Friday, August 28, 2015

Rental Satisfaction Drives Buying Decisions

Satisfaction over the rental experience is a major factor in deciding whether a renter will decide to purchase a home, according to Freddie Mac research.
Renters who are the most satisfied with their rental experience were found to be more likely to continue renting (68%) than to purchase a home (32%), the study showed.
"As we gather data each quarter, we are finding the old perception that renting is something people do until they buy is not always true,” says David Brickman, executive vice president of Freddie Mac Multifamily. “The trend shows that satisfied renters are more likely to continue renting, even as we are seeing rising rents in the market. Dissatisfaction may drive renters to buy, and we are seeing a slight decrease in satisfaction among single-family renters. We will continue to monitor this for stronger indicators and trends, but for now, the single-family rental home market may be a good place to look to find potential home buyers."
The number of U.S. renter households is up again for the tenth consecutive year, according to the U.S. Census Bureau. More households of all sizes, income levels, and age ranges now rent their homes. Renters are leading household formation, which is expected to keep climbing due to the improving economy, millennials continuing into adulthood, and immigration, Brickman says.
The study also found that single-family renters are significantly more likely to say they expect to buy than multifamily renters (53% vs 36%) when asked about their plans in the next three years. In the U.S. about 15 million households rent a single-family house and 25 million rent an apartment, according to U.S. Census Data. Sixty-seven percent of apartment renters report being satisfied compared to 60% of single-family property renters.
Source: “Dissatisfaction Will Make Buyers of Multifamily Renters,” CoStar Group (Aug. 26, 2015)

Freddie: ‘Housing Market Strongest in Years’

The housing market is gradually showing signs of stabilizing, as two additional states – Arkansas and Tennessee – as well as four additional metro areas are added to Freddie Mac’s latest Multi-Indicator Market Index reading. The added metros are Omaha, Neb.; Scranton, Pa.; Chattanooga, Tenn.; and Madison, Wis.
The MiMi measures the stability of the nation’s housing market by comparing its long-term stable range to current ratios in home purchase applications, debt-to-income ratios, on-time mortgage payments, and employment.
Since hitting an all-time low in October 2010, the national MiMi has rebounded 35 percent. However, it remains significantly off from its high of 121.7. It’s currently at a value of 80.3, a housing market considered mostly in a stable range.
"Housing markets are the strongest they've been in years with the National MiMi above 80 for the first time since 2008,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Nationally, all MiMi indicators are heading in the right direction. Robust home buyer demand has put total home sales on pace for the best year since 2007 and look for that trend to continue as the MiMi purchase applications indicator remains on the upswing. The West has been especially strong, with many markets posting double-digit growth in their MiMi purchase applications indicator compared to a year ago."
Still, home prices are about 7 percent below peak values nationally, Kiefer notes. However, home prices in many markets are soaring to all-time highs, and that along with low interest rates, are helping to support home buyer affordability, he says.
Also, "mortgage delinquencies are coming down rapidly, but are still high in many markets,” Kiefer says. “Those markets hardest hit by the Great Recession, including many in Florida, are rebounding but they still need to improve to get delinquencies back in line with their benchmark historic averages. The key driver of all this recovery has been solid job growth, with 96 out of 100 metros and all states within range of their benchmark historic average unemployment rate."
Freddie Mac’s latest MiMi reading showed that 28 of the 50 states, as well as the District of Columbia, have values in a stable range. The top five are: Washington, D.C.; North Dakota; Montana; Hawaii; and California and Utah (tied).
What’s more, 42 of the 100 metro areas have MiMi values in a stable range. Ranking in the top five are: Fresno, Calif.; Austin, Texas; Honolulu; Salt Lake City; and Los Angeles.
Source: Freddie Mac

