Your Property Path

Urban Renters: Who Are They

Howard Bell (www.yourpropertypath.com) — Wed, 22 Jun 2011 21:42:28 -0700

Gen Y

They passed boomers to become America’s largest generation, Gen-Yers, now 15 to 32 years

old will dominate and define residential demand for real estate as did the Boomers before them.The Urban Land Institute commissioned an online survey to discover their preferences

because this next waves needs is mandatory knowledge for owners and buyers of real property. About 4.3 million Gen Yers turned 22 in 2010 and will exceed 4.5 million in 2012 and 2013. For at least ten well over 4 million Americans will turn 22 each year, producing solid apartment demand. Whether they will hold a bias towards rentingover ownership remains to be seen. The survey indicates ownership is still desirable for Gen Y.

Renters Demographics

Why Rent

Flexibility

Renting can provide more flexibility e and lower costs than owning. So certain households are more likely to rent than own, including young singles starting out, families relocating to a new metropolitan area, recent immigrants to the United States, and low-income households

Transition

such as a change in job or marital status, short term commitments that allow people to move on in times of uncertainty.

Relocating

Rental housing can be a good option if you expect to move again within a few years. Buying and expecting to sell, may find you a reluctant landlord.

Immigrants

Consider the strength of immigration. The arrival of young foreign-born households has added to the renter pool and although its slowing now due to low job growth, It will continue to add demand and help keep the rent rates trending up.

Retirees Moving Back

As the baby boom population ages and their children leave home, some will opt for moving out of their homes and into apartments. Not wanting the cost and obligations of home ownership they are choosing the mobility that comes with renting. Expect a lot of retirees coming back into citys for easy access to theater, communtiies of like interests and some excitement not readily available in the suburbs.

Rental Property Is Profitable

From the Freddie Mac site: The multifamily segment of the GSEs has much lower default rates than the singlefamily sector. Fannie and Freddie’s multifamily delinquency rates both remain less than 1 percent. While they have risen in the recession, Freddie Mac’s average delinquency rate (60 days or more past due) is 0.44 percent as of the end of October. And Fannie Mae’s is 0.65 percent as of Sept 30.

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Mortgage Bankers Weekly Survey: Mortgage Applications Increase

Howard Bell (www.yourpropertypath.com) — Thu, 16 Jun 2011 19:51:06 -0700

Mortgage Bankers Association for the week of 6/15/2010

Fixed rate mortgages are changed little this week, the 30-year fixed-rate mortgage inching up to 4.5% from last weekâ€™s 4.49% average rate.
The MBAA reports their Market Composite Index:Loan application volume increased 13% over last weeks number.

Their Refinance Index: increased 16.5 percent from the previous week and made of the bulk of mortgage activity this week.However, Mortgage applications decreased 4% from one week earlier, according to data from the Mortgage Bankers Associations Weekly Mortgage The MBAA reports their Purchase Index increased 4.5 percent from one week earlier, a slight uptick in purchase volume.

Key to better numbers is growth, especially job growth. The MBAA forecasts a slower, but positive growth situation. 4th quarter 2010 GDP growth was 3.1%. After a dip to 1.8% this quarter, they see growth through 2012 largely around 2.8%. Not likely a strong scenario for enough job growth to help the housing markets push forward.

Freddie Mac Weekly Update: Mortgage Rates Mixed; 30-Year Fixed Ticks Up to 4.50 Percent

Howard Bell (www.yourpropertypath.com) — Thu, 16 Jun 2011 19:47:22 -0700

30-year fixed-rate mortgage:
averaged 4.50 percent with an average 0.7 point for the week ending June 16, 2011, up from last week when it averaged 4.49 percent. Last year at this time, the 30-year FRM averaged 4.75 percent.

The 15-year fixed-rate mortgage: t his week averaged 3.67 percent with an average 0.7 point, down from last week when it averaged 3.68 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.27 percent this week, with an average 0.6 point, down from last week when it averaged 3.28 percent. A year ago, the 5-year ARM averaged 3.89 percent.

