Sunday, November 23, 2014

Spread the Word: Mortgage Rates Below 4%

Fixed-rate mortgages fell back near yearly lows again this week, lowering borrowing costs for home buyers and refinancers. The 30-year fixed-rate mortgage averaged 3.99 percent this week, Freddie Mac reports in its weekly mortgage market survey.
“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later,” Frank Nothaft, Freddie Mac’s chief economist, said in the video commentary embedded here.
Freddie Mac reported the following national averages with mortgage rates for the week ending Nov. 20:
  • 30-year fixed-rate mortgages averaged 3.99 percent, with an average 0.5 point, dropping from last week’s 4.01 percent average. The 30-year fixed-rate mortgage dipped to 3.97 percent in mid-October, its lowest average so far this year.
  • 15-year fixed-rate mortgages averaged 3.17 percent, with an average 0.5 point, decreasing from last week’s 3.2 percent average. A year ago, 15-year rates averaged 3.27 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.01 percent, with an average 0.5 point, falling slightly from last week’s 3.02 percent average. A year ago, 5-year ARMs averaged 2.95 percent.
  • 1-year ARMs averaged 2.44 percent, with an average 0.4 point, inching up slightly from last week’s 2.43 percent average. Last year at this time, 1-year ARMs averaged 2.61 percent.
Source: Freddie Mac

5 Latest Stats to Gauge Heat of the Market

For the second consecutive month, existing-home sales were on the rise in October, now above year-over-year levels for the first time in 12 months, according to the National Association of REALTORS®’ latest housing report.
Existing-home sales rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million in October. Sales now are at their highest annual pace since September 2013.
“Buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory, and stabilizing price growth,” says Lawrence Yun, NAR’s chief economist. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”
Here’s an overview of some of the latest key housing indicators from NAR’s existing-home sales report, reflecting October data:
1. Home prices: The median existing-home price for all housing types in October was $208,300—5.5 percent above October 2013. It marks the 32nd consecutive month of year-over-year price gains.
2. Inventory: Total housing inventory at the end of October dropped 2.6 percent to 2.22 million existing homes available for sale. That represents a 5.1-month supply at the current sales pace—the lowest since March. Unsold inventory is now 5.2 percent higher than a year ago, when there were 2.11 million existing homes available for sale.
“The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory,” Yun says. “However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.”
3. Days on the market: Properties, on average, remained on the market longer in October—63 days compared to last month’s 56 days and a year ago at 54 days. However, 33 percent of homes sold last month were on the market for less than a month. But distressed sales tended to have some of the longest market times. Short sales lingered on the market for a median of 150 days, while foreclosures sold, on average, in 68.
4. All-cash sales: These comprised 27 percent of transactions in October, down from 31 percent in October 2013. Individual investors tended to account for the largest bulk of cash sales and purchased 15 percent of homes in October, which is down from their 19 percent share in October 2013.
5. Distressed homes: Reflecting foreclosures and short sales, distressed home sales fell in the single-digits for the third month this year. Distressed sales dropped to 9 percent in October, compared to 14 percent a year ago. Broken out, 7 percent of October sales were foreclosures and 2 percent were short sales. Foreclosures typically sold for a discount of 15 percent below market value while short sales were discounted by an average of 10 percent.
“Although distressed sales are trending downward, there are still areas [such as judicial states Florida, Maryland and New York] plagued by foreclosures, and home owners faced with the awful choice between a tax bill they are unable to pay and losing their home,” says NAR President Chris Polychron.
Snapshot by Region
Here’s a look at how existing-home sales fared across the country in October.
  • Northeast: Existing-home sales rose 2.9 percent to an annual rate of 710,000, and are 4.4 percent above a year ago. Median price: $246,900, a 1.2 percent increase over a year ago.
  • Midwest: Existing-home sales increased 5.1 percent to an annual level of 1.24 million in October, and are 2.5 percent higher than October 2013. Median price: $164,100, up 6.8 percent from a year ago.
  • South: Existing-home sales climbed 2.8 percent to an annual rate of 2.17 million in October, and are now 5.3 percent above October 2013. Median price: $178,000, up 5.1 percent from a year ago.
  • West: Existing-home sales fell 5 percent to an annual rate of 1.14 million in October, and are 3.4 percent below a year ago. Median price: $296,800, up 5 percent from a year ago.
Source: “Existing-Home Sales Rise in October, First Year-over-Year Increase Since October 2013,” National Association of REALTORS® (Nov. 20, 2014)

