MUMBAI : Bandhan Bank is looking to expand its affordable home loan portfolio, aiming to carve out a niche in a segment with a limited presence of lenders. The Kolkata-based private sector bank wants to increase the share of housing loans to 30% of the total loan book by fiscal year 2024-25 (FY25) from 25% now, chief executive Chandra Shekhar Ghosh said in an interview. It is also looking to go solo in credit cards after launching a co-branded card with Standard Chartered Bank four years ago. Edited excerpts:
How has been your bank’s collection efficiency?
A majority of borrowers who were stressed during the covid-19 pandemic have returned to regular repayment discipline. Attendance in group meetings has increased to 70-80%, and that has helped us increase our collection efficiency. People are now growing their businesses, and that is one of the reasons why they are able to pay on time. For credit disbursed in the last two years—FY22 and FY23—our collection efficiency is over 97%. However, if you see only FY23, our collection efficiency is at 99%, showing an improvement in repayment behaviour.
Where do you see credit growth in FY24?
There are two parts to our loan growth. One is from loans to new customers, and another is through existing customers who are enhancing their loans. We will see 17-18% growth in microcredit and 20% growth for the whole bank in the current fiscal year.
Is the bank looking at new product categories?
We will soon launch credit cards. The bank had inked a partnership with Standard Chartered Bank for a co-branded credit card in 2019, which is no longer active. At Bandhan, we want to capture the opportunity primarily in the rural and semi-urban areas where our customers are based. That is not to say we will not go to the urban areas with this product.
How difficult and competitive is the Indian home loan market, and what is in for Bandhan in this pursuit?
The home loan market is big and there are not that many affordable housing players. Our housing loan book is now in good shape and stood at ₹26,580 crore as on 31 March. This includes home loans, loans against property, inter-bank participation certificates, and construction finance. This year, we are looking to achieve 25% growth in that portfolio. From the merger with Gruh Finance Ltd—completed in 2019—we got 195 branches, but now, we have over 400 branches for home loans. We will add more such home loan branches. The bank has strategically decided to push home loans in the affordable housing space across the country. We need to diversify our loan portfolio into more secured products. As of now, 42% of the book is secured, up from 36% in FY22. We expect that by FY26, half of our portfolio will become secured. By FY25, housing loans will account for 30% of our loan book, as against 25%. The bank’s ticket size in housing credit is ₹17-18 lakh.
How do you plan to match the credit uptick with growth in deposits?
Bandhan Bank would like to continue its growth in deposits and has a target of opening 550 branches over FY23 and FY24. About 60% of these have already been opened. The new branches will also help us get more deposits where we are focusing on current and savings accounts (CASA), especially the retail segment. There is some change in strategy too. About 72% of my branches are in rural and semi-urban areas, but the focus by cluster heads on these areas was not as much as on the urban areas. Bandhan had about 78 clusters earlier, and we are adding another 79 clusters. Each of these would comprise 8-10 branches and would renew our focus on rural and semi-urban areas. This process is also helping us get more deposits. The bank has been developing a separate vertical for current accounts to build this business. We are also developing a government business portfolio.
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Nearly 14 percent of mortgage loans on one-to-four unit properties were at least one month delinquent or in some stage of foreclosure at the end of the second quarter, according to the Mortgage Bankers Association.
That’s actually down from 14.01 percent last quarter, but could be deceiving given the large number of loan modifications in process (and they’re horrible re-default rates) and various mortgage lender backlogs.
The delinquency rate (loans that are at least one mortgage payment behind) dropped to a seasonally adjusted rate of 9.85 percent, down from 10.06 percent a quarter earlier, but up from 9.24 percent a year ago.
The seriously delinquency rate, loans that are 90 days or more past due or in the process of foreclosure, was 9.11 percent, down from 9.54 percent in the first quarter, but well above the 7.97 percent rate seen in the second quarter of 2009.
Meanwhile, the foreclosure rate was 4.57 percent, down from 4.63 percent in the first quarter, but up from 4.30 percent last year.
The percentage of loans on which foreclosure actions were started during the second quarter was 1.11 percent, down from 1.23 percent last quarter and 1.36 percent a year ago.
“These latest delinquency numbers contain a mixture of somewhat good news and somewhat bad news,” said Jay Brinkmann, MBA’s chief economist, in the report.
“The good news is that foreclosure starts are down and the inventory of homes anywhere in the process of foreclosure fell for the first time since 2006 and had the largest drop since 2005. Loans 90 days or more past due, the largest share of delinquent loans, also fell. The fact that both the 90+ delinquency rate fell and the foreclosure start rate fell means that a significant number of these seriously delinquent loans have been successfully modified and reclassified as performing, current loans.”
However, the rate of short-term delinquencies has increased and that may drive a new batch of foreclosures – the percent of loans one payment behind, which had peaked at 3.77 percent in the first quarter of 2009, climbed to 3.51 percent during the second quarter, up from 3.31 percent at the end of 2009.
Brinkmann attributed the increase to a rise in unemployment claims, which fell through most of 2009 before plateauing and eventually rising again recently.
“Ultimately the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story,” he added. “Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers.”
