bps to 4.3% of all accounts. Home equity lines of credit rose 20 bps to 2.12% of all accounts. Mobile home delinquencies increased to 3.63% of all accounts, from 3.53% the previous quarter.”

Housing Wire – “Beazer to Offer 18m Shares, $50m in Convertible Debt” (1-7-09)

“Beazer Homes (BZH: 5.06 +6.08%) will issue new common stock and convertible subordinate debt, the Atlanta-based homebuilder said in a pair of Securities and Exchange Commission (SEC) filings. According to the filings, Beazer will issue 18m shares of common stock and $50m in convertible subordinate debt which will convert to stock shares in 2013.”

Bloomberg - “Job Growth Erodes as Housing Bust Pushes Mobility to Record Low” (1-7-09)

“Some households are staying put because they owe more on their mortgages than their properties are worth; others have trouble selling houses in depressed areas, economists say. The S&P/Case-Shiller composite index of home prices in 20 U.S. metropolitan areas was down 29 percent in October from its July 2006 peak.”

Bloomberg - “Principal Cuts on Lender Menus as Foreclosures Rise” (1-7-09)

“While interest-rate reductions or extending loan terms reduce homeowners’ monthly payments, they don’t give much comfort to borrowers who owe more on their homes than their properties are worth. Borrowers who don’t have equity in their homes are more likely to hand over the keys when they run into trouble.”

Bloomberg - “Lennar Leads Builders Higher on Report of Unexpected Profit” (1-7-09)

“Lennar Corp. led U.S. homebuilders higher after the company reported an unexpected quarterly profit as it took advantage of a tax change in the way it accounts for land sales. A Standard & Poor’s measure of 12 home construction companies rose as much as 5.4 percent, the most since November. Lennar climbed as much as 13 percent. KB Home, M/I Homes Inc., Toll Brothers Inc. and D.R. Horton Inc. all gained.”

Bloomberg - “Mortgage Rates on 30-Year U.S. Loans Fall to 5.09%” (1-7-09)

“Mortgage rates in the U.S. fell for the first time in five weeks, lowering borrowing costs and offering a boost to potential buyers. The rate for 30-year fixed U.S. home loans fell to 5.09 percent for the week ended today from 5.14 percent, mortgage finance company Freddie Mac said. Rates hit a record low 4.71 percent the week of Dec. 3. This week’s average 15-year rate was 4.50 percent, Freddie Mac said in today’s statement. ”

Bloomberg - “Record U.S. Apartment Vacancies Force Landlords to Cut Rents” (1-7-09)

“U.S. apartment vacancies rose to a record 8 percent in the fourth quarter and rents fell the most in three decades as unemployment cut demand, according to Reis Inc.”

Looking Back:

One year ago, the Mortgage Bankers Association reported that mortgage applications were decreasing. Statistics from Default Research showed that foreclosures and defaults had significantly increased across California. Apartment rents fell and vacancy rates increased to a 4 year high. Freddie Mac reported that mortgage rates fell for the 9th week in a row.