What do today’s buyers want in a home?

NEW YORK – Aug. 5, 2015 – What building materials are trending in new-home construction? The latest Annual Builder Practices Survey, conducted by Home Innovation, reveals what buyers can expect to see in the new-home market.

1. Garages: The garage door is getting more enhancements, including windows, insulated doors, and doors made of composite or plastic materials. In 2014, 32 percent of all new single-family homes had bays for three or more cars – the most ever recorded in this study’s history.

2. Flooring: Carpeting continues to be the most popular flooring option for new construction, included in about 83 percent of all new-home bedroom installations. However, only about 40 percent of living rooms now have carpet. Hardwood flooring – both solid and engineered– is the second most popular type of flooring included in 27 percent of all new-home installations. Ceramic tile (which appears in 72 percent of all bathroom floor installation) follows in third place, making up 20 percent of all new-home floor installations.

3. Countertops: For kitchen countertops, granite continues to reign in two out of three homes (64 percent of new-home installations). Quartz/engineered stone is gaining popularity while laminate, solid surfacing and ceramic tile are losing appeal.

4. Appliances: Cooktops and wall oven combinations are gaining in popularity and make up about 24 percent of the market, compared to freestanding ovens (45 percent). Freezer-on-bottom refrigerators are gaining in popularity at 19 percent, while side-by-side has fallen to 28 percent of the share.

5. Kitchen sinks: More buyers are paying attention to their kitchen sink, with the single basin kitchen sink making a comeback, growing from 5 percent to 20 percent of all new single-family homes in the past decade. Also growing in popularity are granite/stone kitchen sinks (at 8 percent). One-piece cultured marble lavatories are continuing to decline in demand.

Source: “Material World: The Hottest Trends From the 2015 Builder Practices Survey,” BUILDER Online (July 29, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

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4 Florida cities tops for seriously underwater homes

IRVINE, Calif. — July 30, 2015 — RealtyTrac released its second quarter (Q2) 2015 U.S. Home Equity & Underwater Report, which listed four Florida cities at the top of the list for homes seriously underwater – properties where the homeowners owe at least 25 percent more than the home’s current market worth.

Areas (population greater than 500,000) with the highest percentage of seriously underwater properties included Florida markets such as Lakeland (28.5 percent), Cleveland, Ohio (28.2 percent), Las Vegas (27.9 percent), Akron, Ohio (27.3 percent), Orlando (26.1 percent), Tampa (24.8 percent), Chicago (24.8 percent), Palm Bay(24.4 percent) and Toledo, Ohio (24.3 percent).

In addition, RealtyTrac looked at underwater homes that are also in the foreclosure process.

In the same Florida cities, over half of the homeowners going through foreclosure were seriously underwater:Lakeland (54.8 percent of foreclosures seriously underwater), Tampa (51.7 percent), Palm Bay (51.5 percent) and Orlando (51.2 percent).

Statewide, 23.6 percent Florida of homeowners with a mortgage were seriously underwater in the Q2 2015 – a drop from 23.8 percent in the first quarter and 30.3 percent year-to-year.

On the flipside, RealtyTrac found that 17.6 percent of Florida owners with a mortgage were “equity rich” with at least 50 percent equity. That’s a slight drop for the first quarter’s 17.8 percent but an increase from 15.9 percent year-to-year.

Looking only at homes in foreclosure, 62.8 percent in Florida were seriously underwater, while 18.6 percent, even though going through foreclosure, were equity rich.

“Strong South Florida price increases over the past few years have moved many homeowners from negative to positive equity. We would encourage the remaining distressed homeowners to ask for a Broker Price Opinion (BPO) regarding the value of their property – many may be surprised at their improving value,” says Mike Pappas, CEO and president of Keyes Company in South Florida.

National numbers

Nationwide, 13.3 percent of all properties with a mortgage were seriously underwater in Q2, an increase from 13.2 percent of all homes in the first quarter. However, they dropped from 17.2 percent year-to-year. At the peak of the foreclosure crisis in 2012, the percentage was 28.6 percent.