Jim Fite is a broker and co-owner of CENTURY 21 Judge Fite in Dallas, Texas, which has 1,100 agents, 23 offices, and 120 employees. The firm also offers title, mortgage, insurance, and property management services, operates a real estate school, and maintains a vetted network of close to 200 vendors to recommend to clients. The company is consistently named Best Place to Work by the Dallas Business Journal.
We recently sat down with Jim to talk about his new book “Success Through a Recession: Lessons Learned to Help YOU!”
Realty Biz News: What made you decide to write the book “Success Through a Recession?”
Jim Fite: “Success Through A Recession” was a long time coming. After “succeeding” through six (now on the 7th) recessions, I have learned a lot. There are business degrees, MBA courses, seminars, and books written about how to “build” a business. I have never seen one on what you do during the “Good Times” to prepare for the “Tough Times.” I started the outline in 2009 during the Great Recession. Then during the summer of 2022, I realized that I had to write a book. Business owners just don’t know how to navigate the process when there are more expenses than income.
RBN: Tell me about the book.
Jim: “Success Through A Recession” is a “How To” book! There are practical examples of what to do and what not to do, from developing core values to the establishment of long-range goals and how to hire the right people and take great care of them. I also talk about communication with all levels of the company, both internally and externally, and how to negotiate leases or purchase commercial properties to build a relationship with your banker. For when the “Tough Times” appear, I also make recommendations on how to make a plan and execute the plan in order to maximize results. And finally, the last chapter is about spiritual guidance.
RBN: What are the top takeaways that you would like real estate professionals and others to take away from the book?
Jim: “Success is a journey, not a destination.” The journey is for the benefit of your people, including clients, agents, staff, and leadership – everyone! There will be tough decisions that must be made, and the leader has to make them, then rally your valued people, and execute the well-thought-out plan. When mistakes are made, fix them quickly and communicate the improvements quickly.
RBN: As a long-time real estate professional, what are the things that you see as common threats to real estate brokers and agents during the downturn?
Jim: The most common threat to brokers and agents is their ATTITUDE! They watch the news, listen to the news, and then they listen to other agents who are negative about the market. My father used to say, “Never go to lunch with anyone until you have seen their 1099!” In other words, surround yourself with like-minded people. Take care of yourself, physically, mentally, and spiritually. NEVER GIVE UP!
RBN: What do you tell less experienced REALTORS® to help keep them motivated during the downturn in the market?
Jim:Read my book! I’ve captured 51 years of wisdom and experience for their benefit. Dad also said, “Learn from smart people. Learn from others’ experiences. It’s a lot cheaper than having your own.”“Success Through a Recession” by Jim Fite can be found on Amazon.com in hardback, paperback, and Kindle. All proceeds will be donated to the Judge Fite Charitable Foundation.
Find topics in marketing, technology, and social media for realtors, and housing market resources for homeowners. Be sure to subscribe to Digital Age of Real Estate.
It’s not very common for mortgage lenders to offer cash back or some other sort of reward for taking out a mortgage.
Generally, you might get some sort of closing cost guarantee or some assurance that if they screw up, you’ll be compensated. Really, that’s just making you whole.
But Chase is looking to change that by offering a very healthy 100,000 Ultimate Rewards points (their own rewards currency) for those who apply for a mortgage (and close the sucker).
Update: They have lowered the bonus to 75,000 Ultimate Rewards points, but now offer a bonus across multiple different credit cards.
Chase Is Targeting Sapphire and Other Credit Card Customers
Get 75,000 UR points if you have Chase Sapphire Reserve
50,000 UR points if you have Chase Sapphire Preferred
25,000 UR points if you have Chase Sapphire (no fee version)
25,000 UR points if you have Chase Freedom or Freedom Unlimited
75,000 United Miles if you have Chase Mileage Plus Club
50000 United Miles if you have Chase Mileage Plus Explorer
In order to be eligible for this rather handsome bonus, you need to be an existing Chase credit card customer with either the Chase Sapphire Preferred card or the Chase Sapphire Reserve.
It has since been opened up to those with a Chase Sapphire (no fee version), a Freedom or Freedom Unlimited card, and those with Chase co-branded United credit cards.
Assuming you’ve got one of those, you need to take out a “new, residential first mortgage” with the bank. In other words, a purchase loan. You can’t just refinance your existing mortgage to snag the big bonus.
This appears to be a push to capture more purchase-money business, an emerging trend in the industry ever since mortgage rates began to increase and shrink the eligible pool of borrowers.
The loan application must also be submitted to Chase between March 19th and August 31st 2018, and as noted earlier, must actually fund and close.
Within 10 weeks of closing, Chase will deposit the bonus Ultimate Rewards to the primary cardholder’s account. In practice, they tend to credit these bonuses a lot quicker.
Is This Chase Mortgage Bonus a Good Deal?
It depends on how you value the UR points
And how low the rate and closing costs are with Chase
As opposed to using a different mortgage lender
That might offer a better rate/fee combination
Well, that all depends. Many value Ultimate Rewards points at nearly 2 cents apiece, which equates to $2,000. But their value is dependent on how they are used.
If you simply cash them in, which you’re more than welcome to do, you’ll only get as much as $750. Still, nothing to sneeze at.
Alternatively, if you use them for business class airfare, you might be able to get thousands of dollars in value out of them.