Thursday, August 27, 2015

Loan Demand Holds Steady, For Now

Mortgage applications mostly held steady in the latest week as interest rates dropped slightly. But CNBC reports that we could simply be in “the calm before the storm.” The Federal Reserve is largely expected to start raising rates in September, which likely will impact loan demand.
For the week ending Aug. 21, total mortgage applications – including for refinancings and home purchases – rose 0.2 percent week-to-week on a seasonally adjusted basis, the Mortgage Bankers Association reported on Wednesday.
Broken out, refinance applications dropped 1 percent while applications for home purchases ticked up 2 percent. Applications for home purchases are 18 percent above the same week a year ago, according to MBA. Meanwhile, MBA reports the average interest rate for a 30-year fixed-rate mortgage fell to 4.08 percent, falling from 4.11 percent the week prior.
The stock market’s plunge on Monday sent mortgage rates lower, and lenders were reporting stronger interest from consumers on Monday.
"The turmoil in global stock markets and subsequent drop in interest rates that began late last week is not evident in these results, but will likely have a significant impact on next week's results," says Mike Fratantoni, MBA’s chief economist.
But as rates move higher — which they are largely expected to soon do — home buying also will likely see some initial momentum from the increases.
“Rate moves, especially higher, can cause a short-term surge in home buying” as buyers rush to lock in low rates before any additional increases, CNBC reports. “When rates sit at low levels for a long time, buyers are less apt to act.”
Susan Maklari, senior equity analyst at UBS, told CNBC that they continually hear from homebuilders that there is a lack of urgency among buyers “in part because rates haven't moved at all.”

A 10-Year Housing Surge on the Horizon?

The housing market is poised for one of its largest expansions in history. By 2024, demographic and economic changes are forecasted to bring 15.9 million additional households on board, according to a new study released by the Mortgage Bankers Association.
That means an average of 1.6 million additional households per year, sparking “housing market growth over the next decade that would be among the strongest the U.S. has ever seen,” according to the report.
The MBA report says the bulk of that growth will be from increases in the number of households who are headed by those age 60 and older and households headed by age 45 and younger. Those age group increases are expected to mitigate the decline among households age 45 to 60.
Why you shouldn't be alarmedby dips in home ownership rates
“An aging population should gradually increase demand for home ownership, partially offsetting the influence of a more racially and ethnically diverse population on home ownership rates,” the MBA report notes.
The Census Bureau projects the following breakdown in ages emerging in 2024, as compared to 2014:
  • 20 million more people age 60 and over than there are today (as Baby Boomers age),
  • 4 million fewer people age 45 to 59 (as the large Baby Boomer cohorts are replaced by smaller Generation X cohorts) and
  • 18 million more people age 18 to 44 (as smaller Generation X cohorts are replaced by larger Millennial cohorts)
Household growth is also expected to be driven by 5.5 million additional Hispanic households. For other races, 3.4 million additional non-Hispanic White households are expected to form by 2024, 2.4 million additional black households, 1.8 million more Asian households, and 730,000 additional other households.
Source: “Housing Demand,” Mortgage Bankers Association (2015)

Wednesday, August 26, 2015

FHFA Targets Low-Income Borrowers

The Federal Housing Finance Agency has released new goals for housing finance giants Fannie Mae and Freddie Mac that aim to widen access to housing credit.
On Wednesday, FHFA reportedly instructed Fannie Mae and Freddie Mac to provide additional support to low-income Americans taking out mortgages and refinancing home loans. The new rules order Fannie Mae and Freddie Mac to expand the number of loans they back for low-income families to 24 percent of their purchases of single-family home mortgages from 2015-2017 – that is up from 23 percent in 2014.
FHFA also has instructed the GSEs to back more mortgages refinanced by low-income families and make that a larger share of their refinancing purchases as well.
Fannie Mae and Freddie Mac do not lend money directly to borrowers. The firms purchase mortgages from lenders and then sell them as packaged securities that are guaranteed by the government.

REOs Are Back on the Rise

Foreclosure filings were on the rise in July, as bank repossessions rapidly began to tick up, according to RealtyTrac's July 2015 U.S. Foreclosure Market Report.
Foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were up 7 percent in July month-over-month and are up 14 percent from a year ago, according to RealtyTrac.
"The increase in overall foreclosure activity over the last five months has been driven primarily by rapidly rising bank repossessions, which in July reached the highest level since January 2013," says Daren Blomquist, vice president at RealtyTrac. "Meanwhile foreclosure starts in July were at the lowest level since November 2005 — a nearly 10-year low that demonstrates the recent rise in bank repossessions and represents banks flushing out old distress rather than new distress being pushed into the pipeline."
Indeed, Blomquist notes that "this clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007. It's also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory."
Sixty-one percent of the loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68 percent last year and 75 percent two years ago, Blomquist says.
Bank repossessions last month were at a 30-month high, rising in 44 states. Still, REOs were less than half their peak of 102,134 in September 2010.
REOs have increased the most from a year ago in the following states:
  • Florida: +78%
  • California: +23%
  • Texas: +187%
  • Georgia: +87%
  • Michigan: +129%
  • Ohio: +69%
  • New Jersey: +344%
Meanwhile, foreclosure starts have fallen to pre-crisis levels and are down annually in 31 states, RealtyTrac reports. In July, there were 45,381 properties that started the foreclosure process, down 8 percent month-over-month and down 9 percent from a year ago to the lowest level since November 2005. Foreclosure starts in July were less than one quarter of the peak of 203,948 reached in 2009.
Source: RealtyTrac

Tuesday, August 25, 2015

Is the Market Losing Some Momentum?

