Thursday, July 28, 2016
Tuesday, July 26, 2016
The Coolest Home Invention Ever
As a heat wave leaves sweltering temperatures across the country, more home owners may be thankful they have air conditioning.
Read more: 5 Ways to Trim Utility Costs This Summer
In 1906, Willis Carrier received a patent for what he dubbed at the time an “apparatus for treating air.” (The Carrier name is still prominent among air-conditioning manufacturers still today.) But A/C units did not grow in popularity until after World War II.
In 1965, only 10 percent of homes in the U.S. had one, and just 2.8 million window air conditioners were manufactured that year, according to U.S. Census data.
However, today the A/C is an important system in the home. Ninety-one percent of all new, single-family homes in the U.S. are air-conditioned. Now, nearly 20 percent of electricity consumption in U.S. homes go toward air conditioning. That means Americans use about as much electricity on air conditioning as the entire continent of Africa uses for all purposes, according to the book “Losing Our Cool: Uncomfortable Truths About Our Air-Conditioned World (and Finding New Ways to Get Through the Summer)” by Stan Cox.
Here are some tips so that home owners can make sure that A/C stays working effectively and efficiently through the hottest days of summer:
- Change out filters: Routinely replace or clean dirty filters. Clogged, dirty filters can block normal airflow and reduce the system’s efficiency. In fact, the U.S. Department of Energy’s website says that replacing a dirty, clogged filter with a clean one can lower your air conditioner’s energy consumption by 5 percent to 15 percent.
- Pay attention to the system’s coils: The evaporator coil and condenser coil can collect dirt over time. “A clean filter prevents the evaporator coil from soiling quickly,” The Department of Energy notes at its website. “In time, however, the evaporator coil will still collect dirt. This dirt reduces airflow and insulates the coil, reducing the ability to absorb heat. To avoid this problem, check your evaporator coil every year and clean it as necessary.”
- Check condensate drains: The Department of Energy also recommends occasionally passing a stiff wire through the A/C’s drain channels to make sure it’s not clogged. Clogged drains can prevent the A/C from reducing the humidity in the home and can even cause excess moisture to discolor walls or carpet.
Source: “Maintaining Your Air Conditioner,” Energy.gov and “Too Hot? Maybe Not, Thanks to A/C,” BUILDER (July 25, 2016)
Commercial’s Latest Success Story: Restaurants
Restaurant sales are booming. In fact, restaurant sales for the first time in nearly two decades surpassed supermarket sales last year. Landlords are using that to reinvent the “now-suffering” retail mall. As e-commerce drives some consumers away from shopping centers, food is bringing them back in, CNBC reports.
Latest Commercial Trends
"With restaurants that are coming in with strong, high growth, they're sort of the saving grace for landlords of these retail spaces to come in and drive traffic and sales," Melina Cordero, CBRE's head of retail research in the Americas, told CNBC.
CBRE reports four areas of growth: Food trucks, “grocerants,” food halls, and celebrity chef restaurants.
Some landlords are even approaching food start-ups and offering up seed money to them to locate in the landlord’s shopping center. Smaller restaurants are becoming part of new food halls or located within grocery stores in eating areas inside or by offering diverse prepared food options (known as “grocerants”). The celebrity chef restaurant –such as Wolfgang Puck in Las Vegas or Bryan Voltaggio in Washington, D.C. -- is also becoming the new department store as a retail anchor. And mobile food trucks have bloomed into a $2.7 billion business. Landlords are courting them for food courts at shopping malls.
"Food trucks are basically the pop-ups of the restaurant business,” Cordero says. “They come in, they can set up, low cost, and they're constantly changing," which meets consumers’ demand for diverse food options.
Source: “Food Is Ruling Retail Real Estate, and Food Trucks Are Moving In,” CNBC (July 22, 2016)
Is Your Seller’s Baby Cam a Lawsuit Waiting to Happen?
Baby cams, also known as nanny cams, are popular with parents today. The tiny, easy-to-hide devices help parents keep tabs on their kids while they’re away. State privacy laws differ, but for the most part, you’ll want to let buyers know upfront if there’s a chance they’ll be captured on one of these or other types of surveillance devices while they’re in the house.
