Realtors Commercial Alliance Report, VOL. 9, ISSUE 1 ● WINTER 2008
"...The weaker dollar may gradually push up interest rates, making an already tough lending climate even tougher.
...The dollar’s slide is hardly new; it’s been slowly losing ground against most other currencies since 2003. The biggest culprit, all experts agree, is the huge U.S. trade deficit.
...Another contributor was the failure of other central banks to follow suit when the Federal Reserve began to cut rates last fall, says Adolfo Laurenti, senior economist at Mesirow Financial. “This disparity narrowed the differential in interest rates and made the dollar less attractive,” he says. Continued Fed cuts could exacerbate the situation, he believes.
Compounding the slide in recent months is everyone’s favorite whipping boy, residential subprime credit problems. “The subprime crisis has caused a lack of confidence in the U.S. It
used to be seen as a safe haven,” says John Wickes, senior vice president of research for Jones Lang LaSalle. The fact that quite a few European banks are taking major write-downs on failing mortgage backed securities is helping to keep this perception alive abroad, he adds.
...there’s almost universal consensus that 2008 and 2009 will be years of slow growth in the U.S. at best, the fear that a large-scale Chinese sell off of U.S. bonds will plunge the country into a severe recession is a chimera, says Dr. Dwight Jaffee, Haas School of Business, University of California, Berkeley. While the Chinese may continue to increase the value of their currency and shift some of their dollar denominated investments into other currencies, the shift will be gradual, he says. “International trade is a cooperative venture. The Chinese need to keep their currency low in order to continue to sell their manufactured goods. They can’t afford to let the Chinese yuan jump against the dollar.”
Instead, Jaffee expects several more years of the measured 5 percent annual increases he’s seen in recent times. The oil-producing states will most likely follow the same incremental approach to investment shifts, he adds.
...whether you see the dollar’s slide as an opportunity or a hurdle, get used to the new weakness. “The dollar isn’t going to recover any time soon,” says Wickes. Indeed, things may get worse before they get better, as currency markets have a tendency to overshoot, notes Laurenti. Only when the trade deficit returns to the 2 to 3 percent of GDP range—which may require another
10 percent drop in the dollar—will the dollar improve significantly, Laurenti says.
But “eventually, the dollar will return to equilibrium and the trade deficit will stabilize to a lower rate, but we could be talking five to ten years, or even longer,” says Jaffee."
[TJ: That could mean 5-10 years of much higher mortgage interest rates in the U.S., and 5-10 years is the typical real estate cycle. It is best to lock in your 30 yr. fixed rates now while rates are still near 6%.]
Monday, April 28, 2008
Rebate Checks Go Out Early
From Realtor Magazine Online, Daily Real Estate News April 28, 2008
Incentive tax rebates will start going out to Americans today, a week earlier than expected, President Bush announced Friday afternoon.
Direct deposit payments will go out first, while paper checks will be mailed beginning May 9.
The rebates — up to $600 for an individual, $1,200 for a couple, and an additional $300 for each dependent child — are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.
Source: The Associated Press (04/28/08)
Incentive tax rebates will start going out to Americans today, a week earlier than expected, President Bush announced Friday afternoon.
Direct deposit payments will go out first, while paper checks will be mailed beginning May 9.
The rebates — up to $600 for an individual, $1,200 for a couple, and an additional $300 for each dependent child — are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.
Source: The Associated Press (04/28/08)
Bank of America to Woo Fed for Merger OK
From Realtor Magazine Online, Daily Real Estate News April 28, 2008
Bank of America will tell the Federal Reserve today that if it is allowed to buy Countrywide Financial Corp., it will help more than 265,000 borrowers to keep their homes.
BofA also will promise to double its community development lending, which focuses on affordable housing, particularly in low-income and minority neighborhoods and on properties for small business. Under the plan, the bank will lend $1.5 trillion over 10 years.
Liam E. McGee, president of Global Consumer and Small Business Banking, also will tell the Fed that the bank will donate $2 billion to charity over the next 10 years, a 33 percent increase from its current contribution level.
Approval would give Bank of America 25 percent of the U.S. mortgage market. Regulatory approval of the deal is expected, and the bank hopes to win speedy approval and complete the acquisition in July.
Source: The Los Angeles Times, E. Scott Reckard (04/28/08)
Bank of America will tell the Federal Reserve today that if it is allowed to buy Countrywide Financial Corp., it will help more than 265,000 borrowers to keep their homes.
BofA also will promise to double its community development lending, which focuses on affordable housing, particularly in low-income and minority neighborhoods and on properties for small business. Under the plan, the bank will lend $1.5 trillion over 10 years.
Liam E. McGee, president of Global Consumer and Small Business Banking, also will tell the Fed that the bank will donate $2 billion to charity over the next 10 years, a 33 percent increase from its current contribution level.
Approval would give Bank of America 25 percent of the U.S. mortgage market. Regulatory approval of the deal is expected, and the bank hopes to win speedy approval and complete the acquisition in July.
Source: The Los Angeles Times, E. Scott Reckard (04/28/08)
Friday, April 25, 2008
30-Year Rates Jump to 6.03%
From Realtor Magazine Online, Daily Real Estate News April 25, 2008
Freddie Mac reports a jump in the 30-year fixed mortgage rate to 6.03 percent during the week ended April 24, from 5.88 percent the prior week, marking the first time in six weeks that mortgage rates rose above 6 percent.
The 15-year fixed mortgage rate climbed during the same period, edging up to 5.62 percent from 5.40 percent.
The five-year adjustable mortgage rate increased to 5.68 percent from 5.48 percent, while the one-year adjustable rate shot up to 5.28 percent from 5.10 percent.
Freddie Mac chief economist Frank Nothaft attributes the gains to heightened inflationary concerns.
Source: Baltimore Sun (04/25/08)
Freddie Mac reports a jump in the 30-year fixed mortgage rate to 6.03 percent during the week ended April 24, from 5.88 percent the prior week, marking the first time in six weeks that mortgage rates rose above 6 percent.
The 15-year fixed mortgage rate climbed during the same period, edging up to 5.62 percent from 5.40 percent.
The five-year adjustable mortgage rate increased to 5.68 percent from 5.48 percent, while the one-year adjustable rate shot up to 5.28 percent from 5.10 percent.
Freddie Mac chief economist Frank Nothaft attributes the gains to heightened inflationary concerns.
Source: Baltimore Sun (04/25/08)
Thursday, April 24, 2008
Affordability Improves for New Buyers
From Realtor Magazine Online, Daily Real Estate News April 24, 2008
Falling prices are good news for home buyers, making it increasingly likely that they will be able to find a property at a price that is significantly lower than it would have been two years ago and probably less than the house would have brought just a few months ago.
Real-estate data company Zillow.com estimates that the median value for all homes in the 12 months ending March 31 fell 25 percent in the Las Vegas metro area, 19 percent in Miami and Orlando, and 16 percent in Phoenix. They declined lesser amounts in most other areas.
In the metro areas of Raleigh and Charlotte, N.C., Dallas and Houston, prices are rising — but very modestly.
There’s a “return to normalcy” in the relationship between home prices and incomes, says Richard DeKaser, chief economist at National City Corp. In an analysis of 330 metro areas in the fourth quarter of 2007, National City and Global Insight, an economic research firm, found that home prices were overvalued in relation to household income and other factors in 21 metro areas, down from a peak of 58 metro areas in the second quarter of 2006.
Source: The Wall Street Journal, James R. Hagerty (04/24/08)
Falling prices are good news for home buyers, making it increasingly likely that they will be able to find a property at a price that is significantly lower than it would have been two years ago and probably less than the house would have brought just a few months ago.
Real-estate data company Zillow.com estimates that the median value for all homes in the 12 months ending March 31 fell 25 percent in the Las Vegas metro area, 19 percent in Miami and Orlando, and 16 percent in Phoenix. They declined lesser amounts in most other areas.
In the metro areas of Raleigh and Charlotte, N.C., Dallas and Houston, prices are rising — but very modestly.
There’s a “return to normalcy” in the relationship between home prices and incomes, says Richard DeKaser, chief economist at National City Corp. In an analysis of 330 metro areas in the fourth quarter of 2007, National City and Global Insight, an economic research firm, found that home prices were overvalued in relation to household income and other factors in 21 metro areas, down from a peak of 58 metro areas in the second quarter of 2006.
Source: The Wall Street Journal, James R. Hagerty (04/24/08)
Fed to Slash Rates Again, Then What?
From Realtor Magazine Online, Daily Real Estate News April 24, 2008
The Federal Reserve has cut the federal-funds rate to 2.25 percent from 5.25 percent, amounting to seven reductions over a span of eight months, and experts anticipate another 0.25 percentage point cut at its April 29-30 meeting.
However, experts think the central bank could take a breather after the next rate cut to give officials time to assess the impact of rate reductions, upcoming tax rebates, and other measures on the economy during the latter half of the year.
Moreover, there are concerns that further reducing the federal funds rate could increase inflationary pressure and weaken the dollar even more. Despite rising food and oil prices, officials point to some improvements in the financial markets, with the 30-year mortgage rate on the decline; but they note that stricter lending standards could worsen the downturn.
The statement issued by the Federal Reserve after its meeting likely will point to ongoing concerns about economic growth and inflation and state that additional rate cuts will be made as necessary.
Source: The Wall Street Journal, Greg Ip and Kevin Kingsbury (04/24/08)
The Federal Reserve has cut the federal-funds rate to 2.25 percent from 5.25 percent, amounting to seven reductions over a span of eight months, and experts anticipate another 0.25 percentage point cut at its April 29-30 meeting.
However, experts think the central bank could take a breather after the next rate cut to give officials time to assess the impact of rate reductions, upcoming tax rebates, and other measures on the economy during the latter half of the year.
Moreover, there are concerns that further reducing the federal funds rate could increase inflationary pressure and weaken the dollar even more. Despite rising food and oil prices, officials point to some improvements in the financial markets, with the 30-year mortgage rate on the decline; but they note that stricter lending standards could worsen the downturn.
The statement issued by the Federal Reserve after its meeting likely will point to ongoing concerns about economic growth and inflation and state that additional rate cuts will be made as necessary.
Source: The Wall Street Journal, Greg Ip and Kevin Kingsbury (04/24/08)
Lenders Stall Short Sales, Practitioners Say
From Realtor Magazine Online, Daily Real Estate News April 24, 2008
Real estate practitioners across the country believe mortgage lenders are worsening the housing downturn by taking months to make decisions on short sales and sticking to high internal target prices.
As a result, home buyers are abandoning short sale properties, forcing them to be sold in foreclosure sales that typically result in lenders accepting lower prices than they could have achieved in a short sale.
"The only question banks should ask is can they make more in a short sale than in foreclosure," according to Lighthouse Point, Fla.-based real estate practitioner Ron Rosen, who cites a "broken" system.
"The answer is that in nine out of 10 cases they will lose more money in a foreclosure. But banks seem to be asking a different question."
Some practitioners contend that lenders lack the appropriate systems and staff to handle short sale requests, while lenders insist the short sale process is complicated by the need for approvals from investors and mortgage insurers.
Still, practitioners note that a more efficient short sale process would boost prices and reduce inventory.
Source: Reuters, Nick Carey (04/22/08)
[TJ: This has certainly been our experience in greater San Diego. Countrywide, perhaps the worst offender and the greatest contributor to the Subprime Debacle of 2007 has been very slow to respond.]
Real estate practitioners across the country believe mortgage lenders are worsening the housing downturn by taking months to make decisions on short sales and sticking to high internal target prices.
As a result, home buyers are abandoning short sale properties, forcing them to be sold in foreclosure sales that typically result in lenders accepting lower prices than they could have achieved in a short sale.
