Thursday, April 30, 2015

More Buyers Than Usual Enter Spring Market

An unusually high volume of home-buyer demand is flooding the spring market, as pending home sales rose in March for the third consecutive month and hit the highest level since June 2013, according to the National Association of REALTORS®.
Pending sales rose 1.1 percent month-over-month in March and are 11.1 percent above year-ago levels, according to NAR's Pending Home Sales Index, a forward-looking indicator based on contract signings.
Springing Up
"Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year," says Lawrence Yun, NAR's chief economist. "While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term home owners."
However, Yun cautions that insufficient inventory and accelerating home prices could be a drawback to sales reaching their full potential.
"Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer," Yun says. "This, in turn, has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability."

Regional Outlook

Here's a closer look at the Pending Home Sales Index across the country:
  • South: Contract signings rose 4 percent in March and are 12.4 percent above year-ago levels.
  • West: Contract signings increased 1.7 percent in March and are 15.6 percent higher than March 2014.
  • Northeast: Contract signings fell 1.5 percent for the fourth consecutive month but remain 0.6 percent above a year ago.
  • Midwest: Contract signings decreased 2.5 percent in March but are 11.3 percent above year-ago levels.

Wednesday, April 29, 2015

Mortgage Rates Hover Around Yearly Lows

The 30-year fixed-rate mortgage averaged 3.65 percent this week, remaining near its 2015 low and offering "positive news for potential home buyers in the market this spring," Freddie Mac reports in its mortgage market survey.
The low rates are helping to provide a boost to loan demand. Mortgage applications for home purchases in 60 of the 100 markets that Freddie Mac tracks in its index are up compared to the same point last year. Twenty markets alone are showing double-digit increases in applications.
Freddie Mac reports the following national averages with mortgage rates for the week ending April 23:
  • 30-year fixed-rate mortgages: averaged 3.65 percent, with an average 0.6 point, dropping from last week's 3.67 percent average. Last year at this time, 30-year rates averaged 4.33 percent.
  • 15-year fixed-rate mortgages: averaged 2.92 percent, with an average 0.6 point, falling from last week's 2.94 percent average. A year ago, 15-year rates averaged 3.39 percent. 
  • 5-year hybrid adjustable-rate mortgages: averaged 2.84 percent, with an average 0.4 point, dropping from last week's 2.88 percent average. Last year at this time, 5-year ARMs averaged 3.03 percent.
  • 1-year ARMs: averaged 2.44 percent, with an average 0.4 point, falling from last week's 2.46 percent average. A year ago, 1-year ARMs averaged 2.44 percent.
Source: Freddie Mac

Tuesday, April 28, 2015

The 'Equity Rich' Are Feeling Stuck

Even home owners who are "equity rich" aren't necessarily in any hurry to sell and cash in.
The share of equity rich residential properties – those with at least 50 percent of positive equity – stood at nearly 19.8 percent by the end of the first quarter, up slightly by 0.2 percentage points year-over-year, according to RealtyTrac's U.S. Home Equity & Underwater Report.
But in some markets, the rise of equity rich properties isn't translating into more listings. For example, in Seattle, 21 percent of home owners are equity rich – yet Seattle has the lowest months of inventory in the city's history, says OB Jacobi, president of Windermere Real Estate.
"These positive equity numbers simply aren't converting to new listings because there is nowhere for sellers to move," Jacobi says. "What we have in Seattle is your typical chicken and egg situation, and for now, there's no end in sight."
Indeed, "we have turned from an equity problem to an inventory problem," says Heidi Greer, broker at RE/MAX Alliance in the Denver market. "A majority of sellers are hesitant to sell for fear they will not be able to find or secure a replacement home. New construction will help to relieve some of the pressure although only in the mid-to-higher price ranges, not the affordable sector. Unless a property is outside the window of demand, equity is not an issue, with a large number of homes being sold for thousands over list price and with no simple contingencies such as inspection and appraisal."
The following major metro areas had the highest percentage of equity rich properties at the end of the first quarter:
  • San Jose, Calif.: 43.7%
  • San Francisco, Calif.: 38.6%
  • Honolulu, Hawaii: 36.2%
  • Los Angeles, Calif.: 32.2%
  • New York: 31%
  • Pittsburgh, Pa.: 29.7%
  • Poughkeepsie, N.Y.: 28.3%
  • Oxnard, Calif.: 27.7%
  • San Diego, Calif.: 27%
Source:"U.S. Home Equity & Underwater Report, First Quarter 2015," RealtyTrac (April 23, 2015)