The key issue is expectations of privacy. If you’re inside someone’s home, you have a right to expect a certain amount of privacy; if you’re outside—say on a public sidewalk—you can’t always expect the same level of privacy.
In a similar manner, if you’re recording a phone conversation, privacy expectations are relevant. People expect a phone conversation to be private, so you’ll want to let them know beforehand if you plan to tape the conversation as a way to keep accurate notes or for other reasons.
These types of privacy issues are a top story in the latest Voice for Real Estate news video from NAR. The video shares excerpts from a recent video by NAR’s Legal Affairs division on what you need to know about surveillance cameras when you’re showing a house or recording a phone conversation with customers.
The video also looks at how much easier it’s going to be for your clients to get FHA insured mortgage financing for their condo purchase. Congress just passed an NAR-backed bill that makes financing available even if only 35 percent of the units in a project are owner-occupied. That’s down from a 50-percent owner occupancy ratio, a significant change that can make a big difference in a buyer’s ability to get a loan. Also, a project can have more space set aside for commercial use, a change that will be particularly helpful as more developers design projects that mix housing with retail space.
Watch all of the Voice for Real Estate episodes here.
Other stories in the video look at NAR’s effort to curb accessibility lawsuits in commercial real estate and a meeting NAR hosted on Capitol Hill two weeks ago to flesh out ideas for making housing more affordable to low- and -moderate income households and to reduce homelessness.
—Robert Freedman, REALTOR® Magazine
5 Things Successful People Say Every Day
When you’re feeling unmotivated, overwhelmed, or frustrated, try repeating some of these phrases, writes Neil Patel, a columnist at Forbes.com. It’s what he says successful people tell themselves every day:
1. “Go to bed.”
Arianna Huffington attributes her success managing a media empire to getting 8 hours of sleep each night. “If you want to start every day with a spring in your step, feeling alert, motivated, and focused, then you have to get enough sleep,” Patel writes.
Read more: 6 Steps for New Agents to Succeed Long-Term
2. “Things will get better.”
“Negative thoughts require more mental RAM than positive ones,” Patel notes. “They take longer to get over and generate much more powerful emotions.” Start each day with positive thoughts, such as by writing down three things you are thankful for on a sticky note and then stick it to your mirror or in your office planner, Patel suggests.
3. “Enjoy your lunch.”
Several studies have shown that taking an hour or more off of work before resuming a previous task leads to an increase in productivity and happiness in your job. Step away from your desk or get out of your car to enjoy a lunch by yourself or with peers.
4. “Start small.”
Don’t just focus on your 10- to 20-year goals. “It’s hard to feel happy when you’re constantly reminded just how far you are from where you want to be,” Patel notes. Write out smaller, more measurable goals that you can take on daily, weekly, or monthly and constantly feel the inspiration from accomplishment.
5. “Write it down.”
Make a checklist each morning of what you want to accomplish that day, use either pen and paper or jot down in places like a board on Trello. Start with three goals at first. Then, increase those goals gradually.
Source: “11 Things Successful People Say to Themselves Every Day,” Forbes.com (July 25, 2016)
Is the Election Spooking Some Buyers?
The presidential election is now in full force, and it may be deterring some buyers and sellers from making a move until after Election Day on Nov. 8, real estate professionals report.
Read more: Buyers Gloomy Over Presidential Election
An article at realtor.com® says the election isn’t unusual in causing some Americans to wait. “REALTORS® have long noticed that home buyers and sellers cool their heels during presidential election years,” the article notes. “Because people are uncertain about what a new president will mean for the real estate market, and the U.S. economy as a whole. So they figure it’s wise to maintain a holding pattern until the next president is locked in place.”
Indeed, Cara Ameer, a real estate professional in Florida, asserts that “people do use an election as an excuse to delay selling or buying a home. Having worked in real estate through several presidential election cycles, I have observed that it can seem harder in an election year to move properties. People have fears and concerns, whether perceived or real about an election outcome that may have them putting their real estate process on pause.”
