Do-it-yourself tiny homes is a growing niche among some who desire eco-friendly lifestyles, The Wall Street Journal reports.
A series of new books are coming out next month that show aspiring home owners how they can build their own small home.
“The appeal is that secretly most people would like to be in the country building their own little house," says Jonas Kyle, an owner of Spoonbill & Sugargtown Bestsellers in Brooklyn, N.Y., which publishes the “Tiny Homes: Simple Shelter” by Lloyd Kahn. “There's a builder lurking inside everyone."
"The economy declined, and people are finding ways to downsize," says Patricia Bostelman, vice president of marketing at Barnes & Noble Inc., about the the series of new books about living small and simply being released.
Source: “Tiny Homes Carve a Niche,” The Wall Street Journal (Jan. 30, 2012)
Tuesday, January 31, 2012
5 Housing Markets Expected to Outshine All the Rest
Inman News released a report highlighting metro areas that are expected to “outshine many other markets in real estate performance this year.”
In its report, Inman News scanned metro areas with populations over 150,000 to find where real estate sales volume is rising, job markets are growing, foreclosure activity is low, sales prices are appreciating, and home affordability is at high levels.
Here are the metro areas topping the list, including the third quarter 2011 median sales price and the percentage change in sales price year-over-year.
1. Raleigh-Cary, N.C.
Median sales price: $224,300
Median sales price change year-over-year: 7.3 percent
2. Wichita, Kan.
Median sales price: $120,900
Median sales price change year-over-year: 5.5 percent
3. Rochester, N.Y.
Median sales price: $123,400
Median sales price change year-over-year: 1.4 percent
4. Des Moines-West Des Moines, Iowa
Median sales price: $157,900
Median sales price change year-over-year: 0.8 percent
5. Chattanooga, Tenn.-Ga.
Median sales price: $128,700
Median sales price change year-over-year: 7.3 percent
Find out the other cities that made the top 10 list as well as more about each metro area’s real estate market and why it’s one to watch in the new year.
Source: “10 Real Estate Markets to Watch in 2012,” Inman News (January 2012)
In its report, Inman News scanned metro areas with populations over 150,000 to find where real estate sales volume is rising, job markets are growing, foreclosure activity is low, sales prices are appreciating, and home affordability is at high levels.
Here are the metro areas topping the list, including the third quarter 2011 median sales price and the percentage change in sales price year-over-year.
1. Raleigh-Cary, N.C.
Median sales price: $224,300
Median sales price change year-over-year: 7.3 percent
2. Wichita, Kan.
Median sales price: $120,900
Median sales price change year-over-year: 5.5 percent
3. Rochester, N.Y.
Median sales price: $123,400
Median sales price change year-over-year: 1.4 percent
4. Des Moines-West Des Moines, Iowa
Median sales price: $157,900
Median sales price change year-over-year: 0.8 percent
5. Chattanooga, Tenn.-Ga.
Median sales price: $128,700
Median sales price change year-over-year: 7.3 percent
Find out the other cities that made the top 10 list as well as more about each metro area’s real estate market and why it’s one to watch in the new year.
Source: “10 Real Estate Markets to Watch in 2012,” Inman News (January 2012)
EEM mortgage rewards energy efficiency
If a home is energy efficient and conserves energy, the monthly utility bills won’t be as high. And if the bills aren’t as high, a buyer can afford to pay more each month on the mortgage.
That’s the theory behind Energy Efficient Mortgages (EEMs). EEMs allow borrowers to qualify for a larger loan and a better, more energy-efficient home.
EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. However, the term EEM refers to all types of energy mortgages, including Energy Improvement Mortgages (EIMs), which can be used to purchase an existing home that the buyer plans to improve with energy efficient upgrades. EIMs allow borrowers to roll the cost of the upgrades into the mortgage without increasing the downpayment.
Both EEMs and EIMs typically require that a home energy rating – an estimate of monthly energy savings – be given to the lender before the loan can be approved.
Conventional Energy Efficient Mortgages
Lenders who sell loans to Fannie Mae and Freddie Mac can offer conventional EEMs. Conventional EEMs increase the borrower’s income by a dollar amount equal to the estimated energy savings. The Fannie Mae loan also adjusts the value of the home to reflect the value of the energy efficiency measures. For more information about Fannie Mae’s EEM you can call 1-800-7FANNIE (732-6643).
FHA Energy Efficient Mortgages
The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5 percent of the value of the property, or 115 percent of the median area price of a single family dwelling, or 150 percent of the conforming Freddie Mac limit.
For more information on FHA EEM loans, visit HUD.gov. Additional information is available from HUD’s Office of Single Family Housing by calling (800) 569-4287.
VA Energy Efficient Mortgages
The Veteran’s Administration (VA) EEM is available to qualified military personnel, reservists and veterans, and caps energy improvements at $3,000 – $6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran’s Affairs or by calling (800) 827-1000.
Source: Florida Realtors®
That’s the theory behind Energy Efficient Mortgages (EEMs). EEMs allow borrowers to qualify for a larger loan and a better, more energy-efficient home.
EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. However, the term EEM refers to all types of energy mortgages, including Energy Improvement Mortgages (EIMs), which can be used to purchase an existing home that the buyer plans to improve with energy efficient upgrades. EIMs allow borrowers to roll the cost of the upgrades into the mortgage without increasing the downpayment.
Both EEMs and EIMs typically require that a home energy rating – an estimate of monthly energy savings – be given to the lender before the loan can be approved.
Conventional Energy Efficient Mortgages
Lenders who sell loans to Fannie Mae and Freddie Mac can offer conventional EEMs. Conventional EEMs increase the borrower’s income by a dollar amount equal to the estimated energy savings. The Fannie Mae loan also adjusts the value of the home to reflect the value of the energy efficiency measures. For more information about Fannie Mae’s EEM you can call 1-800-7FANNIE (732-6643).
FHA Energy Efficient Mortgages
The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5 percent of the value of the property, or 115 percent of the median area price of a single family dwelling, or 150 percent of the conforming Freddie Mac limit.
For more information on FHA EEM loans, visit HUD.gov. Additional information is available from HUD’s Office of Single Family Housing by calling (800) 569-4287.
VA Energy Efficient Mortgages
The Veteran’s Administration (VA) EEM is available to qualified military personnel, reservists and veterans, and caps energy improvements at $3,000 – $6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran’s Affairs or by calling (800) 827-1000.
Source: Florida Realtors®
Monday, January 30, 2012
Why Have Banks Really Tightened Lending Standards?
Home ownership affordability is at a record high due to low home prices and all-time low mortgage rates. But housing experts have blamed banks' tightened lending standards for keeping more buyers on the sidelines because they are unable to qualify for financing.
Lending standards increased sharply after the financial crisis in 2008, and even after the recession ended in 2009. Lenders have yet to ease their stricter standards, according to a report by Goldman Sachs economists Hui Shan and Jari Stehn.
Why? The researchers say it’s mostly because there’s less money available to lend.
“During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up,” an article at MSNBC.com notes, in describing the study’s findings. “That market has all but vanished; 90 percent of new mortgages written today are backed by the government.”
Also, researchers found that lenders are swamped with more paperwork, which is also causing delays in processing. Many lenders have issued stricter documentation requirements before they’ll approve a loan. Nowadays, nearly 90 percent of mortgage applications require “full documentation” before getting approved. From 2000 to 2006, less than 60 percent of applications required “full documentation,” researchers found.
Source: “Tight-Fisted Mortgage Lenders Pressure Home Sales,” MSNBC.com (Jan. 27, 2012)
Lending standards increased sharply after the financial crisis in 2008, and even after the recession ended in 2009. Lenders have yet to ease their stricter standards, according to a report by Goldman Sachs economists Hui Shan and Jari Stehn.
Why? The researchers say it’s mostly because there’s less money available to lend.
“During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up,” an article at MSNBC.com notes, in describing the study’s findings. “That market has all but vanished; 90 percent of new mortgages written today are backed by the government.”
Also, researchers found that lenders are swamped with more paperwork, which is also causing delays in processing. Many lenders have issued stricter documentation requirements before they’ll approve a loan. Nowadays, nearly 90 percent of mortgage applications require “full documentation” before getting approved. From 2000 to 2006, less than 60 percent of applications required “full documentation,” researchers found.
Source: “Tight-Fisted Mortgage Lenders Pressure Home Sales,” MSNBC.com (Jan. 27, 2012)
NAR’s Confidence Index shows upswing
The National Association of Realtors® conducts a monthly study on Realtors outlooks about the housing market, and the Realtors Confidence Index for single-family home sales in December increased to 31.6 from November’s 30.4. However, it increased 7.1 points in one year – since December 2010 – when it was 24.5. Overall, the Index has shown a slowly improving market outlook.
The index for townhouses was 18.5 in December down slightly down from November’s 18.7. A year earlier, however, it was 12.6. The index for condos also decreased to 14.3 from November’s 15.3, but one year earlier it was only 10.3.
The index also measured Realtors’ outlooks by region. Overall, the West had the highest outlook at 35.0, but the South – which includes Florida – came in second at 33.3. One year earlier, the South’s index stood at 25.1.
Overall, 55 percent of Realtors surveyed expect prices to rise over the next year, an increase from 50 percent only one month earlier; and 7 percent of Realtors expect prices to rise 5 percent or more compared to November’s 6 percent. On the flip side, 38 percent of Realtors expect prices to fall, but that’s less than the 43 percent who said the same thing one month earlier.
In an analysis, NAR Chief Economist Lawrence Yun said 2012 kicks off with “a significant amount of good news. … Existing home sales in December were up from a year ago. Pending sales – that is, contract signings – were 5 percent ahead of a year ago. Housing inventory – the number of homes available for sale – has declined (both for existing and newly built homes). Housing affordability continues at record high levels.”
Yun says that one major problem still hangs over the housing market, however: Many middle-class buyers have been shut out of the market because they cannot obtain a mortgage.
“Loan qualifications have become so strict since 2009 that only borrowers with super-high credit scores and spotless credit history are able to obtain mortgages,” Yun says. According to one-third of the Realtors surveyed, access to credit was the most important factor limiting clients’ ability to buy a home.
The complete Realtors Confidence Index is available online.
Source: Florida Realtors®
The index for townhouses was 18.5 in December down slightly down from November’s 18.7. A year earlier, however, it was 12.6. The index for condos also decreased to 14.3 from November’s 15.3, but one year earlier it was only 10.3.
The index also measured Realtors’ outlooks by region. Overall, the West had the highest outlook at 35.0, but the South – which includes Florida – came in second at 33.3. One year earlier, the South’s index stood at 25.1.
Overall, 55 percent of Realtors surveyed expect prices to rise over the next year, an increase from 50 percent only one month earlier; and 7 percent of Realtors expect prices to rise 5 percent or more compared to November’s 6 percent. On the flip side, 38 percent of Realtors expect prices to fall, but that’s less than the 43 percent who said the same thing one month earlier.
In an analysis, NAR Chief Economist Lawrence Yun said 2012 kicks off with “a significant amount of good news. … Existing home sales in December were up from a year ago. Pending sales – that is, contract signings – were 5 percent ahead of a year ago. Housing inventory – the number of homes available for sale – has declined (both for existing and newly built homes). Housing affordability continues at record high levels.”
Yun says that one major problem still hangs over the housing market, however: Many middle-class buyers have been shut out of the market because they cannot obtain a mortgage.
“Loan qualifications have become so strict since 2009 that only borrowers with super-high credit scores and spotless credit history are able to obtain mortgages,” Yun says. According to one-third of the Realtors surveyed, access to credit was the most important factor limiting clients’ ability to buy a home.
The complete Realtors Confidence Index is available online.
Source: Florida Realtors®
Can a mobile phone keep you safe on the go?
You’re walking alone late at night, and you sense someone is following you. Is it possible to get protection from your cell phone without calling the police?
“I have four daughters, so developing something that creates a layer of safety for those who feel vulnerable was important to me,” said Tom Rissman, CEO of PeopleGuard LLC and one of the developers of the StreetSafe app. “I wanted to create a sort of personal mobile security system, and that’s when we thought up StreetSafe.”
So why use StreetSafe instead of just calling 911?