Monday, April 27, 2015

Consumers: Real Estate a 'Good Investment'

Americans believe that real estate is the best long-term investment option for the second year in a row, according to a new survey by Gallup.
Americans Sold on Real Estate?
Gallup polled over 1,000 adults and found that 31 percent of respondents considered real estate to be the best long-term investment. 25 percent of those surveyed said that stocks and mutual funds are the best long-term investment, followed by gold at 19 percent. This is a big change from 2011-2012 when gold was the most appealing investment.
"Real estate took a pounding in home values and consumer confidence after the subprime mortgage crisis that started in 2007 spurred the financial crisis of 2008, deepening the 2007-2009 recession," Gallup reports. "Gold gained appeal during this time, likely due to its tangible quality, but this has proved to be temporary."
While confidence in real estate declined during the global banking crisis and recession, real estate is now ranked as the top investment choice or tied for the top choice with all major gender, age and income groups. This sentiment echoes a recent generational trends study from NAR that reported that 79 percent of all buyers surveyed considered buying a home a "good financial investment."
Besides real estate, stocks/mutual funds, and gold, survey respondents also listed savings accounts/CDs, and bonds as solid long-term investment options.

Friday, April 24, 2015

The Real Reason Millennials Aren't Buying

Rents are rapidly rising, jumping 14 percent since 2010 -- yet many young adults are continuing to delay home ownership and rent instead.
While managing debts and saving for a down payment continue to prove big barriers to some, some housing analysts say that the main reason Millennials aren't buying is that they just don't feel any urgency to.
"Millennials are getting married later in life than previous generations, and a sense of urgency to purchase comes with stability, marriage, and growing families," Joan Kamens, a real estate sales associate with Coldwell Banker Hearthside in Newton, Pa., told CNBC.
Responding to buyer concerns"Why Not Rent? I Can't Afford to Buy!"
30 percent of Millennials consider buying a home important but not a priority, according to a recent Goldman Sachs study.
Neeta Mulgaokar, a real estate sales associate with Mirador in New York, says that she often hears her clients say: "Why would I buy when it's so expensive? I could use that money for something else like travel or starting a business." Also, she notes that many Millennials may be reluctant about the home buying process. "Many Millennials have been burned or felt trapped by contracts (cell phones, cable, even student loans) and are shying away from long-term commitment," Mulgaokar notes.
So could anything get this generation moving more toward home ownership? Kamens believes they will, eventually. Once they're more established in their careers and family and when "education for children becomes a factor, they may settle with less for the convenience of quick travel time to the workplace," Kamens says.
But the longer they wait and remain renters, they may face more obstacles getting into home ownership down the road. The gap between rental costs and household income is widening to unsustainable levels across the country, according to a study released last month by the National Association of REALTORS®.
"Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes," Lawrence Yun, NAR’s chief economist, had noted about the study. "With rents taking up a larger chunk of household incomes, it's difficult for first-time buyers – especially in high-cost areas – to save for an adequate down payment."
Source: "Millennials Put Off Home Buying, Despite Rising Rent," CNBC (April 14, 2015) and "Why Renters May Be in Trouble," REALTOR® Magazine Daily News (March 17, 2015)

