Average rate on 30-year mortgage slips to 3.58%

WASHINGTON (AP) – April 14, 2016 – Average long-term U.S. mortgage rates edged down this week to their lowest levels of the year, offering a continued incentive for purchasing during the spring home-buying season.The benchmark 30-year fixed-rate loan touched its lowest point in nearly three years, since May 2013. Mortgage buyer Freddie Mac said Thursday that the average slipped to 3.58 percent from 3.59 percent last week. The key rate stood at 3.67 percent a year ago.
The average rate on 15-year fixed-rate mortgages declined to 2.86 percent from 2.88 percent last week.

The continued strong demand for U.S. government bonds, spurred by indications that the Federal Reserve won’t raise the interest rates it controls any time soon, has kept prices of the bonds at high levels. The bonds’ yields, moving in the opposite direction from their prices and influencing mortgage rates, have remained at low levels.

The yield on the 10-year Treasury bond stood at 1.76 percent Wednesday, unchanged from a week earlier. The yield rose to 1.78 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan rose to 0.5 point from 0.4 point.

Rates on adjustable five-year mortgages averaged 2.84 percent this week, up from 2.82 percent last week. The fee fell to 0.4 point from 0.5 point.

AP Logo Copyright © 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

Buyers need a Realtor to compete in seller’s market  

WASHINGTON – April 14, 2016 – With demand exceeding supply in markets across the U.S., homebuyers may face an uphill battle to find the perfect home this spring.

Total housing inventory at the end of February was 1.88 million existing homes available for sale – 1.1 percent lower year-to-year and at 4.4 month supply at the current sales pace (4.5 months in Florida), which is below the six-month supply that most experts consider a balanced market between buyers and sellers.

“When there is more demand than inventory, homes sell quickly, prices rise and bidding wars can start,” says National Association of Realtors® (NAR) President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “A Realtor with an ABR (Accredited Buyer’s Representative) designation is a homebuyer’s upper hand; they understand local markets and can negotiate on behalf of their buyer-clients.”

Salomone says, “Buying a home is often one of the biggest decisions of a person’s life, and having a Realtor in their corner is the ultimate advantage. They are there to guide consumers through the complexities of this life-changing transaction.”

NAR’s 2015 Profile of Home Buyers and Sellers asked recent homebuyers what they look for when deciding on a real estate agent: 53 percent said someone who could help them find the right home to purchase, and 12 percent said someone who can help them negotiate the terms of sale. The report found that homebuyers look at a median of 10 houses before deciding on one to purchase, and the typical search lasts 10 weeks.

“Having a real estate expert with specific knowledge of the local market and purchase process can mean the difference between a homebuyer getting that 10th house and having to search for another,” says Salomone.

In 2016, the ABR designation celebrates its 20th anniversary, with over 28,000 ABR designees. Realtors with the designation have completed advanced training in representing the specific needs of buyers and have specialized training for finding buyers the right home in a seller’s market.
© 2016 Florida Realtors®  

Homeownership increasingly difficult in some areas

IRVINE, Calif. – March 24, 2016 – Home prices are rising faster than wages in most of the United States, making homeownership increasingly difficult for average Americans in some of the most populous areas of the country, according to a report released on Thursday.

The report found that home price growth exceeded wage growth in nearly two thirds of the nation’s housing markets so far this year, with urban centers like San Francisco and New York City among the least affordable.

Home prices in 9 percent of the U.S. housing market are now less affordable than their historic norms, the report by RealtyTrac found. Home buyers need to spend more of their incomes on housing, leaving less money for other purchases.

“While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,” said Daren Blomquist, senior vice president at RealtyTrac, which monitors housing market trends.

RealtyTrac parsed homes sales and income data in 456 U.S. counties with a combined population of 221 million.

The report comes after data showing house flipping, buying and selling a house to make a quick profit in a hot housing market, had risen to record levels in some markets, generating concerns of a price bubble.

While the latest report could fuel those concerns, prices are still far more affordable than during the peak of the housing bubble in 2006. In the first quarter of this year the average wage earner needed to spend a third of their income on monthly mortgage payments compared to more than half in 2006.

In addition, RealtyTrac’s affordability measure, which compares house prices to wages, was above historic norms in 99 percent of housing markets in 2006. After the housing bubble burst, that fell to a low of 2 percent in 2012 before rising to its current 9 percent.

Still, prices in highly sought after housing markets leave average wage earners far behind, RealtyTrac said.

For example, to buy a median priced home in various areas of New York City, Brooklyn and Manhattan especially, or in the San Francisco metro area, a buyer needs to spend between 120 percent and 95 percent of the average wage on mortgage payments.

Among populous areas where the growth in house prices outstripped wage growth were Los Angles, Phoenix, and San Diego.

Copyright © 2016 Yerepouni Daily News; reporting by Edward Krudy and editing by Daniel Bases and Tom Brown. Provided by SyndiGate Media Inc. (Syndigate.info). All rights reserved.