“People think 911 can instantly track where a cell phone is, and that’s not the case,” he said. “It can take up to six minutes for the police to track a phone because they need to get permission (to do so). If someone is in our system, we have them on GPS and don’t need to get permission to track it, so it’s instant.”
Rissman said the app offers two options – green and red.
If you slide the red button, StreetSafe silently contacts your local 911 center with your location, tracks your every move through GPS and relays your position to the authorities, and transmits your identification information to the authorities age, physical description, etc.
“If you’re in danger, keep your finger next to the red alarm and tuck the phone into your pocket,” Rissman said.
If you slide the green option, you’re immediately connected to a call center staffed by trained safety advisors and off-duty police officers.
Rissman said StreetSafe’s non-emergency option – the green button – sets them apart, because it allows the user to talk to experts who can offer safety tips before things get dangerous.
“We call this the ‘walk with me’ service,” he said. “Our staff is trained to help with any circumstance. It makes people feel better to know it’s there, with or without a crisis.”
Concerned about your privacy? Rissman says the app is not a tracking device others can use against you. “Our information is kept solely to us and shared with the police and only the police” in case of emergency, he said.
“We thought this would be most popular with college students, but young professional women seem to be using it most,” he said.
Cost for the app varies from $19.99 a month to $149.99 a year and includes the security service. Find out more at StreetSafe.com.
Source: the Chicago Tribune. Distributed by MCT Information Services.
“I have four daughters, so developing something that creates a layer of safety for those who feel vulnerable was important to me,” said Tom Rissman, CEO of PeopleGuard LLC and one of the developers of the StreetSafe app. “I wanted to create a sort of personal mobile security system, and that’s when we thought up StreetSafe.”
So why use StreetSafe instead of just calling 911?
“People think 911 can instantly track where a cell phone is, and that’s not the case,” he said. “It can take up to six minutes for the police to track a phone because they need to get permission (to do so). If someone is in our system, we have them on GPS and don’t need to get permission to track it, so it’s instant.”
Rissman said the app offers two options – green and red.
If you slide the red button, StreetSafe silently contacts your local 911 center with your location, tracks your every move through GPS and relays your position to the authorities, and transmits your identification information to the authorities age, physical description, etc.
“If you’re in danger, keep your finger next to the red alarm and tuck the phone into your pocket,” Rissman said.
If you slide the green option, you’re immediately connected to a call center staffed by trained safety advisors and off-duty police officers.
Rissman said StreetSafe’s non-emergency option – the green button – sets them apart, because it allows the user to talk to experts who can offer safety tips before things get dangerous.
“We call this the ‘walk with me’ service,” he said. “Our staff is trained to help with any circumstance. It makes people feel better to know it’s there, with or without a crisis.”
Concerned about your privacy? Rissman says the app is not a tracking device others can use against you. “Our information is kept solely to us and shared with the police and only the police” in case of emergency, he said.
“We thought this would be most popular with college students, but young professional women seem to be using it most,” he said.
Cost for the app varies from $19.99 a month to $149.99 a year and includes the security service. Find out more at StreetSafe.com.
Source: the Chicago Tribune. Distributed by MCT Information Services.
Report: Villages top home seller in U.S.
The Villages, the giant active-adult community northwest of Orlando, was the top-selling master-planned community in the nation last year, according to a report released last week by a California-based real estate research firm.
Spanning parts of Lake, Marion and Sumter counties, the mega-development recorded 2,307 new-home sales last year. The second-most successful development was the Woodlands in Houston with 945 sales – fewer than half as many as the Villages, according to the report by John Burns Real Estate Consulting.
The Villages has only a handful of foreclosures because many of the residents paid cash for their new homes after selling their old dwellings up North. Retirees are typically drawn there for its 37 golf courses, 1,000-plus clubs and activities, and other amenities.
Looking at just the top 10 projects, eight were in the same list last year; this year there were two additions: Alamo Ranch in San Antonio, and Lakewood Ranch in Sarasota.
“With our new sports campus, new commercial construction this year totaling upward of $150 million, and new rental projects springing up, we’re proud that Lakewood Ranch has become the premier new-home destination on Florida’s West Coast,” said Rex Jensen, president of the developer, Schroeder-Manatee Ranch Inc.
Source: The Orlando Sentinel (Orlando, Fla.), Mary Shanklin. Distributed by MCT Information Services.
Spanning parts of Lake, Marion and Sumter counties, the mega-development recorded 2,307 new-home sales last year. The second-most successful development was the Woodlands in Houston with 945 sales – fewer than half as many as the Villages, according to the report by John Burns Real Estate Consulting.
The Villages has only a handful of foreclosures because many of the residents paid cash for their new homes after selling their old dwellings up North. Retirees are typically drawn there for its 37 golf courses, 1,000-plus clubs and activities, and other amenities.
Looking at just the top 10 projects, eight were in the same list last year; this year there were two additions: Alamo Ranch in San Antonio, and Lakewood Ranch in Sarasota.
“With our new sports campus, new commercial construction this year totaling upward of $150 million, and new rental projects springing up, we’re proud that Lakewood Ranch has become the premier new-home destination on Florida’s West Coast,” said Rex Jensen, president of the developer, Schroeder-Manatee Ranch Inc.
Source: The Orlando Sentinel (Orlando, Fla.), Mary Shanklin. Distributed by MCT Information Services.
Friday, January 27, 2012
First-Time Buyers More Willing to Compromise
When it comes to space and upgrades, first-time home buyers are more willing to compromise than repeat buyers, according to the National Association of REALTORS®’ 2011 “Profile of Home Buyers and Sellers.”
While they have big wish lists too, first-time buyers seem to be most driven by finding a home that offers a reasonable monthly mortgage payment.
"Single home buyers tend to value affordability above all when they are choosing a home and a neighborhood," says Jessica Lautz, NAR’s manager of member and consumer survey research. "They also focus more on living some place convenient to friends and family, as well as entertainment and leisure activities."
The median age of first-time home buyers is 31, and about 26 percent are married with children.
First-time home buyers tend to rate energy efficiency high on their wish list, as well as simple, no-hassle technology use in their house, the study finds.
But "even if they like the idea of solar panels, first-time buyers are not likely to spend an extra $20,000 to have them," says Stephen Melman, director of economic services for economics and housing policy for the National Association of Home Builders.
First-time buyers also are willing to compromise on space: The median-size of a home purchased by a first-time buyer is 1,570 square feet.
Overall, "the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room," says Melman. "First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet."
But one thing first-time buyers aren’t as willing to compromise on: Buying a home that needs a lot of repairs.
"Buyers that don't have any experience with home maintenance tend to be afraid of renovations, so home sellers should be sure to fix everything they can and make minor home improvements in order to appeal to first-time buyers," Melman says.
Source: “Size Matters Most to First-time Buyers,” HSH.com and Fox Business News (Jan. 26, 2012)
While they have big wish lists too, first-time buyers seem to be most driven by finding a home that offers a reasonable monthly mortgage payment.
"Single home buyers tend to value affordability above all when they are choosing a home and a neighborhood," says Jessica Lautz, NAR’s manager of member and consumer survey research. "They also focus more on living some place convenient to friends and family, as well as entertainment and leisure activities."
The median age of first-time home buyers is 31, and about 26 percent are married with children.
First-time home buyers tend to rate energy efficiency high on their wish list, as well as simple, no-hassle technology use in their house, the study finds.
But "even if they like the idea of solar panels, first-time buyers are not likely to spend an extra $20,000 to have them," says Stephen Melman, director of economic services for economics and housing policy for the National Association of Home Builders.
First-time buyers also are willing to compromise on space: The median-size of a home purchased by a first-time buyer is 1,570 square feet.
Overall, "the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room," says Melman. "First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet."
But one thing first-time buyers aren’t as willing to compromise on: Buying a home that needs a lot of repairs.
"Buyers that don't have any experience with home maintenance tend to be afraid of renovations, so home sellers should be sure to fix everything they can and make minor home improvements in order to appeal to first-time buyers," Melman says.
Source: “Size Matters Most to First-time Buyers,” HSH.com and Fox Business News (Jan. 26, 2012)
2011 Marks Worst Year on Record for New-Home Sales
Sales of new-home declined in December, dropping 2.2 percent, and marking the end to the worst year on record for new-home sales, the Commerce Department reported Thursday.
New-home sales reached a seasonally adjusted annual pace of 307,000 in December — less than half the 700,000 pace that economists consider healthy for the sector.
In 2011, 302,000 new homes were sold nationwide, overtaking 2010’s 323,000 sales that had previously marked the worst year for sales on record.
The new-home sector continues to struggle to compete against discounted distressed properties that are plaguing many markets and have put downward pressure on home prices. Builders also say tighter lending standards are preventing some home buyers for qualifying for financing, and appraisals of new-homes are coming in lower on the agreed upon purchase price, causing more deals to fall through.
In December, the median sales price of a new-home was $210,300, according to the Commerce Department.
"Although this [December] decline was unexpected, it does not change the story that housing has likely bottomed," Jennifer H. Lee, senior economist at BMO Capital Markets, told the Associated Press.
Source: “New Home Sales 2011: Worst Year on Record,” Associated Press (Jan. 26, 2012)
New-home sales reached a seasonally adjusted annual pace of 307,000 in December — less than half the 700,000 pace that economists consider healthy for the sector.
In 2011, 302,000 new homes were sold nationwide, overtaking 2010’s 323,000 sales that had previously marked the worst year for sales on record.
The new-home sector continues to struggle to compete against discounted distressed properties that are plaguing many markets and have put downward pressure on home prices. Builders also say tighter lending standards are preventing some home buyers for qualifying for financing, and appraisals of new-homes are coming in lower on the agreed upon purchase price, causing more deals to fall through.
In December, the median sales price of a new-home was $210,300, according to the Commerce Department.
Turnaround Coming?
Despite the latest numbers from December, new-home sales rose in the overall final quarter of 2011. Home construction for single-family homes increased in the final three months of 2011, and an index measuring homebuilder sentiment showed builders are more positive about where the market is heading too."Although this [December] decline was unexpected, it does not change the story that housing has likely bottomed," Jennifer H. Lee, senior economist at BMO Capital Markets, told the Associated Press.
Source: “New Home Sales 2011: Worst Year on Record,” Associated Press (Jan. 26, 2012)
Condo buyers frustrated in hunt for FHA mortgages
Buying a condominium is getting trickier for anyone who wants to put down only 3.5 percent and have the government insure their mortgage.
The issue isn’t just the borrower’s financial wherewithal. It’s the building’s, and plenty of condos no longer get a thumbs-up from the Federal Housing Administration.
Since Feb. 1, 2010, condo buyers haven’t been able to secure unit-by-unit “spot” approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.
The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets, as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA’s stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.
The effects of those rejected buildings are likely to linger, particularly if more stringent downpayment requirements take effect for homebuyers, and could hamper any recovery of the housing market.
For the first nine months of 2011, the FHA’s share of the overall home purchase market was 37.4 percent nationally, but the share for condos would have been higher because FHA-insured loans are popular with condo purchasers, said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “They have the most-used program out there,” he said.
Since Oct. 1, 38 percent of condominium communities that have gone through the certification process have been rejected by the FHA.
“It’s a critical year for buildings,” said David Hartwell, a Chicago attorney who represents condo and homeowner associations. “This is a whole new world that we live in now. I see more rejections than acceptances, and the reasons I see clients rejected aren’t quickly curable.”
For buyers like Kristy Fender, of Chicago, FHA certification is a must-have on her list, and not just because it lets Fender and her fiancé, Dan Harvey, make a smaller downpayment on a home purchase. She also figures that in approving buildings the FHA is doing the due diligence that she would otherwise have to do.
But the process has been much more complicated than Fender imagined, and she’s wasted a fair amount of her time. During the past few months that she’s looked at units in Chicago’s South Loop, she’s incorrectly been told that a unit can get spot approval and has looked at units that were listed as FHA approved, only to find out the certification had expired. Her real estate agent, Bette Bleeker of Prudential Rubloff, wound up routinely checking property listings against the FHA’s website of approved buildings.
“It’s been very frustrating,” Fender said. “There’s a lot of wishy-washy information out there.”