"The only question banks should ask is can they make more in a short sale than in foreclosure," according to Lighthouse Point, Fla.-based real estate practitioner Ron Rosen, who cites a "broken" system.
"The answer is that in nine out of 10 cases they will lose more money in a foreclosure. But banks seem to be asking a different question."
Some practitioners contend that lenders lack the appropriate systems and staff to handle short sale requests, while lenders insist the short sale process is complicated by the need for approvals from investors and mortgage insurers.
Still, practitioners note that a more efficient short sale process would boost prices and reduce inventory.
Source: Reuters, Nick Carey (04/22/08)
[TJ: This has certainly been our experience in greater San Diego. Countrywide, perhaps the worst offender and the greatest contributor to the Subprime Debacle of 2007 has been very slow to respond.]
10 Most Challenging Housing Markets
From Realtor Magazine Online, Daily Real Estate News April 24, 2008
The hardest places to sell homes are those with falling prices and a large inventory of unsold homes. Forbes magazine, which examined markets all over the country, concluded that Florida has the most markets that are really in the doldrums. Several cities there are overbuilt, saddled with lousy loans and flat sales. Jonathan Miller, president of Miller Samuel, a Manhattan-based real estate appraisal company that assisted with the analysis, says it is hard for a city to climb out of a slowdown because in the best of circumstances there's generally a three- to six-month lag between the time buyers start putting a serious dent into the inventory and the time when prices start to improve.Here are the 10 markets where Forbes says the sales opportunities are the most challenging:
1. Miami
2. Orlando
3. Phoenix
4. Tampa
5. Los Angeles
6. Washington, D.C.
7. Chicago
8. Baltimore
9. San Diego
10. Denver
Sources: Forbes, Matt Woolsey (04/15/08)
Contrast that list with this article in the San Diego Union-Tribune:
http://www.signonsandiego.com/news/business/20080416-9999-1b16neighbor.html
"Slump spares a few areas"
"Median home prices rise in Encinitas, La Jolla, Ocean Beach"
All real estate is local. The scary headlines affect some areas, but not all. As this article points out, while the volume of sales in La Jolla were down 10% last year, the prices actually ROSE 10%!
The hardest places to sell homes are those with falling prices and a large inventory of unsold homes. Forbes magazine, which examined markets all over the country, concluded that Florida has the most markets that are really in the doldrums. Several cities there are overbuilt, saddled with lousy loans and flat sales. Jonathan Miller, president of Miller Samuel, a Manhattan-based real estate appraisal company that assisted with the analysis, says it is hard for a city to climb out of a slowdown because in the best of circumstances there's generally a three- to six-month lag between the time buyers start putting a serious dent into the inventory and the time when prices start to improve.Here are the 10 markets where Forbes says the sales opportunities are the most challenging:
1. Miami
2. Orlando
3. Phoenix
4. Tampa
5. Los Angeles
6. Washington, D.C.
7. Chicago
8. Baltimore
9. San Diego
10. Denver
Sources: Forbes, Matt Woolsey (04/15/08)
Contrast that list with this article in the San Diego Union-Tribune:
http://www.signonsandiego.com/news/business/20080416-9999-1b16neighbor.html
"Slump spares a few areas"
"Median home prices rise in Encinitas, La Jolla, Ocean Beach"
All real estate is local. The scary headlines affect some areas, but not all. As this article points out, while the volume of sales in La Jolla were down 10% last year, the prices actually ROSE 10%!
Real Estate Pros Woo Foreign Buyers
From Realtor Magazine Online, Daily Real Estate News April 24, 2008
Real estate professionals are looking to attract foreign home buyers by learning to speak their language and paying airfare and hotel bills of those who actually close the deal.
Because of the falling value of the U.S. dollar relative to other currencies, a foreigner who buys a home gets a discount averaging 30 percent, the NATIONAL ASSOCIATION OF REALTORS® estimates.Here are some of the creative ways real estate professionals are getting foreign attention.
- Jacky Teplitzky, the fourth-ranked producer at Prudential Douglas Elliman, which has 3,300 agents in metro New York City, has hired staff lawyers who specialize in foreign buyers. That’s part of the reason that sales to foreigners rose from 10 percent of her business to 25 percent last year.
- Atlanta-based Jenny Pruitt & Associates has added practitioners to the staff who speak Dutch, Korean, Farsi, and Arabic. A search function on its Web site can help a potential buyer locate someone who speaks his language.
- Rick Wohlfarth, owner of Wohlfarth & Association, in New York City, travels regularly to Brazil to help link wealthy buyers with properties. Foreign buyers make up about 20 percent of his sales.
Source: USA Today, Stephanie Armour (04/24/08)
Real estate professionals are looking to attract foreign home buyers by learning to speak their language and paying airfare and hotel bills of those who actually close the deal.
Because of the falling value of the U.S. dollar relative to other currencies, a foreigner who buys a home gets a discount averaging 30 percent, the NATIONAL ASSOCIATION OF REALTORS® estimates.Here are some of the creative ways real estate professionals are getting foreign attention.
- Jacky Teplitzky, the fourth-ranked producer at Prudential Douglas Elliman, which has 3,300 agents in metro New York City, has hired staff lawyers who specialize in foreign buyers. That’s part of the reason that sales to foreigners rose from 10 percent of her business to 25 percent last year.
- Atlanta-based Jenny Pruitt & Associates has added practitioners to the staff who speak Dutch, Korean, Farsi, and Arabic. A search function on its Web site can help a potential buyer locate someone who speaks his language.
- Rick Wohlfarth, owner of Wohlfarth & Association, in New York City, travels regularly to Brazil to help link wealthy buyers with properties. Foreign buyers make up about 20 percent of his sales.
Source: USA Today, Stephanie Armour (04/24/08)
Wednesday, April 23, 2008
Mortgage Application Volume Down 14.2%
From Realtor Magazine Online, Daily Real Estate News April 23, 2008
Mortgage applications fell 14.2 percent last week as interest rates soared, according to the Mortgage Bankers Association weekly mortgage applications survey.
For the week ending April 18, mortgage application volume declined to 637.6 from the previous week's 743.4. On an unadjusted basis, the index decreased 13.4 percent compared with the previous week and was down 3.2 percent compared with the same week a year ago.
Much of the decline was in refinance applications, which fell 20.2 percent, pushing the refinance share of mortgage activity to 49.2 percent from 53.5 percent the previous week. Purchase applications declined 6.4 percent.
Overall, the decrease in demand came in response to rising interest rates:
- 30-year fixed-rate mortgages increased to 6.04 percent from 5.74 percent;
- 15-year fixed-rate mortgages increased to 5.6 percent from 5.27 percent;
- 1-year ARMs decreased to 6.93 percent from 7.02 percent.
Source: Mortgage Bankers Association (04/23/2008)
Mortgage applications fell 14.2 percent last week as interest rates soared, according to the Mortgage Bankers Association weekly mortgage applications survey.
For the week ending April 18, mortgage application volume declined to 637.6 from the previous week's 743.4. On an unadjusted basis, the index decreased 13.4 percent compared with the previous week and was down 3.2 percent compared with the same week a year ago.
Much of the decline was in refinance applications, which fell 20.2 percent, pushing the refinance share of mortgage activity to 49.2 percent from 53.5 percent the previous week. Purchase applications declined 6.4 percent.
Overall, the decrease in demand came in response to rising interest rates:
- 30-year fixed-rate mortgages increased to 6.04 percent from 5.74 percent;
- 15-year fixed-rate mortgages increased to 5.6 percent from 5.27 percent;
- 1-year ARMs decreased to 6.93 percent from 7.02 percent.
Source: Mortgage Bankers Association (04/23/2008)
New Rules for Borrowers With Foreclosures
From Realtor Magazine Online, Daily Real Estate News April 23, 2008
At the end of the month, Fannie Mae will adopt higher minimum down payments and credit scores for borrowers with a past foreclosure.
The government-sponsored enterprise already has boosted the time period for these borrowers to re-establish their credit to five years from four years.
While exceptions could be made for borrowers in hardship situations, Marianne Sullivan, senior vice president of single-family credit policy and risk management at Fannie Mae, says those who had the ability to pay but walked away from their homes should be treated differently than those who met their payment obligations.
Additionally, Sullivan says Fannie Mae will make it more difficult for borrowers to transform their current residences into rentals and purchase new homes to discourage them from walking away from the existing home after the transaction closes.
Fannie Mae is making these changes as Congress considers passing legislation that would allow struggling borrowers to refinance into FHA loans after their lenders write down a portion of their mortgages, and the mortgage industry is pushing for speculators to be barred from the program.
Former Mortgage Bankers Association chair Regina Lowrie asks, "Why should a servicer take a haircut or have a cram-down for any borrower that truly has the ability to pay?"
Source: American Banker, Kate Berry (04/22/08)
At the end of the month, Fannie Mae will adopt higher minimum down payments and credit scores for borrowers with a past foreclosure.
The government-sponsored enterprise already has boosted the time period for these borrowers to re-establish their credit to five years from four years.
While exceptions could be made for borrowers in hardship situations, Marianne Sullivan, senior vice president of single-family credit policy and risk management at Fannie Mae, says those who had the ability to pay but walked away from their homes should be treated differently than those who met their payment obligations.
Additionally, Sullivan says Fannie Mae will make it more difficult for borrowers to transform their current residences into rentals and purchase new homes to discourage them from walking away from the existing home after the transaction closes.
Fannie Mae is making these changes as Congress considers passing legislation that would allow struggling borrowers to refinance into FHA loans after their lenders write down a portion of their mortgages, and the mortgage industry is pushing for speculators to be barred from the program.
Former Mortgage Bankers Association chair Regina Lowrie asks, "Why should a servicer take a haircut or have a cram-down for any borrower that truly has the ability to pay?"
Source: American Banker, Kate Berry (04/22/08)
Tuesday, April 22, 2008
Rental Demand Pushes Rates Up
From Realtor Magazine Online, Daily Real Estate News April 22, 2008
It’s getting harder for renters to find an affordable place to live with rents rising and availability falling.
The median asking rate for rentals has jumped 14 percent, from $591 a month during the fourth quarter of 2003 to $673 a month in 2007, according to the U.S. Census Bureau. Vacancy rates are down from last year, and average rent is projected to rise 5.3 percent in 2008, up from a 3.1 percent increase in 2007, according to the NATIONAL ASSOCIATION OF REALTORS®.
"We've seen demand for rental housing go up," says Mark Obrinsky, chief economist at the National Multi Housing Council. "The ownership side is retrenching, and we're seeing the demand going to the rental side. There's a lot of hesitancy to buy. Others can't get (financing), so they're remaining renters longer."
Here are median rents for the first quarter of 2008 in 12 major metropolitan areas:
Atlanta: $986
Austin: $907
Boston: $1,645
Chicago: $1,355
Las Vegas: $1,056
Los Angeles: $1,699
Miami: $1,368
New York: $1,751
Phoenix: $939
San Francisco: $1,810
Seattle: $1,211
Washington D.C.: $1,687
Source: Rentometer and USA Today, Mark W. Williams (04/22/2008)
It’s getting harder for renters to find an affordable place to live with rents rising and availability falling.
The median asking rate for rentals has jumped 14 percent, from $591 a month during the fourth quarter of 2003 to $673 a month in 2007, according to the U.S. Census Bureau. Vacancy rates are down from last year, and average rent is projected to rise 5.3 percent in 2008, up from a 3.1 percent increase in 2007, according to the NATIONAL ASSOCIATION OF REALTORS®.