REALTOR® confidence over current housing conditions and their six-month outlook for single-family, townhome, and condo properties all showed a slight dip last month – indicative of a slowing housing market, according to the July 2015 REALTOR® Confidence Index, a survey of nearly 3,000 practitioners about the state of housing. Nevertheless, the index remains well-above levels from last year.
The index that measures buyer traffic slid to 62 in July while seller traffic remained below 50 due to a tight supply of homes for-sale nationwide. Any confidence index below 50 indicates that more respondents view conditions as "weak" than "strong." Properties in July also were staying on the market longer at a median of 42 days across the country.
"REALTOR® respondents expressed concern that the steep pace of price appreciation is eroding affordability," according to the REALTOR® Confidence report. "Respondents also expressed concern about the possible adverse effect on market transactions and closing when the new disclosure regulations under TILA-RESPA Integrated Disclosure (TRID) take effect on Oct. 3." About 25 percent of REALTORS® reported that they or their office have not made any effort or don't know of any efforts to deal with the impending changes from the new disclosure regulations.
REALTOR® respondents also cited that the limited number of homes for-sale was another issue weighing down the market’s momentum. According to the report, demand continues to outpace supply in states such as California, Washington, Oregon, Nevada, Colorado, Massachusetts, Florida. On the other hand, supply conditions are showing some improvement in Texas, Utah, North Dakota, South Dakota, Montana, Wyoming, and Utah.
Besides inventory, REALTORS® also reported decreasing affordability as a rising concern. Seventy percent of respondents reported rising prices compared to only 43 percent in December 2014. REALTORS® reported that the sharp price rises had made homes unaffordable for many buyers.
The median price of all existing homes was $236,400 in June, an increase of 6 percent on an annual basis and surpassing a previous price peak price of $230,400 that was recorded in July 2006.
"Strong demand amid tight supply has pushed up prices," the report notes. "While rising prices are lifting home owners out of negative equity, the strong price recovery amid modest growth in incomes is also making homes less affordable and dampening demand."
However, homes are still affordable overall. According to NAR, in June 2015, the median family income of $66,637 was higher than the necessary qualifying income to purchase a house of $43,536 nowadays.
Price Expectations
REALTORS® surveyed expect home prices to continue to rise over the next 12 months, at an average of 3.6 percent.
Price expectations vary considerably across locales. REALTOR® respondents in Colorado and Florida were the most optimistic when it came to price expectations, with the median price growth expected to be around 5 to 6 percent. REALTOR® respondents in Washington, Oregon, Nevada, Texas, and Georgia expect the median price growth to be 4 to 5 percent.  On the other hand, REALTORS® reported a more modest pace of price increases in many of the Northeast states at less than 3 percent.

Gary Keller's Real Estate Market Update - Keller Williams Realty

Gary Keller's Real Estate Market Update - Keller Williams Realty

Monday, August 24, 2015

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Money Magazine: 10 Best Small Places to Live In

Apex, N.C., is the best small town in America, according to Money Magazine’s annual list of “Best Places to Live.” This year the magazine focused on small municipalities, scouring the country’s tiniest towns to find the top places that boast strong employment and economies, affordable homes, top-rated schools, and more.
Here are the small municipalities that topped its list for 2015, along with the median home price for each:
1. Apex, N.C.
Median home price: $243,125
2. Papillion, Neb.
Median home price: $159,788
3. Sharon, Mass.
Median home price: $450,856
4. Louisville, Colo.
Median home price: $427,925
5. Snoqualmie, Wash.
Median home price: $467,475
6. Sherwood, Ore.
Median home price: $304,113
7. Chanhassen, Minn.
Median home price: $283,438
8. Coppell, Texas
Median home price: $327,943
9. Simsbury, Conn.
Median home price: $289,813
10. Solon, Ohio
Median home price: $245,056
Source: “MONEY’s Best Places to Live in America,” Money Magazine (Aug. 16, 2015)