Fannie Offers Closing Cost Aid to First-Timers

Mortgage giant Fannie Mae announced a new program that allows first-time home buyers of its properties to receive up to 3 percent of the purchase price in closing cost assistance. On a $150,000 priced home, for example, buyers could receive up to $4,500 in closing cost savings.
Fannie Mae’s HomePath Ready Buyer Program requires eligible buyers to complete an online home buyer education course as well as purchase a HomePath property – the branding that Fannie Mae uses for the foreclosed properties it owns.
"Purchasing your first home can be an overwhelming process," says Jay Ryan, vice president of REO Sales at Fannie Mae. "We developed the HomePath Ready Buyer program to provide first-time home buyers with the knowledge to make informed decisions as they navigate the complexities of the home buying process. Closing cost assistance provides a cushion many first-time buyers need to more confidently face the financial responsibilities of home ownership."
The education course buyers are required to take covers the responsibilities of owning a home and the home buying process. The course includes nine, 30-minute sessions and is offered exclusively online.
To be eligible for the program, buyers must:
  • Complete the online HomePath Ready Buyer training course on www.homepath.com and receive the Certificate of Completion.
  • Must be a first-time homebuyer (who has not owned a property in the past three years) and who has plans to reside in the property as the primary residence. Auction, pool and investor sales are not eligible.
  • Make their request for closing cost assistance at the initial offer, submitted on or after April 14, 2015.
Visit the Fannie Mae website for additional information about the HomePath Ready Buyer Program.

Wednesday, April 22, 2015

Home Buyers Push Up Loan Demand

Mortgage applications were on the rise last week, as home buyers remain behind the upswing in demand. The Mortgage Bankers Association reported that applications for home purchases, viewed as a leading indicator of future home sales, rose 5 percent week-over-week on a seasonally adjusted basis for the week ending April 17.
Applications for home purchases are now 16 percent higher than the same week one year ago.
"Purchase applications increased for the fourth time in five weeks as we proceed further into the spring homebuying season," says Mike Fratantoni, chief economist for the MBA. "Applications for FHA purchase loans remained strong as well."
Overall, MBA's mortgage application index, which reflects combined applications for refinances and home purchases, rose 2.3 percent last week. Applications for refinances increased only 1 percent last week but remain up 41 percent from a year ago due to lower mortgage rates. A year ago at this time, the 30-year fixed-rate mortgage was significantly higher, averaging around 4.25 percent.
The average 30-year fixed-rate mortgage has mostly hovered around historical lows for the past few weeks. Last week, it dropped slightly to 3.83 percent, its lowest level since January, MBA reports.
Source: “Mortgage Applications Rise 2.3%, Led by Homebuyers,” CNBC.com (April 22, 2015)

Tuesday, April 21, 2015

Credit Unions Want Your Buyers' Business

Credit unions are aggressively expanding their mortgage business by more than quadrupling their share of total mortgage market volume in the last nine years, according to the National Association of Federal Credit Unions.
Navy Federal, the nation's largest credit union, closed more than $1 billion in mortgages for home purchases during March, its best month ever. More than half – 59 percent – of the loans it issued went to first-time buyers too. Navy Federal is available to all branches of the armed services, active and retired, civilian employees, contractors, and relatives.
Navy Federal is hooking first-time buyers at a time when first-time home buyers' presence on the overall market has been near 30-year lows, according to the National Association of REALTORS®. Historically, first-time buyers make up about 40 percent of the housing market, but currently is at just 28 percent to 29 percent.
Navy Federal is offering a range of products that cater to first-time buyers, particularly those who are struggling to save for the down payment. For example, Navy Federal is offering loans with zero-down payments, no private mortgage insurance premiums, as well as the standard low-down payment products of the Federal Housing Administration with a 3.5 percent minimum and the Department of Veterans Affairs with a zero minimum on loans.
Other credit unions are offering similar programs too in expanding their mortgage business. For example, North Carolina’s State Employees' Credit Union is offering qualified members up to 100 percent financing on mortgages up to $400,000 with no private mortgage insurance premium payments. The program also offers up to $2,000 in closing cost aid. The interest rate charged on the loans was 4.25 percent in mid-April for a 30-year term that has a rate adjustable after five years. 
Some credit unions are even offering to refund portions of a real estate agents' commissions. For example, the Boeing Employees' Credit Union – open to all residents and workers in the state of Washington, not just exclusive to Boeing employees – offers home buyers the option to receive a 20 percent cash refund of their real estate agent's commission as well as a $250 credit toward mortgage closing costs.
Credit union officials say they aren’t worried that these loan products will make them vulnerable to losses if home owners default on their loans.
"We know our members," says Katie Miller, vice president for mortgages at Navy Federal. Navy Federal's serious delinquency rate on its entire portfolio was 0.57 percent in March.
Source: "Many Credit Unions Offer Tempting Mortgage Deals," Los Angeles Times (April 19, 2015)