But then you have to ask yourself if acquiring frequent flyer miles is your goal when taking out a mortgage.
For me, if Chase happens to offer the best pricing and service, or close to it, the 75k bonus points could be enough to sway your decision.
On the other hand, if you can get a better mortgage rate elsewhere, with lower closing costs, the benefit of those points could evaporate quickly.
It should also be noted that the bonus might result in a 1099 (be taxed), whereas traditional credit card rewards aren’t taxed because they’re considered a rebate. That reduces the perceived benefit even more.
The good news is the mortgage market seems to be getting more competitive as lenders fight over less business. That sounds like a positive trend for prospective borrowers.
Chase has been working on revamping its mortgage business of late, promising a digital mortgage experience to keep up with the likes of SoFi and Quicken’s Rocket Mortgage.
They also recently announced the hiring of HGTV’s Property Brothers to promote their home loan lending business. It seems to be an attempt to make mortgages cool, or perhaps more appealing to Millennials, given the many new startups in the space.
As always, be sure to comparison shop before deciding on one lender to get perspective, otherwise you won’t know if you’re sitting on a good deal or a bad deal.
It’s back to work after the holiday but mortgage rates aren’t really moving around much. The big economic event of the week will happen tomorrow morning when the monthly jobs data for June gets released. We could certainly see mortgage rates move around when that happens so keep an eye out for any market adjustments. Read on for more details.
Where are mortgage rates going?
Rates decline in Freddie Mac PMMS
After being closed on Wednesday for July 4th, the markets are open again. As one would expect, it’s a fairly quiet day, keeping mortgage rates basically unchanged.
Current mortgage rates have bounced around a little this week but are still staying in a narrow range. It was good news for anyone looking to purchase or refinance today as the Freddie Mac Primary Mortgage Market Survey (PMMS) showed that rates declined again. Here are the numbers:
The average rate on a 30-year fixed rate mortgage fell three basis points to 4.52% (0.5 points)
The average rate on a 15-year fixed rate mortgage sunk five basis points to 3.99% (0.4 points)
The average rate on a 5-year adjustable rate mortgage dropped thirteen basis points to 3.74% (0.3 points)
Here is what the Freddie Mac Economic and Housing Research Group had to say about rates this week:
“After a rapid increase throughout most of the spring, mortgage rates have now declined in five of the past six weeks.
The run-up in mortgage rates earlier this year represented not just a rise in risk-free borrowing costs, but for investors, the mortgage spread also rose back to more normal levels by about 20 basis points. What that means for buyers is good news. Mortgage rates may have a little more room to decline over the very short term.
Although the current economic expansion is in its 10th year, residential single-family real estate was initially slow to recover. Now, backed by the demographic tailwind provided by millennials reaching the peak age to buy their first home, the housing market should have some room to grow going forward.”
Rate/Float Recommendation
Lock while rates are down
Mortgage rates have stayed in a tight range these past couple of months but are still expected to move higher later this year as the Fed brings the nation’s benchmark interest rate up.
If you are thinking about buying a home or refinancing your current mortgage, we strongly recommend that you take advantage of today’s environment and lock in a rate.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
ADP Employment Report
The ADP Employment Report showed that 177,000 jobs were added to the U.S. economy in June. That’s slightly below the 190,000 that analysts had projected. The ADP report is the precursor to the more influence jobs report that will be released tomorrow morning. The two reports don’t always sync up, so it’s hard to make any assumptions about tomorrow’s numbers.
Jobless Claims
Applications filed for U.S. unemployment benefits for the week of 6/30/18 came in at 231,000. That puts the four-week moving average at 224,500. Claims have been getting higher recently, but analysts are still expecting a strong jobs report tomorrow.
PMI Services Index
The PMI Services Index came in exactly as expected at 56.5.
ISM Non-Mfg Index
The ISM Non-Mfg Index struck a 59.1 in June. That’s basically right in line with what was expected.
FOMC Minutes
The FOMC Minutes from the Fed’s meeting a few weeks ago will be released this afternoon at 2pm. It’s always possible that investors will make some trades based on the details that are revealed.
EIA Petroleum Status Report
For the week of 6/29/18:
Crude oil: 1.2 M barrels
Gasoline: -1.5 M barrels
Distillates: 0.1 M barrels
Notable events this week:
Monday:
PMI Manufacturing Index
ISM Mfg Index
Construction Spending
Tuesday:
Wednesday:
Markets Closed: July 4th
Thursday:
ADP Employment Report
Jobless Claims
PMI Services Index
ISM Non-Mfg Index
FOMC Minutes
EIA Petroleum Status Report
Friday:
Employment Situation
International Trade
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
Editor’s note: This is a recurring post, regularly updated with new information and offers.
If you’ve visited a Global Entry kiosk in the past two years, you may have gone through U.S. Customs and Border Protection’s new facial recognition process. It allows you to pass through Global Entry without scanning your passport or fingerprints.
CBP has been rolling out this technology since 2021 to facilitate an even quicker experience for Global Entry users when passing through U.S. customs. Unlike the original kiosks, these use a facial scan to confirm your identity when you arrive at a customs hall kiosk; they also eliminate paper receipts that travelers previously used to show agents.