Fender and Harvey now plan to make an offer on a South Loop condo, but the offer will be contingent on the association getting the building certified for FHA financing. Bleeker has spoken with the building’s management company.
“If sellers were aware of it, they would certainly be more proactive with their management companies and not let their certification lapse,” Bleeker said. “There’s a whole education curve that needs to be done here, at the buyer level and the seller level.”
Many times, particularly in smaller buildings, it is a real estate agent or lender that informs an association that its certification has expired.
In addition to not knowing about the process, a lack of knowledge of the rules and the many gray areas within them is compounding issues for condo buildings. So, too, is not submitting all the required documentation. Many buildings are denied simply for missing or incomplete paperwork, which has led to the creation of a cottage industry of companies and attorneys that help shepherd associations through the process.
“It seems like there’s always something additional that (the FHA) wants,” said Steve Stenger, president of Condo Approval Professionals LLC. “Once it expires, FHA lending stops. Lenders can’t get case numbers; the FHA won’t insure them. That whole section of financing dries up.”
Among the specifics that the FHA looks at is that a building is 50 percent owner occupied, that no more than 10 percent of units are owned by one investor or entity, that no more than 15 percent of the units are 30 days past due on their monthly assessments, and that at least 10 percent of the association budget be set aside for capital expenditures and deferred maintenance. But some of those rules also come with a little wiggle room.
The FHA also looks at special assessments and pending litigation, two areas that can raise red flags.
“It’s really not that onerous,” said an FHA spokeswoman. “A lot of it is just basic information. We do have some that have been appropriately rejected because they are unstable.”
Financially, the 249-unit condo building at 1620 S. Michigan Ave. in Chicago is stable, said condo board President Jeanette Johnson. Nevertheless, she worries that the building won’t pass the test when its certification expires next month because of the high number of renters residing in units.
“I’m anticipating that the board will try to do the recertification, but I don’t know if we’ll qualify,” she said. “We’ll need to evaluate that before we spend any money. It’s definitely on the radar screen.”
If the building doesn’t qualify, Johnson said, it’s likely the board would look to change its declarations and bylaws, itself a difficult and lengthy process, to gradually reduce the number of renters allowed in the building.
The Community Association Institute believes the FHA’s requirements are having a “chilling” effect on the market, and the trade group has asked for flexibility in the guidelines.
“When it comes to the condo market, that is the gateway to affordable housing, and FHA should play a critical role in that,” said Andrew Fortin, a vice president at the trade group.
The FHA hopes to publish its condo certification rules in the Federal Register this year for public comment. Among the areas that may be open to additional flexibility is the requirement that no single entity can own more than 10 percent of a building’s units, a spokeswoman said.
But in the meantime, associations continue to grapple with the rules.
“There are new, more onerous guidelines to comply with, and there are definitely challenges,” said Jason Will, national condominium sales manager for Wells Fargo Home Mortgage. “The smaller or self-managed homeowners association might not be aware of the guidelines changes until they have a buyer. You actually have a real transaction in jeopardy.”
Some associations are deciding that the effort and the expenses tied to the application process, which can run into the thousands of dollars, aren’t worth the payoff and are letting their certifications lapse. In some instances, that position reflects a bias against what are thought to be lower-caliber buyers who need the FHA’s backing.
“It’s the owners that are trying to sell their units versus the owners that want to live in their units,” said Jonathan Bierman, a property manager at Forth Group, a condo association management company.
Many in the housing industry say that position is short-sighted, given consumer demand for FHA-backed mortgages.
“In an economy where it’s difficult to sell your condo, (FHA approval) is almost imperative,” said Kerry Bartell, a Buffalo Grove, Ill., attorney who represents homeowners associations. But, she noted, “We have a lot of clients that say they want to do FHA certification, and we say, ‘Don’t spend the money, because you’re not going to make it.’”
Source: the Chicago Tribune, Mary Ellen Podmolik. Distributed by McClatchy-Tribune News Service.
The issue isn’t just the borrower’s financial wherewithal. It’s the building’s, and plenty of condos no longer get a thumbs-up from the Federal Housing Administration.
Since Feb. 1, 2010, condo buyers haven’t been able to secure unit-by-unit “spot” approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.
The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets, as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA’s stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.
The effects of those rejected buildings are likely to linger, particularly if more stringent downpayment requirements take effect for homebuyers, and could hamper any recovery of the housing market.
For the first nine months of 2011, the FHA’s share of the overall home purchase market was 37.4 percent nationally, but the share for condos would have been higher because FHA-insured loans are popular with condo purchasers, said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “They have the most-used program out there,” he said.
Since Oct. 1, 38 percent of condominium communities that have gone through the certification process have been rejected by the FHA.
“It’s a critical year for buildings,” said David Hartwell, a Chicago attorney who represents condo and homeowner associations. “This is a whole new world that we live in now. I see more rejections than acceptances, and the reasons I see clients rejected aren’t quickly curable.”
For buyers like Kristy Fender, of Chicago, FHA certification is a must-have on her list, and not just because it lets Fender and her fiancé, Dan Harvey, make a smaller downpayment on a home purchase. She also figures that in approving buildings the FHA is doing the due diligence that she would otherwise have to do.
But the process has been much more complicated than Fender imagined, and she’s wasted a fair amount of her time. During the past few months that she’s looked at units in Chicago’s South Loop, she’s incorrectly been told that a unit can get spot approval and has looked at units that were listed as FHA approved, only to find out the certification had expired. Her real estate agent, Bette Bleeker of Prudential Rubloff, wound up routinely checking property listings against the FHA’s website of approved buildings.
“It’s been very frustrating,” Fender said. “There’s a lot of wishy-washy information out there.”
Fender and Harvey now plan to make an offer on a South Loop condo, but the offer will be contingent on the association getting the building certified for FHA financing. Bleeker has spoken with the building’s management company.
“If sellers were aware of it, they would certainly be more proactive with their management companies and not let their certification lapse,” Bleeker said. “There’s a whole education curve that needs to be done here, at the buyer level and the seller level.”
Many times, particularly in smaller buildings, it is a real estate agent or lender that informs an association that its certification has expired.
In addition to not knowing about the process, a lack of knowledge of the rules and the many gray areas within them is compounding issues for condo buildings. So, too, is not submitting all the required documentation. Many buildings are denied simply for missing or incomplete paperwork, which has led to the creation of a cottage industry of companies and attorneys that help shepherd associations through the process.
“It seems like there’s always something additional that (the FHA) wants,” said Steve Stenger, president of Condo Approval Professionals LLC. “Once it expires, FHA lending stops. Lenders can’t get case numbers; the FHA won’t insure them. That whole section of financing dries up.”
Among the specifics that the FHA looks at is that a building is 50 percent owner occupied, that no more than 10 percent of units are owned by one investor or entity, that no more than 15 percent of the units are 30 days past due on their monthly assessments, and that at least 10 percent of the association budget be set aside for capital expenditures and deferred maintenance. But some of those rules also come with a little wiggle room.
The FHA also looks at special assessments and pending litigation, two areas that can raise red flags.
“It’s really not that onerous,” said an FHA spokeswoman. “A lot of it is just basic information. We do have some that have been appropriately rejected because they are unstable.”
Financially, the 249-unit condo building at 1620 S. Michigan Ave. in Chicago is stable, said condo board President Jeanette Johnson. Nevertheless, she worries that the building won’t pass the test when its certification expires next month because of the high number of renters residing in units.
“I’m anticipating that the board will try to do the recertification, but I don’t know if we’ll qualify,” she said. “We’ll need to evaluate that before we spend any money. It’s definitely on the radar screen.”
If the building doesn’t qualify, Johnson said, it’s likely the board would look to change its declarations and bylaws, itself a difficult and lengthy process, to gradually reduce the number of renters allowed in the building.
The Community Association Institute believes the FHA’s requirements are having a “chilling” effect on the market, and the trade group has asked for flexibility in the guidelines.
“When it comes to the condo market, that is the gateway to affordable housing, and FHA should play a critical role in that,” said Andrew Fortin, a vice president at the trade group.
The FHA hopes to publish its condo certification rules in the Federal Register this year for public comment. Among the areas that may be open to additional flexibility is the requirement that no single entity can own more than 10 percent of a building’s units, a spokeswoman said.
But in the meantime, associations continue to grapple with the rules.
“There are new, more onerous guidelines to comply with, and there are definitely challenges,” said Jason Will, national condominium sales manager for Wells Fargo Home Mortgage. “The smaller or self-managed homeowners association might not be aware of the guidelines changes until they have a buyer. You actually have a real transaction in jeopardy.”
Some associations are deciding that the effort and the expenses tied to the application process, which can run into the thousands of dollars, aren’t worth the payoff and are letting their certifications lapse. In some instances, that position reflects a bias against what are thought to be lower-caliber buyers who need the FHA’s backing.
“It’s the owners that are trying to sell their units versus the owners that want to live in their units,” said Jonathan Bierman, a property manager at Forth Group, a condo association management company.
Many in the housing industry say that position is short-sighted, given consumer demand for FHA-backed mortgages.
“In an economy where it’s difficult to sell your condo, (FHA approval) is almost imperative,” said Kerry Bartell, a Buffalo Grove, Ill., attorney who represents homeowners associations. But, she noted, “We have a lot of clients that say they want to do FHA certification, and we say, ‘Don’t spend the money, because you’re not going to make it.’”
Source: the Chicago Tribune, Mary Ellen Podmolik. Distributed by McClatchy-Tribune News Service.
Rate on 30-year fixed mortgage rises to 3.98%
The average rate on the 30-year fixed mortgage rose this week for the first time this month, though it remained below 4 percent for the eighth straight week.
The low rates may be contributing to a slow turnaround in the depressed housing market. Still, many who can afford to buy or refinance a home have already done so.
Freddie Mac said Thursday the average rate on the 30-year fixed mortgage rose to 3.98 percent this week. That’s up from 3.88 percent the previous week, which was the lowest level on record.
The average on the 15-year fixed mortgage also rose to 3.24 percent, from 3.17 percent the previous week. The 15-year mortgage hit a record low of 3.16 percent two weeks ago.
Mortgage rates are low because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week.
For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Historically low mortgage rates are among the signs that point to a pickup in the housing market this year.
Sales of previously occupied homes rose in December for a third straight month. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
Still, new homes fell in December, the Commerce Department said Thursday. About 302,000 new homes were sold last year, making 2011 the worst year for new home sales on records dating back to 1963.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan dipped to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate rose to 2.85 percent from 2.82 percent. The average on the one-year adjustable loan was unchanged at 2.74 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Source: The Associated Press, Christopher S. Rugaber, AP economics writer.
The low rates may be contributing to a slow turnaround in the depressed housing market. Still, many who can afford to buy or refinance a home have already done so.
Freddie Mac said Thursday the average rate on the 30-year fixed mortgage rose to 3.98 percent this week. That’s up from 3.88 percent the previous week, which was the lowest level on record.
The average on the 15-year fixed mortgage also rose to 3.24 percent, from 3.17 percent the previous week. The 15-year mortgage hit a record low of 3.16 percent two weeks ago.
Mortgage rates are low because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week.
For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Historically low mortgage rates are among the signs that point to a pickup in the housing market this year.
Sales of previously occupied homes rose in December for a third straight month. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
Still, new homes fell in December, the Commerce Department said Thursday. About 302,000 new homes were sold last year, making 2011 the worst year for new home sales on records dating back to 1963.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan dipped to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate rose to 2.85 percent from 2.82 percent. The average on the one-year adjustable loan was unchanged at 2.74 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Source: The Associated Press, Christopher S. Rugaber, AP economics writer.
Thursday, January 26, 2012
10 Cities Where List Prices Soared in the Last Year
List prices are heating up in Florida, as recovery takes hold in the Sunshine State. Florida boasts the highest number of cities in the top 10 for largest increases in median list prices in the last year. In Miami alone, median list prices have jumped 32 percent in the last year.
Nationwide, median list prices have inched up 5.03 percent from December 2010 to December 2011, according to Realtor.com data.