"We've seen demand for rental housing go up," says Mark Obrinsky, chief economist at the National Multi Housing Council. "The ownership side is retrenching, and we're seeing the demand going to the rental side. There's a lot of hesitancy to buy. Others can't get (financing), so they're remaining renters longer."
Here are median rents for the first quarter of 2008 in 12 major metropolitan areas:
Atlanta: $986
Austin: $907
Boston: $1,645
Chicago: $1,355
Las Vegas: $1,056
Los Angeles: $1,699
Miami: $1,368
New York: $1,751
Phoenix: $939
San Francisco: $1,810
Seattle: $1,211
Washington D.C.: $1,687
Source: Rentometer and USA Today, Mark W. Williams (04/22/2008)
Groups Add Driving to Home Cost
From Realtor Magazine Online, Daily Real Estate News April 22, 2008
The real cost of housing is significantly higher than we think when transportation is factored into the equation, according to a joint study by the Center for Neighborhood Technology and the Center for Transit Oriented Development.
These organizations have developed a database that measures affordability in 52 major metropolitan areas around the country. Its interactive maps show the cost of housing alone as a percentage of income and then the cost of housing plus transportation as an income percentage.
The farther from public transportation a community is located the higher its cost of living. In some cities, the cost of housing is less than 30 percent of income, but when transportation is added in the costs can be as much as 65 percent of income.
"Gasoline at $1 and gasoline at $3 are whole different worlds," says Dave Van Hattum, program manager for the St. Paul-based Transit for Livable Communities. "This (Web site) map brings it home to people."
Source: Center for Neighborhood Technology and St. Paul Pioneer Press, Bob Shaw (04/22/2008)
The real cost of housing is significantly higher than we think when transportation is factored into the equation, according to a joint study by the Center for Neighborhood Technology and the Center for Transit Oriented Development.
These organizations have developed a database that measures affordability in 52 major metropolitan areas around the country. Its interactive maps show the cost of housing alone as a percentage of income and then the cost of housing plus transportation as an income percentage.
The farther from public transportation a community is located the higher its cost of living. In some cities, the cost of housing is less than 30 percent of income, but when transportation is added in the costs can be as much as 65 percent of income.
"Gasoline at $1 and gasoline at $3 are whole different worlds," says Dave Van Hattum, program manager for the St. Paul-based Transit for Livable Communities. "This (Web site) map brings it home to people."
Source: Center for Neighborhood Technology and St. Paul Pioneer Press, Bob Shaw (04/22/2008)
Alternative Credit Scores Gaining
From Realtor Magazine Online, Daily Real Estate News April 22, 2008
About 70 million of U.S. adults don’t have a traditional credit score. Many of them are recent immigrants, new college grads, and newly divorced or widowed women.
Financial firms are trying to fill that void with new products and services that cater to those who don’t have established banking relationships by collecting data on credit card payments, cell-phone accounts, and rent payments. Among the firms offering these alternatives products are credit report processor First American Credco, data provider LexisNexis, and credit bureau TransUnion.
While this approach to credit screening works for some smaller lenders, there are still some big ones that won’t consider this kind of credit scores. For instance, Bank of America will look at rent and utility bills when screening customers for a loan, but it won't use ratings based on that information.
Part of the reason for their reluctance is the continuing refusal of Fannie Mae and Freddie Mac to consider alternative credit scores at this time.
Source: Business Week, Ben Levisohn and Brian Burnsed (04/21/2008)
About 70 million of U.S. adults don’t have a traditional credit score. Many of them are recent immigrants, new college grads, and newly divorced or widowed women.
Financial firms are trying to fill that void with new products and services that cater to those who don’t have established banking relationships by collecting data on credit card payments, cell-phone accounts, and rent payments. Among the firms offering these alternatives products are credit report processor First American Credco, data provider LexisNexis, and credit bureau TransUnion.
While this approach to credit screening works for some smaller lenders, there are still some big ones that won’t consider this kind of credit scores. For instance, Bank of America will look at rent and utility bills when screening customers for a loan, but it won't use ratings based on that information.
Part of the reason for their reluctance is the continuing refusal of Fannie Mae and Freddie Mac to consider alternative credit scores at this time.
Source: Business Week, Ben Levisohn and Brian Burnsed (04/21/2008)
Monday, April 21, 2008
Mortgage Rates Hit Low Point
From Realtor Magazine Online, Daily Real Estate News April 21, 2008
The 30-year fixed rate mortgage currently sits at 5.88 percent, and analysts say they are unlikely to fall any further for the rest of the year.
The rate on the fixed loans is only down a quarter of a point this year, as the credit markets have cut the link between it and yields on 10-year Treasuries; and while skittish investors have moved to Treasuries to trim the yields, mortgage lenders have not eased lending standards.
Mortgage rates are likely to close 2008 at about 6 percent as investors in bonds focus on rising inflation, driving interest rates higher.
Long-term rates will also increase due to the additional supply of Treasuries as Congress borrows to raise money for the growing federal budget deficit.
Source: Kiplinger.com, Jerome Idaszak(04/21/08)
The 30-year fixed rate mortgage currently sits at 5.88 percent, and analysts say they are unlikely to fall any further for the rest of the year.
The rate on the fixed loans is only down a quarter of a point this year, as the credit markets have cut the link between it and yields on 10-year Treasuries; and while skittish investors have moved to Treasuries to trim the yields, mortgage lenders have not eased lending standards.
Mortgage rates are likely to close 2008 at about 6 percent as investors in bonds focus on rising inflation, driving interest rates higher.
Long-term rates will also increase due to the additional supply of Treasuries as Congress borrows to raise money for the growing federal budget deficit.
Source: Kiplinger.com, Jerome Idaszak(04/21/08)
Friday, April 18, 2008
Why Are Short Sales So Troublesome?
From Realtor Magazine Online, Daily Real Estate News April 18, 2008
Short sales seem like a win-win for everyone involved, but as real estate professionals know, short sales can be hard to pull off. It can take months for the mortgage company to respond to an offer, and the lender or lenders often balk at the price.
Why doesn’t the process go more smoothly when it seems like a much better deal for everyone than foreclosure?
* Paperwork.
Gathering all the information needed to evaluate a short-sale offer can take time, says Patrick Carey, an executive vice president with Wells Fargo. The loan servicer must first determine whether the homeowner really can't continue meeting the loan payments, then get an appraisal or broker's opinion of the home's value.
* Many steps, approvals.
Mortgage servicers also try to ensure that the proposed sale is an "arm's length" transaction between two parties rather than something like a sale to a relative on sweet terms. They must also determine whether the buyer has sufficient funds or the ability to get a loan. If all those hurdles are cleared, the servicer may still need to get approval from the investor that owns the loan and provide an analysis showing that the investor will be better off with a short sale than with another solution.
* Complications often arise.
There are additional complications if the borrower has a mortgage and a home-equity loan. In that case, both parties must approve the deal – which is a challenge when the sales price may not even be enough to cover the mortgage balance.
* Minimize delays.
Carey suggests that home owners contemplating a short sale immediately call the loan servicer to get the approval process started, rather than wait for an offer.
Source: The Wall Street Journal, Ruth Simon and James R. Hagerty (04/17/2008)
LINKS
REALTOR® Magazine: How to Succeed at Short Sales
REALTOR® Magazine: Short Sales: Taxing What Isn't There
NAR: Field Guide to Short Sales
Short sales seem like a win-win for everyone involved, but as real estate professionals know, short sales can be hard to pull off. It can take months for the mortgage company to respond to an offer, and the lender or lenders often balk at the price.
Why doesn’t the process go more smoothly when it seems like a much better deal for everyone than foreclosure?
* Paperwork.
Gathering all the information needed to evaluate a short-sale offer can take time, says Patrick Carey, an executive vice president with Wells Fargo. The loan servicer must first determine whether the homeowner really can't continue meeting the loan payments, then get an appraisal or broker's opinion of the home's value.
* Many steps, approvals.
Mortgage servicers also try to ensure that the proposed sale is an "arm's length" transaction between two parties rather than something like a sale to a relative on sweet terms. They must also determine whether the buyer has sufficient funds or the ability to get a loan. If all those hurdles are cleared, the servicer may still need to get approval from the investor that owns the loan and provide an analysis showing that the investor will be better off with a short sale than with another solution.
* Complications often arise.
There are additional complications if the borrower has a mortgage and a home-equity loan. In that case, both parties must approve the deal – which is a challenge when the sales price may not even be enough to cover the mortgage balance.
* Minimize delays.
Carey suggests that home owners contemplating a short sale immediately call the loan servicer to get the approval process started, rather than wait for an offer.
Source: The Wall Street Journal, Ruth Simon and James R. Hagerty (04/17/2008)
LINKS
REALTOR® Magazine: How to Succeed at Short Sales
REALTOR® Magazine: Short Sales: Taxing What Isn't There
NAR: Field Guide to Short Sales
Thursday, April 17, 2008
Why Lenders Balk at Short Sales
From Realtor Magazine Online, Daily Real Estate News April 17, 2008
The NATIONAL ASSOCIATION OF REALTORS® says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals.
Research from Clayton Holdings Inc. indicates that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors, and home-equity lenders--a process that can take several months to complete.
Mortgage servicers blame delays on staff shortages resulting from the unexpected rise in problem loans, and Mortgage Bankers Association Senior Director Vicki Vidal points out that pricing also poses a challenge because buyers are making low-ball offers on distressed properties.
While servicers prefer repayment plans and modifications to short sales, the process is getting easier for borrowers who are encountering financial difficulties but continue to make timely payments. Additionally, Fannie Mae and Freddie Mac both are taking steps to speed up the process, with Fannie Mae looking to make acceptable minimum prices known beforehand and Freddie Mac giving servicers more leeway in approving short sales.
Source: Wall Street Journal, Ruth Simon and James Hagerty (04/17/08)
The NATIONAL ASSOCIATION OF REALTORS® says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals.
Research from Clayton Holdings Inc. indicates that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors, and home-equity lenders--a process that can take several months to complete.
Mortgage servicers blame delays on staff shortages resulting from the unexpected rise in problem loans, and Mortgage Bankers Association Senior Director Vicki Vidal points out that pricing also poses a challenge because buyers are making low-ball offers on distressed properties.
While servicers prefer repayment plans and modifications to short sales, the process is getting easier for borrowers who are encountering financial difficulties but continue to make timely payments. Additionally, Fannie Mae and Freddie Mac both are taking steps to speed up the process, with Fannie Mae looking to make acceptable minimum prices known beforehand and Freddie Mac giving servicers more leeway in approving short sales.
Source: Wall Street Journal, Ruth Simon and James Hagerty (04/17/08)
Renters Face Their Own Woes
From Realtor Magazine Online, Daily Real Estate News April 17, 2008
For some, it might not seem like a great time to buy a house, but it’s a dreadful time to rent, especially in the western part of the United States.
The average apartment rent through March rose from the previous year in all 19 major Western markets surveyed by the research firm RealFacts.
San Jose, Calif. -- the heart of Silicon Valley -- is now the West's most expensive rental market, with the average apartment leasing for $1,660 per month, up 9.1 percent, $139 per month, from the same time last year. That means a Silicon Valley renter can expect to pay nearly $20,000 to lease an average apartment during the next year.
Tucson, Ariz. offers the West's least expensive apartments, with rents creeping up 2 percent to $668 per month.
Source: The Associated Press, Michael Liedtke (04/16/2008)
For some, it might not seem like a great time to buy a house, but it’s a dreadful time to rent, especially in the western part of the United States.
The average apartment rent through March rose from the previous year in all 19 major Western markets surveyed by the research firm RealFacts.