Average rate on 30-year mortgage falls to 3.71%

WASHINGTON (AP) – March 24, 2016 – Average long-term U.S. mortgage rates declined this week after three straight weeks of increases. The decline could be a spur to prospective buyers as the spring homebuying season gets started.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage slipped to 3.71 percent from 3.73 percent last week. The benchmark rate is above the 3.69 percent level it marked a year ago.

The average rate on 15-year fixed-rate mortgages eased to 2.96 percent from 2.99 percent last week.

After the Federal Reserve’s decision last week to keep a key interest rate unchanged in light of global economic pressures, prices of U.S. government bonds have risen sharply. That has pushed down the yields on the bonds, which mortgage rates follow.

The yield on the 10-year Treasury bond stood at 1.87 percent Wednesday, down from 1.91 percent a week earlier. The yield declined further to 1.85 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan also held steady, at 0.4 point.

Rates on adjustable five-year mortgages averaged 2.89 percent this week, down from 2.93 percent last week. The fee remained at 0.5 point.

Copyright © 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Buyers seeking a lower-end home? Good luck!

NEW YORK – March 16, 2016 – The number of homes for-sale below $100,000 plunged 8.6 percent in January compared to a year earlier. As more first-time homebuyers step into homeownership, lower-priced homes are increasingly difficult to find in many areas.

On the other hand, luxury home buyers are finding more to choose from: homes above $1 million increased 15 percent year-over-year, according to housing data from the National Association of Realtors®.

“The lower the price, the smaller the growth in the number of homes on the market,” The Wall Street Journal reports. “Lower-priced homes [are] selling quickly even as inventory of expensive ones piles up.”

High-end buyers, on the other hand, are more sensitive to stock-market changes and some may be delaying purchases recently – which may explain, at least in part, why inventory is rising in the higher brackets, analysts note.

“In certain price points, it’s really tough for buyers right now. There’s limited inventory and lots of demand,” says Alec Traub, a Los Angeles real estate professional.

In the Phoenix area, for example, real estate pro Cami Elliott says that a buyer she recently assisted had more than 45 potential homes to view in the $750,000 range. But buyers looking for a home close to $400,000, only had about three or four options.

Overall, the housing market nationwide has about a four-month supply of existing homes for sale, according to NAR. Most economists consider six months to be a more balanced, healthy housing market.

Source: “Housing Market Takes on Split Levels,” The Wall Street Journal (March 9, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688
Related Topics: Trends

Where are the nation’s second homes?

WASHINGTON – March 14, 2016 – The nation’s second-home stock rose to 7.5 million in 2014, estimates the National Association of Home Builders (NAHB) – up 0.6 million second homes from 2009, when NAHB Economics last produced its estimate of the market.

Second homes now account for 5.6 percent of the nation’s total housing stock, up from 5.4 percent.

The county with the most second homes was Maricopa County, Ariz., with 118,282, but the next four counties were Florida ones: Palm Beach County was second with 98,627 second homes, followed by Lee County with 93,152, Broward County with 92,907 and Miami-Dade County with 88,940.

In addition, Pinellas County, Fla., ranked seventh with 65,867 second homes and Collier County, Fla., placed ninth with 61,905.

Source: RISMedia (03/13/16) Zhao, Na

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

It’s not a housing bubble: 3 reasons

WASHINGTON – March 17, 2016 – Home prices are rising three to four times faster than wages, and credit conditions are loosening, say Lawrence Yun, chief economist for the National Association of Realtors®. Those conditions usually prompt housing analysts to start uttering the words “housing bubble,” but Yun discounts those warnings.

“Even though the credit conditions appear to be easing somewhat, the move is from overly stringent conditions to not-so-overly-stringent conditions,” Yun writes on Forbes.com. “It is a far-fetched view to imply the current mortgage approval process in any way resembles the loosey-goosey, easy subprime mortgage access conditions of a decade ago.”

Reason one: Mortgage credit scores today aren’t anywhere near where they were during the housing bubble. Today, approval scores average about 740 to 750 compared to 710 to 720 during the housing crisis, according to Fannie Mae data.

Reason two: The no-doc requirements for subprime mortgages of yesteryear are nearly gone today.

Yun also says that while home prices are rising above wages, low mortgage rates have been a silver lining.

“For someone making a 20 percent downpayment, the monthly mortgage payment at today’s mortgage rates would take up 15 percent of a person’s gross income,” Yun writes. “During the bubble years, it was reaching 25 percent of income.”

Reason three: Yun says experts can squash bubble fears by just looking at the housing supply. Inventories are at about four to five months today, which is similar to the bubble years.

However, sales aren’t moving at the same pace. Existing-home sales and new-home sales combined were at 8.4 million back then. In 2015, combined home sales were 5.76 million – about one-third lower.

A limited supply of for-sale homes is mostly behind the latest home-price increases, Yun says.