The following cities are where median list prices have increased the most in the last year, based on December 2011 data of 146 metro areas from Realtor.com:
1. Miami, Fla.
Year-over-year increase: 32.50%
Median list price: $265,000
2. Naples, Fla.
Year-over-year increase: 21.67%
Median list price: $365,000
3. Fort Myers-Cape Coral, Fla.
Year-over-year increase: 21.47%
Median list price: $229,375
4. Punta Gorda, Fla.
Year-over-year increase: 19.42%
Median list price: $179,000
5. Boise City, Idaho
Year-over-year increase: 19.25%
Median list price: $154,900
6. West Palm Beach-Boca Raton, Fla.
Year-over-year increase: 18.38%
Median list price: $219,000
7. Sarasota-Bradenton, Fla.
Year-over-year increase: 17.62%
Median list price: $241,000
8. Daytona Beach, Fla.
Year-over-year increase: 16.06%
Median list price: $179,900
9. Phoenix-Mesa, Ariz.
Year-over-year increase: 13.79%
Median list price: $165,000
10. Grand Rapids-Muskegon-Holland, Mich.
Year-over-year increase: 13.32%
Median list price: $137,000
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Nationwide, median list prices have inched up 5.03 percent from December 2010 to December 2011, according to Realtor.com data.
The following cities are where median list prices have increased the most in the last year, based on December 2011 data of 146 metro areas from Realtor.com:
1. Miami, Fla.
Year-over-year increase: 32.50%
Median list price: $265,000
2. Naples, Fla.
Year-over-year increase: 21.67%
Median list price: $365,000
3. Fort Myers-Cape Coral, Fla.
Year-over-year increase: 21.47%
Median list price: $229,375
4. Punta Gorda, Fla.
Year-over-year increase: 19.42%
Median list price: $179,000
5. Boise City, Idaho
Year-over-year increase: 19.25%
Median list price: $154,900
6. West Palm Beach-Boca Raton, Fla.
Year-over-year increase: 18.38%
Median list price: $219,000
7. Sarasota-Bradenton, Fla.
Year-over-year increase: 17.62%
Median list price: $241,000
8. Daytona Beach, Fla.
Year-over-year increase: 16.06%
Median list price: $179,900
9. Phoenix-Mesa, Ariz.
Year-over-year increase: 13.79%
Median list price: $165,000
10. Grand Rapids-Muskegon-Holland, Mich.
Year-over-year increase: 13.32%
Median list price: $137,000
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Foreclosure Sales are Down, Average Discount 34%
In the third quarter of 2011, homes that were in foreclosure accounted for 20 percent of all residential sales in the country, according to RealtyTrac in its latest Foreclosure Sales Report.
While a high number of foreclosures still persist, the bulk of foreclosed home sales is shrinking. In the second quarter of 2011, foreclosures accounted for 22 percent of all sales and 30 percent of all sales in the third quarter of 2010. For comparison, in 2005 and 2006, foreclosure sales accounted for less than 5 percent of all sales.
Foreclosures continue to sell at big discounts compared to non-foreclosures. Foreclosures in the third quarter sold for about a 34 percent discount compared to the average home not in foreclosure, according to RealtyTrac. The average sales price of a home in foreclosure was $165,322, which is up 1 percent from the second quarter, yet down by 3 percent from the third quarter of 2010.
“While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter,” Brandon Moore, chief executive officer of RealtyTrac, said in a statement. “That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures—and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed. The sooner the market gets more clarity about accepted foreclosure procedures ... the sooner the market can more efficiently dispose of these distressed properties.”
States With Highest Foreclosure Sales
The states with the highest percentage of foreclosure sales in the third quarter were:
Meanwhile, pre-foreclosure sales — which are often sold via short sale — were on the rise in several states. The average sales price of a pre-foreclosure sale was $191,119 in the third quarter, a discount of 24 percent compared to a home not in foreclosure, according to RealtyTrac data.
Pre-foreclosure sales jumped the most in the following states during the third quarter:
While a high number of foreclosures still persist, the bulk of foreclosed home sales is shrinking. In the second quarter of 2011, foreclosures accounted for 22 percent of all sales and 30 percent of all sales in the third quarter of 2010. For comparison, in 2005 and 2006, foreclosure sales accounted for less than 5 percent of all sales.
Foreclosures continue to sell at big discounts compared to non-foreclosures. Foreclosures in the third quarter sold for about a 34 percent discount compared to the average home not in foreclosure, according to RealtyTrac. The average sales price of a home in foreclosure was $165,322, which is up 1 percent from the second quarter, yet down by 3 percent from the third quarter of 2010.
“While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter,” Brandon Moore, chief executive officer of RealtyTrac, said in a statement. “That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures—and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed. The sooner the market gets more clarity about accepted foreclosure procedures ... the sooner the market can more efficiently dispose of these distressed properties.”
States With Highest Foreclosure Sales
The states with the highest percentage of foreclosure sales in the third quarter were:
- Nevada: Nearly 57% of all residential sales were from foreclosure-related sales
- California: Nearly 44% of all residential sales
- Arizona: 43% of all residential sales
- Georgia: 34% of all residential sales
- Colorado: 26% of all residential sales
- Michigan: 23% of all residential sales
Meanwhile, pre-foreclosure sales — which are often sold via short sale — were on the rise in several states. The average sales price of a pre-foreclosure sale was $191,119 in the third quarter, a discount of 24 percent compared to a home not in foreclosure, according to RealtyTrac data.
Pre-foreclosure sales jumped the most in the following states during the third quarter:
- Michigan: Up 68%
- North Carolina: 44%
- Ohio: 43%
- Georgia: 35%
Interest rates will stay low, low, low
Consumers and businesses can brace for another two years of exceptionally low interest rates after the Federal Reserve said Wednesday it is likely to keep its rates below 1 percent until late 2014 because of the economy’s continued weakness.
The decision means the era of historically low rates on loans – and savings – that the Fed kicked off at the peak of the financial crisis in late 2008 will run longer unless the economy improves faster than Fed policymakers predict.
The Fed said unemployment would stay near its 8.5 percent level through the end of this year and could still be in the range of 6.7 percent to 7.6 percent at the end of 2014. Housing remains depressed while growth in business investment has slowed, it said.
Meanwhile, inflation is staying below 2 percent.
Fed Chairman Ben Bernanke left open the possibility that the Fed could do more to fight joblessness, even at the short-term risk of inflation above the bank’s 2 percent annual target.
“There has been some encouraging news recently,” Bernanke said at a press conference. “There are positive signs, no doubt. At the same time, there are mixed signals,” as indicators such as retail sales growth have been disappointing, he said. Policymakers are also worried about Europe’s financial crisis, he said.
The Fed’s moves, and especially its decision to discuss its thinking about rate policy much more publicly than it has in the past, are laden with consequences for savers, borrowers and consumers, said PNC Financial chief economist Stuart Hoffman.
“It means that if you own certificates of deposit and you’ve bemoaned low rates, bad news – you’re going to get that this year, next year and the year after,” Hoffman said. “If you’re a borrower, very low mortgage rates are going to be here for a while. Some people may delay making decisions, but other people will plan for the future” and prepare either to buy or renovate homes, he said.
Bernanke acknowledged that savers are hurt by the low rates. “We realize that low interest rates impose a cost,” he said. “The savers in the economy are dependent on a good economy to get a good return.”
Wall Street reacted favorably to the news, pushing stocks higher and interest rates lower. The Dow Jones industrial average climbed 83 points to 12,759.
The yield on 10-year U.S. Treasuries, which closed at 2.06 percent Tuesday, dropped as low as 1.91 percent before settling at 1.99 percent.
Most Fed governors think the economy will grow by 2.2 percent to 2.7 percent this year, with unemployment at 8.2 percent to 8.5 percent and core inflation at 1.5 percent to 1.8 percent, the Fed said.
Source: USA TODAY, a division of Gannett Co. Inc., Tim Mullaney
The decision means the era of historically low rates on loans – and savings – that the Fed kicked off at the peak of the financial crisis in late 2008 will run longer unless the economy improves faster than Fed policymakers predict.
The Fed said unemployment would stay near its 8.5 percent level through the end of this year and could still be in the range of 6.7 percent to 7.6 percent at the end of 2014. Housing remains depressed while growth in business investment has slowed, it said.
Meanwhile, inflation is staying below 2 percent.
Fed Chairman Ben Bernanke left open the possibility that the Fed could do more to fight joblessness, even at the short-term risk of inflation above the bank’s 2 percent annual target.
“There has been some encouraging news recently,” Bernanke said at a press conference. “There are positive signs, no doubt. At the same time, there are mixed signals,” as indicators such as retail sales growth have been disappointing, he said. Policymakers are also worried about Europe’s financial crisis, he said.
The Fed’s moves, and especially its decision to discuss its thinking about rate policy much more publicly than it has in the past, are laden with consequences for savers, borrowers and consumers, said PNC Financial chief economist Stuart Hoffman.
“It means that if you own certificates of deposit and you’ve bemoaned low rates, bad news – you’re going to get that this year, next year and the year after,” Hoffman said. “If you’re a borrower, very low mortgage rates are going to be here for a while. Some people may delay making decisions, but other people will plan for the future” and prepare either to buy or renovate homes, he said.
Bernanke acknowledged that savers are hurt by the low rates. “We realize that low interest rates impose a cost,” he said. “The savers in the economy are dependent on a good economy to get a good return.”
Wall Street reacted favorably to the news, pushing stocks higher and interest rates lower. The Dow Jones industrial average climbed 83 points to 12,759.
The yield on 10-year U.S. Treasuries, which closed at 2.06 percent Tuesday, dropped as low as 1.91 percent before settling at 1.99 percent.
Most Fed governors think the economy will grow by 2.2 percent to 2.7 percent this year, with unemployment at 8.2 percent to 8.5 percent and core inflation at 1.5 percent to 1.8 percent, the Fed said.
Source: USA TODAY, a division of Gannett Co. Inc., Tim Mullaney
Dec. new-home purchases fall
Fewer Americans bought new homes in December, making 2011 the worst sales year on record.
The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
About 302,000 new homes were sold last year. That’s less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
The median sales prices for new homes dropped in December, as builders continued to slash prices. It fell 2.5 percent to $210,300.
Still, sales of new homes rose in the final quarter of 2011. That occurred as other signs suggest the depressed housing market is starting to slowly turn around.
Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
And hiring has improved, which is critical to a housing rebound. Fewer people are seeking unemployment benefits than at any time in nearly four years, which is evidence of far fewer layoffs. The unemployment rate fell in December to its lowest level in nearly three years.
Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
A key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales – when lenders accept less for a house than what is owed on the mortgage.
Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.
Source: The Associated Press, Derek Kravitz, AP real estate writer.
The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
About 302,000 new homes were sold last year. That’s less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
The median sales prices for new homes dropped in December, as builders continued to slash prices. It fell 2.5 percent to $210,300.
Still, sales of new homes rose in the final quarter of 2011. That occurred as other signs suggest the depressed housing market is starting to slowly turn around.
Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
And hiring has improved, which is critical to a housing rebound. Fewer people are seeking unemployment benefits than at any time in nearly four years, which is evidence of far fewer layoffs. The unemployment rate fell in December to its lowest level in nearly three years.
Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
A key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales – when lenders accept less for a house than what is owed on the mortgage.
Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.
Source: The Associated Press, Derek Kravitz, AP real estate writer.
Wednesday, January 25, 2012
Mortgage Applications Fall 5%
After soaring last week by more than 20 percent, mortgage applications dropped 5 percent compared to the week prior, the Mortgage Bankers Association reports in its weekly survey. The most recent survey was for the week ending Jan. 20, which included the Martin Luther King holiday.
Mortgage applications for refinancings fell 5.2 percent during the week while applications for purchases dropped 9.7 percent. Purchase applications were 6.5 percent lower compared to the same week one year prior, the MBA reports.
The MBA reports that the average contract interest rate for the 30-year fixed-rate mortgage, the most popular choice among home buyers, increased to 4.11 percent last week from 4.06 percent.
Last week, low mortgage rates helped send mortgage applications surging 23 percent, with applications for home purchases, a future gauge of home buying, jumping 10.3 percent alone.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Mortgage applications for refinancings fell 5.2 percent during the week while applications for purchases dropped 9.7 percent. Purchase applications were 6.5 percent lower compared to the same week one year prior, the MBA reports.
