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.

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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®  

Monthly REO filings rise again

NEW YORK – March 9, 2016 – Even though serious mortgage delinquency and the foreclosure rate remained low, completed foreclosures continued to rise in January.

Borrowers who were 90 days or more past due made up 3.2 percent of all U.S. residential loan borrowers as of January. The last time the rate of serious mortgage delinquency was as low as it was in January was back in November 2007.

Those details and more were delivered Tuesday by CoreLogic Inc. in its National Foreclosure Report January 2016.

Serious delinquency was previously reported at 3.2 percent as of Dec. 31, 2015, and 4.0 percent as of Jan. 31, 2015.

Ninety-day delinquencies finished January 2016 at 7.5 percent in New Jersey, the worst rate in the nation. New York followed with a 6.2 percent serious delinquency rate, then 5.2 percent in Florida, 4.9 percent in Mississippi and 4.7 percent in Maine.

The lowest 90-day rate was in North Dakota: 1.0 percent.

There were preliminarily around 456,000 U.S. home loans that were in some stage of foreclosure as of Jan. 31, 2016, down from an upwardly revised 463,000 at the end of last year.

Foreclosures in process have tumbled since Jan. 31, 2015, when there were an upwardly revised 583,000. The foreclosure count has retreated on a year-over-year basis for 51 consecutive months.

The latest count left the foreclosure rate at a preliminary 1.2 percent as of Jan. 31, 2016 – “back to November 2007 levels,” CoreLogic said.

The foreclosure rate was previously reported at 1.1 percent a month earlier – apparently revised up since the original report – and was an upwardly revised 1.5 percent as of a year earlier.

New Jersey had the highest foreclosure rate as of the most-recent date: 4.3 percent. No. 2 New York’s rate was 3.5 percent, then Hawaii’s 2.4 percent, Florida’s 2.3 percent and the District of Columbia’s 2.3 percent.

The lowest foreclosure rate was in Alaska: 0.3 percent.

The preliminary number of U.S. homes repossessed was 38,000 – more than the upwardly revised 33,000 completed foreclosures in December 2015 and the second month in a row of deterioration.

In January 2015, mortgage servicers completed an upwardly revised 46,000 foreclosures.

Real-estate-owned filings are slowly returning to pre-crisis levels, when the monthly average was 21,000.

Copyright © 2016 Mortgage Daily. Distributed by Tribune Content Agency, LLC.

Foreign buyers pulling back…..

MIAMI – March 9, 2016 – Rising home prices have undermined foreign buyers’ demand for U.S. residential real estate, according to the National Association of Realtors® (NAR).

Many foreign buyers have been pulling back because they’ve been priced out of many of the cities they favor, including New York and San Francisco. A strong U.S. dollar has also played a role.
In January, the median price of existing U.S. homes had increased 67 percent for a buyer from Brazil once the monetary exchange rate is factored into the equation compared to January 2015. For a buyer from Canada, the median price increased 27 percent year-to-year, and 14 percent for a Chinese buyer.
Foreign buyers remain a small chunk of America’s housing market. However, pullback could have a disproportionate effect on demand for high-end condominiums in such markets as Miami and Manhattan.
On the other hand, falling foreign demand could help make residences more affordable for U.S. buyers. “Given that the U.S. currently has a housing shortage, any demand pullback helps,” says Lawrence Yun, NAR’s chief economist.
Source: Wall Street Journal (03/08/16) Kusisto, Laura
© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Does homebuyer education really help?