“We are not in a housing market bubble in terms of an inevitable impending home-price crash,” Yun says. “Rather, we are facing an above-normal home-price growth trend, which admittedly is unhealthy on several levels because of the simple economic law of insufficient supply. We need more homebuilding.”

Source: “Are we Entering a New Housing Bubble?” Forbes.com (March 14, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Hispanic ownership rate up for first time in 6 years

WASHINGTON – March 18, 2016 – According to a report released by the Hispanic Wealth Project and the National Association of Hispanic Real Estate Professionals (NAHREP), the Hispanic homeownership rate rose in 2015 for the first time since 2009.

According to the State of Hispanic Homeownership Report, the Hispanic homeownership rate averaged 45.6 percent last year, up 0.2 percent from 2014. However, a comparison of year-to-year December numbers found that the rate surged from 44.5 percent in 2014 to 46.7 percent in 2015 – the biggest one-year gain in over a decade.

“Policymakers and the housing industry need to recognize that the face of homeownership in America has changed, and it is in everyone’s interest to ensure that these new consumers have access to relevant lending products, affordable housing stock, and culturally competent service providers in the coming years,” says NAHREP President Joseph Nery.

Meanwhile, “The Latino community is massive, it’s ready to own, and it’s now,” says Mortgage Bankers Association President and CEO David Stevens notes. “The significance of Hispanics to housing and the economy will only grow, creating opportunity for all who focus on this vibrant, dynamic and impactful part of the U.S. economy.”

Source: RealtorMag (03/16/2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Buyers seeking a lower-end home? Good luck

NEW YORK – March 16, 2016 – The number of homes for-sale below $100,000 plunged 8.6 percent in January compared to a year earlier. As more first-time homebuyers step into homeownership, lower-priced homes are increasingly difficult to find in many areas.

On the other hand, luxury home buyers are finding more to choose from: homes above $1 million increased 15 percent year-over-year, according to housing data from the National Association of Realtors®.

“The lower the price, the smaller the growth in the number of homes on the market,” The Wall Street Journal reports. “Lower-priced homes [are] selling quickly even as inventory of expensive ones piles up.”

High-end buyers, on the other hand, are more sensitive to stock-market changes and some may be delaying purchases recently – which may explain, at least in part, why inventory is rising in the higher brackets, analysts note.

“In certain price points, it’s really tough for buyers right now. There’s limited inventory and lots of demand,” says Alec Traub, a Los Angeles real estate professional.

In the Phoenix area, for example, real estate pro Cami Elliott says that a buyer she recently assisted had more than 45 potential homes to view in the $750,000 range. But buyers looking for a home close to $400,000, only had about three or four options.

Overall, the housing market nationwide has about a four-month supply of existing homes for sale, according to NAR. Most economists consider six months to be a more balanced, healthy housing market.

Source: “Housing Market Takes on Split Levels,” The Wall Street Journal (March 9, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Do buyers like the new mortgage disclosure rules?

SAN DIEGO – March 16, 2016 – A survey of people who bought two homes – one before new truth-in-lending disclosure rules went into effect in October 2015 and one after – found that the lending process is easier to understand, but it’s tougher to complete.

ClosingCorp conducted the survey of repeat buyers to find out how the new TILA-RESPA Integrated Disclosure (TRID) rule impacts the customer experience in getting and closing a residential mortgage.

Major findings

64 percent of respondents said it was easier getting a mortgage under the old pre-TRID rules
70 percent, however, said that the actual closing day was faster post-TRID; 19 percent said it was about the same; 11 percent said it was slower
In terms of the time it took to get and close a mortgage, 57 percent said it took more time post-TRID
63 percent said that the new “Know Before You Owe” forms for loan estimates and closing disclosures were easier to understand.
68 percent said the new forms did a better job preparing them for the closing costs; only 6 percent disagreed
65 percent said costs and fees were “explained better” post-TRID
51 percent, however, said there were more “unexpected costs, fees and surprises” post-TRID
Respondents highlighted one consumer benefit with the new TRID disclosures: The ability to shop for service providers, such as title companies, inspectors, pest services, etc.; 78 percent said they were informed about this option, and 74 percent took advantage of it
55 percent of buyers said they saved money post-TRID due to the ability to shop around for services
Of the respondents, more women (61 percent) said they weren’t told they could shop around for services than men (39 percent)
“There’s been a lot of speculation about TRID’s impact and its value to consumers,” says Brian Benson, chief executive officer of ClosingCorp. “Our new study of consumers who have bought homes and gotten mortgages both the new and the old way suggests that TRID is making it easier for consumers to understand the costs and fees that they’ll face at closing – but at the same time, the new rules are adding time and anxiety to the closing process.”

According to Benson, “The findings suggest that our industry has more work to do to get comfortable with the TRID forms and processes, and to educate consumers and their advisors.”

© 2016 Florida Realtors®