A trusted traveler program run by the U.S. government, Global Entry allows preapproved, low-risk travelers expedited clearance upon arrival to the U.S. from abroad through automated kiosks at nearly 80 airports.
How do these new facial recognition machines work?
“The new paperless biometric kiosks use facial comparison and leverages mobile officer technology by confirming traveler identity and making an admissibility decision without producing a receipt,” a CBP spokesperson said. “This process will continue to enable increasingly contactless processing and a reduced environmental footprint through the elimination of paper receipts.”
With this new screening capability, you approach the Global Entry kiosks as normal and pose for a photo that verifies your identity. In theory, this whole process should take less than 30 seconds.
Like other technology implemented recently — including the Transportation Security Administration’s new computed tomography X-ray systems — facial recognition kiosks are designed to be more efficient. They also remove physical contact points between agents and travelers while minimizing environmental impact.
The updated Global Entry technology is part of a broader CBP and TSA effort to implement more facial recognition software. The hope is that it will expedite the identity verification process, including upon arrival in the U.S. and when passing through TSA security.
These efforts align TSA with Clear, the private sector’s equivalent of TSA PreCheck.
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In addition to time saved, this is also good news for parents of children who have Global Entry, as fingerprints on kids — especially babies — aren’t necessarily fully developed. Prior to this new process, families with children who weren’t fingerprinted had to see an officer before entry, significantly slowing down the process.
This technology potentially eliminates these issues and allows those globe-trotting children (and their parents) to enter the U.S. without a fuss, as TPG’s director of content, Summer Hull, recently experienced in coming home from Canada with her kids. She said:
“When we went through preclearance in Vancouver, we encountered the new Global Entry facial recognition machines. Typically, with younger kids, it’s been next to impossible to actually get their photo and fingerprints to register correctly and therefore, you usually have to see the agent. Though the new machines were confusing at first, it quickly became a fantastic upgrade as all you need to do is tilt the camera down a bit to see the kids, and there’s no additional scanning. It was fantastically simple and made having Global Entry for the whole family feel more valuable than ever since we actually all got to really use it.”
Where they are now?
As of June 2023, 15 U.S. airports have facial recognition Global Entry kiosks, including Dallas-Fort Worth International Airport (DFW), Miami International Airport (MIA), John F. Kennedy International Airport (JFK) and Seattle-Tacoma International Airport (SEA).
Global Entry is available at a total of 77 airports in the U.S. and abroad, including all major airports and all Preclearance airports.
Ways to save money on Global Entry
For $100, travelers can reap the benefits of both a Global Entry and TSA PreCheck membership for five years.
Fortunately, many cobranded airline and hotel credit cards offer up to $100 in statement credit reimbursement for the application fees associated with Global Entry or TSA PreCheck. This credit is typically available every four to five years.
Some of the credit cards offering this benefit are:
See here for a complete list of credit cards that offer a discount for TSA PreCheck.
Bottom line
With summer travel in full swing, expedited entry following an international trip is welcome news for travelers. Global Entry kiosks speed up the process by using facial scanners to verify identities.
In the charming Sonoma County town of Sebastopol, roughly 50 miles north of San Francisco, amidst picturesque landscapes, rolling hills, vineyards, and apple orchards, sits an enchanting two-parcel, 8.82-acre property with a very unique claim to fame.
The larger parcel, spanning 7.32 acres, was once owned by Charles M. Schulz, the creator of the beloved comic strip Peanuts, and still houses the cartoonist’s former studio, which has been carefully preserved — and turned into an inviting one-bedroom home.
It’s now being brought to market for the very first time in 47 years. Asking $3,950,000, the former studio and the land that surrounds it is listed with Mark Stevens and Gail Gijzen, affiliated with the Sebastopol office of Coldwell Banker Realty.
Schulz had the studio built in 1966 and used it as a creative space where he penned the adventures of beloved characters like Charlie Brown, Snoopy, and the rest of the “Peanuts” gang. His house at the time sat on an adjacent lot that was part of the same property, which was later broken down into several lots due to its massive size.
“The main house where the Schulz family lived was initially part of the same property as the art studio,” says one of the property’s current owners, Eric Rogers, whose grandparents bought the property 47 years ago.
His father, Timothy Rogers, chimes in to provide a little more background on just how massive the Schulz estate was back in the day: “Schulz’s property encompassed roughly 27 acres with the main house, the grandmother’s house and other structures including a large pond, baseball field, miniature golf course, large swimming pool and an enclosed entertainment pavilion.”
“The studio was the last structure built at the western end of the property, isolated on a dead-end road with surrounding vineyards and apple orchards and a tight-knit group of neighbors.”
Charles Schulz’s art studio lives on as a one-bedroom home
The midcentury modern home was built by Steele & Van Dyk, the same architecture firm that built the Redwood Empire Ice Arena (more commonly known as “Snoopy’s Home Ice,” now part of the Charles M. Schulz Museum in Santa Rosa, CA) where Schulz held annual hockey tournaments and hosted tennis exhibitions.
“My grandparents, Don & Helen Rogers, bought the property in 1976,” Eric Rogers tells us.