San Jose, Calif. -- the heart of Silicon Valley -- is now the West's most expensive rental market, with the average apartment leasing for $1,660 per month, up 9.1 percent, $139 per month, from the same time last year. That means a Silicon Valley renter can expect to pay nearly $20,000 to lease an average apartment during the next year.
Tucson, Ariz. offers the West's least expensive apartments, with rents creeping up 2 percent to $668 per month.
Source: The Associated Press, Michael Liedtke (04/16/2008)
Bargain Home Prices Boost Sales
From Realtor Magazine Online, Daily Real Estate News April 17, 2008
In cities where housing prices have fallen dramatically, bargain hunters are swooping in and pushing sales upward.
Boston, Cleveland, Detroit, Sacramento, and San Diego have all seen sales increases recently after a period of price declines, according to a March report by Radar Logic, a real estate data and analytics firm. In Detroit, sales of homes and condos rose 12.8 percent in February compared with a year ago, according to Realcomp.
The most aggressive shoppers include investors, particularly nationally based ones who are cherry-picking single-family homes in good neighborhoods all over the country.
International buyers also see U.S. home prices as a bargain. With the dollar down against the Euro, European buyers get particularly good deals, but buyers from Asia and Canada also are active, according to international real estate practitioners.
First-time homebuyers are finding this a good time to dip toes in the water. In November 2007, 39 percent of purchasers were first-time homebuyers, according to the NATIONAL ASSOCIATION OF REALTORS®.
Source: USA Today, Stephanie Armour (04/17/2008)
In cities where housing prices have fallen dramatically, bargain hunters are swooping in and pushing sales upward.
Boston, Cleveland, Detroit, Sacramento, and San Diego have all seen sales increases recently after a period of price declines, according to a March report by Radar Logic, a real estate data and analytics firm. In Detroit, sales of homes and condos rose 12.8 percent in February compared with a year ago, according to Realcomp.
The most aggressive shoppers include investors, particularly nationally based ones who are cherry-picking single-family homes in good neighborhoods all over the country.
International buyers also see U.S. home prices as a bargain. With the dollar down against the Euro, European buyers get particularly good deals, but buyers from Asia and Canada also are active, according to international real estate practitioners.
First-time homebuyers are finding this a good time to dip toes in the water. In November 2007, 39 percent of purchasers were first-time homebuyers, according to the NATIONAL ASSOCIATION OF REALTORS®.
Source: USA Today, Stephanie Armour (04/17/2008)
Wednesday, April 16, 2008
Practitioners Say Business Is Improving
From Realtor Magazine Online, Daily Real Estate News April 16, 2008
Real estate practitioners nationwide are seeing signs of recovery in the housing market.
"If you're not going for pie-in-the-sky type of numbers and price your house accordingly, I think that it’ll go pretty quickly," says Victoria Hanbury Howard, an associate at Coldwell Banker in Washington DC.
"There's definitely more traffic," says Patricia Giambalvo, an associate with Realty Executives in Huntington, Long Island, N.Y.
RE/MAX associates in Phoenix, Tucson, Las Vegas and Orange County, Calif., are reporting that sales volume doubled in March compared to February and there are twice as many homes under contract in April, says Jack Kreider, executive vice president of regional services at RE/MAX International."
Yes, this is definitely seasonal activity, but I can assure you that a year ago we weren't doubling what we did the month prior,” he says. The fact that it doubled is significant. It wasn't that big a year ago.”
Source: Reuters News, Lynn Adler (04/16/2008)
Real estate practitioners nationwide are seeing signs of recovery in the housing market.
"If you're not going for pie-in-the-sky type of numbers and price your house accordingly, I think that it’ll go pretty quickly," says Victoria Hanbury Howard, an associate at Coldwell Banker in Washington DC.
"There's definitely more traffic," says Patricia Giambalvo, an associate with Realty Executives in Huntington, Long Island, N.Y.
RE/MAX associates in Phoenix, Tucson, Las Vegas and Orange County, Calif., are reporting that sales volume doubled in March compared to February and there are twice as many homes under contract in April, says Jack Kreider, executive vice president of regional services at RE/MAX International."
Yes, this is definitely seasonal activity, but I can assure you that a year ago we weren't doubling what we did the month prior,” he says. The fact that it doubled is significant. It wasn't that big a year ago.”
Source: Reuters News, Lynn Adler (04/16/2008)
Mortgage Applications Rise
From Realtor Magazine Online, Daily Real Estate News April 16, 2008
Mortgage applications rose last week for the second week in a row, up 2.5 percent to 743.4 on a seasonally adjusted basis from 725.6 a week earlier, according to the Mortgage Bankers Association’s weekly mortgage applications survey.
On an unadjusted basis, the index increased 2.7 percent compared with the previous week and was up 16.4 percent compared to the same week a year ago.
Most of the increase came from refinances, which increased 5.2 percent from the previous week. Purchases actually decreased 0.8 percent.
The refinance share of mortgage activity was 53.5 percent of total applications, up from 52.2 percent the previous week.Interest rates decreased slightly.
- 30-year fixed-rate mortgages decreased to 5.74 percent from 5.78 percent.
- 15-year fixed-rate mortgages decreased to 5.27 percent from 5.39 percent.
- 1-year ARMs decreased to 7.02 percent from 7.06 percent.
Source: Mortgage Bankers Association (04/16/2008)
Mortgage applications rose last week for the second week in a row, up 2.5 percent to 743.4 on a seasonally adjusted basis from 725.6 a week earlier, according to the Mortgage Bankers Association’s weekly mortgage applications survey.
On an unadjusted basis, the index increased 2.7 percent compared with the previous week and was up 16.4 percent compared to the same week a year ago.
Most of the increase came from refinances, which increased 5.2 percent from the previous week. Purchases actually decreased 0.8 percent.
The refinance share of mortgage activity was 53.5 percent of total applications, up from 52.2 percent the previous week.Interest rates decreased slightly.
- 30-year fixed-rate mortgages decreased to 5.74 percent from 5.78 percent.
- 15-year fixed-rate mortgages decreased to 5.27 percent from 5.39 percent.
- 1-year ARMs decreased to 7.02 percent from 7.06 percent.
Source: Mortgage Bankers Association (04/16/2008)
Why Selling Now Makes Sense
From Realtor Magazine Online, Daily Real Estate News April 16, 2008
Home owners who are reluctant to sell because prices have fallen, should do the math, and realize that the market downturn could work in their favor, say practitioners in hard-hit, but still pricey Boston.
Their reasoning may work in many other parts of the country as well.
"People are finding houses at prices they thought they'd never see again," says David W. O'Neil of Century 21 Spindler & O'Neil Associates in suburban Boston.
O’Neil points out to potential sellers that if the house a buyer covets used to be $500,000 but its price has fallen 20 percent to $400,000, it is a deal, even if the buyer’s own home also has lost 20 percent of its value.
In general, the toughest sell is people who bought about four years ago at the height of the market, says Zur Attias of The Attias Group at Barrett & Co. in Concord, Mass. But even for these home owners, selling now may make sense as long as they can at least break even.
He argues that almost everyone forgoes something, and probably several things, that he or she wanted when buying a house. For instance, the home may be in the right school district, but on a busy street. Or it may in a great neighborhood, but it's a Cape, not a Colonial. These are things Attias calls "unchangeables."
He says it’s a good time to sell if a seller can get rid of the most negative unchangeables in his current home, and replace them with better unchangeables in a new home. Once the market really turns around, the growth will be bigger in the better house, he predicts.
Source: The Boston Globe, Vanessa Parks and Jonathan Wiggs (04/13/2008)
Home owners who are reluctant to sell because prices have fallen, should do the math, and realize that the market downturn could work in their favor, say practitioners in hard-hit, but still pricey Boston.
Their reasoning may work in many other parts of the country as well.
"People are finding houses at prices they thought they'd never see again," says David W. O'Neil of Century 21 Spindler & O'Neil Associates in suburban Boston.
O’Neil points out to potential sellers that if the house a buyer covets used to be $500,000 but its price has fallen 20 percent to $400,000, it is a deal, even if the buyer’s own home also has lost 20 percent of its value.
In general, the toughest sell is people who bought about four years ago at the height of the market, says Zur Attias of The Attias Group at Barrett & Co. in Concord, Mass. But even for these home owners, selling now may make sense as long as they can at least break even.
He argues that almost everyone forgoes something, and probably several things, that he or she wanted when buying a house. For instance, the home may be in the right school district, but on a busy street. Or it may in a great neighborhood, but it's a Cape, not a Colonial. These are things Attias calls "unchangeables."
He says it’s a good time to sell if a seller can get rid of the most negative unchangeables in his current home, and replace them with better unchangeables in a new home. Once the market really turns around, the growth will be bigger in the better house, he predicts.
Source: The Boston Globe, Vanessa Parks and Jonathan Wiggs (04/13/2008)
Tuesday, April 15, 2008
Four Reasons Not to Raise the Capital Gains Tax
Four reasons not to raise the capital gains tax, cribbed from NPR's Marketplace report, featuring John Steele Gordon:
Both Senator Clinton and Senator Obama have called for an increase in the capital gains tax rate. It's currently at 15 percent, and they'd like to see 20 or even 25 percent. Have they really thought this through? Consider four things.
First, the capital gains tax is usually thought of as a "rich man's tax." After all, only capitalists have capital gains, right? That was mostly true in the 1930s, when capital gains were first treated differently from other kinds of income. It's not true today, when over half of American households own financial securities. The vast majority of capital gains taxpayers today are solidly middle class. In 2005, 47 percent of households paying capital gains taxes had incomes below $50,000, and 79 percent, almost four out of five, had incomes under $100,000.
Second, both senators have said an increase in capital gains taxes would increase federal revenues, but when the tax was raised in 1986, from 20 to 28 percent, tax receipts went down, not up. People just stopped realizing capital gains. When Bill Clinton signed a reduction in the tax rate into law in 1997, however, receipts soared. They soared again after 2003, when the tax was further cut to 15 percent. Capital gains tax receipts actually doubled in the next three years.
Third, stock prices are determined by the market's best guess as to future earnings. If you raise the capital gains tax you inescapably lower the possible future earnings on all stocks. So what happens? The market goes down. A capital gains tax hike is a perfect way to cause a bear market, or make one worse.
Fourth, in a globalized economy, a capital gains tax increase would discourage investment in the US from abroad, where capital gains taxes are often lower.
Raising the capital gains tax is a classic example of what George Orwell called, "an idea so stupid only an intellectual could have conceived it."
Both Senator Clinton and Senator Obama have called for an increase in the capital gains tax rate. It's currently at 15 percent, and they'd like to see 20 or even 25 percent. Have they really thought this through? Consider four things.
First, the capital gains tax is usually thought of as a "rich man's tax." After all, only capitalists have capital gains, right? That was mostly true in the 1930s, when capital gains were first treated differently from other kinds of income. It's not true today, when over half of American households own financial securities. The vast majority of capital gains taxpayers today are solidly middle class. In 2005, 47 percent of households paying capital gains taxes had incomes below $50,000, and 79 percent, almost four out of five, had incomes under $100,000.
Second, both senators have said an increase in capital gains taxes would increase federal revenues, but when the tax was raised in 1986, from 20 to 28 percent, tax receipts went down, not up. People just stopped realizing capital gains. When Bill Clinton signed a reduction in the tax rate into law in 1997, however, receipts soared. They soared again after 2003, when the tax was further cut to 15 percent. Capital gains tax receipts actually doubled in the next three years.
Third, stock prices are determined by the market's best guess as to future earnings. If you raise the capital gains tax you inescapably lower the possible future earnings on all stocks. So what happens? The market goes down. A capital gains tax hike is a perfect way to cause a bear market, or make one worse.