Home prices during presidential election years rise about 1.5 percent less than other years, finds a study of real estate listings in California dating back to 1980 (e.g. that means a $166,000 home would sell for $7,462 more – but about $2,000 less than usual, realtor.com®’s article notes).
“I don’t think it’s a wise idea to try to time any markets, especially housing,” says Kurt Westfield, a real estate expert at WCE Equity Group. “Housing markets are very localized, subject to microeconomic shifts. The election takes place on a much larger macroeconomic scale.”
Source: “Should You Wait Until After the Election to Buy or Sell a Home?” realtor.com® (July 25, 2016)
The Place Where Home Owners Are Happiest
Home owners in San Francisco and other West Coast cities are the happiest in the country, according to HomeAdvisor’s Homeowner Happiness Index, which recently surveyed 18,000 home owners across 36 metros in the U.S. Meanwhile, home owners in the Midwest and on the East Coast are the least happy.
Read more: States Where Home Owners are Most Satisfied
The nation’s happiest home owners reside in San Francisco, Los Angeles, Denver, St. Louis, and Seattle. The country’s least happy home owners live in Baltimore, Philadelphia, Salt Lake City, Indianapolis, and Milwaukee.
“A home owner’s quality of life is more likely to be dependent on their community and access to important attractions and services than it is on the number of bedrooms and bathrooms in their home,” says psychotherapist Karen Ruskin, HomeAdvisor’s happiness expert. “Our research shows that home owners are happiest in urban cities with good weather, an active culture, arts scene, and higher income levels.”
The survey found that residents who were happiest tended to be more upbeat because they said they had practical commutes and easy access to attractions and services as well as community diversity and safety. The study also found that consumers care less about the square footage of a home than its style, personalized design, and natural light. Also, consumers surveyed said that convenience to retail and restaurants is an important factor for them in being happy where they live.
Source: HomeAdvisor
Reverse Mortgages Slowly Make a Comeback
The New York Times is dubbing the reverse mortgage the “quiet comeback” kid in the mortgage marketplace.
Reverse mortgages allow home owners 62 years old or older to tap into their home equity without having to face monthly payments. Reverse mortgages had a bad reputation a few years ago when widespread abuses of their use was reported. But now they’re gradually making their way back into the market, as reforms in the system make them a safer option for lenders. The Federal Housing Administration and the Consumer Financial Protection Bureau have tightened regulations on their use.
Reverse mortgage volume was around 30,000 this year, modest compared to about 115,000 from its peak in popularity in 2009, according to the Federal Housing Administration.
“They’ve always been there as a last resort,” John Salter, a financial planning professor at Texas Tech, told The New York Times. “But they make a lot more sense now because home equity can be a big part of net worth.”
More financial planner are starting to recommend them due to the lowers costs and better consumer protections – such as the mandate that counseling is now required, says Jamie Hopkins, a professor at the American College of Financial Services.
“Many people don’t have enough money to get through retirement, so they have to consider all of their wealth, including home equity as a retirement income source,” Hopkins says.
Still, reverse mortgages aren’t right for everyone. “If you want to provide a bequest to your heirs by allowing them to sell your home upon your death, a reverse mortgage can wipe out much of the equity in your home,” The New York Times reports. The loans also can prove more challenging for those who need to move due to a disability or need to sell their home after a short period of time living there.
Source: “The Quiet Comeback of Reverse Mortgages,” The New York Times (July 22, 2016)
Budget-Friendly Cities for Real Estate Investing
Now is a good time to be a real estate investor: Median prices on existing homes are expected to climb 6 percent this year, according to a new study by realtor.com® and HomeUnion. And those looking to invest in real estate now can find plenty of options if they're willling to look past pricey big metro areas.
Read more: Survey: Real Estate Is the Best Investment
To find the best budget-friendly places to invest, they looked at single-family homes that cost $232,500 or under, which is the median price of existing homes nationwide in April, according to NAR). Their analysis also included other factors, which is why some markets with lower appreciation appear higher on the list.)