Thursday, November 20, 2014

Fla.’s housing market: Rising sales, prices in Oct. 2014

Florida's housing market reported more closed sales, higher median prices and a rising inventory in October, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 21,894 last month, up 17.8 percent over the October 2013 figure.
The statewide median sales price for single-family existing homes last month was $177,000, up 4.6 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis (IDA) department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in October was $139,900, up 7.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
"October marks the 35th month in a row that statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties," said 2014 Florida Realtors®President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. "The state's housing market continues to benefit from more people moving to Florida, a steadily improving jobs outlook and growing economy."
Statewide, the inventory (active listings) of single-family homes in October rose 4.9 percent year-over-year, while new townhouse-condo inventory rose 3.4 percent.
According to the National Association of Realtors (NAR), thenational median sales price for existing single-family homes in September 2014 was $210,300, up 5.9 percent from the previous yearthe national median existing condo price was $205,200.In California, the statewide median sales price for single-family existing homes in September was $460,940; in Massachusetts, it was $325,000; in Maryland, it was $257,575; and in New York, it was $227,500.
Looking at Florida's townhouse-condo market, statewide closed sales totaled 9,377 last month, up 7.4 percent compared to October 2013. The closed sales data reflected fewer short sales last month compared to the previous year: Short sales for condo-townhouse properties declined 55.6 percent while short sales for single-family homes dropped 47.6 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.
"Everything appears to be moving in the right direction, against a background of moderate and sustainable price changes," said Florida Realtors Chief Economist Dr. John Tuccillo, "Condo sales stand out, since they had been down for the first eight months of the year when compared with the previous year. However, it's unclear whether the October numbers signal a revival of the brisk-paced recovery in the housing market, or whether this is a one-month anomaly. The next several months will tell the tale.
"We could be seeing an early onset of the 'Winter of '13' effect, whereby snowbirds, fearing a recurrence of the bitter weather of last winter, are arriving early and looking to lock in homes before the main seasonal rush."
Inventory was at a 5.4-months' supply in October for single-family homes and at a 5.9-months' supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.04 percent in October 2014, down from the 4.19 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, visit Florida Realtors website.
© 2014 Florida Realtors®

Mortgage Applications Take Surprising Turn

Loan demand was on the rise last week, posting a strong rebound that was driven mostly by applications to purchase a home, the Mortgage Bankers Association reports in its seasonally adjusted weekly mortgage market survey, reflecting the week ending Nov. 14. The increase in demand came despite interest rates mostly staying flat for the week.
Total application volume, which reflects applications for home purchases and refinances, climbed nearly 5 percent week-to-week. Broken out, refinance applications rose 1 percent week-to-week, while applications for home purchases, viewed as a gauge of future home buying activity, surged 12 percent. It was the highest level for purchase applications since July, the MBA reports.
"The MBA and other data are showing strength in the market for new homes, likely reflecting the boost from continued job growth in recent months," says Michael Fratantoni, the MBA’s chief economist.
Nevertheless, despite the rebound, purchase applications remain 6 percent below year-over-year levels.
Meanwhile, the 30-year fixed-rate mortgage declined slightly last week to 4.18 percent from 4.19 percent the week prior, the MBA reports.
Source: “Weekly Mortgage Applications Jump Unexpectedly,” CNBC (Nov. 19, 2014)