The MBA reports that the average contract interest rate for the 30-year fixed-rate mortgage, the most popular choice among home buyers, increased to 4.11 percent last week from 4.06 percent.
Last week, low mortgage rates helped send mortgage applications surging 23 percent, with applications for home purchases, a future gauge of home buying, jumping 10.3 percent alone.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Pending home sales decline in Dec.; above year ago
After reaching a 19-month high, pending home sales eased in December but stayed above year-ago levels, according to the National Association of Realtors®(NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, declined 3.5 percent to 96.6 in December from 100.1 in November, but it’s 5.6 percent above December 2010 when it was 91.5. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, says the trend line remains positive.
“Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,” Yun says. “Contract failures remain an issue, reported by one-third of Realtors over the past few months, but homebuyers are not giving up.”
Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. “Housing affordability conditions are too good to pass up,” he says. “Our hope is lending conditions will gradually improve with sustained increases in closed existing-home sales.”
The PHSI in the Northeast declined 3.1 percent to 74.7 in December and is 0.8 percent below a year ago. In the Midwest the index rose 4.0 percent to 95.3 and is 13.3 percent higher than December 2010.
Pending home sales in the South slipped 2.6 percent to an index of 101.1 in December but are 4.9 percent above a year ago. In the West the index fell 11.0 percent in December to 107.9 but is 3.7 percent higher than December 2010.
Source: Florida Realtors®
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, declined 3.5 percent to 96.6 in December from 100.1 in November, but it’s 5.6 percent above December 2010 when it was 91.5. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, says the trend line remains positive.
“Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,” Yun says. “Contract failures remain an issue, reported by one-third of Realtors over the past few months, but homebuyers are not giving up.”
Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. “Housing affordability conditions are too good to pass up,” he says. “Our hope is lending conditions will gradually improve with sustained increases in closed existing-home sales.”
The PHSI in the Northeast declined 3.1 percent to 74.7 in December and is 0.8 percent below a year ago. In the Midwest the index rose 4.0 percent to 95.3 and is 13.3 percent higher than December 2010.
Pending home sales in the South slipped 2.6 percent to an index of 101.1 in December but are 4.9 percent above a year ago. In the West the index fell 11.0 percent in December to 107.9 but is 3.7 percent higher than December 2010.
Source: Florida Realtors®
High downpayments: More harm than good?
To avoid future housing crises, the federal government is creating a QRM (qualified residential mortgage) rule – a minimum standard a buyer or refinancer must hit before most banks will consider originating a mortgage, as required under the Dodd-Frank financial law.
However, raising the qualifications to get mortgage approval will also push some potential homebuyers out of the market. Since any QRM standard has the potential for harm as well as good, the University of North Carolina conducted a study.
According to UNC, a mandatory 10% downpayment for mortgages would push about 38 percent of creditworthy borrowers out of the home market. If the federal government chose to make a 20 percent downpayment mandatory, 61 percent of potential homebuyers would be unable to buy property.
The study also looked at possible default rates. Raising mandatory downpayments to 10 percent or 20 percent each decreased the potential risk of default, as did demanding higher credit scores from buyers – but at what cost, asked researchers.
The study authors said that “Overall, the evidence … suggests that stricter underwriting may not be the best approach to reducing foreclosures when weighed against ensuring continued access to sustainable mortgage credit for a wide range of creditworthy borrowers.” Authors said that the marginal benefit of tighter mortgage standards did not justify the risk to the housing market.
Researchers concluded that federal QRM protections could be achieved through “responsible underwriting without having to set a bright line for the QRM market.”
The 44-page study is available in PDF format on the University of North Carolina’s website.
Source: Florida Realtors®
However, raising the qualifications to get mortgage approval will also push some potential homebuyers out of the market. Since any QRM standard has the potential for harm as well as good, the University of North Carolina conducted a study.
According to UNC, a mandatory 10% downpayment for mortgages would push about 38 percent of creditworthy borrowers out of the home market. If the federal government chose to make a 20 percent downpayment mandatory, 61 percent of potential homebuyers would be unable to buy property.
The study also looked at possible default rates. Raising mandatory downpayments to 10 percent or 20 percent each decreased the potential risk of default, as did demanding higher credit scores from buyers – but at what cost, asked researchers.
The study authors said that “Overall, the evidence … suggests that stricter underwriting may not be the best approach to reducing foreclosures when weighed against ensuring continued access to sustainable mortgage credit for a wide range of creditworthy borrowers.” Authors said that the marginal benefit of tighter mortgage standards did not justify the risk to the housing market.
Researchers concluded that federal QRM protections could be achieved through “responsible underwriting without having to set a bright line for the QRM market.”
The 44-page study is available in PDF format on the University of North Carolina’s website.
Source: Florida Realtors®
Tuesday, January 24, 2012
More Buyers Ready to Get Off the Sidelines?
When you compare the cost of owning a home to renting, you’ll find that buying may soon make more sense, Paul Diggle, a housing economist at Capital Economics, told MSNBC.com.
Diggle’s analysis of the housing market showed a 33 percent drop in home prices, record-low mortgage rates (with 30-year fixed-rate mortgages available under 4 percent now), and a 15 percent rise in rents since the housing market turned sour are making more consumers take a closer look at buying.
“The median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check,” an article at MSNBC.com notes about Diggle’s analysis. “If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.”
Case in point: Diggle says that a buyer who purchases a median-priced home and stays there for at least seven years would likely come out ahead by about $9,000 than if they chose to rent for those seven years. Diggle’s calculations factor in rents continuing to rise 3 percent a year, and housing prices staying flat for the next two years before rising in 2014.
But while more Americans may be motivated to buy, many still can’t, Diggle notes. Home owners who lost their home to foreclosure may be forced to wait on the sidelines before owning again, other Americans may not have a 20 percent down payment that more lenders are wanting, lack a high credit score to qualify for the best financing, or have steady employment.
Source: “Home Buying Could Soon Beat Renting,” MSNBC.com (Jan. 23, 2012)
Diggle’s analysis of the housing market showed a 33 percent drop in home prices, record-low mortgage rates (with 30-year fixed-rate mortgages available under 4 percent now), and a 15 percent rise in rents since the housing market turned sour are making more consumers take a closer look at buying.
“The median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check,” an article at MSNBC.com notes about Diggle’s analysis. “If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.”
Case in point: Diggle says that a buyer who purchases a median-priced home and stays there for at least seven years would likely come out ahead by about $9,000 than if they chose to rent for those seven years. Diggle’s calculations factor in rents continuing to rise 3 percent a year, and housing prices staying flat for the next two years before rising in 2014.
But while more Americans may be motivated to buy, many still can’t, Diggle notes. Home owners who lost their home to foreclosure may be forced to wait on the sidelines before owning again, other Americans may not have a 20 percent down payment that more lenders are wanting, lack a high credit score to qualify for the best financing, or have steady employment.
Source: “Home Buying Could Soon Beat Renting,” MSNBC.com (Jan. 23, 2012)
Are Cash Buyers Driving Down Home Prices?
Cash buyers are sending home values down much lower than they otherwise would be, suggests a new survey by Campbell Inside Mortgage Finance, which polled more than 2,500 real estate agents nationwide.
In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.
“Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.
Cash buyers can be attractive to home sellers, banks, and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.
Source: “Cash Buyers Pushing Home Prices Lower,” Housing Predictor (Jan. 24, 2012)
In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.
“Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.
Cash buyers can be attractive to home sellers, banks, and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.
Source: “Cash Buyers Pushing Home Prices Lower,” Housing Predictor (Jan. 24, 2012)
Monday, January 23, 2012
6 Housing Markets Gear Up for a Rebound
Stronger job markets are pushing several cities’ housing markets into recovery-mode. Forbes and the Local Market Monitor, a real estate research firm, recently profiled its top picks for cities that are most poised for a real estate rebound. The list is based on housing and economic data from the 100 largest cities in the country.
“For real estate to do well you want to see two things: that incomes are growing rapidly … and that the growth in jobs attracts other people to that market,” Ingo Winzer, founder and president of Local Market Monitor, told Forbes.
Here are the cities topping the list:
1. San Jose, Calif.
Population growth: 5 percent
Job growth: 3.3 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 97 percent increase
2. Houston, Texas
Population growth: 7 percent
Job growth: 3 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 38 percent increase
3. Boston, Mass.
Population growth: 3 percent
Job growth: 2.1 percent
Home prices for the past 12 months: 1 percent decrease
New-home construction: 1 percent increase
4. Raleigh, N.C.
Population growth: 12 percent
Job growth: 1.4 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 14 percent increase
5. Austin, Texas
Population growth: 11 percent
Job growth: 1.5 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 20 percent increase
6. Oklahoma City, Okla.
Population growth: 4 percent
Job growth: 2.6%
Home prices for the past 12 months: 3 percent decrease
New-home construction: 1 percent decrease
Find out more about why these cities are poised for a rebound, and see what other cities made the list.
Source: “Cities Where Real Estate Is Ripe for a Rebound,” Forbes (January 2012)
“For real estate to do well you want to see two things: that incomes are growing rapidly … and that the growth in jobs attracts other people to that market,” Ingo Winzer, founder and president of Local Market Monitor, told Forbes.
Here are the cities topping the list:
1. San Jose, Calif.
Population growth: 5 percent
Job growth: 3.3 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 97 percent increase
2. Houston, Texas
Population growth: 7 percent
Job growth: 3 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 38 percent increase
3. Boston, Mass.
Population growth: 3 percent
Job growth: 2.1 percent
Home prices for the past 12 months: 1 percent decrease
New-home construction: 1 percent increase
4. Raleigh, N.C.
Population growth: 12 percent
Job growth: 1.4 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 14 percent increase
5. Austin, Texas
Population growth: 11 percent
Job growth: 1.5 percent
Home prices for the past 12 months: 2 percent decrease
New-home construction: 20 percent increase
6. Oklahoma City, Okla.
Population growth: 4 percent
Job growth: 2.6%
Home prices for the past 12 months: 3 percent decrease
New-home construction: 1 percent decrease
Find out more about why these cities are poised for a rebound, and see what other cities made the list.
Source: “Cities Where Real Estate Is Ripe for a Rebound,” Forbes (January 2012)
Economic survey: Growth will ebb
The U.S. economy will slow this year after a flurry of stronger growth in late 2011, leaving the 8.5 percent unemployment rate about where it is now on Election Day, according to USA TODAY’s quarterly survey of economists.
The economy will slow to 2.2 percent annual growth in the first half of 2012 after an estimated 3.1 percent gain in fourth-quarter gross domestic product, according to the median forecast of the 48 economists surveyed.
The biggest reason for slower growth is that a late-2011 bounce back from the effects of the Japanese earthquake last March won’t last, according to Diane Swonk, chief economist at Mesirow Financial. Slower growth will help keep unemployment at 8.4 percent or higher through year’s end, economists predict.
“The little improvement we saw was partly catch-up; the retail recovery at Christmas was more hype than reality,” Swonk says. “Consumer confidence is still at recession levels, just not at depression levels.”
The good news:
• The risk of a U.S. recession is falling. The median estimate of USA TODAY’s panel calling it only a 22 percent probability in the next 12 months.
• Europe’s financial crisis will shave only a quarter of a percentage point from this year’s U.S. growth, the economists said.
• More than 90 percent of the economists think home prices have bottomed out, or will by the end of this year.
• The Federal Reserve won’t raise interest rates until the second half of 2013, half the experts says. Almost as many say it will be 2014 or later.
The shaky news:
• Job growth will slow to a monthly pace of 144,000 new jobs early this year, rising to 165,000 a month in the fourth quarter, the panel predicted. The economy produced an average of 137,000 new jobs monthly in the fourth quarter, driven by December’s gain of 200,000.
• Unemployment won’t reach a healthy level until 2014 or later, the economists unanimously agreed.
The uncertainty has Wall Street betting that the Federal Reserve will do more to rekindle the economy, possibly as soon as the meeting of the Fed’s Open Market Committee Tuesday and Wednesday. It might decide to pump as much as $1 trillion into the economy by buying mortgage-backed bonds from banks and institutions, Miller Tabak & Co. economic strategist Andrew Wilkinson says.