The top 10 cities for investors on a budget:
- Jacksonville, Fla.: 3.6%
- Tampa, Fla.: 4.4%
- Orlando, Fla.: 3.7%
- Chicago, Ill.: 4.2%
- Detroit, Mich.: 3.1%
- Las Vegas, Nev.: 4.7%
- Cincinnati, Ohio: 3.4%
- Phoenix, Ariz.: 4.8%
- Cleveland, Ohio: 3.4%
- Minneapolis, Minn.: 3.4%
HomeUnion also identified the following metros as where buyers can see the largest first-year rental returns as a landlord:
- Cleveland, Ohio: 11.1%
- Columbia, S.C.: 9.7%
- Birmingham, Ala.: 8.5%
- Pittsburgh, Pa.: 8.4%
- Milwaukee, Wis.: 8.4%
Source: “The Best Cities to Invest in Real Estate on a Budget,” realtor.com® (July 25, 2016)
How Long Does It Take to Build a New Home?
The average time it takes to complete a new single-family home is seven months, according to recent Census Bureau data. That completion time includes nearly a month for getting the permit to start the project and then another 6 months to complete the construction.
Houses built for sale took the shortest amount of time – 6 months to complete after obtaining building permits. On the other hand, homes built by owners averaged the longest time at nearly a year. Homes built for rent averaged about 9 months from permit to completion, the data shows.
Home buyers will likely have the longest waits for their new home in the New England area, which had the longest time from permit to completion at 10 months. On the other hand, the Mountain region had the shortest amount of time at 6 months. The region also has the shortest waiting period from permit to construction start.
Here’s a breakdown by region of the average months from permit to completion of single-family new homes:
- Pacific: 8 months
- Mountain: 6 months
- West north Central: 8 months
- West South Central: 7 months
- East North Central: 8 months
- New England: 10 months
- Middle Atlantic: 10 months
- South Atlantic: 6 months
The Census data also reveals the average days by region from permit to start on the new home:
- Pacific: 31 days
- Mountain: 15 days
- West North Central: 20 days
- West South Central: 35 days
- East North Central: 23 days
- East South Central: 25 days
- New England: 28 days
- Middle Atlantic: 27 days
- South Atlantic: 27 days
Homes in metro areas took, on average, nearly 7.5 months to complete, about 2 months shorter than homes started in non-metro areas.
The data also shows that in 2015 the share of single-family homes sold while under construction was 66 percent. Thirty-two percent of those homes sold before the construction started and 12 percent sold during the same month of completion, according to the Census data. The percentage of single-family homes completed last year that were unsold was only 6 percent, as of the first quarter of 2016.
Source: “Time to Build a Single-Family Home in 2015,” National Association of Home Builders’ Eye on Housing blog (July 20, 2016)
Poll: Real Estate Better Than Stocks, Gold
Despite recent gains in the stock market, Americans have more confidence investing in real estate. About a quarter of Americans surveyed said real estate was their top choice for long-term investing, according to a new national survey released by Bankrate.
Read more: 5 Solid Property Investments This Year
Consumers selected real estate as the top pick to invest money they wouldn’t need for more than 10 years, followed by cash investments (e.g. certificates of deposit and savings accounts). Then, coming in a distant third was the stock market.
“Houses are tangible,” says Sterling White, co-founder of Holdfolio, a real estate investment firm. “You can physically see and feel the product. So you know where your money is going: It’s going into that house. With stocks, you have no clue where your money is going.”
The millennial generation was the only group that valued cash investments above other choices (32 percent of those between the ages of 18 and 35 and 43 percent of 18 to 25 year olds selected cash as their top choice) by a large margin.
It’s concerning “that so many people think that’s such a good investment for such a long period of time,” says Avani Ramnani, a financial planner and director of financial planning and wealth management at Francis Financial. “Right now, especially, you’re getting practically no interest from cash investments like savings accounts and CDs.”
Americans are feeling more bullish about their sense of financial well-being, according to the Bankrate Financial Security Index, which is based on survey questions of how consumers feel about their debt, savings, net worth, and job security.
Source: “Real Estate Top Investing Choice, Survey Finds,” RISMedia (July 24, 2016)
Owning Beats Renting in These High-Priced Areas
In high-priced housing markets, does it still make more financial sense to buy than rent? Yes, according to a study by RealtyTrac.
