A Closer Look at What Lies Ahead

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first_img Arch Mortgage Insurance Homeownership Rate Housing Market Mortgage Rates Originations Ralph Defranco 2016-11-11 Seth Welborn Share Ralph DeFranco is the Chief Economist at Arch Mortgage Insurance. DeFranco leads Arch MI’s forecasting of regional housing prices, overall regional housing market risk, and development of the company’s mortgage claim and pricing models. He also authors the quarterly Housing and Mortgage Market Review (HAMMR) on the state of the nation’s housing sector. DeFranco recently spoke with MReport about some predictions for the housing market for 2017, including origination volumes, mortgage rates, and the homeownership rate.Some in the industry, such as Freddie Mac, are predicting lower origination volumes next year compared to 2016. What is your outlook for mortgage originators?I like the standard conventional wisdom that rates are going to be gradually rising, so that means that we are going to see a steep drop in refinances. At the same time, the purchase market is growing, so it may grow by 10 or 15 percent next year from this year. The MBA is predicting a 20 percent increase in the purchase market. The reasons for that would be higher home prices, but also there is a slightly lower share of loans purchased that are all cash each year, so there will be a few more actual mortgages within the same number of transactions. But then also the homebuilding is ramping up. Between homebuilding, fewer all cash purchases, and higher home prices, you get higher seller volume on the purchase front. All in, we’re still expecting a decline when you add up the purchase and refi. They’ll probably be down slightly, but it’s hard to say. It depends on how fast interest rates move up. These things really should have very wide ranges around them, because the interest rate uncertainty is so large.What role will foreign homebuyers play in the market in 2017?If the dollar weakens, that will increase the number of foreign buyers. The foreign buyers are concentrated in certain areas. Foreign buyers have a small impact on the country as a whole, but they have an impact in certain areas, such as the West Coast—particularly in the upper middle class and higher end neighborhoods. They tend to buy houses that are almost twice as expensive as the median house in their markets, so they tend to be on the upper end of the quality scale.Why is there a higher risk of home price decline in the “energy patch”?Job growth has been falling. There are some areas of the country where there has been job losses. That includes North Dakota, Wyoming, and some smaller cities within other states. Those areas have still seen positive home price growth, but the risk is higher that there will be stagnation or a slight decline. The reasons behind that are the boom in tracking hasn’t fully unwound. There still layoffs and still over-effects from the slowdown in that sector that are still occurring.What do you think is going to be the effect of this new administration on the country’s homeownership rate, which hit a 51-year low in Q2?The trend has been downward, and part of that is because there are still foreclosures. Basically 0.9 percent of all mortgages are still in the foreclosure process, and most of that is left over from the housing crisis. As that finishes getting mopped up at the tail end of the foreclosure process, that is actually probably going to continue. The homeownership rate will likely decrease in the near term. What happens in the longer term will depend on what housing policies Trump puts in place. My sense is that he’s going to help on the demand side of the equation. For example, it will likely ease credit availability. There are good quality borrowers out there that have had difficulty getting a mortgage because of very tight regulations. I expect a lot of that is going to be reversed. An increase in infrastructure spending and tax cuts will be stimulative, and that will help the homeownership rate. Trump has talked about increasing supply, but it’s not clear how he can do that. Most of the restrictions on housing are local, so they won’t be able to have too strong of an effect on that.President-elect Trump has talked about easing regulation on the housing industry. Do you think that will have a positive or negative or negative effect?It will increase demand, but if supply doesn’t increase as well, what you’ll see is home prices will go up even faster than they currently are. They’re up around 5 percent year-over-year, which is faster than incomes have risen, so affordability is getting a little squeezed. If you loosen the underwriting guidelines a little bit, nothing like what we had back in the crisis, but if you open up the credit box some, that would increase demand even more, which would push up home prices even faster.What do you think will happen with mortgage rates in 2017?Our economy is actually standing pretty well. The U.S. has created about 2.5 million jobs over the last year. Interest rates should actually be much higher than they actually are right now. They’ve just been artificially suppressed by weakness overseas and concern over things like Brexit.Where they are headed is a harder question to answer after the election, because there is so much uncertainty about what a Trump Administration is going to do and what policies he is going to pursue. I personally think that they will probably rise faster than previously forecasted, because I expect that with a Republican Congress and president, they’re going to push forward with a large tax cut and large infrastructure spending, both of which will be positive for the economy, which would push interest rates up faster than they would be without those.”Will mortgage rates rise gradually over the next year? Will they get above 4 percent?That is a really tough one to call. We were thinking mortgage rates would average about 4 percent for next year. That was before the election. Now I think there is a much wider range around what could happen, and I expect it will be variable. It probably won’t go in a straight line gradually upward. It may lurch forward or lurch down based on surprises to the market, like trade friction or bellicose language against Iran. Who knows how the markets will react to that sort of thing?If there is increased uncertainty, that typically benefits mortgage rates. It keeps them lower than they normally would be. But a big tax cut and a big infrastructure bill, if those pass or even seem likely to pass, what would push rates up higher. I wouldn’t expect them to skyrocket. I would say rates are probably going to be perhaps a half a percentage point higher next year compared to this year. That’s not the end of the world in terms of affordability, but it does mean that people should move sooner rather than later. A Closer Look at What Lies Aheadcenter_img November 11, 2016 767 Views in Daily Dose, Data, Featured, Newslast_img