Monday, April 20, 2015

Home Prices Surge to Fastest Pace in Year

Existing-home sales showed some improvement in February, but remain constrained by low inventories of homes for-sale that are pushing price growth to the fastest pace in a year, according to the National Association of REALTORS®.
Inventory Crunch
The median existing-home price for all housing types was $202,600 in February – 7.5 percent higher than a year ago.
"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsustainable levels," says Lawrence Yun, NAR’s chief economist. "Stronger price growth is a boon for home owners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before [mortgage] rates rise."
Mortgage rates, for now, continue to hover near historical lows. The 30-year fixed-rate mortgage averaged 3.71 percent in February, according to mortgage giant Freddie Mac.
"With all indications pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – affordability concerns could heighten as home prices and rents both continue to exceed wages," says Yun. Indeed, an NAR study earlier this month found a widening gap between rent and income growth across the country, which is making it more difficult for renters to become home owners.
4 Stats to Gauge the Market
Here are some more findings from NAR's latest housing report:
1. Existing-home sales: Existing-home sales rose 1.2 percent month-over-month, reaching a seasonally adjusted annual rate of 4.88 million in February. Sales are 4.7 percent higher than a year ago.
2. Housing inventory: Housing inventories rose 1.6 percent to 1.89 million existing-homes for-sale in February, but remain 0.5 percent below a year ago. Unsold inventory is at a 4.6-month supply at the current sales pace. Most economists consider a 6-month supply healthy for the market.
3. Distressed sales: Foreclosures and short sales comprised 11 percent of sales in February, down from 16 percent a year ago. In February, 8 percent of sales were foreclosures, and 3 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value (in January, it was 15 percent) and short sales were discounted by 15 percent on average (from 12 percent in January).
4. Days on the market: Properties were on the market for 62 days, on average, in February, down from 69 days in January. Short sales were on the market for the longest – 120 days. Foreclosures tended to sell in 58 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month, according to NAR’s report.
By Region
The following is an overview of how sales fared in February across the country:
  • Northeast: existing-home sales plunged 6.5 percent to an annual rate of 580,000, but are 3.6 percent above year ago levels. Median price: $241,800, up 3.3 percent year-over-year.
  • Midwest: existing-home sales were mostly unchanged from January at an annual level of 1.08 million, but are 4.9 percent higher than February 2014 levels. Median price: $152,900, up 8.8 percent from a year ago.
  • South: existing-home sales rose 1.9 percent to an annual rate of 2.11 million last month, and are 6 percent higher than year ago levels. Median price: $177,900, up 8.5 percent from a year ago.
  • West: existing-home sales increased 5.7 percent to an annual rate of 1.11 million in February, and are 2.8 percent above a year ago. Median price: $290,100 -- 4.2 percent above February 2014.

Friday, April 17, 2015

The Real Reason Millennials Aren't Buying

Rents are rapidly rising, jumping 14 percent since 2010 -- yet many young adults are continuing to delay home ownership and rent instead.
While managing debts and saving for a down payment continue to prove big barriers to some, some housing analysts say that the main reason Millennials aren't buying is that they just don't feel any urgency to.
"Millennials are getting married later in life than previous generations, and a sense of urgency to purchase comes with stability, marriage, and growing families," Joan Kamens, a real estate sales associate with Coldwell Banker Hearthside in Newton, Pa., told CNBC.
Responding to buyer concerns"Why Not Rent? I Can't Afford to Buy!"
30 percent of Millennials consider buying a home important but not a priority, according to a recent Goldman Sachs study.
Neeta Mulgaokar, a real estate sales associate with Mirador in New York, says that she often hears her clients say: "Why would I buy when it's so expensive? I could use that money for something else like travel or starting a business." Also, she notes that many Millennials may be reluctant about the home buying process. "Many Millennials have been burned or felt trapped by contracts (cell phones, cable, even student loans) and are shying away from long-term commitment," Mulgaokar notes.
So could anything get this generation moving more toward home ownership? Kamens believes they will, eventually. Once they're more established in their careers and family and when "education for children becomes a factor, they may settle with less for the convenience of quick travel time to the workplace," Kamens says.
But the longer they wait and remain renters, they may face more obstacles getting into home ownership down the road. The gap between rental costs and household income is widening to unsustainable levels across the country, according to a study released last month by the National Association of REALTORS®.
"Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes," Lawrence Yun, NAR’s chief economist, had noted about the study. "With rents taking up a larger chunk of household incomes, it's difficult for first-time buyers – especially in high-cost areas – to save for an adequate down payment."
Source: "Millennials Put Off Home Buying, Despite Rising Rent," CNBC (April 14, 2015) and "Why Renters May Be in Trouble," REALTOR® Magazine Daily News (March 17, 2015)