Fourth, in a globalized economy, a capital gains tax increase would discourage investment in the US from abroad, where capital gains taxes are often lower.
Raising the capital gains tax is a classic example of what George Orwell called, "an idea so stupid only an intellectual could have conceived it."
San Diego 1 of 5 Major Metro Areas With Rising Transactions
America's Riskiest Real Estate Markets
Matt Woolsey, Forbes.com
Apr 10th, 2008
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled
In Pictures: America’s Riskiest Real Estate Markets
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Matt Woolsey, Forbes.com
Apr 10th, 2008
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled
In Pictures: America’s Riskiest Real Estate Markets
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Housing Slowdown Goes Beyond U.S.
From Realtor Magazine Online, Daily Real Estate News April 15, 2008
Countries in the rest of the world are beginning to feel their own versions of the U.S. housing downturn.
In Ireland, Spain, Britain, and elsewhere, housing markets are returning to earth after soaring for decades. Experts worry that these countries could suffer the mortgage defaults and foreclosures that have been such a problem in California, Florida, and other U.S. states.
''The problems in the U.S. are being transmitted to Europe,'' says Michael Ball, professor of urban and property economics at the University of Reading in Britain, who studies housing prices. ''What's happening now is an awful lot more grief than we expected.''
The problem is most acute in Spain, where more than 4 million homes have been built in the last decade – more than in Germany, Britain, and France combined. Now property values have dropped more than 15 percent and mortgages are drying up.
Source: The New York Times, Mark Landler (04/14/2008)
[TJ: When bank mortgage access "dries up", seller financing in the form of 2nd trust deeds fills the void and keeps the real estate market moving. To learn more, call me.]
Countries in the rest of the world are beginning to feel their own versions of the U.S. housing downturn.
In Ireland, Spain, Britain, and elsewhere, housing markets are returning to earth after soaring for decades. Experts worry that these countries could suffer the mortgage defaults and foreclosures that have been such a problem in California, Florida, and other U.S. states.
''The problems in the U.S. are being transmitted to Europe,'' says Michael Ball, professor of urban and property economics at the University of Reading in Britain, who studies housing prices. ''What's happening now is an awful lot more grief than we expected.''
The problem is most acute in Spain, where more than 4 million homes have been built in the last decade – more than in Germany, Britain, and France combined. Now property values have dropped more than 15 percent and mortgages are drying up.
Source: The New York Times, Mark Landler (04/14/2008)
[TJ: When bank mortgage access "dries up", seller financing in the form of 2nd trust deeds fills the void and keeps the real estate market moving. To learn more, call me.]
Smaller Floor Plans in Big Demand
From Realtor Magazine Online, Daily Real Estate News April 15, 2008
American’s appetite for big homes and over-sized furniture appears to be shrinking.
New-home buyers began asking builder KB Home for smaller floor plans right after the collapse in subprime lending last year, says CEO Jeffrey Mezger.
The demand for a huge, high-ceilinged great room is giving way to the desire for special-purpose rooms, including media rooms and home offices, says a spokesman for luxury specialist Pulte Homes.
In three of its four new sofa collections, Younger Furniture is offering "apartment size" sofas, which are about 10 inches shorter than full-sized ones. Citing a trend toward smaller homes, Rowe Fine Furniture says it expects its Mini Mod line will account for a quarter of its collection this fall."
They're finally getting it," says Jodi FitzGerald, owner of Door Store Furniture, an 11-store retail chain in metropolitan New York that specializes in small-scale furniture. She estimates the number of smaller offerings has grown by about a third over the past year.
Source: The Wall Street Journal, Nancy Keates (03/21/2008)
American’s appetite for big homes and over-sized furniture appears to be shrinking.
New-home buyers began asking builder KB Home for smaller floor plans right after the collapse in subprime lending last year, says CEO Jeffrey Mezger.
The demand for a huge, high-ceilinged great room is giving way to the desire for special-purpose rooms, including media rooms and home offices, says a spokesman for luxury specialist Pulte Homes.
In three of its four new sofa collections, Younger Furniture is offering "apartment size" sofas, which are about 10 inches shorter than full-sized ones. Citing a trend toward smaller homes, Rowe Fine Furniture says it expects its Mini Mod line will account for a quarter of its collection this fall."
They're finally getting it," says Jodi FitzGerald, owner of Door Store Furniture, an 11-store retail chain in metropolitan New York that specializes in small-scale furniture. She estimates the number of smaller offerings has grown by about a third over the past year.
Source: The Wall Street Journal, Nancy Keates (03/21/2008)
Are VA-Approved Condos also FHA-Approved?
No. The approval does not carry over from VA to FHA and vice versa. There are a large number of condo projects in San Diego that are not FHA-approved because of the previous lower loan limits.
If client are interested in a condo that is not yet FHA-approved we can submit for a spot-approval ONCE THE DEAL IS ACCEPTED. Now that our in-house mortgage affiliate is co-owned by Wells Fargo and Warren Buffett's HomeServices, Inc. we have acquired some good connections within HomeServices to get these spot-approvals done quickly and efficiently.
If you have any further questions, contact:
Tracy Neal
Home Services Lending
1299 Prospect St Suite 203
La Jolla, CA 92037
(P) 858-729-1018
(F) 858-459-0986
(E) tracy@gregparkerteam.com
If client are interested in a condo that is not yet FHA-approved we can submit for a spot-approval ONCE THE DEAL IS ACCEPTED. Now that our in-house mortgage affiliate is co-owned by Wells Fargo and Warren Buffett's HomeServices, Inc. we have acquired some good connections within HomeServices to get these spot-approvals done quickly and efficiently.
If you have any further questions, contact:
Tracy Neal
Home Services Lending
1299 Prospect St Suite 203
La Jolla, CA 92037
(P) 858-729-1018
(F) 858-459-0986
(E) tracy@gregparkerteam.com
Monday, April 14, 2008
Consequences for 'Walk-Away' Borrowers
From Realtor Magazine Online, Daily Real Estate News April 14, 2008
The government and the lending industry are taking aim at “walk-away” home owners who stop making payments and months later send the house keys back to their lender.
Such borrowers will not be able to get another mortgage through Fannie Mae for five years, unless there are “documented extenuating circumstances.” In that case, the prohibition is three years. Even after the prescribed time has elapsed, a borrower with a foreclosure in his file will have to make at least a 10 percent down payment and have a FICO credit score of at least 680 to qualify for a Fannie Mae loan.
Freddie Mac, which counts foreclosures as major credit black mark for seven years, is now aggressively pursuing walk-away borrowers where permitted under state law, a senior official said.
Federal legislation enacted last year allows home owners who negotiate loan modifications with lenders and have portions of their principal debt eliminated to escape income tax liability for the amount forgiven.
Walk-away borrowers, by contrast, have nothing forgiven, and the Internal Revenue Service may demand taxes on the balance they never paid, the IRS says.
Source: Washington Post Writers Group, Kenneth R. Harney (04/12/2008)
The government and the lending industry are taking aim at “walk-away” home owners who stop making payments and months later send the house keys back to their lender.
Such borrowers will not be able to get another mortgage through Fannie Mae for five years, unless there are “documented extenuating circumstances.” In that case, the prohibition is three years. Even after the prescribed time has elapsed, a borrower with a foreclosure in his file will have to make at least a 10 percent down payment and have a FICO credit score of at least 680 to qualify for a Fannie Mae loan.
Freddie Mac, which counts foreclosures as major credit black mark for seven years, is now aggressively pursuing walk-away borrowers where permitted under state law, a senior official said.
Federal legislation enacted last year allows home owners who negotiate loan modifications with lenders and have portions of their principal debt eliminated to escape income tax liability for the amount forgiven.
Walk-away borrowers, by contrast, have nothing forgiven, and the Internal Revenue Service may demand taxes on the balance they never paid, the IRS says.
Source: Washington Post Writers Group, Kenneth R. Harney (04/12/2008)
Friday, April 11, 2008
FHA Helps College Students Buy Condos
Here in the UTC-La Jolla area of San Diego County we are experiencing a market-in-transition. Premium properties are actually starting to rise in price. I hear that the markets are a bit weaker in pockets throughout some of the perimeter areas San Diego County, but downtown, the marina district, and of course the beach remain strong markets.
Even so, I am finding 2-3 fresh "steals" every week for my clients who don't mind playing the short-sale and foreclosure game that so favors the banks to the demise of their borrowers who got caught in the subprime debacle.
Any agent/client with any questions may email Greg Parker directly: greg@gregparkerteam.com. They are the experts.
Today, I encourage buyers to consider an FHA mortgage. Here are some notes I took from a presentation made by our in-house lender:
An FHA mortgage can cover 97% of the property's appraised value.
FHA loans are not credit-driven. You can qualify even if you have a lower FICO score.
For a borrower to qualify for an FHA loan, all it takes is a clean credit history for the most recent 1 year; the income (ability) to paydebt; and the desire (willingness) to pay debt.
Almost everybody qualifies. Even those who had a bankruptcy 2 or more years ago.
FHA loans are all full-doc loans. Borrowers will need to present W2s, paystubs, tax returns. In fact, here's what you will need to give your lender:
- Most recent year to date pay stub.
- 2 most recent years W2’s or 1099’s.
- 2 most recent years Federal personal tax returns with all schedules.
- Most recent months bank statements for all assets including checking, savings, investment, retirement etc.
The value of the property is determined by an FHA Appraiser. They will confirm that the property is habitable (kitchen, bathrooms, etc.), and that the condo project/subdivision is FHA-Approved.
All FHA loans come with a 1.5% (points) "funding fee".
All FHA loans come with a 0.5% PMI (mortgage insurance) fee. (To calculate yourmonthly cost: [loan amount] x 0.5% / 12).
When banks require PMI on a Conventional loan, they will usually eliminate the PMI once you can prove thatyou have 20% or more equity in the property...and this can happens either by paying down on the loan's principle, or by appreciation of the property.
But with FHA loans there is a minimum of 5 years requirement, so if you get a 3% FHA loan, you're stuck paying the PMI for a minimum of 5 years. But if you time the market and buy one of the properties caught in the subprime mess you could make out like a bandit and never even notice the extra monthly charge!
All FHA loans are insured by the Fed'l gov't so that's why they require PMI. Your premium payment goes to pay-off the lends when the occasional borrower defaults.
FHA loans require a minimum of 3% down, however 100% of that can be a "gift".
We've had a lot of cases where someone will "gift" students the 3% downpayment. Anybody can donate the "gift". Plus, the donor may be able to deduct that "gift" from their income taxes up to a total of 50% oftheir income in any given year.
One scenario: If the purchase price is $450,000, 3% = $13,500 downpayment. If you have that sum in savings, or if somebody will "gift" that to you, you might be able to buy this property.
Speaking of students, if the borrower will have to start repaying their student loans within 1 year from the start of the mortgage loan, that student loan debt WILL affect what the borrower qualifies for. Students who have jobs (income) + can come up with 3% of the loan for the downpayment + are more than a year from having to start paying back their student loans would likely qualify for a 97% mortgage.
FHA loans also allow a seller to contribute up to 6% toward the buyer's recurring and non-recurring closing costs. A motivated seller whose property sells for $450K can contribute up to $27,000 toward the buyer's "closing costs". Be sure to call Greg Parker for clarification of these details.
Seller contribution is limited to 6%. The borrower can use 3% for the downpayment (through Neimiah) and the other 3% towards buying down the rate,1.5% funding fee and closing costs. If the seller contributes 6%, thisallows the borrower to come in with less money out of pocket and obtain thebest rate possible.
Bank-owned properties ("REO"s) are OK for FHA loans.