Sunday, November 16, 2014

Mortgage Rates Still Near Yearly Lows

The 30-year fixed-rate mortgage is hovering around 4 percent. This has been keeping borrowing costs low for refinancers and home buyers for the last few weeks, Freddie Mac reports in its weekly mortgage market survey.
Freddie Mac reported the following national averages for mortgage rates for the week ending Nov. 13:
  • 30-year fixed-rate mortgages averaged 4.01 percent, with an average 0.5 point, dropping from last week’s 4.02 percent. A year ago, 30-year rates averaged 4.35 percent.
  • 15-year fixed-rate mortgages averaged 3.2 percent, with an average 0.5 point, dropping from last week’s 3.21 percent average. Last year at this time, 15-year rates averaged 3.35 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.02 percent, with an average 0.5. point, rising from last week’s 2.97 percent average. A year ago, 5-year ARMs averaged 3.01 percent.
  • 1-year ARMs averaged 2.43 percent, with an average 0.4 point, dropping from last week’s 2.45 percent average. Last year at this time, 1-year ARMs averaged 2.61 percent.
Source: Freddie Mac

Monday, November 10, 2014

Slight Uptick in Markets Returning to ‘Normal’

In the third quarter, nearly 17 percent – or 59 of 350 metros -- returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index. That represents a year-over-year gain of seven markets on the index.
“The markets are recovering at a slow, gradual pace,” says NAHB Chairman Kevin Kelly. “Continued job creation, economic growth, and increasing consumer confidence should help spur pent-up demand for housing.”
The index identifies markets that are approaching or exceeding their previous normal levels of economic and housing activity by taking into account more than 350 metros’ average permit, home prices, and employment levels for the past 12 months and comparing it to the last normal period (which is considered from 2000-2003 for single-family permits and home prices, and 2007 for employment).
The top major market on the LMI continues to be Baton Rouge, La., which is performing at 39 percent better than its last normal market level. Additional major metro leaders that had LMI scores equal to or exceeding their previous norms are Austin, Texas; Honolulu; Oklahoma City; Houston; Los Angeles; San Jose, Calif.; Salt Lake City; New Orleans; and Charleston, S.C.
Smaller metros leading the way include Midland and Odessa, Texas -- both markets are now at double their strength prior to the recession. Other small metro leaders include Grand Forks, N.D.; Bismarck, N.D.; and Casper, Wyo.
"Nearly half of all the markets on the Leading Markets Index are up since August, which is a good sign that the ongoing housing recovery will keep moving forward in 2015," says Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
However, a full-fledged housing recovery rests on builders ramping up homebuilding activity. Single-family permits are still only at 44 percent of normal activity nationwide, says David Crowe, NAHB’s chief economist.
Source: National Association of Home Builders

20% Down Payment Takes 12 Years of Saving

First-time buyers have a whole lot of saving to do — possibly more than a decade of saving for a home purchase. It can take, on average, 12.5 years for first-time buyers to save a 20 percent down payment based on a current personal savings rate at 5.6 percent, according to new research by RealtyTrac. The figure is based on current median home prices and doesn’t take into account further home price rises.
In RealtyTrac’s analysis of 512 counties, it found that the median price of a home is around $259,000, which would require buyers to save $51,800 for a 20 percent down payment.
Millennials entering the workforce often have several years until they start earning the national median salary — usually that is not reached until the age of 30, according to a 2013 Georgetown University study by Anthony Carnevale, “Failure to Launch: Structural Shift and the New Lost Generation.”
If that’s the case, first-time buyers who need a 20 percent down payment would have to wait until they’re 42 years old to be able to afford to buy a house, Carnevale told The Wall Street Journal. Coupled with other debt, such as student loans, the wait could even be longer.
Melvin Watt, director of the Federal Housing Finance Agency, has suggested lowering the down payment for a conventional loan to 3 percent from the traditional 20 percent. In that case, it would take first-time buyers less than two years to save enough.
The Federal Housing Administration allows buyers to get a mortgage with a down payment as low as 3.5 percent with a 30-year fixed rate. However, buyers still have to meet the debt-to-income ratio and cash reserve requirements and they would likely qualify for better terms for a loan if they could bring a higher down payment, says Whitney Fite, managing director of Angel Oak Home Loans in Atlanta.
Source: “Saving for a Down Payment? It Could Take You Until 2027,” MarketWatch (Nov. 5, 2014)