“The Fed is underwhelmed by the recovery,” he says. “They see the recovery hampered by the housing market, which is not going away anytime soon, and it’s causing employment gains to be lightweight.”
Source: USA TODAY, a division of Gannett Co. Inc., Tim Mullaney.
The economy will slow to 2.2 percent annual growth in the first half of 2012 after an estimated 3.1 percent gain in fourth-quarter gross domestic product, according to the median forecast of the 48 economists surveyed.
The biggest reason for slower growth is that a late-2011 bounce back from the effects of the Japanese earthquake last March won’t last, according to Diane Swonk, chief economist at Mesirow Financial. Slower growth will help keep unemployment at 8.4 percent or higher through year’s end, economists predict.
“The little improvement we saw was partly catch-up; the retail recovery at Christmas was more hype than reality,” Swonk says. “Consumer confidence is still at recession levels, just not at depression levels.”
The good news:
• The risk of a U.S. recession is falling. The median estimate of USA TODAY’s panel calling it only a 22 percent probability in the next 12 months.
• Europe’s financial crisis will shave only a quarter of a percentage point from this year’s U.S. growth, the economists said.
• More than 90 percent of the economists think home prices have bottomed out, or will by the end of this year.
• The Federal Reserve won’t raise interest rates until the second half of 2013, half the experts says. Almost as many say it will be 2014 or later.
The shaky news:
• Job growth will slow to a monthly pace of 144,000 new jobs early this year, rising to 165,000 a month in the fourth quarter, the panel predicted. The economy produced an average of 137,000 new jobs monthly in the fourth quarter, driven by December’s gain of 200,000.
• Unemployment won’t reach a healthy level until 2014 or later, the economists unanimously agreed.
The uncertainty has Wall Street betting that the Federal Reserve will do more to rekindle the economy, possibly as soon as the meeting of the Fed’s Open Market Committee Tuesday and Wednesday. It might decide to pump as much as $1 trillion into the economy by buying mortgage-backed bonds from banks and institutions, Miller Tabak & Co. economic strategist Andrew Wilkinson says.
“The Fed is underwhelmed by the recovery,” he says. “They see the recovery hampered by the housing market, which is not going away anytime soon, and it’s causing employment gains to be lightweight.”
Source: USA TODAY, a division of Gannett Co. Inc., Tim Mullaney.
FHA to limit seller help at closing
Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante announced the latest in a series of steps designed to strengthen FHA’s Mutual Mortgage Insurance Fund. FHA issued a final rule governing its lenders and announced a new rule, which it has not yet published, to “reduce the maximum allowable seller concession from its current level to one more in line with industry norms.”
Under current law, a seller may contribute 6 percent toward the buyer’s closing costs, which include prepaid expenses, discount points and other financing concessions. FHA previously proposed a lower rate in July 2010 and says its soon-to-be-released rule proposal will be based, in part, on comments received following that recommendation. The new proposal will also have a 30-day comment period once published in the Federal Register. FHA says a final rule will become effective after all comments are analyzed.
Any rule change remains controversial. If a seller cannot contribute more than 3 percent or 4 percent to closing costs, a buyer must bring more money to the table. The change could impact a housing market still finding its feet after the recent meltdown.
FHA, however, says the change is needed to keep FHA funding viable. According to FHA, the 6 percent cap creates “incentives to inflate appraised value.”
Lender requirements
The tighter lender rules call for FHA-approved banks, which insure more than 80 percent of all FHA forward mortgage loans, to meet stricter performance standards.
HUD may require indemnification for ‘serious and material’ violations of FHA origination requirements. A lender must also show a low delinquency rate. FHA says it will monitor lender performance on an ongoing basis.
The new lender rules have been published by HUD and are available online.
Source: Florida Realtors®
Under current law, a seller may contribute 6 percent toward the buyer’s closing costs, which include prepaid expenses, discount points and other financing concessions. FHA previously proposed a lower rate in July 2010 and says its soon-to-be-released rule proposal will be based, in part, on comments received following that recommendation. The new proposal will also have a 30-day comment period once published in the Federal Register. FHA says a final rule will become effective after all comments are analyzed.
Any rule change remains controversial. If a seller cannot contribute more than 3 percent or 4 percent to closing costs, a buyer must bring more money to the table. The change could impact a housing market still finding its feet after the recent meltdown.
FHA, however, says the change is needed to keep FHA funding viable. According to FHA, the 6 percent cap creates “incentives to inflate appraised value.”
Lender requirements
The tighter lender rules call for FHA-approved banks, which insure more than 80 percent of all FHA forward mortgage loans, to meet stricter performance standards.
HUD may require indemnification for ‘serious and material’ violations of FHA origination requirements. A lender must also show a low delinquency rate. FHA says it will monitor lender performance on an ongoing basis.
The new lender rules have been published by HUD and are available online.
Source: Florida Realtors®
Sunday, January 22, 2012
December Existing-Home Sales Show Uptrend
Existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above where they were a year ago, according to the National Association of REALTORS®.
The latest monthly data shows total existing-home salesrose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.
Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.
NAR President Moe Veissisaid more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”
Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.
Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.
“The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future,” Yun said.
The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes — foreclosures and short sales — accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010.
All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010. Investors account for the bulk of cash transactions.
Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.
Contract failures were reported by 33 percent of NAR members in December, unchanged from November; they were 9 percent in December 2010. Although closed sales are holding up better than this finding would suggest, contract cancellations are caused largely by declined mortgage applications and failures in loan underwriting from appraised values coming in below the negotiated price.
Single-family home sales increased 4.6 percent to a seasonally adjusted annual rate of 4.11 million in December from 3.93 million in November, and are 4.3 percent higher than the 3.94 million-unit pace a year ago. The median existing single-family home price was $165,100 in December, which is 2.5 percent below December 2010.
Existing condominium and co-op sales rose 8.7 percent to a seasonally adjusted annual rate of 500,000 in December from 460,000 in November but are 2.0 percent below the 510,000-unit level in December 2010. The median existing condo price was $160,000 inDecember, down 3.0 percent from a year ago.
Existing-home sales in the Midwest rose 8.3 percent in December to a level of 1.04 million and are 9.5 percent above December 2010. The median price in the Midwest was $129,100, down 7.9 percent from a year ago.
In the South, existing-home sales increased 2.9 percent to an annual level of 1.76 million in Decemberand are 3.5 percent above a year ago. The median price in the South was $146,900, down 1.1 percent from December 2010.
Existing-home sales in the West rose 2.6 percent to an annual pace of 1.19 million in December but are 0.8 percent below December 2010. The median price in the West was $205,200, up 0.3 percent from a year ago.
Source: NAR
The latest monthly data shows total existing-home salesrose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.
Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.
Affordability Conditions
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.NAR President Moe Veissisaid more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”
Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.
Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.
“The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future,” Yun said.
Who’s Buying What
Foreclosures sold for an average discount of 22 percent in December, up from 20 percent a year ago, while short sales closed 13 percent below market value compared with a 16 percent discount in December 2010.The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes — foreclosures and short sales — accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010.
All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010. Investors account for the bulk of cash transactions.
Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.
Contract failures were reported by 33 percent of NAR members in December, unchanged from November; they were 9 percent in December 2010. Although closed sales are holding up better than this finding would suggest, contract cancellations are caused largely by declined mortgage applications and failures in loan underwriting from appraised values coming in below the negotiated price.
Single-family home sales increased 4.6 percent to a seasonally adjusted annual rate of 4.11 million in December from 3.93 million in November, and are 4.3 percent higher than the 3.94 million-unit pace a year ago. The median existing single-family home price was $165,100 in December, which is 2.5 percent below December 2010.
Existing condominium and co-op sales rose 8.7 percent to a seasonally adjusted annual rate of 500,000 in December from 460,000 in November but are 2.0 percent below the 510,000-unit level in December 2010. The median existing condo price was $160,000 inDecember, down 3.0 percent from a year ago.
Around the Country
Regionally, existing-home sales in the Northeast jumped 10.7 percent to an annual pace of 620,000 in December and are 3.3 percent above a year ago. The median price in the Northeast was $231,300, which is 2.7 percent below December 2010.Existing-home sales in the Midwest rose 8.3 percent in December to a level of 1.04 million and are 9.5 percent above December 2010. The median price in the Midwest was $129,100, down 7.9 percent from a year ago.
In the South, existing-home sales increased 2.9 percent to an annual level of 1.76 million in Decemberand are 3.5 percent above a year ago. The median price in the South was $146,900, down 1.1 percent from December 2010.
Existing-home sales in the West rose 2.6 percent to an annual pace of 1.19 million in December but are 0.8 percent below December 2010. The median price in the West was $205,200, up 0.3 percent from a year ago.
Source: NAR
3 ways to sell a home that’s not selling
Surveys suggest that a high number of real estate deals are falling apart due to financing issues, and today’s sellers might need to get creative if they want their property to sell. Options to consider:
• Sellers could back a second mortgage for the buyer at an amount that enables the buyer to meet the lender’s downpayment requirements, providing the lender agrees.
• Sell the home “subject to the existing mortgage,” which means the buyers take over the sellers’ existing mortgage payments for a specified time, after which time they must obtain a new loan. This arrangement relieves sellers of their mortgage debt and helps buyers with credit scores too low secure a traditional loan. And while it forces buyers to get a mortgage as specified in the contract, experts say banks will not foreclose if payments are made on time.
• Sellers willing to finance the sale can unload properties for a low downpayment by adding a sweat equity clause to the contract, which requires the buyers to bring the home into tip-top shape. The renovation details are written into the contract, and buyers must complete the repairs by the agreed-upon date to qualify for long-term seller financing.
Source: INFORMATION, INC.
• Sellers could back a second mortgage for the buyer at an amount that enables the buyer to meet the lender’s downpayment requirements, providing the lender agrees.
• Sell the home “subject to the existing mortgage,” which means the buyers take over the sellers’ existing mortgage payments for a specified time, after which time they must obtain a new loan. This arrangement relieves sellers of their mortgage debt and helps buyers with credit scores too low secure a traditional loan. And while it forces buyers to get a mortgage as specified in the contract, experts say banks will not foreclose if payments are made on time.
• Sellers willing to finance the sale can unload properties for a low downpayment by adding a sweat equity clause to the contract, which requires the buyers to bring the home into tip-top shape. The renovation details are written into the contract, and buyers must complete the repairs by the agreed-upon date to qualify for long-term seller financing.
Source: INFORMATION, INC.
Rate on 30-year mortgage down to record 3.88%
The average rate on the 30-year fixed mortgage fell again this week to a record low. The eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.
The average on the 15-year fixed mortgage ticked up to 3.17 percent from 3.16 percent, which was also a record low. Records for mortgage rates date back to the 1950s.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.
For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Yet cheap rates on the most popular mortgage option have done little to boost home sales.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will almost certainly be the worst on records going back half a century.
Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.
So far, the low rates have had minimal impact. Mortgage applications have risen about 6 percent on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate was unchanged at 2.82 percent. The average on the one-year adjustable loan fell to 2.74 percent from 2.76 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.
The average on the 15-year fixed mortgage ticked up to 3.17 percent from 3.16 percent, which was also a record low. Records for mortgage rates date back to the 1950s.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.
For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Yet cheap rates on the most popular mortgage option have done little to boost home sales.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will almost certainly be the worst on records going back half a century.
Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.
So far, the low rates have had minimal impact. Mortgage applications have risen about 6 percent on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate was unchanged at 2.82 percent. The average on the one-year adjustable loan fell to 2.74 percent from 2.76 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Source: The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.
Florida’s housing sales activity higher as 2011 ends
At the close of 2011, Florida’s existing home and condominium markets reported higher sales compared to the previous year, according to the latest housing data released by Florida Realtors®. It was the third consecutive year for statewide home and condo sales activity to end the year on a positive upswing – higher year-over-year sales also were reported at the close of 2010 and 2009, records show.
Looking back on 2011, Florida’s existing home sales rose 8 percent for the year, with a total of 185,921 homes sold compared to 172,462 homes sold in 2010. The statewide existing home median price for 2011 was $131,700; it was $135,900 in 2010 for a 3 percent decrease. In Florida’s condo market, a total of 87,581 units sold statewide in 2011, a gain of 15 percent compared to 76,209 units sold in 2010. The statewide existing condo median price in 2011 was $88,300; it was $90,000 in 2010 for a 2 percent decrease.
Sixteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales at the close of 2011 compared to 2010; the same number of MSAs also reported higher existing condos sales.
“Florida’s economy is continuing to strengthen, which is good news,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Many people are hoping to take advantage of the current record low mortgage rates and affordable conditions to find their Florida dream home – but overly restrictive lending requirements continue to create barriers to homeownership for qualified homebuyers. To re-energize the housing market and the economic recovery, we need improved access to affordable financing options for qualified buyers and investors.”
In December, a total of 15,290 existing single-family homes sold statewide, a decrease of 2 percent from the 15,546 homes sold in December 2010. The statewide existing home median sales price last month was $134,300, up 1 percent from the $133,000 reported in December 2010, according to Florida Realtors’ data. The national median existing single-family home price was $165,100 in December, according to the National Association of Realtors® (NAR). The median is the midpoint; half the homes sold for more, half for less.
In the year-to-year comparison for statewide existing condo sales, a total of 6,836 units changed hands last month, compared to 6,985 condos sold in December 2010 for a decrease of 2 percent. The statewide existing condo median sales price in December was $91,900, up 4 percent from the $88,400 reported a year earlier. The national median existing condo price was $160,000 in December, according to NAR.
“Although sales were down slightly in December, they’re up strongly for the year, which reinforces the reality that Florida is in a slow real estate recovery,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Our expectation is that recovery will continue through 2012. The major obstacle in the market is the inadequate accessibility to financing. Prices are moderating, but we don’t expect too much movement owing to the continuing significance of distressed properties.”
In December, the interest rate for a 30-year fixed-rate mortgage averaged 3.96 percent, down from the 4.71 percent average during the same month a year earlier, according to Freddie Mac. The annual average rate for a 30-year mortgage in 2011 was 4.45 percent. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Looking back on 2011, Florida’s existing home sales rose 8 percent for the year, with a total of 185,921 homes sold compared to 172,462 homes sold in 2010. The statewide existing home median price for 2011 was $131,700; it was $135,900 in 2010 for a 3 percent decrease. In Florida’s condo market, a total of 87,581 units sold statewide in 2011, a gain of 15 percent compared to 76,209 units sold in 2010. The statewide existing condo median price in 2011 was $88,300; it was $90,000 in 2010 for a 2 percent decrease.
Sixteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales at the close of 2011 compared to 2010; the same number of MSAs also reported higher existing condos sales.
“Florida’s economy is continuing to strengthen, which is good news,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Many people are hoping to take advantage of the current record low mortgage rates and affordable conditions to find their Florida dream home – but overly restrictive lending requirements continue to create barriers to homeownership for qualified homebuyers. To re-energize the housing market and the economic recovery, we need improved access to affordable financing options for qualified buyers and investors.”
In December, a total of 15,290 existing single-family homes sold statewide, a decrease of 2 percent from the 15,546 homes sold in December 2010. The statewide existing home median sales price last month was $134,300, up 1 percent from the $133,000 reported in December 2010, according to Florida Realtors’ data. The national median existing single-family home price was $165,100 in December, according to the National Association of Realtors® (NAR). The median is the midpoint; half the homes sold for more, half for less.
In the year-to-year comparison for statewide existing condo sales, a total of 6,836 units changed hands last month, compared to 6,985 condos sold in December 2010 for a decrease of 2 percent. The statewide existing condo median sales price in December was $91,900, up 4 percent from the $88,400 reported a year earlier. The national median existing condo price was $160,000 in December, according to NAR.
“Although sales were down slightly in December, they’re up strongly for the year, which reinforces the reality that Florida is in a slow real estate recovery,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Our expectation is that recovery will continue through 2012. The major obstacle in the market is the inadequate accessibility to financing. Prices are moderating, but we don’t expect too much movement owing to the continuing significance of distressed properties.”
In December, the interest rate for a 30-year fixed-rate mortgage averaged 3.96 percent, down from the 4.71 percent average during the same month a year earlier, according to Freddie Mac. The annual average rate for a 30-year mortgage in 2011 was 4.45 percent. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Friday, January 20, 2012
10 Housing Markets Getting the Most Web Traffic
Chicago continues to garner the most Web traffic at Realtor.com, taking the No. 1 spot once again for the highest search ranking in December at Realtor.com.
Based on rankings of 146 metro markets, here are the cities that had the highest search rankings for December 2011 at Realtor.com:
1. Chicago
Median list price: $189,000
2. Detroit
Median list price: $80,000
3. Los Angeles-Long Beach, Calif.
Median list price: $324,900
4. Phoenix-Mesa, Ariz.
Median list price: $165,000
5. Atlanta
Median list price: $150,000
6. Tampa-St. Petersburg-Clearwater, Fla.
Median list price: $139,900
7. Philadelphia, Pa.-N.J.
Median list price: $224,950
8. Dallas
Median list price: $190,000
9. Las Vegas
Median list price: $120,000
10. Orlando, Fla.
Median list price: $155,000
By Melissa Dittmann Tracey for REALTOR® Magazine’s Daily News
Based on rankings of 146 metro markets, here are the cities that had the highest search rankings for December 2011 at Realtor.com:
1. Chicago
Median list price: $189,000
2. Detroit
Median list price: $80,000
3. Los Angeles-Long Beach, Calif.
Median list price: $324,900
4. Phoenix-Mesa, Ariz.
Median list price: $165,000
5. Atlanta
Median list price: $150,000
6. Tampa-St. Petersburg-Clearwater, Fla.
Median list price: $139,900
7. Philadelphia, Pa.-N.J.
Median list price: $224,950
8. Dallas
Median list price: $190,000
9. Las Vegas
Median list price: $120,000
10. Orlando, Fla.
Median list price: $155,000
By Melissa Dittmann Tracey for REALTOR® Magazine’s Daily News
Single-family housing starts up 4.4% in Dec.
Nationwide production of new single-family homes rose 4.4 percent to a seasonally adjusted annual rate of 470,000 units in December, according to the U.S. Commerce Department. It’s the third consecutive increase for single-family homes, and the fastest pace since April 2010.
However, the overall number of housing starts declined 4.1 percent in December, to a 657,000-unit rate, after a 20.4 percent dip on the more volatile multifamily side, which logged a big increase one month earlier.
“Today’s report adds to the growing evidence that demand for new, single-family homes is finally starting to firm up in an increasing number of markets nationwide,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB). “This emerging trend is allowing builders to put more crews back to work, and could be even stronger if not for the overly tight credit conditions that prevail for both builders and buyers, as well as the continuing foreclosure crisis and the challenges of obtaining accurate appraisal values on new homes.”
By year-end 2011, overall housing production hit 606,900 units – 3.4 percent better than the overall number of starts in 2010.
Regionally, December housing starts rose 54.8 percent in the Midwest following a big decline the previous month. The Northeast posted a 41.2 percent decline that offset a big gain in the previous month, while the South and West also posted declines of 3.0 percent and 17.6 percent, respectively.
Permit issuance, which can be an indicator of future building activity, held virtually flat at a 679,000-unit rate in December. But single-family permits rose for a third consecutive month, by 1.8 percent to 444,000 units; multifamily permits declined 3.7 percent to 235,000 units.
Regionally, permits rose 5.8 percent in the Midwest and held unchanged in the West, but declined 6.5 percent in the Northeast and 0.6 percent in the South in December.
“This report is in keeping with our expectations for slow but steady improvement in the single-family market, where production hit its lowest yearly rate in over 50 years in 2011,” says NAHB Chief Economist David Crowe.
Source: Florida Realtors®
However, the overall number of housing starts declined 4.1 percent in December, to a 657,000-unit rate, after a 20.4 percent dip on the more volatile multifamily side, which logged a big increase one month earlier.
“Today’s report adds to the growing evidence that demand for new, single-family homes is finally starting to firm up in an increasing number of markets nationwide,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB). “This emerging trend is allowing builders to put more crews back to work, and could be even stronger if not for the overly tight credit conditions that prevail for both builders and buyers, as well as the continuing foreclosure crisis and the challenges of obtaining accurate appraisal values on new homes.”
By year-end 2011, overall housing production hit 606,900 units – 3.4 percent better than the overall number of starts in 2010.
Regionally, December housing starts rose 54.8 percent in the Midwest following a big decline the previous month. The Northeast posted a 41.2 percent decline that offset a big gain in the previous month, while the South and West also posted declines of 3.0 percent and 17.6 percent, respectively.
Permit issuance, which can be an indicator of future building activity, held virtually flat at a 679,000-unit rate in December. But single-family permits rose for a third consecutive month, by 1.8 percent to 444,000 units; multifamily permits declined 3.7 percent to 235,000 units.
Regionally, permits rose 5.8 percent in the Midwest and held unchanged in the West, but declined 6.5 percent in the Northeast and 0.6 percent in the South in December.
“This report is in keeping with our expectations for slow but steady improvement in the single-family market, where production hit its lowest yearly rate in over 50 years in 2011,” says NAHB Chief Economist David Crowe.
Source: Florida Realtors®
Wednesday, January 18, 2012
Mortgage Applications Surge 23%
Record-low mortgage rates sparked a wave in mortgage applications for home purchase and refinancings last week, increasing more than 20 percent in a week, the Mortgage Bankers Association reports.
For the week ending Jan. 13, mortgage applications for refinancing applications jumped 26.4 percent while home purchase applications, a future gauge for home buying, increased 10.3 percent.
"With mortgage rates reaching new lows, refinance volume jumped," Michael Fratantoni, MBA's vice president of research and economics, said in a statement. "Purchase activity also increased as buyers returned to the market after the holiday season."
Freddie Mac reported that 30-year fixed-rate mortgage averaged a record low of 3.89 percent for the week ending Jan. 12. For six consecutive weeks, 30-year fixed-rate mortgages -- the most popular choice among home buyers -- has averaged below 4 percent.
Source: “Mortgage Applications Surge on Refinancing Demand,” Reuters (Jan. 18, 2012)
For the week ending Jan. 13, mortgage applications for refinancing applications jumped 26.4 percent while home purchase applications, a future gauge for home buying, increased 10.3 percent.
"With mortgage rates reaching new lows, refinance volume jumped," Michael Fratantoni, MBA's vice president of research and economics, said in a statement. "Purchase activity also increased as buyers returned to the market after the holiday season."
Freddie Mac reported that 30-year fixed-rate mortgage averaged a record low of 3.89 percent for the week ending Jan. 12. For six consecutive weeks, 30-year fixed-rate mortgages -- the most popular choice among home buyers -- has averaged below 4 percent.
Source: “Mortgage Applications Surge on Refinancing Demand,” Reuters (Jan. 18, 2012)
High-tech takes on urban design
Hitachi Ltd., Toshiba Corp. and other major Japanese electronics makers are increasingly turning their sights toward “smart city” projects designed to create eco-friendly, energy-efficient communities.
In the wake of the March earthquake in Japan, smart cities are considered to be a crucial part of the government’s energy-saving policy. Such projects are already under way overseas, particularly in urban developments in newly emerging economies.
Other electronics companies, including General Electric Co., are also gearing up to enter the smart city market, intensifying competition for orders.
The concept of a smart city refers to urban designs that maximize conservation of the environment by utilizing such renewable energy sources as solar and wind power, based on the introduction of a next-generation power supply control technology called a smart grid.
Hitachi plans to take part in smart city plans in Dalian, China, as well as one in the city of Kashiwa, Japan.
Urban development plans inspired by the smart city concept have been spawning a wide range of new demand for technologies such as rechargeable batteries and electric vehicles.
The market for smart city projects worldwide is expected to expand about 44 percent by 2030, according to estimates by Nikkei BP Clean Tech Institute.
To ramp up its smart city development activities, Hitachi is considering setting up an in-house group specializing in smart city planning that would be self-supporting and responsible for its sales and profits.
Toshiba plans to participate in 20 smart city projects in various parts of the world, including a demonstration model in Lyon, France.
The smart city concept is also being incorporated into recovery projects for Japanese regions struck by the March's earthquake and tsunami.