“My grandfather was intrigued when he saw an ad in the paper about a property belonging to a famous celebrity for sale in Sebastopol. Out of curiosity, he made an 80-mile trip from where they lived and discovered it was owned by Charles Schulz. The original property was divided into three sections: the main house, recreational area, and art studio. My grandparents ended up buying the art studio parcel which included the golf course.”
SEE ALSO: You can rent Walt Disney’s storybook house in Los Angeles – but it won’t be cheap
The original 7+ acre property has been in their family ever since, and there have been many discussions over the years about whether or not to enlarge the existing structure. But in the end, their love for the history behind the studio surpassed any desire to change the home.
Instead, they made minor enhancements meant to make the small house more livable.
Changes to the home include the addition of a stove/oven and custom-matched cabinetry in the kitchen on the opposite wall of the sink, Velux skylights installed in the kitchen, living room, bathrooms, and bedroom. All windows and sliding exterior doors were replaced with double-pane insulated glass but the Rogers made sure not to alter the nature of the design and had them all custom-made to match the unique originals.
In what was the original art studio space, some of the shelves and drawers were removed to accommodate a recessed king-size bed.
The end result is an inviting one-bedroom home with one full bath and a powder room, a stone fireplace, and 1,176 square feet of living space. Since the owners weren’t living on the property, they turned it into a licensed vacation rental for a few years.
“We started renting out the property in April 2016 and have had a growing number of people stay year after year. We ended up booking more people than we imagined — mostly couples looking for a romantic getaway to the wine country,” Eric says. “We stopped renting in 2022.”
While they always wanted to enjoy the property as it was originally designed, the family has long considered building an additional structure. They purchased an adjoining lot that can be developed but decided to keep it as an open space instead, and they’re now including that vacant parcel of land (spanning 1.5 acres) in the sale.
The 8.82-acre property is now hitting the market for $3.95M
While Charles M. Schulz’s former studio may be the centerpiece, the entire property is a semi-secluded paradise.
“The grounds are a combination of a four-hole golf course, Redwoods groves, walking trails surrounded by numerous rhododendrons, azaleas, camellias, dogwoods, numerous varieties of ferns, fruit trees and a vast variety of flowers,” Timothy Rogers tells us.
“After I retired as a helicopter pilot over two decades ago, I have developed and taken care of the landscaping as a labor of love. I will miss all those moments of sheer beauty that I have experienced at the passing of each season and sharing all that time with the wildlife that has shared it with me.”
And Timothy’s labor of love is showcased throughout the sprawling property, whose beautifully landscaped grounds are accented by walking trails with wood-carved benches and statues.
There’s also a massive deck (approximately 1,340 square feet) and a 4-hole, par-3 golf course that dates back to Schulz’s ownership — one that the Rogers family has revamped after it was left in disrepair.
It wasn’t uncommon for them to find golf balls owned by Schulz’s many famous friends. They found golf balls with names like Bob Hope, Bing Crosby, and Robert Mitchum inscribed on them, hinting at the many star-studded charity tournaments that once took place on the property.
The Peanuts creator’s ties to his former art studio haven’t been fully severed over the years. Schulz’s two sons would occasionally stop by to visit and reminisce.
“The sons have come by the property at different times to take trips down memory lane. It sounded like the childhood we all dream of — living on a large property amongst beautiful redwoods and surrounded by animals and livestock,” Eric shares.
“They would tell hilarious stories about driving their dirt bikes up and down the property and riding horses. It is rumored that the family hosted charity events on the golf course that drew in celebrity friends. Their love and effort went into building this amazing and magical place that we got to share as a family for decades.”
Now, it’s time for a new family to create memories here.
After 47 years and three generations of ownership, Eric and Timothy Rogers are selling the property for $3,950,000, and have enlisted the help of Mark Stevens and Gail Gijzen, affiliated with the Sebastopol office of Coldwell Banker Realty, to find the right buyer.
“We have built memories here that we’ll cherish forever. It is the perfect place to find serenity without being too far from civilization,” Eric tells us. “But the time has come for someone new to find a home here. We know they’ll love it as much as we have, and hopefully, continue the legacy that was left to us by the Schulz family when they created this loving place that we were fortunate to help build upon.“
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A sweltering, muggy day in Paris did little to dampen the atmosphere at the Paris Air Show on Monday. Representatives from the aviation industry gathered for the first time in four years to showcase the latest products and technologies and to plot the course for the aerospace industry.
There was joy in being back at Paris—Le Bourget Airport (LBG) for the first time since 2019 (the coronavirus pandemic canceled the 2021 edition of the biennial show) and overall happiness about the demand the industry is currently seeing even as supply chains continue to buckle. Still, a muted undercurrent set the tone of the day.
Despite the overall bright spot that commercial aviation and its airline industry customers are currently enjoying, few new things were expected to be announced. Most of what was on display had been introduced at previous shows.
Instead, the day felt like a grounding exercise, a reset — or even just a chance to catch a collective breath — as the industry orients itself to whatever direction is next.
Complete coverage from the 2023 Paris Air Show:
There was manic yet tentative jubilation at the world’s nascent reopening that underpinned the Dubai Air Show in late 2021, and there were high expectations and sprawling displays at the first European show to return, Farnborough, just under a year ago. The first hours in Paris felt more like a deliberate effort to check for sure footing and to look up and see where things are heading.