“Slowing home price appreciation in 2015 has resulted in the share of seriously underwater properties plateauing at about 13 percent of all properties with a mortgage,” says Daren Blomquist, vice president at RealtyTrac.

“However, the share of homeowners with the double-whammy of seriously underwater properties also in foreclosure is continuing to decrease and is now at the lowest level we’ve seen since we began tracking that metric in the first quarter of 2012,” he adds.

© 2015 Florida Realtors®

Bill seeks to stop second-lien holders from killing short sales

WASHINGTON – July 27, 2012 – Second-lien holders are being blamed for derailing many short sale transactions. But a bill working its way through Congress – the Fast Help for Homeowners Act – would, if approved, require second mortgage lenders on federal mortgages to report their final decision on a short sale agreement within 45 days. If the second-lien holder doesn’t do that, the deal would automatically be approved on the 46th day. U.S. Rep. Jerry McNerney, D-Calif., proposed the legislation.

Greg Galli, a broker with Suburban Realty in Palmdale, Calif., supports the bill after seeing some of his recent short sale transactions fall through because second-lien holders refused to negotiate. He recalled one incident in which the second-lien holder refused a $6,000 payment from the first-lien holder in order for a short sale to move forward. Instead, the second-lien holder demanded $1,400 more, amounting to a total of $7,400, and all from the homeowner.

“(Second lien-holders) can really delay the deal if they don’t want to respond, or if they just don’t want to do anything,” Galli told HousingWire. “It doesn’t make sense. If they let it go to foreclosure, the second lien is going to lose out completely. It would make sense for us to work through the process, and then they can negotiate.”

Some in the housing industry aren’t in favor of legislation that might push a second-lien holder to make a faster decision on a short sale. Critics argue that first-lien holders need to be more willing to work with second-lien holders on an agreement that favors both parties.

“I am always hesitant to force second-lien holders or any lender to do something that they didn’t contractually agree to upfront, because ultimately that will add to the cost of future credit and reduce its availability,” Mark Zandi, Moody’s Analytic’s chief economist said.

Source: “Evasive Second-Lien Holders Thwarting Short Sales,” HousingWire (July 25, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Buyers frustrated by lack of inventory

SEATTLE – Aug. 31, 2012 – Redfin released a quarterly survey of homebuyer attitudes, with opinions less than two weeks old. According to the company, data was collected from active home shoppers – people who expressed an interest in buying within the next twelve months. The survey included 829 home shoppers in 19 cities.

Key findings

• 46 percent believe now is a good time to buy, down two quarters in a row; and 32 percent believe now is a good time to sell, up two quarters in a row

• 61 percent believe prices will increase, up two quarters in a row

• 62 percent “very interested” in conventional sales, up from 57 percent in the second quarter and 48 percent in the first quarter

• 31 percent would step back from competing against other buyers for a home, compared to 28 percent in the second quarter

• 27 percent of respondents cited general economic weakness as a concern about buying this year, up from 24 percent in the second quarter and 20 percent in the first quarter

“Even as prices have begun to rise, the overwhelming issue for most of today’s buyers is the selection of homes for sale, not what they cost,” says Redfin CEO Glenn Kelman. “The value-driven investors scooping up foreclosures for pennies on the dollar have largely been replaced by first-timers seeking to buy a pretty house now when mortgage rates are below 4 percent. With so few houses for sale, many will come up empty. The only homeowners willing to sell now mostly are the ones who have to – for a job in a new city or for a new baby.”

© 2012 Florida Realtors®

REO inventory posts big drop from a year ago

WASHINGTON – Aug. 31, 2012 – The amount of foreclosed homes on banks’ books has dropped by 18 percent in the last year, the Federal Deposit Insurance Corp. reports. The FDIC also says that levels have been dropping since the third quarter of 2010.

As of June 30, banks held $41.7 billion in REO properties – that’s down from $51.2 billion one year prior.

But more foreclosures are likely on the way, a recent report by CoreLogic warns. About 1.3 million homes are in the foreclosure process. While that’s down from 1.5 million reported a year ago, the numbers are still elevated.