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This is why the Steppe Cement share price has slumped 14%!

first_img Royston Wild | Monday, 7th June, 2021 | More on: STCM Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. Enter Your Email Addresscenter_img Simply click below to discover how you can take advantage of this. FREE REPORT: Why this £5 stock could be set to surge See all posts by Royston Wild UK share markets are flattish in start-of-week trading as stubborn inflation-related fears and poor Chinese trade data sap investor confidence. Whilst movements are unspectacular the same can’t be said for the Steppe Cement (LSE: STCM) share price on Monday.Prices of the building materials supplier have tanked 14% in morning trade to 45p per share. The Steppe Cement share price had fallen to a six-week low of under 42p at one stage.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Steppe Cement — which manufactures cement in Kazakhstan — has slumped due to a negative reception to full-year financials.Kazakh sales tipped to slow in 2021Sales volumes at the company slipped 4% year-on-year in 2020 to 1.65m tonnes, it said. This annual droppage came in spite of sales growth in the broader Kazakh cement market. Volumes across the country rose 6% from 2019 levels to 9.4m tonnes.The AIM-quoted share said that its own local sales decreased 6% “due to milling limitations during two months of the high season.” Export sales rose 20% year-on-year, however.Production at Steppe Cement’s Karaganda cement factory in central Kazakhstan ran at 85% of capacity last year. It said that Line 5 produced 938,074 tonnes of cement last year because of two planned maintenance stops. Line 6 recorded output of 707,670 tonnes, meanwhile, in line with guidance.Looking ahead, Steppe Cement said “the market demand in 2021 seems strong despite the effects of Covid-19 temporary lockdowns”. However, the business expects demand growth in Kazakhstan to cool from last year’s levels. It predicts an increase of between 2% and 4% “as oil prices have recovered and the government stimulus packages continue.”The company is expecting total production at its Karaganda asset to rise to 1.75m tonnes in 2021.Steppe Cement’s profits grow despite revenues dropSteppe Cement’s lower volumes in 2020 caused total revenues to drop 6% year-on-year to $74.8m. Still, this didn’t derail strong profits growth at the business and on a pre-tax basis these rose 14% to $11.1m.This was also despite a 3% drop in average selling prices, to $45.40 per tonne. Steppe Cement’s cost of production per tonne fell by the same percentage from 2019 levels thanks to lower electricity and coal costs. General and administrative costs rose by $600,000 year-on-year to $6.2m because of higher provision for doubtful debts and the withholding of $400,000 of tax on transfers from its Karcement arm to the holding company.Capital investment at the company slowed in 2020 and Steppe Cement spent less than $1m in total. This reduced spending was directed towards packing improvements and steps to reduce power consumption. The reduction was due to “Covid-19 restrictions mostly during the summer of 2020,” which meant the company didn’t have a full complement of engineers.Steppe Cement has targeted capital investment of $3m in 2021 to make up for the lower expenditure last year. It expects maintenance capital expenditure to fall from 2020’s levels of $2m too. This is why the Steppe Cement share price has slumped 14%! 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Howard Lake | 8 February 1999 | News About Howard Lake Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world’s first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp and co-founder of GoodJobs.org.uk. Researching massive growth in giving. Givewell has established a charity research site in Australia providing profiles on over 200 of Australia’s major charities. Givewell has established a charity research site in Australia providing profiles on over 200 of Australia’s major charities. It is a useful resource for researchers and grantmakers who receive applications from Australian-based organisations. It publishes a number of surveys on giving: its two reports for January 1999 cover “Who Finances Australia’s Charities?” and “The Ethics of Accountability for Australian Charities.” Givewell claims it is the first organisation in Australia to provide a comprehensive research service for informed giving. Their aim is “to play a key role in fostering a better culture of giving in Australia. We do this by conducting research on charities and generating ideas on better ways to give.” Advertisement More Aus Fundraising AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to LinkedInLinkedInShare to EmailEmailShare to WhatsAppWhatsAppShare to MessengerMessengerShare to MoreAddThis  18 total views,  1 views today AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to LinkedInLinkedInShare to EmailEmailShare to WhatsAppWhatsAppShare to MessengerMessengerShare to MoreAddThis

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