New-Home Sizes Are Starting to Shrink

The median size of U.S. homes dropped slightly in the second quarter, edging back from a record set in the previous quarter, the Commerce Department reported Tuesday.
In the second quarter, the median size of a new home was 2,479 square feet – about 40 square feet smaller than the record high set in the first quarter.
The smaller size may be a sign that builders are starting to focus on building more entry-level homes,The Wall Street Journal reports. The National Association of Home Builders has predicted that first-time home buyers, who most often purchase entry-level homes, will comprise 18 percent of new-home sales this year, up from 16 percent last year. Still, that is far short of the 25 percent to 27 percent share of buyers that first-time home buyers comprised in the market from 2001 to 2005. At that time, the median size of new homes ranged from 2,051 to 2,263 square feet.
But anticipating the return of first-time buyers, some builders have announced efforts to focus on the entry-level market. For example, Meritage and D.R. Horton have launched divisions to build starter homes.
In the quarter ended June 30, D.R. Horton completed sales of 1,577 of its Express starter homes, which average 2,000 square feet and cost $188,000. Meritage has announced plans to expand into the entry-level market, which now accounts for 20 percent to 25 percent of its sales. Chief Executive Steven Hilton says he wants the entry-level share to rise to 35 percent in the coming years.
David Crowe, chief economist with the National Association of Home Builders, predicts that the median size of new-homes will continue to shrink over the coming years as more first-time buyers enter the market. Still, it may take a long time for the national median-size figure to reflect the trend further.
“It probably will take the rest of this year and next year before the first-time buyer share is sufficient to affect the median size of all new homes in a sustained manner,” Crowe told The Wall Street Journal.
Source: “Size of New Homes in U.S. Shrinks By One Closet,” The Wall Street Journal (Aug. 18, 2015)

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New-Home Starts Surge to 2007 Highs

Homebuilders broke ground on new homes at the fastest pace in about eight years, according to statistics released by the Commerce Department Tuesday.
“A fresh supply of new homes will therefore reach the market in upcoming months to help relieve the inventory tightness,” says Lawrence Yun, the chief economist for the National Association of REALTORS®. “There is no need to worry about an oversupply. Even more production would be welcomed.”
An increase in single-family housing starts led the strong rebound in housing production in July, climbing 12.8 percent month over month to a seasonally adjusted annual rate of 782,000 units. The volatile multifamily market, on the other hand, dropped 17 percent last month to 424,000 units.
"Our builders are reporting more confidence in the market, and are stepping up production of single-family homes as a result," says NAHB Chairman Tom Woods. "However, builders are still reporting problems accessing land and labor."
"This month's drop in the more volatile multifamily side is a return to trend after an unusually high June," says NAHB Chief Economist David Crowe. "While multifamily production has fully recovered from the downturn, single-family starts are improving at a slow and sometimes intermittent rate as consumer confidence gradually rebounds. Continued job and economic growth will keep single-family housing moving forward."  
Regionally, new-home starts – reflecting both single-family and multifamily starts -- jumped by the highest percentages in the Midwest, which saw a 20.1 percent increase in starts in July. The South also posted a 7.7 percent gain in starts. On the other hand, the Northeast posted a 27.5 percent decrease in housing starts in July, followed by a 3.1 percent loss in the West.
Housing permits – a sign of future production – posted a 16.3 percent decrease in July. Single-family permits dropped 1.9 percent to a rate of 679,000 while multifamily permits fell 31.8 percent to 440,000.

Friday, August 21, 2015

How to Manage Your Bills

How to Manage Your Bills

30-Year Mortgage Rates Remain Below 4%

For the fifth consecutive week, the 30-year fixed-rate mortgage has averaged below 4 percent, as home buyers and refinancers rush to lock in low rates.
"Housing markets have responded positively to low mortgage rates," says Sean Becketti, chief economist at Freddie Mac. "The latest NAHB/Wells Fargo Housing Market Index for August 2015 was 61, the highest level in more than nine years. One-unit housing starts in July 2015 jumped to 782,000 units, up 12.8 percent from June and up 19 percent from last year. Overall housing markets remain on track for the best year since 2007."
Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 20:
  • 30-year fixed-rate mortgages: averaged 3.93 percent, with an average 0.6 point, dropping from last week's 3.94 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
  • 15-year fixed-rate mortgages: averaged 3.15 percent, with an average 0.6 point, falling from last week's 3.17 percent average. A year ago, 15-year rates averaged 3.23 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.94 percent, with an average 0.5 point, rising from last week's 2.93 percent average. A year ago, 5-year ARMs averaged 2.95 percent.
  • 1-year ARMs: averaged 2.62 percent, with an average 0.3 point, holding the same as last week's average. A year ago, 1-year ARMs averaged 2.38 percent.
Source: Freddie Mac