Looking at data from the first quarter of 2016, the study reveals that even in some counties where home buyers spend the highest percentage of wages to buy a median-priced home its still the better bet for consumers than renting a three-bedroom.
Take a look at some of the high-priced markets where owning is a better financial decision than renting.
Dorchester, S.C.
- Metro area: Charleston-North Charleston, S.C.
- Percent of wages needed to own: 36.59%
- Percent of wages needed to rent: 42.77%
Adams, Colo.
- Metro area: Denver-Aurora-Lakewood, Colo.
- Percent of wages needed to own: 36.89%
- Percent of wages needed to rent: 39.83%
Baldwin, Ala.
- Metro area: Daphne-Fairhope-Foley, Ala.
- Percent of wages needed to own: 38.08%
- Percent of wages needed to rent: 44.62%
Ulster, N.Y.
- Metro area: Kingston, N.Y.
- Percent of wages needed to own: 39.03%
- Percent of wages needed to rent: 43.32%
Kendall, Ill.
- Metro area: Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
- Percent of wages needed to own: 42.95%
- Percent of wages needed to rent: 50.78%
Snohomish, Wash.
- Metro area: Seattle-Tacoma-Bellevue, Wash.
- Percent of wages needed to own: 45.25%
- Percent of wages needed to rent: 48.86%
Ocean, N.J.
- Metro area: New York-Newark-Jersey City, N.Y.-N.J.-Pa.
- Percent of wages needed to own: 45.85%
- Percent of wages needed to rent: 53.23%
Stafford, Va.
- Metro area: Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
- Percent of wages needed to own: 47.31%
- Percent of wages needed to rent: 51.54%
Source: “12 Pricey Housing Markets Where Owning Still Beats Renting,” National Mortgage News (July 2016)
Monday, July 25, 2016
Talks focus on housing crisis for blacks in Clark County
Talks focus on housing crisis for blacks in Clark County: Social equity, education, jobs and housing were main talking points at Friday’s meeting of the Washington State Commission on African American Affairs. But that last topic, housing, was the most-discu
Homeownership skewing toward six-figure incomes
Homeownership skewing toward six-figure incomes: As homeownership declines nationally and locally, it’s an achievement increasingly reserved for higher-income households.
Thursday, July 14, 2016
Student Housing Is Booming
The student-housing sector is reaching new highs. In the first quarter of this year, capital pouring into student housing reached a record $2.6 billion, according to commercial real estate services firm JLL. Sales volume for the student-housing sector was up 66.2 percent year-over-year.
"We are seeing more direct deals by foreign investors this year," says Lucy Fletcher, a managing director and international capital expert at JLL. About half of the volume — or $1.4 billion — came from offshore investors, Fletcher says.
Get Educated About Opportunities in College Towns
Land lease agreements are also growing in popularity for campuses that need repositioning or that have been vacant, adding fuel to the boom, the National Real Estate Investor reports.
"Investors are buying into really well-managed platforms. There is large pent-up demand across the entire sector of core products," says Scott Streiff, JLL executive vice president. Class-A products are deemed as those having enrollment of 30,000 students or more. "We are seeing investors chasing core products that deliver attractive cap rates with projected student enrollment increases."
The student-housing sector tends to be recession-proof, and investors are viewing it as safer than some other investment classes. "I don't know if there will ever be a point of supply and demand meeting in this sector," adds Jaclyn Fitts, national director of student housing at real estate services firm CBRE.
Student housing reached a new record in the 2014-15 academic year, adding about 60,000 beds, according to CBRE data. CBRE predicts another 45,000 student-housing beds will be added in 2016-17.
"There will continue to be investment opportunities in 2017 and 2018," Fitts told the National Real Estate Investor. "We will continue to see new development in 2017. Additionally, purpose-built student housing properties completed in the 2000s are primed for repositioning, so we will continue to see opportunity there in rehabbing first-generation purpose-built [properties] and raising rents."
Source: “Student Housing Sector Continues to Outperform,” National Real Estate Investor (July 12, 2016)
The Ultimate Real Estate Workout
Looking to fit a workout into your daily routine? How about a DIY home renovation? "If you do any type of home rehab, you'll find yourself forced to develop some lean muscle mass," Anne Vilimek, a personal trainer at Health Track Sports Wellness in Glen Ellyn, Ill., told realtor.com®. She offers a few examples of how a home rehab can work your body:
- Hammering nails works your biceps, triceps, and shoulders.