Still, while “levels of troubled assets and troubled institutions remain high … they are continuing to improve,” says Martin Gruenberg, FDIC acting chairman.

The improvements are leading more banks to post greater profits and even start to lend more. Lending rose 15 percent compared to last year, according to the FDIC report.

Source: “Bank REO Down 18% From One Year Ago,” HousingWire (Aug. 28, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Average on 30-year mortgage falls to 3.59%

WASHINGTON – Aug. 31, 2012 – Average U.S. rates on fixed mortgages fell this week and are just slightly above record lows reached earlier this year. The low rates have contributed to a modest housing recovery.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan declined to 3.59 percent, down from 3.66 percent last week. Five weeks ago, the rate fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, slipped to 2.86 percent. That’s down from 2.89 percent last week and closer to the record low of 2.80 percent five weeks ago.

Cheap mortgages are a key reason the housing market is finally started to rebound five years after the bubble burst.

Sales of newly built and previously occupied homes are well above last year’s levels. Prices have increased consistently, largely because the supply of homes has shrunk while sales have risen. And builder confidence is at its highest level in five years.

Still, the housing market has a long way back to full health. Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million. That’s well below the 5.5 million annual sales considered healthy. Many people are still having difficulty qualifying for home loans or can’t afford larger downpayments required by banks.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 30-year loans was 0.6 point, down from 0.7 point last week. The fee for 15-year loans also slipped to 0.6 point from 0.7.

The average rate on one-year adjustable rate mortgages fell to 2.63 percent from 2.66 percent last week. The fee for one-year adjustable rate loans was unchanged at 0.4 point.

The average rate on five-year adjustable rate mortgages declined to 2.78 percent from 2.80 percent. The fee held steady at 0.6 point.
Copyright © 2012 The Associated Press, Marcy Gordon, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More homeowners refinancing through HARP

WASHINGTON – Aug. 8, 2012 – According to the Federal Housing Finance Agency’s (FHFA) June Refinance Report, one-third of all home refinances through Fannie Mae and Freddie Mac were made through the Home Affordable Refinance Program (HARP) – the highest percentage of homeowners helped by HARP since the program began in April 2009.

FHFA attributed the increase in HARP volume to record-low mortgage rates and program enhancements announced last fall. After failing to meet forecasts, the federal government tinkered with HARP. Last fall, it removed the loan-to-value (LTV) ceiling for borrowers who refinance into fixed-rate loans and, for some borrowers, it removed or lowered fees.

Also in the report:

• Fannie Mae and Freddie Mac refinanced more loans through HARP in the first half of this year, 422,969, than the 400,024 it refinanced in all of 2011.

• HARP refinances for loans with LTV greater than 125 percent were also up in June – more than 40 percent of HARP loans.

• More than two-thirds of borrowers in states hard-hit by the housing downturn – Florida, Nevada and Arizona – refinanced through HARP in June, compared with 33 percent nationwide.

FHFA says that since 2009 Fannie Mae and Freddie Mac refinanced more than 2.2 million loans through their existing programs and more than 1.4 million loans through HARP.

FHFA has the full report posted online.

© 2012 Florida Realtors®

CitiMortgage homeowner rental program includes Florida

South Florida Business Journal
Date: Thursday, August 9, 2012, 7:51am EDT

A CitiMortgage pilot program in Florida and five other states will aim to keep struggling homeowners in their houses.
The Sun Sentinel reports that the program will transfer mortgages to the bank in deed-for-lease arrangements, turning the homeowner into a renter. It will begin with about 500 candidates selected by Carrington Capital Management, which will also manage the pilot program.

Vacation-home buyers pounce on short sales, foreclosures

ORLANDO, Fla. – July 10, 2012 – The vacation-home market, hit particularly hard by walk-away owners during the real-estate downturn, appears to be making a comeback, with sales growth in recent years exceeding that of primary residences.

Central Florida’s second-home market has been thriving, thanks to a seemingly irresistible combination of record-low prices and record-high numbers of tourists. The Orlando metropolitan area was recently listed, for instance, as one of the country’s “10 hot spots for foreign buyers” by Inman News, an online real-estate news service.