WASHINGTON – March 8, 2016 – Mortgage giants like Fannie Mae and Freddie Mac believe that educating homebuyers about the homeownership process will help prevent lending mistakes– but new studies question the effectiveness of homebuyer education efforts.
“There is widespread agreement in the industry that homebuyer counseling can help prevent some of the mistakes made during the housing boom,” Freddie Mac officials state in their publication Insight and Outlook the month. “However, early studies of the impact of counseling produced sometimes conflicting or inconclusive results and raised questions about the effectiveness of borrower education and counseling.”
A study of 40,000 participants in Freddie Mac’s Affordable Gold Loans Program, for example, found that borrowers who underwent classroom and home study counseling had lower rates of serious delinquency by 26 percent and 21 percent, respectively. Individual counseling to borrowers was found to reduce serious delinquency by 34 percent.
But critics question whether the reductions are linked to the education.
“Perhaps the borrowers who received counseling also were more high-educated than the borrowers in the other group,” Freddie Mac’s article notes. “Maybe they had a greater disposition or ability to apply the information provided by the education course. Maybe they had higher credit scores than the other borrowers.”
A 2014 study by the Federal Reserve Bank of Philadelphia evaluated first-time homebuyers who received prior counseling to purchase a home over a five-year period. The counseling included one-on-one instruction on budgeting and the home buying process, as well as a two-hour pre-purchase workshop that included information about applying for a mortgage, shopping for a home and closing. The buyers raised their credit scores an average of 16.2 points after the training, the study found.
Source: “Does Homeownership Counseling Make a Difference?” Mortgage News Daily (March 2, 2016)
© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688  

Study: Renters moving from cities to suburbs

NEW YORK (AP) – March 8, 2016 – In the American imagination, suburbs are places to buy a house and put down roots. But a growing percentage of suburbanites rent, according to a new study.
About 29 percent of suburbanites living outside the nation’s 11 most populous cities were renters in 2014, up from 23 percent in 2006, according to a report being released by New York University’s Furman Center real estate think tank and the bank Capital One.
The finances of homeownership since the mortgage meltdown might be a lead reason for the change, but the cost of renting also is rising in most of the biggest metropolitan areas, the study found.
Adding to data showing a national rise in renters in the past decade, the report zooms in on Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco, Washington and their suburbs. For a national benchmark, the researchers also looked at all metropolitan areas encompassing a city of at least 50,000 people.
“It’s the extensiveness of the affordability problem that is notable,” Laura Bailey, Capital One’s managing vice president of community development, told The Associated Press before the report’s release.
Still, the study shows some of the nation’s biggest rental markets have become more, not less, affordable to their typical tenants. Some findings:
At home – with renting – in the suburbs
Renting is still more common in big cities than their suburbs. In Miami and New York, about two-thirds of residents rent. But the gap is narrowing.
In the Atlanta area, the increase in the suburban rental population between 2006 and 2014 was twice the size of the entire tenant population in the city itself. Eighty percent of the growth in Dallas-area renters happened outside the city limits. Nearly half of residents outside the city of Los Angeles are tenants.
Nationwide, 37 percent of all households nationwide now rent, the highest level since the mid-1960s, Harvard University’s Joint Center for Housing Studies noted in December.
Making the rent
Typical tenants could afford fewer than half the rental homes available in metro areas nationwide in 2014, under officials’ traditional definition of affordability: spending under 30 percent of income on rent and utilities. (Government-ese for people who spend more: “rent-burdened.”)
But the picture differs from city to city, depending on the interplay of median rents and incomes. The percentage of rent-burdened tenants actually declined moderately between 2006 and 2014 in Boston and Houston, while staying flat in Chicago and San Francisco and rising elsewhere.
Where do renters have it the hardest?
That depends how you measure it. The Washington and San Francisco metro areas had 2014 median rents topping $1,500 a month but also the highest median tenant incomes: $57,000 for San Francisco and $58,200 for Washington. That made them relatively affordable: Half of San Francisco-area tenants and 49 percent of Washington-area ones were rent-burdened. (The national metro-area average was 53 percent.)
Contrast that with about two-thirds of tenants in the Miami area, where the median renter made $34,300 a year while paying $1,150 a month.
… and the easiest?
The Houston and Dallas areas boast the lowest big-metro median rents (around $950 in 2014). With median incomes around $38,000 a year, fewer than half of tenants are rent-burdened.
Why is this happening?
Experts attribute the renter surge partly to the foreclosures, financial struggles, stagnant incomes and tighter credit that followed the mortgage meltdown. Researchers also note the wave of young adults – often renters – in the large, so-called millennial generation, though the Harvard study in December noted a majority of U.S. renters now are 40 and older.
AP Logo Copyright 2016 The Associated Press, Jennifer Peltz. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

New rules go into effect for visa waiver visitors

WASHINGTON – Jan. 22, 2016 – Tighter U.S. travel rules went into effect on Thursday in a bid to keep out potential terrorists, requiring some travellers who normally do not require a visa to obtain the document.