One-year Treasury-indexed ARMs: averaged 2.97 percent this week with an average 0.5 point, up from last week when it averaged 2.95 percent. At this time last year, the 1-year ARM averaged 3.82 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Mortgage rates were little changed this week as financial market participants shrugged off the recent inflation reports. The core producer price index rose just 0.2 percent in May while the core consumer price index increased 0.3 percent, both near the market consensus forecast.

Much of the run down in home mortgage debt so far has been through second mortgages, according to the Federal Reserve Board. Household mortgage balances fell by more than $930 billion between the peak set at the end of March 2008 and March of this year, of which, second mortgages accounted for $820 billion of the decline

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Freddie Mac Weekly Update: Fixed Mortgage Rates Continue Downward Slide

Howard Bell (www.yourpropertypath.com) — Thu, 02 Jun 2011 21:32:48 -0700

30-year fixed-rate mortgage:
averaged 4.55 percent with an average 0.6 point for the week ending June 2, 2011, down  from last week when it averaged 4.60 percent. Last year at this time, the 30-year FRM averaged 4.79 percent.

The 15-year fixed-rate mortgage: this week averaged 3.74 percent with an average 0.7 point, down from last week when it averaged 3.78 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.41 percent this week, with an average 0.6 point, the same from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.94 percent .

One-year Treasury-indexed ARMs: averaged 3.13 percent this week with an average 0.6 point, up from last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 3.95 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing. First quarter growth in consumer spending was revised downward by half of a percentage point to 2.2 percent, according to theBureau of Economic Activity, consumer confidence in May was weaker than the market consensus forecast, and the manufacturing industry slowed for the third straight month in May

The housing market is showing strain as well. The S&P/Case-Shiller National Home Price Index fell 5.1 percent between the first quarters of 2010 and 2011, representing the largest annual decline since the third quarter of 2009. In addition, the index of pending existing home sales dropped 11.6 percent from March to April, led by the Midwest and South regions where the tornados and flooding occurred

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Mortgage Bankers Weekly Survey: Mortgage Applications Decrease

Howard Bell (www.yourpropertypath.com) — Thu, 02 Jun 2011 21:30:19 -0700

Mortgage Bankers Association for the week of 6/1/2010

Fixed rate mortgages continue to decline this week, with the 30-year loan averaging 4.55% its lowest average this year. The MBAA reports their Market Composite Index: ( Loan application volume) Decreased 4%.

Their Refinance Index: Decreased 5.7% from the previous week on further declines in the interest rate.

However, this isnt helping sell homes. Mortgage applications decreased 4% from one week earlier, according to data from the Mortgage Bankers Associations Weekly Mortgage The MBAA reports their Purchase Index decreased 1.2% compared with the previous week

The recent Fed meeting indicates that lower rates will continue as the economic recovery is unremarkable. Thats Bernakes word for this...unremarkable

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Mortgage Bankers Weekly Survey: Mortgage Refinance Applications Increase

Howard Bell (www.yourpropertypath.com) — Thu, 19 May 2011 18:22:10 -0700

Mortgage Bankers Association for the week of 5/18/2010

Fixed rate mortgages continue to decline this week, with the 30-year loan averaging 4.61% its lowest average this year. The MBAA reports their Market Composite Index: (loan application volume) increased 7.8 percent.

Their Refinance Index: increased 13.2 percent from the previous week and is at its highest level since the week ending December 10, 2010. Rates continue to decline and people are taking advantage of low rates.

However, this isnt helping many sell homes. Mortgage applications increased 7.8 percent from one week earlier, according to data from the Mortgage Bankers Associations Weekly Mortgage The MBAA reports their Purchase Index: increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago. However The Refinance Index did increase by 3% to 66.7%

Although low rates are not translating into many home sales, I do think these refis are helping people fix their personal balance sheets and hopefully, this is keeping some people out of the foreclosure cycle.