Hitachi plans to help create an eco-friendly, energy-efficient city in Sendai, Japan, while Toshiba plans to realize its smart city ideas in the city of Ishinomaki, Japan.
Source: The Yomiuri Shimbun (Tokyo). Distributed by MCT Information Services.
In the wake of the March earthquake in Japan, smart cities are considered to be a crucial part of the government’s energy-saving policy. Such projects are already under way overseas, particularly in urban developments in newly emerging economies.
Other electronics companies, including General Electric Co., are also gearing up to enter the smart city market, intensifying competition for orders.
The concept of a smart city refers to urban designs that maximize conservation of the environment by utilizing such renewable energy sources as solar and wind power, based on the introduction of a next-generation power supply control technology called a smart grid.
Hitachi plans to take part in smart city plans in Dalian, China, as well as one in the city of Kashiwa, Japan.
Urban development plans inspired by the smart city concept have been spawning a wide range of new demand for technologies such as rechargeable batteries and electric vehicles.
The market for smart city projects worldwide is expected to expand about 44 percent by 2030, according to estimates by Nikkei BP Clean Tech Institute.
To ramp up its smart city development activities, Hitachi is considering setting up an in-house group specializing in smart city planning that would be self-supporting and responsible for its sales and profits.
Toshiba plans to participate in 20 smart city projects in various parts of the world, including a demonstration model in Lyon, France.
The smart city concept is also being incorporated into recovery projects for Japanese regions struck by the March's earthquake and tsunami.
Hitachi plans to help create an eco-friendly, energy-efficient city in Sendai, Japan, while Toshiba plans to realize its smart city ideas in the city of Ishinomaki, Japan.
Source: The Yomiuri Shimbun (Tokyo). Distributed by MCT Information Services.
Politics could again delay flood insurance
A pattern of short-term extensions for the National Flood Insurance Program (NFIP), which is currently $18 billion in debt, was repeated in December when lawmakers extended it to May 31, 2012.
Each short-term NFIP extension came at the last minute after lawmakers realized that a major program overhaul would probably not pass before the program’s expiration.
However, this year, the NFIP could be modified. Groups that support coverage for wind damage have scaled back their language, and U.S. Senate lawmakers have backed away from forgiving the program’s debt.
Among the reforms being considered: Have the Federal Emergency Management Agency (FEMA) require more people to enroll in the program and eliminate the subsidized rates that allow property owners to only pay a portion of their premiums.
NFIP changes and an extension are possible only if the issue can get floor time in the Senate. However, Majority Leader Harry Reid (D-Nev.) has not made any promises, though U.S. Sens. David Vitter (R-La.) and Jon Tester (D-Mont.) are collecting signatures in hopes that a show of support will pressure leadership to call for a vote in February. More than 20 insurance groups have offered their support.
American Insurance Association (AIA) Vice President for Federal Affairs Tom Santos says there is “some optimism and momentum” for reauthorizing the program, and sources indicate that some of the more controversial provisions of the Senate bill are off the table.
Santos says one of the last major stumbling blocks to the reform’s passage are disagreements between lawmakers over the way new flood mapping and levee assessments would impact their districts. “I’ve often joked that there’s 435 districts in the United States so there’s probably 435 individual mapping concerns, which is a hard thing to overcome,” he said.
Source: INFORMATION, INC.
Each short-term NFIP extension came at the last minute after lawmakers realized that a major program overhaul would probably not pass before the program’s expiration.
However, this year, the NFIP could be modified. Groups that support coverage for wind damage have scaled back their language, and U.S. Senate lawmakers have backed away from forgiving the program’s debt.
Among the reforms being considered: Have the Federal Emergency Management Agency (FEMA) require more people to enroll in the program and eliminate the subsidized rates that allow property owners to only pay a portion of their premiums.
NFIP changes and an extension are possible only if the issue can get floor time in the Senate. However, Majority Leader Harry Reid (D-Nev.) has not made any promises, though U.S. Sens. David Vitter (R-La.) and Jon Tester (D-Mont.) are collecting signatures in hopes that a show of support will pressure leadership to call for a vote in February. More than 20 insurance groups have offered their support.
American Insurance Association (AIA) Vice President for Federal Affairs Tom Santos says there is “some optimism and momentum” for reauthorizing the program, and sources indicate that some of the more controversial provisions of the Senate bill are off the table.
Santos says one of the last major stumbling blocks to the reform’s passage are disagreements between lawmakers over the way new flood mapping and levee assessments would impact their districts. “I’ve often joked that there’s 435 districts in the United States so there’s probably 435 individual mapping concerns, which is a hard thing to overcome,” he said.
Source: INFORMATION, INC.
Builder confidence rises fourth consecutive time in January
Builder confidence in the market for newly built, single-family homes continued to climb for a fourth consecutive month in January, rising four points to 25 on the NAHB/Wells Fargo Housing Market Index (HMI). It’s the HMI’s highest level since June 2007.
“Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB). “Policymakers must now take every precaution to avoid derailing this nascent recovery.”
Each of the HMI’s three component indexes registered a fourth consecutive month of improvement in January. The component gauging current sales conditions rose three points to 25, which was its highest point since June 2007. The component gauging sales expectations in the next six months also rose three points, to 29 – its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June 2007.
The HMI also posted gains in all four regions in January, including a nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest, a two-point gain to 27 in the South and a five-point gain to 21 in the West.
“Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets,” says NAHB Chief Economist David Crowe. “That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”
Derived from a monthly survey NAHB has conducted for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Source: Florida Realtors®
“Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB). “Policymakers must now take every precaution to avoid derailing this nascent recovery.”
Each of the HMI’s three component indexes registered a fourth consecutive month of improvement in January. The component gauging current sales conditions rose three points to 25, which was its highest point since June 2007. The component gauging sales expectations in the next six months also rose three points, to 29 – its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June 2007.
The HMI also posted gains in all four regions in January, including a nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest, a two-point gain to 27 in the South and a five-point gain to 21 in the West.
“Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets,” says NAHB Chief Economist David Crowe. “That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”
Derived from a monthly survey NAHB has conducted for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Source: Florida Realtors®
Tuesday, January 17, 2012
Housing outlook is more upbeat
Optimism is building that the housing industry is nearing a bottom – finally.
Home sales and homebuilding are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.
Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.
Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record-low interest rates.
Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”
Many economists expect home prices to fall more this year because of foreclosures and other properties sold at very low prices.
As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.
On average, prices have fallen by about a third since 2006.
“This year will feel a lot better to builders, investors and real estate agents than to consumers,” says Jed Kolko, economist for real estate website Trulia.
Housing’s outlook is brightening with signs of a better economy. Last month, U.S. employers added 200,000 jobs, and the unemployment rate fell to 8.5 percent, lowest in nearly three years.
While an economic shock could derail progress, “there’s now more evidence of improvement in the economy, and housing will follow the economy,” says David Crowe, chief economist at the National Association of Home Builders. More improvement is expected for:
Sales. Existing home sales will rise 12 percent this year after a 2 percent increase last year, and new home sales, coming off a horrid year, will jump 74 percent this year, Moody’s Analytics predicts.
November’s existing home sales hit their highest mark in 10 months, and new home sales were the year’s second best, IHS Global Insight says.
Construction. Single-family housing starts will rise 37 percent this year, Moody’s predicts, after falling 9 percent last year.
Home builder stocks are on a run. The S&P 1500 homebuilding index is up 38 percent since mid-October, vs. 7 percent for the S&P 500.
Source: USA TODAY, a division of Gannett Co. Inc., Julie Schmit.
Home sales and homebuilding are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.
Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.
Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record-low interest rates.
Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”
Many economists expect home prices to fall more this year because of foreclosures and other properties sold at very low prices.
As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.
On average, prices have fallen by about a third since 2006.
“This year will feel a lot better to builders, investors and real estate agents than to consumers,” says Jed Kolko, economist for real estate website Trulia.
Housing’s outlook is brightening with signs of a better economy. Last month, U.S. employers added 200,000 jobs, and the unemployment rate fell to 8.5 percent, lowest in nearly three years.
While an economic shock could derail progress, “there’s now more evidence of improvement in the economy, and housing will follow the economy,” says David Crowe, chief economist at the National Association of Home Builders. More improvement is expected for:
Sales. Existing home sales will rise 12 percent this year after a 2 percent increase last year, and new home sales, coming off a horrid year, will jump 74 percent this year, Moody’s Analytics predicts.
November’s existing home sales hit their highest mark in 10 months, and new home sales were the year’s second best, IHS Global Insight says.
Construction. Single-family housing starts will rise 37 percent this year, Moody’s predicts, after falling 9 percent last year.
Home builder stocks are on a run. The S&P 1500 homebuilding index is up 38 percent since mid-October, vs. 7 percent for the S&P 500.
Source: USA TODAY, a division of Gannett Co. Inc., Julie Schmit.
Total Sales Dollar Volume Dade & Broward Counties 2011
The above data is for Residential Real Estate Only, Market Data from SEF MLS
Total Sales Count Dade & Broward Counties 2011
The above data is for Residential Real Estate Only, Market
Data from SEF MLS
Southeast Florida Monthly Market Update, December 2011
December, 2011 Market Update for the "BIG 5" Hialeah,
Miami Lakes, Miami Gardens, Miramar and Pembroke Pines in Florida
Market update for the cities of Hialeah, Miami Lakes, Miami Gardens:
Total Sold for Dade and Broward Counties
Market update for the cities of Hialeah, Miami Lakes, Miami Gardens:
Area 20 |
|||
| Total Active Listings: | 87 | ||
| Total Value Dollar Volume: | $15,305,110.00 | ||
| Average List Price: | $175,921.00 | ||
| Median List Price: | $110,000.00 | ||
| Change from Previous Month (N. of Units) | 26% | ||
| Change from Previous Month (Dollar Vol.) | 33% | ||
| Total Sold Properties: | 123 | ||
| Total Dollar Volume Sold: | $15,786,121.00 | ||
| Average Sold Price: | $128,342.00 | ||
| Median Sold Price: | $90,000.00 | ||
| Change from Previous Month (N. of Units) | -4% | ||
| Change from Previous Month (Dollar Vol.) | 0% | ||
| Total Pending Sale: | 123 | ||
| Total Dollar Pending Volume: | $13,619,900.00 | ||
| Average Pending Price: | $110,731.00 | ||
| Median Pending Price: | $79,500.00 | ||
| Change from Previous Month (N. of Units) | -25% | ||
| Change from Previous Month (Dollar Vol.) | -40% | ||
Market update for the cities of Miramar and Pembroke Pines:
| Area 3990 | |||
| Total Active Listings: | 16 | ||
| Total Value Dollar Volume: | $5,995,300.00 | ||
| Average List Price: | $374,706.00 | ||
| Median List Price: | $353,500.00 | ||
| Change from Previous Month (N. of Units) | -54% | ||
| Change from Previous Month (Dollar Vol.) | -51% | ||
| Total Sold Properties: | 46 | ||
| Total Dollar Volume Sold: | $14,189,116.00 | ||
| Average Sold Price: | $308,459.00 | ||
| Median Sold Price: | $295,000.00 | ||
| Change from Previous Month (N. of Units) | 31% | ||
| Change from Previous Month (Dollar Vol.) | 33% | ||
| Total Pending Sale: | 26 | ||
| Total Dollar Pending Volume: | $7,040,098.00 | ||
| Average Pending Price: | $270,773.00 | ||
| Median Pending Price: | $263,000.00 | ||
| Change from Previous Month (N. of Units) | -42% | ||
| Change from Previous Month (Dollar Vol.) | -46% | ||
Total Sold for Dade and Broward Counties
| Dade County | |||
| Total Sales Count: | 2276 | ||
| Total Sales Dollar Volume: | $723,089,785.00 | ||
| Change from Previous Month (N. of Units) | 13% | ||
| Change from Previous Month (Dollar Vol.) | 22% | ||
| Broward County | |||
| Total Sales Count: | 2490 | ||
| Total Sales Dollar Volume: | $510,191,891.00 | ||
| Change from Previous Month (N. of Units) | 15% | ||
| Change from Previous Month (Dollar Vol.) | 21% | ||
The above data is for Residential Real Estate Only, Market
Data from SEF MLS
For an update on your market area please contact us
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