- Squatting when hauling heavy items such as lumber works your quads and glutes.
- Strengthen your core by tightening the abdominal muscles while you're doing the reno work.
But what's the ultimate workout? Painting.
Focus on Fitness
"Painting is a full-body workout," says Vilimek. "You're up and down ladders. You're using rollers and paintbrushes. You're squatting and lifting paint cans and tarps."
Home renovations can also help you log plenty of steps for the day. Writer and home owner Michelle Mulak says she logged 19,800 steps after one day's work remodeling her Cocoa Beach, Fla., house. "Who needs to pay for a gym membership when squatting, bending, lifting, reaching, stretching, climbing, pushing, and pulling are all a part of your daily work routine?" Mulak wrote in a column for Florida Today.
But make sure you know what you're doing or you can get injured. "You can really strain your lower back or end up with neck problems if you don't know how to lift things properly," Vilimek says.
Source: “Want to Get in Shape Fast? Renovate a House,” Florida Today (July 11, 2016) and “Want a Killer Workout? Try a Home Renovation,” realtor.com® (July 12, 2016)
Most Popular Exteriors on New Homes
Vinyl is the most widely used exterior on new single-family homes, according to the latest Census Bureau data. Vinyl (which includes vinyl-covered aluminum) was used for siding material on 27 percent of new homes nationwide in 2015, followed by stucco at 25 percent, brick or brick veneer at 22 percent, and fiber cement siding at 19 percent. Wood or wood products accounted for 5 percent of new homes.
New-Home Trends
The materials used can vary drastically from region to region. For example, stucco was the most popular siding material in the Pacific and Mountain regions, at 57 percent and 55 percent, respectively. In the East and West South Central regions, at least 55 percent of new single-family homes last year used brick or brick veneer.
Take a look at this map from the National Association of Home Builders to see the most popular siding materials by region.
Source: “Vinyl Is the Most Widely Used Exterior on New Homes,” National Association of Home Builders’ Eye on Housing blog (July 7, 2016)
Are Pokémons Your Listing's Selling Point?
Is your listing near a Pokémon gym or Poké Stop? That may be your selling hook.
Pokémon Go, a new augmented reality game, has millennials glued to their smartphone screens as they walk around communities searching for fictional species called Pokémons. Using the Pokémon Go mobile app, users digitally collect Pokémons in different places across the country using GPS on their mobile devices. The game, available for Android and iPhone users, has exploded in popularity since it launched July 6. More than 10 million people have installed the app on their Android devices alone.
In other weird news: Glow-in-the-Dark Cement: A Game Changer?
Some real estate professionals are looking for ways to capitalize on the game's popularity — even trying to use it to draw attention to their listings. One listing in British Columbia advertised a single-family home that was "conveniently located between two Pokémon gyms and has 8 Poké Stops within walking distance."
In Redmond, Wash., a three-bedroom listing also highlights the home's proximity to Pokémons as an amenity. "Pokémon Go gym <5m walk, 3 Poké Stops within 7m walk," the ad reads. What's more, the Tralee Village Apartments in Dublin, Calif., is using Poké Stops to try to lure potential tenants: "So many Poké Stops and Pokémons, such lil' time! Spacious 1 x 1 nearby!"
Some real estate professionals reportedly are using it to attract buyers to open houses, too, with slogans in Facebook ads such as "Looking for Pokémon? Try here…"
So how can you find out if your listing or business is a Poké Stop? Check your status as a Pokémon Gym or Poké Stop by viewing the Ingress Intel Map (you'll need to log in with your Google account). Search addresses and look for a green or blue dot over it. (A better way to check is to install Pokémon Go on your phone.)