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Freddie Mac Weekly Update: Fixed-Rate Mortgages Hit a New Year To Date Low

Howard Bell (www.yourpropertypath.com) — Thu, 19 May 2011 18:16:49 -0700

30-year fixed-rate mortgage:
averaged 4.61 percent with an average 0.7 point for the week ending May 19, 2011, down from last week when it averaged 4.63 percent. Last year at this time, the 30-year FRM averaged 4.84 percent

The 15-year fixed-rate mortgage: this week averaged 3.80 percent with an average 0.7 point, down from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.24 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.48 percent this week, with an average 0.6 point , up from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.91 percent .

One-year Treasury-indexed ARMs: averaged 3.15 percent this week with an average 0.6 point, upfrom last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 4.00 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates inched down for the fifth consecutive week as financial markets try to ascertain the current strength of the economy. Industrial production was unchanged in April owing to disruptions in automobile parts supplies due to the earthquake and tsunami in Japan. Netting out automobiles and gasoline, retail sales rose 0.2 percent in April, which was less than a third of the increase in March and the weakest growth since December 2010. However,consumer confidence, as measured by the University of Michigan, rose above the market consensus in May to the highest reading since February

Data on the housing market was also mixed. New construction on single-family homes fell 5.1 percent in April, with the largest declines occurring in the Midwest and South regions where tornados hit the hardest. Homebuilder confidence remained unchanged in May and near its January 2009 historical low, according to the NAHB/Wells Fargo Housing Market Index. However,conventional mortgages applications rose for the past five straight weeks ending May 13^th, buoyed by lower mortgage rates and stronger refinancing activity

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Mortgage Bankers Weekly Decrease in Latest MBA Weekly Survey

Howard Bell (www.yourpropertypath.com) — Thu, 05 May 2011 22:22:38 -0700

Mortgage Bankers Association for the week of 5/04/2010

Market Composite Index: (loan application volume) decreased 5.6 percent from one week earlier

Refinance Index: increased 6.0 percent from the previous week

Purchase Index: increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity: increased to 62.7 percent of total applications from 61.6 percent the previous week.

MBA outlook: (Excerpted from mbaa.org)
Mortgage originations

The MBAA expects rate to rise this year, largely due to the Fed announcement that they will begin to back away from their mortgage buyback program, allowing the markets to begin to price the cost of loans. This is a hit to affordability and will likely impact sales a bit.

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Freddie Mac Weekly Update: 30-year Fixed-Rate Mortgage Matches Yearly Low of 4.71%

Howard Bell (www.yourpropertypath.com) — Thu, 05 May 2011 22:20:25 -0700

30-year fixed-rate mortgage:
averaged 4.78 percent with an averaged 4.71 percent with an average 0.7 point for the week ending May 5, 2011, down from last week when it averaged 4.78 percent. Last year at this time, the 30-year FRM averaged 5.00 percent. .

The 15-year fixed-rate mortgage: this week averaged 3.89 percent with an average 0.7 point, down from last week when it averaged 3.97 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.51 percent. A year ago, the 5-year ARM averaged 3.97 percent .

One-year Treasury-indexed ARMs: averaged 3.14 percent this week with an average 0.5 point, down from last week when it averaged 3.15 percent. At this time last year, the 1-year ARM averaged 4.07 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week. For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April.

Data reports on the housing market, on the other hand, were a little more uplifting. The National Association of Realtorsreported pending home sales rose in March for the second month in a row to the highest index reading since November 2010. Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening

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Freddie Mac Weekly Update: Mortgage Rates Fall With Economic and Housing Reports

Howard Bell (www.yourpropertypath.com) — Thu, 28 Apr 2011 20:23:01 -0700

30-year fixed-rate mortgage:
averaged 4.78 percent with an average 0.7 point for the week ending April 28, 2011, down  from last week when it averaged 4.80 percent. Last year at this time, the 30-year FRM averaged 5.06 percent.