The changes to the U.S. visa waiver program will require nationals of the 38 visa waiver countries to get a visa to travel to the U.S. if they have been to Iran, Iraq, Sudan or Syria in the last five years, or if they are dual-citizens of those countries and a visa waiver country.

An estimated 20 million people, or about 40 percent of all overseas visitors, use the program annually to enter the U.S. without a visa for business or pleasure for up to 90 days.

Concerns had risen that terrorists could take advantage of the program to travel to the U.S. without additional scrutiny.

The U.S. Congress had included the new measures in a spending bill passed last month, and the White House had also tightened the program’s security checks.

The new rules do not apply to diplomats or members of the military, and U.S. officials can offer waivers to some travellers who visited Iraq, Iran, Syria or Sudan because they work for aid groups, as journalists or have other legitimate business travel.

The State Department stressed that most travellers will be able to easily obtain a visa, and that the new rules are not a travel ban.

The 38 countries in the visa waiver program are Andorra, Australia, Austria, Belgium, Britain, Brunei, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Malta, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland and Taiwan.

Copyright © dpa Alliance News

Source: New rules go into effect for visa waiver visitors

Is rent-to-own a solution to the rental crisis?

NEW YORK – Jan. 17, 2016 – Rents are skyrocketing across the U.S., and an increasing number of renters devote more than half their paychecks to covering rental costs. It’s not just a family burden: Those escalating rent costs have been cited as a major hindrance preventing renters from saving enough for a home purchase downpayment.

But some housing analysts are pointing to rent-to-own agreements as a solution for families who are stuck paying rent but longing for homeownership.

A report from Moody’s Investors Service singles out a program called Home Partners of America that helps potential buyers with credit problems or not enough money for a downpayment. One of the unique aspects of the program – compared to other single-family rent-to-own programs – is that the buyers select a property they would like to purchase, and then Home Partners of America buys it, providing it meets the program’s qualifications. It then sets up an agreement to rent the property to the would-be buyer. The end goal, however, is that Home Partners of America will eventually sell the property to the renter later on.

The buyer-chosen properties are likely to be “higher quality and in more desirable locations [such as those with better school districts]” than properties that are purchased through foreclosure sales, according to Moody’s.

Under the rent-to-own agreement and during the lease term, the tenant would be able to purchase the home at a pre-set price. The lease term generally runs between three to five years. The longer they wait to buy, the higher the purchase price will rise – usually 3.5 percent to 5 percent per year during the term of the lease.

“Furthermore, the strategy could benefit property recovery values because renters with purchase options are incentivized to maintain their properties well,” Moody’s report notes.

Moody’s report shows that the average value of properties under the program is $247,483 in comparison to rental homes offered by Invitation Home sand American Homes 4 Rent that average $167,631 and $143,066.

Source: “Is Rent-to-Own the Future of Housing?” HousingWire (Jan. 14, 2016)

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

Florida tops list of most-desirable states

NEW YORK – Dec. 18, 2015 – For the first time since 2001, Florida – the nation’s 27th state – is back on top as Americans’ most desired state to live.When asked where they would most like to live (excluding their current state), Florida landed at the top of the list. Overall, sunshine and waterfront acreage were consistent themes among the most popular states, with California (2) and Hawaii (3) rounding out the top three. However, non-beach states Colorado (4) and New York (5) closed out the top five states.
This year’s top five were, for the most part, also top-five honorees the last time this question was asked in 2013, Harris reports. The sole exception is New York, which edged into the top-five after a sixth place showing. Texas, meanwhile, dropped out of the top five to No. 6.

The remaining 9 states on the “top 15” list include diverse geographies, though most do fall within a few general categories:

The coasts are well represented: Along with Florida, the Carolinas – North (7) and South (12) – and Georgia cover most of the southeastern United States beachfront. Meanwhile, Oregon (9) and Washington (14) make for full west coast coverage (when combined with California). Perhaps for some it’s not the coast but the warmth, which takes precedence, as landlocked-but-sunny states Arizona (8) and Tennessee (10) also make the list.