To avoid encouraging investor "flippers", an owner cannot sell a property that has an FHA loan until the 91st day after close of escrow. (That is not much of a discouragement. It'll probably take that long to get the place in good shape to resell for your profit!)
Since San Diego County as a whole is subject to "declining values" rules, Conventional lenders require a minimum of 10% down. Those borrowers will also have to pay PMI. But if the borrower can afford to come up with 20% down (from "gifts", seller carrybacks, etc.) the PMI can be avoided.
Since FHA loans are insured by the Fed'l gov't, we can work with only 3% down. Plus, for the 2007and 2008 tax return years, PMI is tax deductible. This may or may not be extended beyond 2008.
My point in bringing this information to your attention is to show you that it is possible even for prospective buyers who are college students, or who have shaky credit or even a bankruptcy 2+ years ago to get into the real estate investment business.
Our government has done many, many things to make up for the subprime debacle. And the market will surely rise in the future. So now is the time to buy something you can afford with these generous FHA loans. There's no reason to be left behind.
Here are two websites where you can find if the condo project you want is already FHA-Approved:
For VA Approved Condo/PUD http://condopudbuilder.vba.va.gov/2.2/frames.html
For FHA Approved Condo/PUD http://www.financinghelp.com/mortgage2/site/FHACondo.htm
You can search by city also.
However, if the condo project you want is not on these lists we might still be able to get it approved. Email Greg Parker or me if you would like me to provide you more information re: mortgages or the current real estate offerings.
Tim James
Email: drtimjames@prusd.com
Greg Parker
Email: greg@gregparkerteam.com
Even so, I am finding 2-3 fresh "steals" every week for my clients who don't mind playing the short-sale and foreclosure game that so favors the banks to the demise of their borrowers who got caught in the subprime debacle.
Any agent/client with any questions may email Greg Parker directly: greg@gregparkerteam.com. They are the experts.
Today, I encourage buyers to consider an FHA mortgage. Here are some notes I took from a presentation made by our in-house lender:
An FHA mortgage can cover 97% of the property's appraised value.
FHA loans are not credit-driven. You can qualify even if you have a lower FICO score.
For a borrower to qualify for an FHA loan, all it takes is a clean credit history for the most recent 1 year; the income (ability) to paydebt; and the desire (willingness) to pay debt.
Almost everybody qualifies. Even those who had a bankruptcy 2 or more years ago.
FHA loans are all full-doc loans. Borrowers will need to present W2s, paystubs, tax returns. In fact, here's what you will need to give your lender:
- Most recent year to date pay stub.
- 2 most recent years W2’s or 1099’s.
- 2 most recent years Federal personal tax returns with all schedules.
- Most recent months bank statements for all assets including checking, savings, investment, retirement etc.
The value of the property is determined by an FHA Appraiser. They will confirm that the property is habitable (kitchen, bathrooms, etc.), and that the condo project/subdivision is FHA-Approved.
All FHA loans come with a 1.5% (points) "funding fee".
All FHA loans come with a 0.5% PMI (mortgage insurance) fee. (To calculate yourmonthly cost: [loan amount] x 0.5% / 12).
When banks require PMI on a Conventional loan, they will usually eliminate the PMI once you can prove thatyou have 20% or more equity in the property...and this can happens either by paying down on the loan's principle, or by appreciation of the property.
But with FHA loans there is a minimum of 5 years requirement, so if you get a 3% FHA loan, you're stuck paying the PMI for a minimum of 5 years. But if you time the market and buy one of the properties caught in the subprime mess you could make out like a bandit and never even notice the extra monthly charge!
All FHA loans are insured by the Fed'l gov't so that's why they require PMI. Your premium payment goes to pay-off the lends when the occasional borrower defaults.
FHA loans require a minimum of 3% down, however 100% of that can be a "gift".
We've had a lot of cases where someone will "gift" students the 3% downpayment. Anybody can donate the "gift". Plus, the donor may be able to deduct that "gift" from their income taxes up to a total of 50% oftheir income in any given year.
One scenario: If the purchase price is $450,000, 3% = $13,500 downpayment. If you have that sum in savings, or if somebody will "gift" that to you, you might be able to buy this property.
Speaking of students, if the borrower will have to start repaying their student loans within 1 year from the start of the mortgage loan, that student loan debt WILL affect what the borrower qualifies for. Students who have jobs (income) + can come up with 3% of the loan for the downpayment + are more than a year from having to start paying back their student loans would likely qualify for a 97% mortgage.
FHA loans also allow a seller to contribute up to 6% toward the buyer's recurring and non-recurring closing costs. A motivated seller whose property sells for $450K can contribute up to $27,000 toward the buyer's "closing costs". Be sure to call Greg Parker for clarification of these details.
Seller contribution is limited to 6%. The borrower can use 3% for the downpayment (through Neimiah) and the other 3% towards buying down the rate,1.5% funding fee and closing costs. If the seller contributes 6%, thisallows the borrower to come in with less money out of pocket and obtain thebest rate possible.
Bank-owned properties ("REO"s) are OK for FHA loans.
To avoid encouraging investor "flippers", an owner cannot sell a property that has an FHA loan until the 91st day after close of escrow. (That is not much of a discouragement. It'll probably take that long to get the place in good shape to resell for your profit!)
Since San Diego County as a whole is subject to "declining values" rules, Conventional lenders require a minimum of 10% down. Those borrowers will also have to pay PMI. But if the borrower can afford to come up with 20% down (from "gifts", seller carrybacks, etc.) the PMI can be avoided.
Since FHA loans are insured by the Fed'l gov't, we can work with only 3% down. Plus, for the 2007and 2008 tax return years, PMI is tax deductible. This may or may not be extended beyond 2008.
My point in bringing this information to your attention is to show you that it is possible even for prospective buyers who are college students, or who have shaky credit or even a bankruptcy 2+ years ago to get into the real estate investment business.
Our government has done many, many things to make up for the subprime debacle. And the market will surely rise in the future. So now is the time to buy something you can afford with these generous FHA loans. There's no reason to be left behind.
Here are two websites where you can find if the condo project you want is already FHA-Approved:
For VA Approved Condo/PUD http://condopudbuilder.vba.va.gov/2.2/frames.html
For FHA Approved Condo/PUD http://www.financinghelp.com/mortgage2/site/FHACondo.htm
You can search by city also.
However, if the condo project you want is not on these lists we might still be able to get it approved. Email Greg Parker or me if you would like me to provide you more information re: mortgages or the current real estate offerings.
Tim James
Email: drtimjames@prusd.com
Greg Parker
Email: greg@gregparkerteam.com
Mortgage Rates Hold Steady
From Realtor Magazine Online, Daily Real Estate News April 11, 2008
The average interest on the benchmark mortgage rate held below the 6-percent threshold for the fourth consecutive week as 30-year loans remained at 5.88 percent this week, according to Freddie Mac.
''Once again, mortgage rates held relatively steady this week amid release of subdued economic data,'' says Freddie Mac chief economist Frank Nothaft, who cited a government report on the number of jobs that were eliminated by businesses last month.
There was little movement involving the other mortgage rates as 15-year, fixed loans held steady at 5.42 percent, five-year adjustable-rate mortgages fell 0.03 percent to 5.56 percent, and one-year ARMs declined 0.01 percent to 5.18 percent.
Source: Chicago Sun-Times (04/11/08)
The average interest on the benchmark mortgage rate held below the 6-percent threshold for the fourth consecutive week as 30-year loans remained at 5.88 percent this week, according to Freddie Mac.
''Once again, mortgage rates held relatively steady this week amid release of subdued economic data,'' says Freddie Mac chief economist Frank Nothaft, who cited a government report on the number of jobs that were eliminated by businesses last month.
There was little movement involving the other mortgage rates as 15-year, fixed loans held steady at 5.42 percent, five-year adjustable-rate mortgages fell 0.03 percent to 5.56 percent, and one-year ARMs declined 0.01 percent to 5.18 percent.
Source: Chicago Sun-Times (04/11/08)
FHA Loans Can Ease Mortgage Dilemmas
From Realtor Magazine Online, Daily Real Estate News April 11, 2008
Potential home buyers may be hesitant as they start their hunt in today's market, but many quickly discover that their market is full of choices, sellers are becoming more willing to negotiate, and interest rates are still low.
That's not to say there will be no setbacks. The hard part may come when they go shopping for a mortgage. Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit scores seeking a conventional loan to come to the table with at least a 5 percent down payment. Borrowers with credit scores below 700 may need a more significant 20 percent down payment.
But there is help on that front. The answer for some buyers is a Federal Housing Administration (FHA) loan. Credit scores count less with FHA loans; the more important factor is whether the potential borrower has paid other bills on time, says Todd Johnson, CEO of Edina Realty Mortgage. FHA's government-backed loans require only 3 percent down and allow cosigners and gifts for down payments.
Source: Star-Tribune, Kara McGuire (08/06/2008)
Potential home buyers may be hesitant as they start their hunt in today's market, but many quickly discover that their market is full of choices, sellers are becoming more willing to negotiate, and interest rates are still low.
That's not to say there will be no setbacks. The hard part may come when they go shopping for a mortgage. Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit scores seeking a conventional loan to come to the table with at least a 5 percent down payment. Borrowers with credit scores below 700 may need a more significant 20 percent down payment.
But there is help on that front. The answer for some buyers is a Federal Housing Administration (FHA) loan. Credit scores count less with FHA loans; the more important factor is whether the potential borrower has paid other bills on time, says Todd Johnson, CEO of Edina Realty Mortgage. FHA's government-backed loans require only 3 percent down and allow cosigners and gifts for down payments.
Source: Star-Tribune, Kara McGuire (08/06/2008)
Thursday, April 10, 2008
Cities Where Green is the Favorite
From Realtor Magazine Online, Daily Real Estate News April 10, 2008
Drivers are enthusiastic about green cars, particularly drivers in West Coast cities, says Cars.com editor-in-chief Patrick K Olsen.
Cars.com has created the Green Index to monitor interest in hybrid vehicles in the 50 largest markets in the country. Rankings are calculated on the number of hybrid searches in a market as a percentage of all new-car Internet searches in the market.
Anyone who would like to live where most of the neighbors are environmentally concerned should consider these top-10 markets with the highest level of interest in hybrids.
San Francisco/Oakland/San Jose
Portland, Ore
Seattle
Sacramento
San Diego
Los Angeles
Denver
Washington, D.C.
Minneapolis/St. Paul
Boston
Source: Cars.com (08/09/2008)
Drivers are enthusiastic about green cars, particularly drivers in West Coast cities, says Cars.com editor-in-chief Patrick K Olsen.
Cars.com has created the Green Index to monitor interest in hybrid vehicles in the 50 largest markets in the country. Rankings are calculated on the number of hybrid searches in a market as a percentage of all new-car Internet searches in the market.
Anyone who would like to live where most of the neighbors are environmentally concerned should consider these top-10 markets with the highest level of interest in hybrids.
San Francisco/Oakland/San Jose
Portland, Ore
Seattle
Sacramento
San Diego
Los Angeles
Denver
Washington, D.C.
Minneapolis/St. Paul
Boston
Source: Cars.com (08/09/2008)
Wednesday, April 9, 2008
Mortgage Demand Up, Despite Higher Rates
From Realtor Magazine Online, Daily Real Estate News April 9, 2008
The number of mortgage applications increased 5.7 percent last week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly mortgage applications survey.
On an unadjusted basis, the index rose 10.9 percent compared with the same week a year ago. The bulk of the increase came from purchase loans, which rose 8.1 percent, compared with the refinance index, which was up 3.4 percent. The refinance share of mortgage activity decreased slightly from 53.4 the previous week to 52.2 last week.