The 15-year fixed-rate mortgage: this week  averaged 3.97 percent with an average 0.7 point, down  from last week when it averaged 4.02 percent.  A year ago at this time, the 15-year FRM averaged 4.39 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.51 percent this week, with an average 0.6 point ,  down from last week when it averaged 3.61 percent. A year ago, the 5-year ARM averaged 4.00 percent .

One-year Treasury-indexed ARMs: averaged 3.15 percent this week with an average 0.6 point, downfrom last week when it averaged 3.16 percent. At this time last year, the 1-year ARM averaged 4.25 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices. Regional Federal Reserve Banks reported that business and manufacturing activities declined in Philadelphia, Dallas and Richmond in April. In addition, the S&P/Case-Shiller 20-city composite home price index recorded year-over-year declines through February in 19 of the 20 markets.

Declining home prices and a high level of foreclosures continue to affect housing tenure decisions. Between the third quarter of last year and the first quarter of 2011, the housing stock experienced a decline of nearly 400,000 homeowners on net, according to the Census Bureau. However, the National Association of Realtors reported that during the same period there were almost 700,000 first-time homebuyers, which suggests gross losses may have been closer to 1.1 million homeowners over the October-through-March timeframe

Mortgage Bankers Weekly Decrease in Latest MBA Weekly Survey

Howard Bell (www.yourpropertypath.com) — Thu, 28 Apr 2011 20:19:47 -0700

Mortgage Bankers Association for the week of 4/27/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volumedecreased 5.6 percent from one week earlier

Refinance Index: Refinance Index decreased 0.6 percent from the previous week. The seasonally adjusted Purchase Index decreased 13.6 percent to its lowest level since February 25, 2011, driven by a 26.6 percent decrease in government purchase applications.

Purchase Index: decreased 12.8 percent compared with the previous week and was 28.8 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity: increased to 61.6 percent of total applications from 58.5 percent the previous week. This is the highest refinance share of the month

Arm Share: remained unchanged from the previous week at 6.5 percent of total applications.

MBA outlook: (Excerpted from mbaa.org)
Mortgage originations

Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect, said Michael Fratantoni, MBAs Vice President of Research and Economics. This decrease reverses a 20 percent increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this deadline

Case Shiller: Thoughts From Around The Web

Howard Bell (www.yourpropertypath.com) — Thu, 28 Apr 2011 19:50:15 -0700

Optimists

A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.

If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market," said Celia Chen, senior director at Moody's Analytics. "Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.

NAR

According to the latest Realtors Confidence Index, the gap between the indices of Prospective Home Buyer Traffic and Prospective Home Seller Traffic has narrowed, with an increase in Prospective Buyer Traffic. A continuation of the narrowing of the gap between buyer and seller interest would be favorable to the strengthening of real estate markets nationwide.

In many cases, and in recent years, market prices have already declined substantially. The size of the shadow inventory, mortgages, 30 days overdue or in forecolsure, suggests that problems may not be resolved for two or three years. However, the shadow inventory is declining in size and we may be near the end of continued price declines in many markets.

Pessimists

Standard and Poors

“There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing. says David M. Blitzer, Chairman of the Index Committee at S&P Indices. Ten of the 11 MSAs that recorded index lows in January fell further in February.

Wall Street Journal

The enormous supply overhang of existing homes (particularly factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time,” said Joshua Shapiro, chief U.S. economist at MFR Inc. “From a longer-term perspective, it is important to keep in mind that in the seven years leading up to the peak in July 2006, the nonseasonally adjusted national 20 city home price index jumped by 155% (126 index points)… So far, this index has dropped by 32% (66 index points) in the 55 months since the peak.