Wednesday, April 15, 2015

A First-Time Buyer Comeback?

More jobs and a strengthening economy may give homes sales a jolt this spring.
2015 got off to a snowy and sluggish start for residential markets. While running at a faster clip than at the same time 12 months earlier, January’s closing activity clocked in markedly lower compared to the final months of 2014.
Click on images for larger view.
Sure, the severe weather experienced by much of the country had a hand in the tepid performance—an annual pace of just 4.8 million sales. But other factors, apart from the season, could be restricting home sales.
First, buyers are not excited by their choices. Inventories are low and falling. The supply of homes fell in January for the second straight month on a year-over-year basis, after having risen for 16 straight months, and are far below what the market needs. Larger inventories not only help to motivate buyers, they also keep prices from rising too quickly.
Inventory remains low in many areas, and income growth lags behind home appreciation.
But the news is not all grim. Demand for new construction is rising, and with it the need for workers. Homebuilders, who have been scrambling to find skilled laborers, may find a larger available pool as hard-hat workers leave the slowing oil drilling industry in favor of construction, which is experiencing wage hikes. As a result, we could see a 30 percent increase in new-home sales this year.
Second, there could be a change in lifestyle as young adult households—millennials—settle in as renters. Does this generation prefer not to be tied down? It’s too early to tell. The home ownership rate—now at 64 percent —is at its lowest level in more than 20 years.
Practitioners are seeing more activity from buyers as interest rates remain low and financing becomes easier to obtain, at least in some markets. 
This phenomenon may have little to do with lifestyle choices and more to do with economic realities. After all, the number of millennials—those in their 20s and early 30s—-living with their parents is at sky-high levels, and it’s doubtful that staying with mom and dad is their idea of freedom. More likely, they’ve felt -hampered trying to find stable, good-paying jobs, let alone obtain mortgage financing in today’s overly strict environment.
But there are hopeful signs here as well. Jobs and wages are steadily improving. The mortgage credit box is opening up a bit. When you look at these trends along with the improving prospects for home construction amid a strengthening economy and continuing low interest rates, first-time buyers could be poised for a comeback in 2015. Overall, we could see a good year ahead. The formation of more new households is something parents, as well as their young adult children, can smile about.

Tuesday, April 14, 2015

A Big Mistake Mortgage Shoppers Make

About one-third of recent home buyers failed to shop around for a mortgage, saying they were satisfied with the first quote that a lender gave them, according to Fannie Mae's National Housing Survey. But that could be a big mistake.
Researchers found that higher-income, younger-aged, and minority borrowers were the most likely to gather multiple quotes when shopping for a mortgage.
On the other hand, "first-time home buyers and lower-income borrowers are more likely to say that referrals from friends, family, or co-workers had a major influence on their choice of lender," note Sarah Shahdad and Qiang Cai of Fannie Mae's
 Economic & Strategic Research Group in commentary at Fannie Mae’s website. "Only first-time home buyers are more likely to say that a real estate agent's or mortgage specialist's referral influenced their choice of lender. … These findings suggest that there is an opportunity to help consumers be better informed and improve upon the mortgage shopping process."
Shahdad and Cai urge that consumers be provided with more information about mortgage product choices and that buyers be encouraged to seek multiple sources of information.
"As large and infrequent as the mortgage transaction is in most people’s financial lives, borrowers may be leaving money on the table by not shopping around and negotiating for the best terms they can get," Shahdad and Cai write. "Getting a better deal can help borrowers sustain their mortgage even in the case of unexpected increases in expenses or decreases in income. The level of influence of referrals on today’s first-time and lower-income home buyers suggests that finding a lender who delivers on other dimensions, such as efficiency and customer service, also is a key area of focus for many."