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Of course, there was still plenty to see, hear and explore at the world’s biggest aviation event, and the quieter vibe didn’t stop a planemaker from inking a record-shattering deal. It is an air show, after all.
Airbus signed an agreement with Indian carrier IndiGo for a firm order of 500 A320 family aircraft — the biggest single aircraft purchase in the nearly 120-year history of commercial aviation. The deal was not quite a surprise as Reuters first reported earlier this month that it was nearing completion. Nevertheless, it eclipsed Air India’s recent order for 470 jets (itself a record-breaker at the time) and capped a successful first day for Airbus.
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The European planemaker also announced that Saudi budget airline Flynas had firmed 30 options for A320neo jets, while Air Mauritius ordered three A350 wide-bodies.
It was a quiet day for Boeing, by comparison, with no orders announced. However, the company had previously said it expected a quieter showing this year, having announced several major orders over the past six months.
Early in the day, Canadian planemaker De Havilland Canada made noise by introducing a new variant of its storied workhorse “Twin Otter” aircraft, the DHC-6. The new plane, the Twin Otter Classic 300-G, is a lighter version with a greater payload. Twin Otters can be seen on commuter routes, ferrying guests from the airport to their resorts in the Maldives, carrying supplies and cargo to rugged environments around the world, running medevac missions and more. DHC said it had sold up to 45 new planes so far.
Behind the scenes: What it was like to cover my first airshow: A Dubai Airshow recap
Air shows are sprawling affairs that typically take over an entire airport, albeit a smaller one. They feature taxiways and ramps full of aircraft on display, temporarily constructed “chalets” in which major companies and airlines hold meetings, exhibition halls full of civil and military aviation tech, glimpses of future projects that could define the industry and much more. For many attendees, the deals are an afterthought; the chance to see cool new stuff is the latest.
Over the coming days, TPG will bring more from the show. This year, the show features a strong presence from eVTOL makers racing to be the first “flying taxi” company to market. The gathering will also showcase everything from hopeful supersonic airplane designers to electric and hydrogen engines and sustainable aviation fuel providers looking to help transition the industry to a greener future.
Today, though, was about finding our own footing at the show, exploring some planes we rarely see inside (stay tuned!) and, of course, watching the flying displays and checking out the new stuff on the ground.
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DAVID SLOTNICK/THE POINTS GUY
I have a weakness for helicopter acrobatics, so seeing a few bonus swoops and dives earlier in the day was a treat. The official flying program doesn’t start until the afternoon.
We also saw Airbus fly its A321XLR at an air show for the first time. The planemaker first flew this extra-long-range variant last year, but not as part of a public display.
A Dassault Rafale fighter took the stage next. While I’m not as big on military aviation, it was cool to see it take flight with an Air France jet approaching Paris Charles de Gaulle Airport (CDG) in the background … and some of the stunts it pulled off in the humidity.
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DAVID SLOTNICK/THE POINTS GUY
Back on the ground, Qatar Airways CEO Akbar Al Baker held a ceremony for the first Gulfstream G700 to join the airline’s executive fleet.
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DAVID SLOTNICK/THE POINTS GUY
Sitting next to a modified Airbus A319 already part of that fleet, the two were a notable pairing. We’ll have more on these two jets soon, but here’s a sneak preview:
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DAVID SLOTNICK/THE POINTS GUY
Speaking of sneak previews, new startup Saudi Arabian airline Riyadh Air — a sister airline to flag carrier Saudia and owned by the state’s sovereign wealth fund — displayed a leased 787-9 in its brand new livery. Riyadh doesn’t take delivery of its first planes until 2025, but it was an opportunity that the airline saw to make a splashy debut.
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DAVID SLOTNICK/THE POINTS GUY
I missed some of the afternoon flying display but still had the chance to see Boeing’s latest two jets — the 737 MAX 10 and 777-9, which are both still undergoing certification work.
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DAVID SLOTNICK/THE POINTS GUY
Finally, I saw some remarkable flying by a FedEx ATR-72-600, a French Potez CM-170 Fouga stunt plane and a U.S. F-35.
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DAVID SLOTNICK/THE POINTS GUY
Stay tuned for lots more at the Paris Air Show, and be sure to follow TPG on Instagram for even more from France.
If you could watch any TV series for the first time again, what would it be? After someone polled the internet, these are the top-voted television series.
1. Breaking Bad
“Breaking Bad,” shared one. “The greatest tv series of all time. Though it wasn’t a Netflix original, I’d say this was one of the first shows that helped usher us into the streaming era. Truly iconic, and Bryan Cranston is one of the greatest actors of all time..”
2. The Good Place
Many people agreed with, The Good Place. “It is one of those shows that gets more interesting (in new ways) each time you watch it, and I don’t think that can be said for many other shows! Plus, it’s an absolute masterclass in casting, makes intellectual topics fun, and has unique characters — no wonder it’s my favorite.”
3. Futurama
Futurama came in at number three on the list. However, one person noted, “We skip the dog episode, though.” “I completely agree,” said another. “As this is probably my most rewatchable show, there were many memorable first-time moments. The Bee episode is up there for me.”