Source: “People Are Already Using Pokemon Go as a Real Estate Selling Point,” Atlas Obscura (July 12, 2016); “This Is Not a Game. (OK, it is. But Businesses Are Capitalizing on Pokemon Go’s Popularity),” Wink News (July 12, 2016) and “How to Remove Your Business Location From Pokemon Go,” TechRepublic.com (July 12, 2016)
Low Rates Prompt Rush to Refinance
The number of home owners refinancing their mortgages zoomed to its highest level in three years last week as mortgage rates continue to fall. The Mortgage Bankers Association reports that total mortgage application volume — including for refinancings and home purchases — climbed 7.2 percent last week compared to the previous week on a seasonally adjusted basis.
Refinance applications, which rose 11 percent last week and are up nearly 65 percent from a year ago, fueled the overall jump, MBA reported Wednesday. "Mortgage rates dropped again last week to their lowest level in more than three years, as investors continued to seek safety in U.S. assets given the global turbulence following the 'Brexit' vote," says Mike Fratantoni, MBA's chief economist.
The 30-year fixed-rate mortgage averaged 3.6 percent last week, the lowest average since May 2013, MBA reports. Rates for jumbo loans — those greater than $417,000 — plummeted to 3.61 percent.
"For the second week in a row, jumbo rates exceeded conforming rates on 30-year fixed-rate loans, reversing the pattern that has been in place for much of the past three years," Fratantoni says. "This could be a sign that banks are being somewhat more cautious in putting long-term, fixed-rate assets on their balance sheets at these rate levels."
Meanwhile, applications for home purchases barely budged week-to-week but are 5 percent lower compared to the same week a year ago. "Although some local markets remain on solid economic footing, more agents are citing buyers' concerns with the broader economy and volatile financial markets as holding activity back," according to a report released by Credit Suisse. "Moreover, high-end market trends continue to lag those on the low end in many metros."
Source: “Mortgage Refinances Surge 11% as Rates Drop to Three-Year Low,” CNBC (July 13, 2016)
More Renters Express Doubt About Owning
Renters are taking a dimmer view of home ownership as concerns over housing affordability and student debt have a larger influence on their attitudes, according to the National Association of REALTORS®.
NAR's latest Housing Opportunities and Market Experience (HOME) survey found a growing disconnect in the morale among home owners versus renters about home ownership. The share of renters who think now is a good time to buy a home dropped to 62 percent in the second quarter of this year — down from 68 percent in December 2015 — with those under the age of 35 expressing the least amount of confidence in buying. Eighty percent of home owners, on the other hand, believe now is a great time to purchase a home.
What's Next for Renters
"Existing-home prices surpassed their all-time peak this spring and have climbed, on average, over 5 percent nationally through the first five months of the year — and even faster in areas with severe supply shortages," says NAR Chief Economist Lawrence Yun. "Most home owners appear to realize that if they're ready to sell, they'll likely find a buyer rather quickly and be able to use the sizeable equity they've accumulated in recent years towards their next home purchase. Meanwhile, renters interested in buying continue to face minimal choices, strong competition, and home prices growing faster than their incomes. … Given these affordability pressures, it's no surprise respondents earning over $100,000 and those living in the Midwest — the most affordable region of the country — are the most optimistic about buying right now."
Student debt is making many people uneasy about taking on additional debt to purchase a home. Two-thirds of non-home owners and half of those under 35 with student debt say they aren't comfortable adding a mortgage on to their debt load, according to the HOME survey. They also were less likely to believe they'd even qualify for a mortgage.
"It's becoming very evident from this survey and our research released last month that the financial and emotional impact of repaying student debt is contributing to a delay in purchasing a home for many would-be buyers," Yun says. "At a time of quickly rising rents, mortgage rates at all-time lows, and increasing housing wealth, a lot of young adults in their prime buying years are struggling to enter the market and are ultimately missing out on the stability and wealth accumulation that owning a home can provide."
Economists are predicting that strong home-price appreciation will continue in the coming months throughout most of the country. As such, a growing number of current home owners — 61 percent — say they believe it's a good time to sell compared to 56 percent who said so in the first quarter of this year. Survey respondents who live in the West were most likely to say now is a good time to sell but were also least likely to say now is a good time to buy, according to the survey.
"More home owners acknowledging this pent-up demand may perhaps mean we begin to see more supply come online in the near future," Yun says.