6 Key Housing Stats to Gauge the Market

Existing-home sales were back on the rise in July, marking the third consecutive month of increases, while low inventories of homes for-sale and rising prices were the reason behind first-time buyers falling to their lowest share since January, according to a new report from the National Association of REALTORS®.
Regional Breakdown
Here's how existing-home sales fared across the country in July:
  • Northeast: sales fell 2.8 percent to an annual rate of 700,000, but are 9.4 percent above a year ago. Median price: $277,200, which is 1.3 percent higher than a year ago.
  • Midwest: sales held steady at an annual rate of 1.32 million, unchanged from June but 10.9 percent above a year ago. Median price: $186,500, up 6.6 percent from a year ago.
  • South: sales rose 4.1 percent to an annual rate of 2.29 million in July, and are 9.6 percent higher than a year ago. Median price: $203,500, up 7 percent from a year ago.
  • West: sales increased 3.2 percent to an annual rate of 1.28 million in July, and are 11.3 percent above a year ago. Median price: $327,400, which is 8.4 percent above a year ago.
Source: National Association of REALTORS®
Total existing-home sales – which include single-family homes, townhomes, condos, and co-ops – rose 2 percent in July to a seasonally adjusted annual rate of 5.59 million. Sales are at the highest pace since February 2007, and are 10.3 percent above a year ago.
"The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more household to buy now," says Lawrence Yun, NAR’s chief economist. "As a result, current home owners are using their increasing housing equity toward the down payment on their next purchase."
Here's a look at five main indicators from NAR's latest housing report:
1. Home prices: The median existing-home price for all housing types was $234,000 in July – 5.6 percent above a year ago. "Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand," says Yun. "REALTORS® in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains."
2. Housing inventories: At the end of July, the inventory of homes for-sale fell 0.4 percent to 2.24 million existing homes available for sale. The inventory now is 4.7 percent lower than a year ago and at a 4.8-month supply at the current sales pace.
3. First-time home buyers: The percentage of first-time home buyers fell for the second consecutive month, reaching 28 percent in July – the lowest share since January. Last year at this time, first-time buyers comprised 29 percent of all buyers.
"The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face," says Yun. "Rising rents and flat wage growth make it difficult for many to save for a down payment, and the dearth of supply in affordable price ranges is limiting their options."
4. Days on the market: Properties stayed on the market for an average of 42 days in July, below the 48 days average from a year ago. Forty-three percent of homes were on the market for less than a month in July. Short sales were on the market the longest at a median of 135 days while foreclosures were on the market for 49 days and non-distressed homes sold in 41 days.
5. All-cash sales: The percentage of all-cash sales rose to 23 percent of transactions in July, down from 29 percent a year ago. The share of individual investors – who account for the bulk of cash sales – was 13 percent in July, down from 16 percent a year ago.
6. Distressed sales: The percentage of foreclosures and short sales declined to the lowest share since NAR began tracking it in October 2008. Distressed sales fell 7 percent in July month-over-month and are 9 percent below a year ago. In July, 5 percent of sales comprised foreclosures while 2 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value while short sales sold for an average discount of 12 percent.
"Five years ago, distressed sales represented 33 percent of the market in July," says Chris Polychron, NAR's president. "For many previously distressed homeowners throughout the country, rising home values in recent years have helped recover equity and the vast improvement in several local job markets means fewer are falling behind on their mortgage payments."
Source: National Association of REALTORS®

Wednesday, August 19, 2015

Whole Foods vs. Trader Joe's on Home Values

A new study pitted two rival grocery store chains – Whole Foods and Trader Joe's – against one another to find out which grocery store increases the value of nearby homes the most.
To determine if it's better to buy near Whole Foods or Trader Joe's, RealtyTrac looked at home values, appreciation, and property taxes across the country in ZIP codes with these grocery chains.
There's good news for home owners living near a Trader Joe's, according to the study. Home owners near a Trader Joe’s have seen an average 40 percent increase in home values since they purchased compared to home owners living near Whole Foods who have seen a 34 percent appreciation.
Homes near a Trader Joe's tend to have a higher value on average at $592,339 – 5 percent greater than the $561,840 average value for homes near Whole Foods. For comparison, the average value of homes nationwide is $260,068 across all ZIP codes nationwide.
In property taxes, home owners living near a Trader Joe's pay an average of $8,536 in property taxes each year, 59 percent more than the $5,382 average for home owners living near a Whole Foods. That is also much higher than the national average for property taxes, which is $3,239 across all ZIP codes, according to the analysis.
Source: "Better to Own Near Trader Joe’s or Whole Foods?" RealtyTrac (Aug. 11, 2015)