Monday, April 13, 2015

Can you believe Portland didn't make this list?

America's 10 Healthiest Cities

A high quality of health care and an abundance of outdoor exercise activities earned Minneapolis, Minn. the title of "the healthiest city in America," by Livability.com. Their list highlights cities that give residents a variety of exercise opportunities, healthy food options, and quality support systems to help them live healthy lives.
Cities and Quality of Life
To come up with the ranking, Livability.com editors looked at data from County Healthcare Rankings as well as information from Esri to find places with quality and affordable health care. Factors such as the adult obesity rate, the access to healthy food, the ratio of doctors to residents, and the number of hospitals were also considered.
Cities were also evaluated on the ability of their infrastructures to promote a healthy lifestyle for residents, including walkability, the number of farmers markets, parks and golf courses, and the amount of natural amenities. They also took data from the EPA to assess environmental elements.
"The link between cities and health is increasingly clear," says Livability Editor Matt Carmichael. "It’s not enough to have a great hospital to take care of you when you’re sick. The city itself can help you lead a healthier life."
These are the top 10 healthiest cities:
 1. Minneapolis, Minn.
  2. Cambridge, Mass.
  3. Madison, Wis.
  4. Miami, Fla.
  5. Bridgeport, Conn.
  6. Arlington, Va.
  7. Santa Ana, Calif.
  8. Honolulu, Hawaii
  9. Fort Collins, Colo.
10. Yonkers, N.Y.
Source: "Top 10 Healthiest Cities," Livability.com (April 6, 2015)

Friday, April 10, 2015

Home Prices Heat Up for Spring

Home prices are on the move this spring, as many markets inch closer to prices they haven't reached since the peak during the housing boom. Twenty-six states as well as the District of Columbia were at or within 10 percent of their peak home prices, according to the February 2015 CoreLogic Home Price Index, which has measured home prices dating back since January 1976.
Six states reached new price highs in January, including:
  • Colorado: +9.8%
  • New York: +8.2%
  • North Dakota: +7.7%
  • Texas: +8.5%
  • Wyoming: +8.4%
  • Oklahoma: +5.2%
NAR's Existing-Home Sales Report: Home Prices Surge to Fastest Pace in Year
Nationwide, CoreLogic’s home price index, including distressed sales, showed home prices rose 5.6 percent in February year-over-year. That marks three years of consecutive year-over-year increases in home prices.
"This is the hottest home price appreciation prior to the spring selling season in nine years," says Anand Nallathambi, president and CEO of CoreLogic.
If interest rates continue to remain low and consumer confidence stays strong, CoreLogic housing analysts predict that home prices will rise an additional 5 percent over the next 12 months.
"Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months," says Frank Nothaft, chief economist for CoreLogic.
From February 2014 to February 2015, low-end home prices climbed by 9.3 percent compared to 4.8 percent for high-end home prices -- a gap that is three times the average historical difference, according to CoreLogic’s housing data.
The following five states posted the highest home price appreciation (including distressed sales) year-over-year, according to CoreLogic’s latest index:
  • Colorado: +9.8%
  • South Carolina: +9.3%
  • Michigan: +8.5%
  • Texas: +8.5%
  • Wyoming: +8.4%

Thursday, April 9, 2015

More Proof Home-Buyer Demand Is Rising

Mortgage applications for home purchases rose last week for the third consecutive week, a fresh sign that home-buyer demand is increasing. Applications, which are viewed as a leading gauge of home-buying activity, were up 7 percent week-over-week and are now 12 percent higher than the same week one year ago, according to the Mortgage Bankers Association.
"Purchase mortgage application volume last week increased to its highest level since July 2013, spurred on by still-low mortgage rates and strengthening housing markets," says Mike Fratantoni, MBA's chief economist.
The MBA's seasonally adjusted mortgage application index showed that overall volume, including for purchases and refinancing, rose 0.4 percent week-over-week for the week ending April 3. The modest rise was due to a sluggish number of applications for refinancing last week.
Despite low mortgage rates, refinance applications dropped 3 percent from the previous week and are down 47 percent from last year's levels.
"Rates have been below 4 percent in 12 of the last 13 weeks," Fratantoni says. "However, so many borrowers have refinanced in recent years at very low rates, and they just are not responding to rates at this level. The refinance index has actually decreased in seven of the last 13 weeks despite rates fluctuating within a narrow range."
MBA reports that the 30-year fixed-rate mortgage averaged 3.86 percent last week, dropping from 3.89 percent the previous week.
Source: “Mortgage Applications Rise Points to More Homebuyers,” CNBC.com (April 8, 2015)