Second-home sales nationally through last year have grown 15 percent since 2008, while sales of regular homes have fallen 13 percent during that time, according to a recent report by the National Association of Realtors. Local agents say that national trend also holds true for the Orlando area, largely because of the area’s cheap real-estate prices and an increasing supply of prospective buyers in the form of vacationers and other visitors, particularly Canadians and South Americans.

“Six months ago through the Easter rush, buyers wanted something for under $150,000, and you could find 40 to 60 listings,” said Joe Rogers, property manager for Florida Scandinavian Vacation Homes and Management in Kissimmee. “Now it’s more like five to 10 listings. The market is evaporating, and the inventory is being sucked up in a vacuum.”

Even though such vacation-home sales aren’t tracked locally, Rogers estimated that prices for those properties have increased as much as 20 percent in the past six months. Financing for second-home mortgages, nonexistent just a few years ago, is now available with downpayments of 30 percent, he noted.

Despite the reported price increases of recent months, area properties are still so deeply discounted from the 2007-08 housing bubble that buyers can still find deals.

In Osceola County’s Reunion Resort community, which allows short-term rentals, vacation-home broker Scott James recently secured a $535,000 contract on a home that had been valued at $1.5 million at the market’s peak. Many of these sales, he said, are in the Davenport area of Polk and Osceola.

“A lot more investors are circling those areas and buying up a lot of the properties, especially the foreclosures,” said James, owner of Luxury Lifestyle Vacation Homes, which is based in Davenport.

The area’s resort-home market was troubled during the bubble by unscrupulous property-management companies that pocketed rental income without maintaining the properties. But many of those overseas operations went out of business during the real-estate downturn, according to James.

On a national level, the vacation-rental website HomeAway Inc. recently estimated that 39 percent of vacation-home buyers in the U.S. have purchased distressed properties. Resort-home owners had abandoned their properties at higher rates than regular homeowners had in recent years, pushing a larger share of vacation houses into foreclosure and further driving down second-home prices.

Prices in the second-home market plunged by more than a third in the past five years as prices for primary residences fell by a quarter, according to the National Association of Realtors’ latest Investment and Vacation Home Buyers Survey.

“A lot of people who walked away from properties walked away from vacation properties because it doesn’t really affect their property overseas,” said Rogers, the Kissimmee property manager. In other words, foreign buyers were able to maintain their credit ratings back home even after their U.S. investment properties slumped in value and they stopped paying their mortgages, triggering foreclosures and repossessions.

Looking ahead, the second-home market is likely to heat up further, said Lawrence Yun, chief economist for the national Realtors group.

In the association’s latest survey, eight of every 10 people who responded indicated that they considered this to be a particularly good time to buy a vacation home – and one-third of the second-home owners said they were likely to consider purchasing yet another vacation home within two years.

“Given that the number of people who are in their 40s is somewhat larger than the 50-somethings, the long-term demographic demand for purchasing vacation homes is favorable,” Yun said, “because these younger households are likely to enter the market as their desire for these kinds of properties grows and individual circumstances allow.”

© 2012 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin, The Orlando Sentinel, Fla. Distributed by MCT Information Services.

30-year mortgage rate drops to record 3.56%

WASHINGTON – July 13, 2012 – Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.56 percent. That’s down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week’s previous record of 2.89 percent.

The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects and spending at a faster pace.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger downpayments required by banks.

And the sluggish job market could deter some from making a purchase this year.

U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2 percent, the government reported last week.

Slower job creation has caused consumers to pull back on spending.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans also was 0.7 point, unchanged from the previous week.

The average rate on one-year adjustable rate mortgages rose to 2.69 percent from 2.68 percent last week. The fee for one-year adjustable rate loans slipped to 0.4 point, down from 0.5 point.

The average rate on five-year adjustable rate mortgages dropped to 2.74 percent from 2.79 percent last week. The fee was unchanged at 0.6 point.
Copyright © 2012 The Associated Press, Marcy Gordon, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.