Realtor.com®: The 10 Hottest ZIP Codes

The ZIP codes 02176 (Melrose, Mass.) and 43085 (Worthington, Ohio) are the hottest ZIP codes in the nation, topping a new list released by realtor.com®.
Realtor.com® took a look at the ZIP codes where housing markets are booming the most, basing its rankings on how quickly properties are selling and how frequently homes are viewed in each ZIP code.
"Each locale on this list is emblematic of the key trends driving housing this year – healthy local economics, job opportunities, and affordability," says Jonathan Smoke, realtor.com®'s chief economist.
Each of the top-ranked ZIP codes are seeing a housing supply and demand that's about five times stronger than the rest of the country. Homes are selling four to nine times faster than the national average.
What's more, the median household income among the Top 10 ZIP codes is $71,000, 32 percent higher than the national average of $54,000.
Here are the top 10 hottest ZIP codes from the midyear of 2015:
  1. 02176: Melrose, Mass.
  2. 43085: Columbus, Ohio (Worthington)
  3. 80122: Littleton, Colo. (Centennial)
  4. 75023: Plano, Texas
  5. 48375: Novi, Mich.
  6. 78247: San Antonio, Texas
  7. 63126: St. Louis (Crestwood)
  8. 78729: Austin, Texas
  9. 58103: Fargo, N.D.
  10. 92010: Carlsbad, Calif.
View realtor.com®'s full rankings of the top 50 below.

Tuesday, August 18, 2015

Credit Unions Gaining Ground with Buyers

Mortgage shoppers are increasingly turning to credit unions to get a mortgage, according to new research by TransUnion.
Credit unions' share of all mortgage originations has grown considerably over the last two years, from 7 percent in the first quarter of 2013 to 11 percent in the first quarter of 2015, according to TransUnion.
"Mortgage originations had declined substantially across the board in the last few years; however, the decline had been less dramatic for credit unions," says Nidhi Verma, director of research and consulting in TransUnion's financial services business unit. "In the last year alone, it appears significantly more credit union executives are seeing growth in this area. Credit unions are becoming bigger players in the mortgage loan market, something that may serve them well in the future as the housing market continues to recover."
Credit unions saw 25 percent growth in non-prime mortgage originations in the first quarter of 2015 while the rest of the industry increased at 4 percent.
"As the U.S. economy continues to recover, non-prime mortgage originations are growing for both credit unions and the rest of the industry," said Verma. "Historically, credit unions have seen lower delinquency rates than the rest of the industry, and their focus on membership expansion makes them well-positioned to take advantage of this growth."
Source: "TransUnion: Credit Unions Go Big in Mortgage Originations," HousingWire (Aug. 11, 2015)

How High Will Mortgage Rates Actually Climb?

The lowest mortgage rates on record have lured buyers during the last few years, but the Federal Reserve has already given plenty of signals that will soon come to an end.
Mortgage rates are already inching up, ever-so-slightly. From January to June, the 30-year fixed-rate mortgage climbed from 3.7 percent to 4.2 percent. Mortgage rates recently have been hovering around 4 percent.
In this latest era of super-low mortgage rates, what's normal? A 6 percent interest rate is "normal," says Jonathan Smoke, realtor.com®'s chief economist. He says mortgage rates likely won't hit that point in the next two years, however.
"We will likely see less than a 100 basis point increase over the next two years, which would bring us to around 5.5 percent in 2017," he says.
If Smoke's prediction holds true, mortgage rates will then remain below normal even in two years. However, that increase in rates would translate into a 12 percent increase in monthly payments over current rates, according to Smoke.
For now, mortgage rates remain low, and in 80 percent of the U.S. markets, it's more affordable to buy a home than rent, according to realtor.com®.
Source: "Just How High Might Mortgage Rates Go?" realtor.com® (Aug. 14, 2015)

Monday, August 17, 2015

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Mortgage Rates Begin to Nudge Higher

For the first time in four weeks, fixed-rate mortgages reversed course this week and began to edge higher.
"Headed into the fall, we'll likely see continued interest rate tension, with dollar appreciation weighing against possible Fed rate hikes leaving the rate outlook clouded," says Sean Becketti, Freddie Mac's chief economist.
Freddie Mac showed the following national averages with mortgage rates for the week ending Aug. 13:
  • 30-year fixed-rate mortgages: averaged 3.94 percent, with an average 0.6 point, rising from last week's 3.91 percent average. Last year at this time, 30-year rates averaged 4.12 percent.
  • 15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.6 point, rising last week's 3.13 percent average. A year ago, 15-year rates averaged 3.24 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.93 percent, with an average 0.5 point, dropping from last week's 2.95 percent average. A year ago, 5-year ARMs averaged 2.97 percent.
  • 1-year ARMs: averaged 2.62 percent, with an average 0.3 point, rising from last week's 2.54 percent average. A year ago,1-year ARMs averaged 2.36 percent.

