Mortgage purchase applications rose 0.4% in the week ending May 6, 2016. We’re in the seasonally strong period for house purchases.
The federal government has taken steps to reduce foreclosures, including encouraging servicers to pursue other means of dealing with delinquent borrowers.
Foreclosure completions rose by 2,000 units to 36,000 in March 2016, according to CoreLogic. Completions fell 15% year-over-year.
Planned job cuts rose 6% in April year-over-year. They rose 35% from March. That being said, the number for December 2015 was the lowest in years.
Given the rough patch in the global economy, the Fed might have an excuse not to hike rates in June. If wage inflation is returning, the Fed’s hands will be tied.
In April 2016, non-farm payrolls rose by 160,000. Non-farm payrolls missed Wall Street analysts’ estimate of 200,000 by a wide margin.
In March 2016, there were 5.8 million job openings—up 9% YoY. The number of job openings came in well above Wall Street analysts’ estimates.
Historically, the use of public construction dollars has been the big lever that the government uses to stimulate the economy. This dates back to the New Deal.
In March, housing starts fell to an annualized rate of 1.1 million from 1.2 million the month before. Building permits fell from 1.2 million to 1.1 million as well.
In March, the share of existing home sales attributable to the first-time homebuyer was 30%—flat with February. Historically, this was closer to 40%.
Construction spending rose to a seasonally adjusted annual rate of $1.14 trillion in March from $1.13 trillion in February. Spending rose 8% YoY.
In the quarter ending March 31, construction spending as a percentage of the GDP was flat at 6.2%. This was a big rise from 5.7% a year ago.
D.R. Horton was relatively optimistic on its conference call. It was clearly happy with the most recent quarter. It re-affirmed and updated its guidance for 2016.
D.R. Horton (DHI) reported net income of $195.1 million, or $0.52 per share, for 2Q16. On a YoY (year-over-year) basis, the net income rose 32%.
D.R. Horton (DHI) has been reporting lower gross margins due to sticker shock. Home prices have been increasing, but wage growth has been stagnant.
D.R. Horton reported 2Q16 revenue of $2.7 billion—a 16% increase on a YoY basis and a sequential increase of ~14%. The revenue beat analysts’ expectations.
Over time, Pulte has lifted its gross margins and improved revenues. However, the stock has still lagged its peers, especially the S&P SPDR Homebuilder ETF (XHB).
PulteGroup (PHM) reported net income of $83 million, or $0.24 per share, which beat the Wall Street estimate of $0.20 per share.
PulteGroup (PHM) reported 1Q16 revenues of $1.4 billion, which topped Wall Street’s estimate of $1.3 billion. But not all is as rosy as it seems.
In March 2016, building permits fell to 1.1 million from 1.2 million.