4. M*A*S*H
“I’m dating myself here, but M*A*S*H,” shared another. “Very, very funny. It’s about the Korean war, but the good thing is that you don’t have to know or even understand anything about history to laugh your bum off. It has its touching moments too.
5. Community
“Community. I’d give anything to see ‘Remedial Chaos Theory’ or ‘Intermediate Documentary Filmmaking’ for the first time again,” one confessed. While others agreed, one added, “You discover new things on the 30th rewatch.”
6. Fleabag
Several people voted for the show, Fleabag. “Oh man, I’m feeling wistful just imagining seeing it again for the first time.” Another added, “I can’t stress how much I would recommend this show even if you don’t see why on the first episode, everyone should watch it. I promise by the end. You’ll be glad you did. It’s only two very short seasons. I came here looking specifically for this show.”
7. The X-Files
“I started watching The X-Files when I was eight and rewatched the entire series when I was 28,” answered another. “It was such an enriching experience. All of the episodes I didn’t get when I was a kid hit deep 20 years later. The truth is out there, my friends.”
8. Fringe
One user confessed, “I didn’t expect this answer so high up. Fringe is so underrated! Hate the last season, but I wish I could experience the second season for the first time again.” A second added, “Watched it several times over. Never disappoints.”
9. Twin Peaks
“Twin Peaks. Every watch-through is a wild ride. But nothing compares to that first watch,” one suggested. Another said, “It’s an intense fever dream of a show and probably a bit quirky for some, but for my money, it’s the most absorbing series of all time.
I’m still obsessed with it years later. For those new to the show, start with seasons one and two. Then watch the movie Fire Walk With Me and then season three, which takes place 25 years later.”
10. Avatar: The Last Airbender
“Avatar: The Last Airbender,” answered another. “I’d give anything to experience it the first time again. I’m going to watch the new series from Avatar studios and hope it can replicate that feeling.”
11. Firefly
Someone volunteered, “Firefly. The best show I never want to see a remake of” shared one. “I honestly don’t want to go through the heartbreak of learning that it was canceled all over again. It’s taken me a lot of time to heal from that,” confessed another.
12. True Detective Season 1
“True Detective Season 1. Peak Matthew McConaughey right there,” one replied. “My life was much better when I watched this the first time.” Another admitted, “I saw this season again recently, and it was even better the second time. I missed so many details the first time around.”
13. Black Mirror
“Black Mirror,” one noted. “It’s not the same when rewatching. Still good, but nothing beats seeing each story for the first time.” A second said, “Yo, that show was wild the first run. It was like anti-anti depressants.”
14. Lost
One person shouted, “Definitely LOST. I’m wondering how it would be to binge the series, but there was something about the year wait to find out what was in the hatch.” A second added, “I love Lost! You can only recreate the magic of watching it for the first time by introducing it to someone who’s never seen it and watching it with them!”
15. The Wire
Finally, The Wire comes in at number fifteen on this list. Someone suggested, “The Wire is great for multiple rewatches. It’s nice having an attachment to the characters from the get-go and being reminded why you like them so much.”
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First, total home sales should be 6.2 million or higher during 2020-2024. This is new home sales and existing home sales combined. The demographic bump in 2020-2024 is giving us a push in demand.
Second, because of the downtrend in inventory since 2014 and the demand pick-up we will see in the years 2020-2024, we had a risk of home prices accelerating too much. So, I set a five-year home-price cumulative growth level of 23%. If home prices grew between 0-23% in the five years of 2020-2024, we should be OK with where wage growth was going.
The fact that the 23% home-price growth level has been smashed in just two years and inventory just collapsed to all-time lows has created the most unhealthy housing market post-2010. The only risk to that 6.2 million line in the sand has been this:
Home prices grow above that 23% level: check
Mortgage rates spike higher: check
The two things I had as risk factors are now in play.
We have a risk to sales here, and the one area where we could be most in trouble is the new home sales sector. This sector on an apples-to-apples basis is more expensive than the existing home sales market. It’s also driven more by mortgage buyers who tend to be older and make more money than the new-home buyers. Compared to the existing home sales marketplace, it doesn’t have a high cash buyer or investor buyer profile.
Today, new home sales came in as a miss of estimates at 772,000, but the revisions were all positive so there’s not too much going on here. The builders are struggling to finish their homes, and there is a risk to builders in a rising rate environment when you have people wait so long to build a house.
Regarding the new home sales sector itself, it’s just an OK marketplace and has been for some time.
From Census: Sales of new single‐family houses in February 2022 were at a seasonally adjusted annual rate of 772,000, according to estimates released today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.0 percent (±11.9 percent)* below the revised January rate of 788,000 and is 6.2 percent (±13.7 percent)* below the February 2021 estimate of 823,000.
As you can see below, the new home sales market from 2018-2022 doesn’t look like the housing market we had from 2002-2005. Without exotic loan debt structures, credit always has limits, which is a good thing. Could you imagine this housing market if we eased lending standards? I would be protesting in front of Congress and speaking at congressional hearings if lending standards were reduced.
From Census: The seasonally‐adjusted estimate of new houses for sale at the end of February was 407,000. This represents a supply of 6.3 months at the current sales rate.
My rule of thumb for anticipating builder behavior is based on the three-month average of supply:
When supply is 4.3 months and below, this is an excellent market for the builders.