Friday, August 14, 2015

Home Prices Rising = Equity in your home BUY NOW

Home Prices Rise in Nearly Every U.S. Metro

The nationwide inventory crunch has pushed up home prices year-over-year in 93 percent of the country's 176 major metro areas during the second quarter, according to the National Association of REALTORS®. Nineteen percent of those metros, or 34, saw double-digit increases in the second quarter.
5 Priciest Housing Markets
  1. San Jose, Calif.: $980,000 (median single-family price)
  2. San Francisco: $841,600
  3. Anaheim-Santa Ana, Calif.: $685,700
  4. Honolulu: $698,600
  5. San Diego: $547,800
5 Most Affordable 
  1. Cumberland, Md.: $82,400 (median single-family price)
  2. Youngstown-Warren-Boardman, Ohio: $85,000
  3. Rockford, Ill.: $94,700
  4. Decatur, Ill.: $96,000
  5. Elmira, N.Y.: $98,300
"Steady rent increases, the slow rise in mortgage rates, and stronger local job markets fueled demand throughout most of the country this spring," says NAR Chief Economist Lawrence Yun. "While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas."
For renters considering home ownership, affordability is becoming a growing problem, Yun says.
"With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering home ownership — especially in higher-priced markets," Yun says.
The national median price for an existing single-family home in the second quarter was $229,400 — an 8.2 percent increase from a year ago.
"The ongoing rise in home values in recent years has greatly benefited home owners by increasing their household wealth," says Yun. "In the meantime, inequality is growing in America because the downward trend in the home ownership rate means these equity gains are going to fewer households."
The median household income in the U.S. rose slightly to $66,637 in the second quarter, but it would still take annual earnings of $49,195 to buy a home at the national median price with a 5 percent down payment; $46,605 for a 10 percent down payment; and $41,427 for a 20 percent down payment, according to NAR.

Regional Snapshot on Home Sales

Here's a look at how home sales fared across the country in the second quarter:
  • Northeast: Total existing-home sales rose 10.3 percent and are 8.6 percent ahead of this time last year. Median single-family price: $269,300, up 5.2 percent from a year ago.
  • Midwest: Existing-home sales climbed 13.4 percent and are 12.7 percent higher than a year ago. Median single-family price: $182,000, a year-over-year increase of 8.7 percent.
  • South: Existing-home sales dropped 1.1 percent but are 6.3 percent above the second quarter of 2014. Median single-family home price: $202,900, up 8.7 percent compared to a year ago.
  • West: Existing-home sales climbed 8.1 percent and are 8.1 percent above a year ago. Median single-family home price: $325,200, up 9.6 percent over year-ago levels. 

Thursday, August 13, 2015

Housing Trends Portland Region and Portland Region Real Estate Market Updat

Housing Trends Portland Region and Portland Region Real Estate Market Updat

Housing Trends eNewsletter- LaTasha Fox

Housing Trends eNewsletter- LaTasha Fox

Yun: 'Prices Are Rising Just Too Fast'

The tight supply of available homes is prompting more house hunters to bid up home prices, housing analysts say.
"Prices are rising just too fast," says Lawrence Yun, chief economist with the National Association of REALTORS®. "And certainly far ahead of people's income."
NAR recently reported that the limited number of homes for sale was pushing the national median sales price above its 2006 peak. In its latest existing-home sales report, NAR noted that the median home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400.
Housing's inventory problem is occurring across housing types. Condos made up just 5.5 percent of all multifamily building in the first quarter of this year, the lowest on record for the Commerce Department, which has been tracking such information for more than four decades. Single-family construction is also about half of what it should be, according to Bob Denk, senior economist at the National Association of Home Builders.
As for what's hindering the new-home supply, Denk points to a skilled labor shortage in the building industry as well as a shortage in the number of lots to build on.
"We are having these supply chain headwinds," Denk says. "It's hard to just double overnight. But the other part of that is we have produced at this level before, so it's not impossible."
Source: "A Lack of Supply Drives Up Housing Prices," MarketPlace (Aug. 10, 2015)