Thursday, July 7, 2016
Quicken Quietly Offers 1% Down Loans
Quicken Loans has been fairly hush about its latest offering of a super low down payment mortgage, even as rival bank giants like Bank of America, Wells Fargo, and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent down payment mortgages.
Read more: Quicken Loans, Freddie Team for 3% Loans
The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured to be part of Freddie Mac’s Home Possible Advantage program, which requires a 3 percent down payment.
However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans’ vice president of capital markets, told HousingWire in an exclusive interview.
“We require 1 percent from consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately,” Banfield told HousingWire.
The 1 percent down-payment loans are available only for those purchasing a home and can only be used on a single-family home or condo (second home and investment properties or co-ops are not included). Borrowers also must have a FICO score of 680 or above and must earn less than the median income for their county. Their debt-to-income ratio must be 45 percent or less.
“We want to try to help people and do it in a smart way,” Banfield told HousingWire. “For us, it was really a question of if you want to provide access to credit, how do you do it responsibly? How can you help people? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit? ... We wanted to have a conventional option to get people into more homes.”
Source: “Quicken Loans Now Offering 1% Down Mortgages,” HousingWire (June 24, 2016)
Judge Says Accuracy Matters In Real Estate
A Glendale, Calif., home owner sued and won in a lawsuit against developer Americana at Brand for allegedly inflating the advertised square footage of the condo unit he bought.
Buyer Paul Abramson won $4,999 in small claims court. In 2011, he purchased a condo from Americana Housing for $567,000 in all cash, documents from the Los Angeles Superior Court show. Two months later, he found that his condo was 78 square feet less than advertised. The condo was advertised at 1,338 square feet but is actually 1,260 square feet.
Abramson never had his condo unit appraised since he paid all cash for it. But he later learned of the size discrepancy after his neighbor had a tough time at closing due to the difference between the condo’s listed and actual size.
Abramson charged in court documents that the developer “made a material misrepresentation” about the property’s square footage.
The developer countered in court that a disclaimer in a disclosure statement that was given to Abramson noted that the square footage listed in sales materials was “approximate.”
However, the judge sided with Abramson.
Abramson says he overpaid more than $30,000 for his unit based on its actual size. But by filing in small claims court, the maximum for damages was set at $10,000. He says he mistakenly thought the maximum was $5,000 and never amended his complaint to receive a higher reward.
"It's more of a moral victory, and at least makes this developer aware they can't do the same thing to other consumers out there, because it's out there now," Abramson told the Los Angeles Times.
Source: “Glendale Man Gets ‘Moral Victory’ in Lawsuit Against Americana Housing for Allegedly Exaggerating Condo’s Size,” Los Angeles Times (June 25, 2016)
5 Tips to Help Buyers Save for a Down Payment
Saving for a down payment can pose one of the biggest challenges for potential home buyers.
Indeed, “a down payment is often the largest single payment a consumer makes in their lifetime and saving for it isn’t easy,” says Corey Carlisle, executive director of the American Bankers Association Foundation. “However, with a few changes, consumers can put themselves on track to make their home ownership dream a reality.”
Read more: How Long It Takes to Save for a Down Payment
In honor of American Housing Month, the American Bankers Association Foundation recently featured several tips to help consumers cut their household costs and start saving for a down payment.
Determine how much you need. Find out how much you’ll need for a down payment. From there, create a budget by figuring how much you can realistically set aside each month. Then, you can set a timeline.
Create a separate savings account. Separate a savings account that is just for the down payment. Make monthly contributions automatic.
Find ways to reduce your monthly bills. Check your car insurance, renter’s insurance, health insurance, cable and Internet plan rates. See if there are any promotions that could help you save money by revisiting your contracts.
Investigate state and local home-buying programs. Several state, counties, and local governments offer first-time home buyer programs that offer down payment assistance. Find out if you’re eligible for one.
Celebrate. Set smaller savings goals as you work up to the larger goal. For example, if you need to save $30,000, celebrate -- such as with a nice meal -- every time you hit the $5,000 saving milestone. “This will help you stay motivated throughout the process,” ABA notes.
Source: American Bankers Association
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