Monday, April 6, 2015

Helping your dreams of home ownership become reality - Check out Lender Troy Pohrman from US Bank and what he can offer you!

Helping your dreams of 
home ownership become reality 

We offer a variety of loan options including: 

• Conventional Mortgages 
• Government FHA & VA Mortgages 
• New Construction to Permanent financing 
• Vacant Lot loans (including acreage if typical for the area) 
• Fixed Interest Rate Second Mortgages 
• Adjustable Rate Mortgages (ARM) 
• JUMBO loans 
• Home Equity Line of Credit (HELOC) 

Why go to US Bank for a mortgage loan? My top 5. 

1) We have pricing specials for getting a mortgage loan with US Bank. If you are new, I can give you .25% off your closing costs or apply this to your rate. For example $200k loan, I can give you a credit for $500, with a max credit of $1000. If you have an existing US Bank Mortgage you will receive a credit of $300. US Bank also has a pricing special on new purchase loans of .50% of the loan amount as a credit. This can be used to buy the rate down or apply towards your closing costs. 

2) Our interest rates are very competitive along with low closing costs. US Bank only charges a $745 fee, all the other fee's are third party that you would have with any other lender. US Bank also has niche products, please call me on these. For one example we can lend on land up to 80% loan to value. 

3) Closing purchases less then 30 days. Great communication with you and the realtor. Local processing and underwriting. I have my own personal processor and a great team. 

4) I have 24 years experience in the mortgage field and a top producer in loans closed. This causes me to be on top of the market and what the best product will be for your customers. A loan officer only closing a few loans a month, will not have a great grasp on the changing market. 

5) I'm not a order taker. I will take the time to interview your customer in great detail to find out what the best product will be for them and their family. For example I had a customer who wanted a FHA loan to purchase a home, he went to another bank and they put him in this. When he came to me, I dug a little deeper in the customer's long term/short goals and discovered that a conventional loan will be the best for them. It saved them over $54 a month in payments and a savings over $2000 that would have been added to their loan. 




Take care and have a blessed day!
Troy Pohrman
Mortgage Loan Officer
Phone: 503-313-3101
Fax: 509-694-2393
305 NE 181st Ave Portland, OR 97230
www.usbank.com
NMLS: 404305
Website: www.mortgage.usbank.com/troypohrman 