Mortgage rates were up slightly:
- 30-year fixed-rate mortgages increased to 5.78 percent from 5.75 percent
- 15-year fixed-rate mortgages increased to 5.39 percent from 5.27 percent
- 1-year ARMs increased to 7.06 percent from 7 percent
Source: Mortgage Bankers Association (04/09/2008)
The number of mortgage applications increased 5.7 percent last week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly mortgage applications survey.
On an unadjusted basis, the index rose 10.9 percent compared with the same week a year ago. The bulk of the increase came from purchase loans, which rose 8.1 percent, compared with the refinance index, which was up 3.4 percent. The refinance share of mortgage activity decreased slightly from 53.4 the previous week to 52.2 last week.
Mortgage rates were up slightly:
- 30-year fixed-rate mortgages increased to 5.78 percent from 5.75 percent
- 15-year fixed-rate mortgages increased to 5.39 percent from 5.27 percent
- 1-year ARMs increased to 7.06 percent from 7 percent
Source: Mortgage Bankers Association (04/09/2008)
Tuesday, April 8, 2008
Families Feel Crunch From Rising Rents
From Realtor Magazine Online, Daily Real Estate News April 8, 2008
Residential rents are up across the country, confirms the National Low Income Housing Coalition in the latest issue of its annual report "Out of Reach."
The organization identifies Hawaii, California, and New York as the least unaffordable states and names Connecticut's Stamford-Norwalk market as the most costly metropolitan area in the nation.
According to the study, one in seven U.S. households is contributing more than half of their income toward keeping a roof over their heads; and low-income, minority, and first-time home buyers are especially being impacted by escalating shelter costs.
"The numbers in 'Out of Reach' are a stark reminder that in nearly every community in our nation, families are struggling to make ends meet," said U.S. Sen. Christopher J. Dodd (D-Conn.), in a preface to the NLIHC report. "While we have federal programs in place to assist people in affordable housing, they are relatively small compared to the great need. More must be done to ensure housing opportunities for all."
Source: Worcester Telegram & Gazette (Mass.), Bronislaus B. Kush (04/08/08)
Residential rents are up across the country, confirms the National Low Income Housing Coalition in the latest issue of its annual report "Out of Reach."
The organization identifies Hawaii, California, and New York as the least unaffordable states and names Connecticut's Stamford-Norwalk market as the most costly metropolitan area in the nation.
According to the study, one in seven U.S. households is contributing more than half of their income toward keeping a roof over their heads; and low-income, minority, and first-time home buyers are especially being impacted by escalating shelter costs.
"The numbers in 'Out of Reach' are a stark reminder that in nearly every community in our nation, families are struggling to make ends meet," said U.S. Sen. Christopher J. Dodd (D-Conn.), in a preface to the NLIHC report. "While we have federal programs in place to assist people in affordable housing, they are relatively small compared to the great need. More must be done to ensure housing opportunities for all."
Source: Worcester Telegram & Gazette (Mass.), Bronislaus B. Kush (04/08/08)
Policymakers to Propose Housing Tax Breaks
From Realtor Magazine Online, Daily Real Estate News April 8, 2008
U.S. House Democrats are drafting a plan for curing the housing crisis by offering tax breaks to home owners, first-time homebuyers, and developers of low-income housing.
The plan, which will be unveiled this week, deliberately snubs the struggling home-building industry.
"We need to provide relief to the buyers and families themselves, not just the banks and builders," House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) said yesterday in a written statement. "The House bill will put families first."
The House proposal would create a temporary tax credit of as much as $8,000 for first-time buyers and increase tax credits for investors in low-income housing. It would create a standard deduction for property taxes, aiding those who don’t itemize on their federal returns. And it would expand the authority of state and local housing finance agencies to use tax-exempt bonds to refinance troubled mortgages.
This package, together with the previous package of housing bills created by the House, would be the most far-reaching attempt by Congress to address the mortgage crisis. House leaders plan to present it to the full chamber for a vote in the next few weeks, says Rahm Emanuel (D-Ill.), chairman of the House Democratic Caucus. "There's a determination to get this done," he says.
Source: The Washington Post, Lori Montgomery (04/08/08)
U.S. House Democrats are drafting a plan for curing the housing crisis by offering tax breaks to home owners, first-time homebuyers, and developers of low-income housing.
The plan, which will be unveiled this week, deliberately snubs the struggling home-building industry.
"We need to provide relief to the buyers and families themselves, not just the banks and builders," House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) said yesterday in a written statement. "The House bill will put families first."
The House proposal would create a temporary tax credit of as much as $8,000 for first-time buyers and increase tax credits for investors in low-income housing. It would create a standard deduction for property taxes, aiding those who don’t itemize on their federal returns. And it would expand the authority of state and local housing finance agencies to use tax-exempt bonds to refinance troubled mortgages.
This package, together with the previous package of housing bills created by the House, would be the most far-reaching attempt by Congress to address the mortgage crisis. House leaders plan to present it to the full chamber for a vote in the next few weeks, says Rahm Emanuel (D-Ill.), chairman of the House Democratic Caucus. "There's a determination to get this done," he says.
Source: The Washington Post, Lori Montgomery (04/08/08)
Monday, April 7, 2008
Canadians Seek U.S. Vacation-Home Deals
From Realtor Magazine Online, Daily Real Estate News April 7, 2008
Canadians – especially those who live in U.S. border areas – are snapping up vacation homes in the U.S. as the Canadian dollar gains value against the declining American dollar.
Developers in the finger lake areas of Washington State say more than 80 percent of buyers are Canadian. "The Canadians are just running out of space, and affordable space at that, so it's driving them across the border," says Chris Branch, city planner for Oroville, Wash.
The largest number of Canadians seeking U.S. property head to Florida. California was second in popularity, according to a survey by the NATIONAL ASSOCIATION OF REALTORS®.
How can you capitalize on Canadian buyers? Greg Moesser, estates director at Prudential California Realty in Beverly Hills, says a strong Internet presence with an international flair is crucial because Canadians frequently familiarize themselves with U.S. housing markets online before they search for a specific property in person.
Source: The Associated Press, Shannon Dininny (04/04/2008) and The Los Angeles Times, Marcie Geffner (03/23/2008)
Canadians – especially those who live in U.S. border areas – are snapping up vacation homes in the U.S. as the Canadian dollar gains value against the declining American dollar.
Developers in the finger lake areas of Washington State say more than 80 percent of buyers are Canadian. "The Canadians are just running out of space, and affordable space at that, so it's driving them across the border," says Chris Branch, city planner for Oroville, Wash.
The largest number of Canadians seeking U.S. property head to Florida. California was second in popularity, according to a survey by the NATIONAL ASSOCIATION OF REALTORS®.
How can you capitalize on Canadian buyers? Greg Moesser, estates director at Prudential California Realty in Beverly Hills, says a strong Internet presence with an international flair is crucial because Canadians frequently familiarize themselves with U.S. housing markets online before they search for a specific property in person.
Source: The Associated Press, Shannon Dininny (04/04/2008) and The Los Angeles Times, Marcie Geffner (03/23/2008)
Rent Keeps Getting More Expensive
From Realtor Magazine Online, Daily Real Estate News April 7, 2008
Average rents for U.S. apartments rose 1 percent in the first three months of 2008.
This was the 24th consecutive quarter that rental property rates have risen, according to New York-based real estate research firm Reis Inc. The last time rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis.
A soft housing market beset by stricter loan terms and falling home prices is the "dominant driver" pushing people to rent apartments, said Sam Chandan, chief economist at Reis.
New York had the highest average rent at $2,790 a month, followed by San Francisco at $1,801, Fairfield County, Conn., at $1,759 and Boston at $1,620, Reis said.
Source: Bloomberg News (04/05/2008)
Average rents for U.S. apartments rose 1 percent in the first three months of 2008.
This was the 24th consecutive quarter that rental property rates have risen, according to New York-based real estate research firm Reis Inc. The last time rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis.
A soft housing market beset by stricter loan terms and falling home prices is the "dominant driver" pushing people to rent apartments, said Sam Chandan, chief economist at Reis.
New York had the highest average rent at $2,790 a month, followed by San Francisco at $1,801, Fairfield County, Conn., at $1,759 and Boston at $1,620, Reis said.
Source: Bloomberg News (04/05/2008)
Friday, April 4, 2008
Banks Up Rates for FHA Jumbo Loans
From Realtor Magazine Online, Daily Real Estate News April 4, 2008
Banks are adding fees and increasing interest rates on Federal Housing Administration loans that make the government-guaranteed mortgages less likely to assist their target customers.
Congress recently approved an increase in the ceiling on loans the FHA can insure to as much as $729,750 in the highest-cost areas, up from $362,790.
J.P. Morgan Chase & Co. is only one of the lenders saying it will charge at least a half-point premium and demand a minimum 580 credit score from borrowers seeking the FHA jumbos.
Kevin W. Lynch, a mortgage broker at A. Anderson Scott Mortgage Group in Rockville, Md., says he has been quoted rates of nearly 7 percent on jumbo FHA loans. The loans are so expensive they "aren't going to sell," Lynch says. "It's a waste of everybody's time."
Source: The Wall Street Journal, James R. Hagerty (04/04/08)
Banks are adding fees and increasing interest rates on Federal Housing Administration loans that make the government-guaranteed mortgages less likely to assist their target customers.
Congress recently approved an increase in the ceiling on loans the FHA can insure to as much as $729,750 in the highest-cost areas, up from $362,790.
J.P. Morgan Chase & Co. is only one of the lenders saying it will charge at least a half-point premium and demand a minimum 580 credit score from borrowers seeking the FHA jumbos.
Kevin W. Lynch, a mortgage broker at A. Anderson Scott Mortgage Group in Rockville, Md., says he has been quoted rates of nearly 7 percent on jumbo FHA loans. The loans are so expensive they "aren't going to sell," Lynch says. "It's a waste of everybody's time."
Source: The Wall Street Journal, James R. Hagerty (04/04/08)
30-Year Rates Climb for Week
From Realtor Magazine Online, Daily Real Estate News April 4, 2008
Mortgage borrowing costs were up for the week, reports Freddie Mac. According to the company's figures, interest on 30-year fixed loans bumped up to 5.88 percent from 5.85 percent a week ago; while 15-year fixed loans climbed to 5.42 percent from 5.34 percent.
On the other hand, adjustable-rate products moved in the opposite direction, with the one-year ARM dipping to 5.19 percent from 5.24 percent and the five-year ARM sliding to 5.59 percent from 5.67 percent.
Source: San Diego Union-Tribune (04/04/08)
Mortgage borrowing costs were up for the week, reports Freddie Mac. According to the company's figures, interest on 30-year fixed loans bumped up to 5.88 percent from 5.85 percent a week ago; while 15-year fixed loans climbed to 5.42 percent from 5.34 percent.
On the other hand, adjustable-rate products moved in the opposite direction, with the one-year ARM dipping to 5.19 percent from 5.24 percent and the five-year ARM sliding to 5.59 percent from 5.67 percent.
Source: San Diego Union-Tribune (04/04/08)
Foreign Buyers Fuel Second-home Sales, While U.S. Buyers Hold Back
From Inman News, by Glenn Roberts Jr., Monday, March 31, 2008.
"...Foreign buyers are taking advantage of lopsided currency values against the U.S. dollar in some market areas and are propping up second-home sales while many U.S. buyers are taking a wait-and-see approach. Markets with luxury properties can be more immune to the slowdown in second-home sales, real estate professionals also report....
Second-home purchases represented an estimated 40 percent share of total home sales in 2005, compared with 36 percent in 2004 and 2006, and 33 percent in 2007....