Tuesday, August 11, 2015

An Easy Way to Find the Perfect Real Estate Agent

An Easy Way to Find the Perfect Real Estate Agent

Harvard’s 5 Financial Reasons to Buy a Home

Harvard’s 5 Financial Reasons to Buy a Home

20% of Housing Markets Return to 'Normal'

Seventy-five metro areas out of the 360 examined nationwide have returned to or exceeded their last normal levels of economic and housing activity during the second quarter. That marks a year-over-year increase of 13 markets, according to the National Association of Home Builders/First American Leading Markets Index, which compares current housing permits, prices, and employment data to past "normal" averages.
Housing Appreciation
As a whole, 66 percent of markets across the country have shown a year-over-year improvement, according to the index. 
"The markets are gradually improving and economic and job growth continue to strengthen, which bodes well for housing for the remainder of the year," says NAHB Chairman Tom Woods.
"Home prices have seen the largest recovery out of the three elements the index looks at (home prices, permits, and employment)," says David Crowe, NAHB's chief economist. "Sixty-four markets have met or exceeded their normal employment levels," he notes. "The housing permit level has made the least progress toward normality, with only 26 markets at or above their last normal level."
Baton Rouge, La., continues to top the list of major metros that are exceeding their previous norms. It's performing 47 percent better than its last normal market level, according to the index. Other major metros topping the list also include Austin, Texas; Honolulu; Houston; and Oklahoma City; San Jose, Calif.; Los Angeles; Charleston, S.C.; Salt Lake City; and Nashville, Tenn.
Among smaller metros, Midland and Odessa, Texas, top the list, both housing markets performing at double their strength prior to the recession. Other top performing small metros include Manhattan, Kan.; Grand Forks, N.D.; and Casper, Wyo.
The index seeks to identify areas that are now approaching and exceeding their previous normal levels of economic and housing activity.

Monday, August 10, 2015

3.8M Homes Stand Vacant

At a time when for-sale inventories remain constrained, a growing number of vacant homes are being held off the market nationwide. The bulk of these 3.8 million vacant homes are bank-owned properties or homes that are in badly need of repair. Some of these abandoned homes, known as "zombie foreclosures," were abandoned by their owners before the foreclosure process was finished. RealtyTrac reports that in the second quarter there were about 127,021 "zombie foreclosures," which numbered at 24 percent of all active foreclosures.
Indeed, the Census Bureau says that for a "large portion" of these vacant homes the status is unknown.
The 3.8 million vacant homes are nearly twice as many as the total listings that are currently for-sale on the nation's MLSs.
Many of these vacancies are concentrated in certain areas of the country. For example, nearly 40 percent of the vacant homes nationwide are located in just 10 percent of all census tracts, according to HUD. Wayne County, Mich., and Cook County, Ill., have more than 200 high-vacancy neighborhoods. Cook County alone has 55,000 abandoned homes, one of the highest amounts in the country.
In some areas, economists see some improvement. "A growing number of states and cities have enacted public policy measures to combat the problem of zombie foreclosures, and we are seeing the results of those efforts in the overall decrease nationwide as well as in several hard-hit markets such as Chicago, Miami and Cleveland," says Daren Blomquist, vice president at RealtyTrac. "Still, as banks push through long-deferred foreclosures that are more likely to be owner-vacated this year, we are seeing a somewhat surprising increase in zombie foreclosures in markets with overall low foreclosure rates such as Los Angeles, Houston and Boston."
But in a pocketful of markets, the abandoned homes remain problematic for cities. For example, Detroit owns 16,000 vacant homes due to tax lien foreclosures, where home owners failed to pay their property taxes and other municipal fees. Baltimore also has more than 16,000 vacant homes while Philadelphia has 40,000.
Cities are tackling the vacancies differently. For example, in Cleveland, nearly 6,000 foreclosed, abandoned homes are being demolished as city officials try to rescue neighborhoods from blight, crime, and falling home prices. In Buffalo, N.Y., city officials began selling its 4,500 vacant homes for a $1 each.
Source: "The Dry Rot in America’s Housing Stock: A Sad Legacy of the Foreclosure Era," Real Estate Economy Watch (Aug. 9, 2015)

The Truth about Zillow Zestimates

Do you know how much your home is worth? No, really, do you? Homeowners and buyers across the country often answer this question by turni...