When supply is 4.4 to 6.4 months, this is an OK market for the builders. They will build as long as new home sales are growing.
When supply is 6.5 months and above, the builders will pull back on construction.
Currently, the monthly supply headline is 6.3 months, and the three-month average is at 5.93 months. This is just an OK marketplace, so don’t look for the builders to be really pressing to build now, especially when rates have risen so much. They’re mindful of higher rates because in 2013, 2014 and 2015 they had to deal with a miss in sales expectations. Then in 2018, when mortgage rates got to 5%, we saw a supply spike in the monthly home sales data and their stocks were down over 30%.
As you can see below, the completion data looks terrible. It’s taking forever to build a home and that has created a huge number of homes under construction. The risk is that cancellations can rise by the time the home is ready for move in.
From Census: The median sales price of new houses sold in February 2022 was $400,600. The average sales price was $511,000.
As always, the years 2020-2024 were going to be different. The builders have pricing power that means they can push the price onto their consumers. Like home sellers, they try to make as much money as possible. The only thing we have that creates balance in this market is higher rates, hence why I am team higher rates.
From the National Association of Home Builders, the builder’s confidence has faded recently, and you have to go with this data because it has been good historically with where housing starts and new home sales. Until you find a base on the data line, go with the trend. We no longer have the COVID-19 comps in play with the moderation in the data that needed to happen.
Purchase application data
Regarding the purchase application data that came out on Wednesday, some context needs to be discussed here. Purchase application data is down 2% week to week, 12% year over year. This data line has been negative year over year since June of 2021. A big theme of my work on HousingWire is to try to talk about housing data making COVID-19 adjustments because if you didn’t realize that we had some high comps due to the make-up demand of COVID-19, you might have thought housing was crashing in the middle of last year.
First, as you can see from the chart below, the market we had from 2002-2005 never existed in housing from 2014-2022. We cannot have a credit boom because speculation debt has been taken off-grid post-2010 with credit. It was always a slow and steady ride from the 2014 lows.
This is the year-over-year data since the start of the year. I have talked about how we would still have some makeup demand COVID-19 comps into February, and that’s what happened from my view: makeup demand spilled over into early 2021.
Jan. 5: -12%
Jan. 12: -17%
Jan. 19: -13%
Jan. 26: -11%
Feb. 2: -7%
Feb. 9: -12%
Those make-up demand comps are now gone.
Feb. 16: -7%
Feb. 23: -6%
March 2: -9%
March 9: -7%
March 16: -8%
Now, this week the year-over-year data shows -12%. You can see some of the weakness, but nothing too drastic. We can compare these previous times when housing was soft too.
In 2013-2014, when the 10-year yield went from 1.60% – to 3%, it created a negative 20% year-over-year data trend for most of the year. As you can see below, that downtrend was noticeable but we are far from those levels today.
2014 was the last year total inventory rose from weakness in demand. When rates rose toward 5% in 2018, we only had three negative year-over-year prints in the purchase application data, and the total inventory didn’t grow that year.
This year, inventory has collapsed again, and I have downgraded the housing market to a savagely unhealthy market because we simply lack homes, creating forced bidding. For me to stop saying this housing market is unhealthy, I need to see inventory get back up in a 1.52 – 1.93 million range, which takes us back toward 2018-2019 levels. Historically, that level of inventory is low but the market was still much more balanced then.
Speaking at a housing conference in 2019, I explained to the audience that it was a good thing that real home prices went negative. I had a big smile back then as housing was balanced. We don’t have a balanced housing market any longer.
Why won’t inventory grow? At the end of 2017, existing home sales went from 5.72 million and trended toward 4.98 million by Jan 2019, and we saw no inventory growth back then!
Housing tenure has doubled; homeowners on paper in 2018-2019 were already in great shape and now look better than ever on paper with the last refinance boom. What a hedge against inflation this year! But, housing tenure has become a severe problem in the housing market as inventory is collapsing in 2022.
While I am on team higher rates and welcome this significant bit of news to try to create more days on the market to cool this terrible home-price growth down, I am not blinded by the reality that this can also cause issues with home sellers who want to buy a home. Home seller data has been showing some stress, and that is the last thing I wanted to see right now.
However, it makes sense when inventory has collapsed to such low levels, and now rates are higher. Are you going to risk selling your home, not getting the home you want, and renting at a higher cost? This is the last thing I wanted to see in 2022, and since we are so close to April, it’s a reality we have to deal with for the rest of the year as long as inventory is still negative year over year.
Going out for the rest of the year, keep an eye out for that new home sales data. One of my six recession red flags is that new home sales and housing starts fade into a recession. Because the new home sales marketplace means more to an economy than the existing home sales marketplace, it’s more important to look at that.
Housing construction jobs and big-ticket item purchases are things that move with the demand of new homes. The existing home sales market results in a transfer of commission, moving trucks and some big-ticket item purchases.
Going back to my summer of 2020 premise of what can cool down the housing market, a 10-year yield over 1.94% should. Even though mortgage rates are still low historically, rising rates do matter, and with the home-price growth we saw in 2020, 2021 and 2022, it matters even more. You can see why I believe in economic models; they keep us in line.