Some of the foreign buyers are particularly eyeing foreclosure properties, and coupled with the power of their currencies against the U.S. dollar, "they are picking them up for pennies on the dollar," she said. Finding properties for half the price that they were originally listed at is not uncommon these days, she said.
While U.S. buyers of second homes may view the properties as an eventual retirement home, foreign buyers more typically are looking to rent out the properties for a profit. Foreign buyers are more likely to engage in cash transactions than U.S. buyers, she said.
Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent condos, 7 percent townhouses or row houses, and 5 percent were other types of homes. In 2006, single-family homes accounted for 67 percent of vacation-home sales, while condos were 21 percent, NAR reported in the survey results.
Sixty-one percent of investment homes purchased in 2007 were detached single-family homes; 20 percent were condos; 11 percent were townhouses or row houses; and 8 percent were other. Twenty-eight percent of vacation-home buyers paid cash for their property, and 35 percent of investment buyers paid cash for their properties....
When asked about the most important reasons for their purchase of an investment home, 51 percent said to provide rental income; 39 percent to diversify investments; 21 percent to use for vacations or as a family retreat; 16 percent for use by a family member, friend or relative; 11 percent for tax benefits; 10 percent to use as a primary residence in the future; and 4 percent because they had extra money to spend, according to the report....
80 percent of second-home buyers consider it a good time to invest in real estate, compared with 59 percent of buyers of primary residences, and 44 percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years."
"...Foreign buyers are taking advantage of lopsided currency values against the U.S. dollar in some market areas and are propping up second-home sales while many U.S. buyers are taking a wait-and-see approach. Markets with luxury properties can be more immune to the slowdown in second-home sales, real estate professionals also report....
Second-home purchases represented an estimated 40 percent share of total home sales in 2005, compared with 36 percent in 2004 and 2006, and 33 percent in 2007....
Some of the foreign buyers are particularly eyeing foreclosure properties, and coupled with the power of their currencies against the U.S. dollar, "they are picking them up for pennies on the dollar," she said. Finding properties for half the price that they were originally listed at is not uncommon these days, she said.
While U.S. buyers of second homes may view the properties as an eventual retirement home, foreign buyers more typically are looking to rent out the properties for a profit. Foreign buyers are more likely to engage in cash transactions than U.S. buyers, she said.
Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent condos, 7 percent townhouses or row houses, and 5 percent were other types of homes. In 2006, single-family homes accounted for 67 percent of vacation-home sales, while condos were 21 percent, NAR reported in the survey results.
Sixty-one percent of investment homes purchased in 2007 were detached single-family homes; 20 percent were condos; 11 percent were townhouses or row houses; and 8 percent were other. Twenty-eight percent of vacation-home buyers paid cash for their property, and 35 percent of investment buyers paid cash for their properties....
When asked about the most important reasons for their purchase of an investment home, 51 percent said to provide rental income; 39 percent to diversify investments; 21 percent to use for vacations or as a family retreat; 16 percent for use by a family member, friend or relative; 11 percent for tax benefits; 10 percent to use as a primary residence in the future; and 4 percent because they had extra money to spend, according to the report....
80 percent of second-home buyers consider it a good time to invest in real estate, compared with 59 percent of buyers of primary residences, and 44 percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years."
Thursday, April 3, 2008
Real Estate's Fifth Best Year
From Eureka Times-Standard, by Richard Dorn
Article Launched: 03/27/2008 01:27:28 AM PDT
The fifth best year in the last 50 years ... not bad. I am referring to our real estate market. Although there has been a great deal of media attention lately about the real estate market, let's take a look at a few facts, presented in plain English, without the addition of sensationalized headlines.
The bottom line? We sold 5.67 million homes in the U.S. in 2007 compared to 6.48 million in 2006. Over the years we have seen a 50 percent increase in home values nationally compared with a 1.5 percent decrease in home values nationally over the past 18 months.
Homes sales actually peaked in the summer of 2005, and 2007 was the first time home prices have dropped since the 1930s. Many believe that the slight drop in home sales in 2007 was the balancing of our free market economy
Further research indicates that not all real estate markets in the U.S. are experiencing a slowdown. Salt Lake City, for example, is still rapidly appreciating, as are Salem, Seattle, San Antonio, Buffalo, Raleigh and many other cities.
When considering the current condition of the real estate market, it is important to consider the impact that all the recent press regarding home loans has had on the market.
Let's look at the real numbers: 35 percent of the homes in the United States are owned free and clear. Prime loans are still a great product for the investor and continue to be solid, with very few foreclosures.
Only 9 percent of the homes in this country have a subprime loan, less than one in 10. However, if you have a poorly created subprime loan, you are in a less than desirable position. I was just speaking with someone who, unfortunately, refinanced with a subprime loan and can no longer make the payments. After asking many questions, it was quite clear that the loan should never have been made in the first place.
What does 2008 have in store for us? A return to a rational and reasonable real estate market. There will be a great deal of pent up buyer demand.
The proof of this begins with the fact that the number of homes for sale is shrinking (remember the balancing of our free market economy). We have seen this in our local market in the last quarter, with the total number of homes for sale dropping approximately 15 percent. First-time home buyers will also re-enter the market, as they have been waiting in the wings for the market to equalize.
Furthermore, home loans will be revamped and restructured. In turn, buyers can feel more secure in purchasing a home without so much worry of foreclosure. One big benefit of the recent mortgage crisis is that the consumer is more aware of the pitfalls of some loans.
One of the largest groups of buyers actively purchasing and projected to continue to purchase in greater numbers is the international buyer. With the dollar continuing to fall against the euro dollar and the pound, it makes sense that international investors would be looking at our market.
The top markets that the international buyer is looking at are Florida, California and Texas. The top three countries which these buyers are from are Mexico, the United Kingdom and Canada.
The current market, and the market in the foreseeable future, offers an outstanding opportunity for home sellers who are moving up to a larger or more expensive home to potentially save tens of thousands of dollars. All in all, we are forecast to sell 5.69 million homes in the U.S. in 2008, and prices should stabilize.
As I mentioned earlier, this is the first year home prices have dropped since the 1930s. If past history is any indication of the future, right now is a great time to get back into the real estate market. Whether buying your first home, or expanding your real estate portfolio, 2008 will be a solid year for real estate and one of the best opportunity years in recent times.
Richard Dorn is a local Realtor and a member of the College of the Redwoods Board of Trustees. He resides in Eureka.
Article Launched: 03/27/2008 01:27:28 AM PDT
The fifth best year in the last 50 years ... not bad. I am referring to our real estate market. Although there has been a great deal of media attention lately about the real estate market, let's take a look at a few facts, presented in plain English, without the addition of sensationalized headlines.
The bottom line? We sold 5.67 million homes in the U.S. in 2007 compared to 6.48 million in 2006. Over the years we have seen a 50 percent increase in home values nationally compared with a 1.5 percent decrease in home values nationally over the past 18 months.
Homes sales actually peaked in the summer of 2005, and 2007 was the first time home prices have dropped since the 1930s. Many believe that the slight drop in home sales in 2007 was the balancing of our free market economy
Further research indicates that not all real estate markets in the U.S. are experiencing a slowdown. Salt Lake City, for example, is still rapidly appreciating, as are Salem, Seattle, San Antonio, Buffalo, Raleigh and many other cities.
When considering the current condition of the real estate market, it is important to consider the impact that all the recent press regarding home loans has had on the market.
Let's look at the real numbers: 35 percent of the homes in the United States are owned free and clear. Prime loans are still a great product for the investor and continue to be solid, with very few foreclosures.
Only 9 percent of the homes in this country have a subprime loan, less than one in 10. However, if you have a poorly created subprime loan, you are in a less than desirable position. I was just speaking with someone who, unfortunately, refinanced with a subprime loan and can no longer make the payments. After asking many questions, it was quite clear that the loan should never have been made in the first place.
What does 2008 have in store for us? A return to a rational and reasonable real estate market. There will be a great deal of pent up buyer demand.
The proof of this begins with the fact that the number of homes for sale is shrinking (remember the balancing of our free market economy). We have seen this in our local market in the last quarter, with the total number of homes for sale dropping approximately 15 percent. First-time home buyers will also re-enter the market, as they have been waiting in the wings for the market to equalize.
Furthermore, home loans will be revamped and restructured. In turn, buyers can feel more secure in purchasing a home without so much worry of foreclosure. One big benefit of the recent mortgage crisis is that the consumer is more aware of the pitfalls of some loans.
One of the largest groups of buyers actively purchasing and projected to continue to purchase in greater numbers is the international buyer. With the dollar continuing to fall against the euro dollar and the pound, it makes sense that international investors would be looking at our market.
The top markets that the international buyer is looking at are Florida, California and Texas. The top three countries which these buyers are from are Mexico, the United Kingdom and Canada.
The current market, and the market in the foreseeable future, offers an outstanding opportunity for home sellers who are moving up to a larger or more expensive home to potentially save tens of thousands of dollars. All in all, we are forecast to sell 5.69 million homes in the U.S. in 2008, and prices should stabilize.
As I mentioned earlier, this is the first year home prices have dropped since the 1930s. If past history is any indication of the future, right now is a great time to get back into the real estate market. Whether buying your first home, or expanding your real estate portfolio, 2008 will be a solid year for real estate and one of the best opportunity years in recent times.
Richard Dorn is a local Realtor and a member of the College of the Redwoods Board of Trustees. He resides in Eureka.
America's Riskiest Real Estate Markets
From Forbes.com, by Matt Woolsey, 03.31.08, 10:30 AM ET
To read the whole article, click here:
http://www.forbes.com/realestate/2008/03/31/homes-risky-property-forbeslife-cx_mw_0331realestate.html
"...Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise.
...Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
...The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. ..."
To read the whole article, click here:
http://www.forbes.com/realestate/2008/03/31/homes-risky-property-forbeslife-cx_mw_0331realestate.html
"...Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise.
...Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
...The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. ..."
Wednesday, April 2, 2008
Mortgage Applications Fall
From Realtor Magazine Online, Daily Real Estate News April 2, 2008
Mortgage applications declined last week as rates rose and the approval process tightened, but application rates were still higher than they were the same time last year.
The Mortgage Bankers Association weekly mortgage applications survey showed that application volume had declined 28.7 percent on an adjusted basis to 688.3 from 965.9 the previous week. On an unadjusted basis, the index decreased 28.1 percent from the previous week, but was up 4.8 percent compared with the same week a year ago.
The refinance index decreased 38.1 percent, while the purchase index decreased 11.8 percent. The refinance share of mortgage activity decreased to 53.4 percent.Mortgage rates rose:
- 30-year fixed-rate mortgages increased to 5.75 percent from 5.74 percent.
- 15-year fixed-rate mortgages increased to 5.27 percent from 5.23 percent.
- 1-year ARMs decreased to 7.0 percent from 7.02 percent.
Source: Mortgage Bankers Association (04/02/08)
Mortgage applications declined last week as rates rose and the approval process tightened, but application rates were still higher than they were the same time last year.
The Mortgage Bankers Association weekly mortgage applications survey showed that application volume had declined 28.7 percent on an adjusted basis to 688.3 from 965.9 the previous week. On an unadjusted basis, the index decreased 28.1 percent from the previous week, but was up 4.8 percent compared with the same week a year ago.
The refinance index decreased 38.1 percent, while the purchase index decreased 11.8 percent. The refinance share of mortgage activity decreased to 53.4 percent.Mortgage rates rose:
- 30-year fixed-rate mortgages increased to 5.75 percent from 5.74 percent.
- 15-year fixed-rate mortgages increased to 5.27 percent from 5.23 percent.
- 1-year ARMs decreased to 7.0 percent from 7.02 percent.
Source: Mortgage Bankers Association (04/02/08)
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