Many states have both admirers and detractors, according to Harris.

California may be 2nd on the list of states Americans would like to live in, but it also tops the list of states where Americans would least like to dwell. New York and Alaska may both be top 15 performers when Americans say where they would like to live, but they also round out the top three states where Americans would not want to live (2 and 3, respectively). Mississippi (4) and Texas (5) complete the top 5 for the dubious list, with Alabama (6), Florida (7), Illinois (8), Michigan (9) and the District of Columbia (10) completing the top 10.

Favorite and least favorite cities

Americans continue their love/hate relationship with New York City, which has topped The Harris Poll’s list of cities where Americans most want to live for well over a decade – but it also tops the list of cities they’d least like to live.

California and Florida are well represented among the top 10 most desired cities, with San Diego, Los Angeles and San Francisco nabbing the 2nd, 4th and 6th spots for the Golden State, while Miami and Orlando bring the 5th and 10th spots home to the Sunshine State.

Denver, CO (3) fills in the lone gap in the top five, while Honolulu, HI (7); Atlanta, GA (8) and Seattle, WA (9) fill out the rest of the top 10.

The top three cities Americans would least want to live in have remained the same since this question was first asked in 2010 with New York, followed by Detroit (2) and Los Angeles (3). Chicago repeats in 4th place, while Dallas, Texas (5) rounds out the top five. Miami (6); San Francisco (7); Houston (8); Washington, D.C. (9) and Las Vegas (10) complete this less desirable top 10 list.

The Harris Poll surveyed 2,232 U.S. adults online between Nov. 11 and 16, 2015.

How will higher interest rates affect housing?

WASHINGTON – Dec. 11, 2015 – The timer is ticking: The Federal Open Market Committee is less than a week away from a vote to raise the federal funds rate for the first time since June 2006, according to most analysts’ predictions. An uptick in the federal funds rate would then prompt interest rates to move higher.
Some housing analysts say just anticipation of a rate hike has already affected the housing market.

“The housing market’s capacity for existing-home sales is declining with the expectation of a Fed rate increase, pre-adjusting mortgage rates and a slowdown in house price appreciation,” says Mark Fleming, chief economist at First American Financial, in a new report on the fourth quarter Real Estate Sentiment Index. “Market capacity remains modestly in excess of actual sales due to leverage-assisted housing asset inflation, which is home price appreciation fueled by low mortgage rates. Rising mortgage interest rates and moderation in house price appreciation were the most important market fundamentals that reduced market capacity this month. Now that interest rates are pre-adjusting in response to signals from the Fed for a highly expected increase in December, demand is also declining.”

A 25-basis point rise in the 30-year fixed-rate mortgage, for example (which was at 3.95 percent this week), would likely slow home appreciation by 1 percent more than expected without the rate increase, Fleming says. He also predicts that existing-home sales would then slow by about 2.5 percent on annualized and seasonally adjusted basis – a decline of less than 150,000 sales a year.

“The housing market isn’t doomed by a Fed rate increase, but demand would fall modestly,” Fleming maintains.

Just how big of an impact could it have to potential home shoppers’ wallets? Forbes.com cites an example based on a 30-year fixed-rate mortgage, 10 percent downpayment, $350,000 home and 4 percent interest rate. Under that example, it would cost home purchasers about $1,503.86 per month plus taxes, homeowner’s insurance and Private Mortgage Insurance. That same 30-year fixed-rate mortgage with a 4.5 percent interest rate would cost a homebuyer $1,596.06 per month – an extra $92.20 per month, or $33,191.54 over the 30-year life of a mortgage. If rates rise to 5 percent, the costs would jump to an extra $184.40 per month and $66,383 over the 30-year life of the loan.

Despite the uptick in rates, “expectations for future homeownership demand remain positive, despite changing market conditions,” Fleming notes.

According to the First American report, interest rates would need to reach 5.1 percent before significantly influencing the volume of residential transactions.

Source: “What Will the Looming Fed Rate Hike Do to Housing?” HousingWire (Dec. 9, 2015) and “How Much House Will a Rate Hike Cost You?” Forbes (Nov. 8, 2015)
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