Saturday, April 4, 2015

Industry Hears Call for Credit Scoring Changes

The way companies calculate people's credit scores needs to change to reflect how people live their lives today, or millions of people will continue to fall outside traditional calculation models and not be able to become home owners.
That was the consensus view of a dozen real estate and mortgage industry experts who met Wednesday at the legislative headquarters of the National Association of REALTORS® in Washington, D.C. to examine the state of credit scoring and what can be done to improve what’s become a key part of the mortgage finance process.
Julian Castro, the secretary of the U.S. Department of Housing and Urban Development, was one of a diverse group of housing industry stakeholders who attended the meeting. Castro said his agency is looking at the credit scoring issue as part of its effort to improve credit access to Americans.
NAR President Chris Polychron meets with HUD Secretary Julian Castro at NAR as part of a credit access summit NAR hosted April 1 with Hispanic and Asian real estate groups.
"We do hear about the need to look at new ways of incorporating and analyzing data so that it’s more sensitive to getting at the responsibility folks have shown in their lives that would indicate—be predictive of—their future behavior and paying down that mortgage," Castro said. "There’s been a disconnect there."
The credit scoring industry has already taken a number of steps to revamp the way people’s credit worthiness is calculated. Both Fair Isaac Corp., which produces the widely used FICO score, and credit scoring company VantageScore were present at the meeting to talk about recent changes in the way they determine scores. Fair Isaac Corp. has changed the way it handles medical collections, among other things, so people aren’t unfairly penalized for non-recurring problems. Both companies are experimenting with non-traditional charges such as monthly rental and utility payments, although those efforts are not yet built into their regular models.
Experts around the table, including Mark Zandi of Moody’s Analytics, Jude Landis of Fannie Mae, and Laurie Goodman of the Urban Institute, agreed that though the housing market has recovered in many respects since the economic downturn of almost eight years ago, one way in which it hasn’t come back is in the return to more balanced credit scores as a threshold for obtaining financing. Most conventional loans today are made to borrowers with a credit score of around 740, up 20 points from before the housing boom, when the typical score was around 720.
Zandi noted that, although the difference seems small, the 20-point gap represents millions of borrowers. What’s more, a 740 score today is much harder to obtain than it was before the downturn, simply because the economy is so much tougher today.
Among the recommendations to come out of the meeting is a need to add measurement standards that better reflect changing technology, lifestyles, and demographic trends in the U.S., because up-and-coming minority and millennial consumers don’t use credit in the same way households did in the past. For that reason, experts expressed support for credit scoring companies building in non-traditional payments like monthly rent and utility bills into their models.
Representatives from FICO and VantageScore at the meeting said they are doing that and intend to build on innovations that they’ve already recently incorporated into their models.
"It’s such a critical topic,” NAR President Chris Polychron said in closing the meeting. "We’d like to see these scoring models that rely on non-traditional histories. We just have a lot to do."
The Asian Real Estate Association of America and the National Association of Hispanic Real Estate Professionals partnered with NAR on the meeting. Representing AREAA was Jim Park, the association’s chairman emeritus, and representing NARHREP was Jerry Ascencio, a REALTOR® from the San Fernando Valley in California. Other participants at the meeting were Vanessa Perry of George Washington University, Barrett Burns of Vantage Score, Julie Steinhagen of the Homeownership Preservation Foundation, and Jim Wehmann of Fair Isaac Corp.  
—Rob Freedman, REALTOR® Magazine

Wednesday, April 1, 2015

Market Is Healthiest in Years, New Index Says

A newly unveiled forward-looking housing index by Nationwide says the U.S. housing market is at its healthiest level since 2001. The Health of Housing Markets Report will analyze the housing health outlook on a quarterly basis throughout 373 metro areas.
The index’s current leading indicator score for the fourth quarter of 2014, was 109.8, the highest level in the 15 years of data already examined by the study's authors. A reading of more than 100 suggests the national housing market is healthy and shows few signs of a housing downturn over the next year.
The healthiest housing markets in the country are Pittsburgh, Cleveland, and Philadelphia, according to the index. The report considers employment, demographics, the mortgage market, and house prices to determine the health of each market.
While the majority of housing markets showed improvement, about 25 percent of the housing markets evaluated showed a decline over the past year. The least healthy housing markets, according to the index: Bismarck, N.D., and Atlantic City, N.J. (although both of these markets received “just slightly negative performance rankings,” the report notes). 
“The HoHM Report provides a look into the future instead of the rear view mirror,” says David Berson, Nationwide’s chief economist and senior vice president. “The quarterly report should serve as a resource to gauge how healthy housing markets are today but, perhaps more important, what to expect in the future and why.” 
This week, the National Association of REALTORS® reported that its forward-looking index, which is based on signed housing contracts, showed pending home sales at the highest level since June 2013. The largest gains were in the Midwest and West, which offset some declines in February in the Northeast and South.
Report's Top 10 Metros
The HoHM Report found that the 10 healthiest metro areas in the fourth quarter of 2014 were:
  1. Pittsburgh
  2. Cleveland-Elyria, Ohio
  3. Philadelphia
  4. Rockford, Ill.
  5. Burlington, N.C.
  6. Scranton-Wilkes-Barre, Pa.
  7. Fayetteville-Springdale, Ark.-Mo.
  8. Idaho Falls, Idaho
  9. Tulsa
  10. Kennewick-Richland, Wash.

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