I could fill the page with pessimists, hardly a positive thought out there today. I think the most positive take away is that at least this is an orderly retreat, rather than the kind of screeching declines we have seen.

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Mortgage Bankers Weekly Update: Mortgage Applications Decrease

Howard Bell (www.yourpropertypath.com) — Fri, 15 Apr 2011 22:16:18 -0700

Mortgage Bankers Association for the week of 4/13/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volume, decreased 6.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6.3 percent compared with the previous week.

Refinance Index: decreased 7.7 percent to its lowest level since February 11, 2011.

Purchase Index: The seasonally adjusted Purchase Index decreased 4.7 percent from one week earlier.

Refinance Share of Mortgage Activity: decreased to 60.3 percent of total applications from 61.2 percent the previous week. This is the lowest refinance share since May 7, 2010.

Arm Share: decreased to 5.9 percent from 6.1 percent of total applications from the previous week.

MBA outlook: (Excerpted from mbaa.org)
Mortgage originations

We expect declines in refinance activity will be the primary factor impacting our originations forecast for the full year 2011, with total mortgage originations decreasing to $1 trillion in 2011. However, we have increased our forecast for refinance originations given the dip in rates associated with global uncertainties. Increases in purchase originations will not be enough to offset the drop in refinances over the year, as mortgage rates reach 5.5 percent by the end of 2011. We expect that the refinance share of originations will drop from 70 percent in 2010 to 41 percent in 2011, and then 24 percent in 2012 as rates climb above the 6 percent mark. We project that originations will be below $1 trillion in 2012.

Freddie Mac Weekly Update: 30-Year Fixed-Rate Mortgage Moves Up to 4.91 Percent

Howard Bell (www.yourpropertypath.com) — Fri, 15 Apr 2011 22:14:37 -0700

30-year fixed-rate mortgage:
averaged 4.91 percent with an average 0.6 point for the week ending April 14, 2011, up from last week when it averaged 4.87 percent. Last year at this time, the 30-year FRM averaged 5.07 percent.

The 15-year fixed-rate mortgage: averaged 4.13 percent with an average 0.7 point, up from last week when it averaged 4.10 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.78 percent this week, with an average 0.6 point, up from last week when it averaged 3.72 percent. A year ago, the 5-year ARM averaged 4.08 percent.

One-year Treasury-indexed ARMs: averaged 3.25 percent this week with an average 0.6 point, up from last week when it averaged 3.22 percent. At this time last year, the 1-year ARM averaged 4.13 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Mortgage rates edged up following a light week of economic data releases. Although rates on 30-year fixed mortgages have risen four weeks in a row, they have remained below 5 percent for eight straight weeks now, helping to maintain affordability in the housing market. Meanwhile,consumer purchases of retail goods rose for the ninth consecutive month in March, suggesting families have an increasing capacity to spend, which bodes well for the economic recovery.

Reinforcing this notion, the Federal Reserve reported in its April 13th regional economic review that consumer spending picked up modestly in February and March across most Districts. In addition, it noted that economic activity generally continued to improve and that reports focusing on the near-term outlook were most often upbeat

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Freddie Mac Weekly Update: 30 Year Mortgage Drops for Third Consecutive Week

Howard Bell (www.yourpropertypath.com) — Sun, 10 Apr 2011 20:17:56 -0700

30-year fixed-rate mortgage:
averaged 4.86 percent with an average 0.7 point for the week ending March 31, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.08 percent.

The 15-year fixed-rate mortgage: this weekend 4.87 percent with an average 0.7 point for the week ending March 3, 2011, down from last week when it averaged 4.95 percent. Last year at this time, the 30-year FRM averaged 4.97 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 4.15 percent with an average 0.7 point, down from last week when it averaged 4.22 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

One-year Treasury-indexed ARMs: averaged 3.72 percent this week, with an average 0.6 point , down from last week when it averaged 3.8 percent. A year ago, the 5-year ARM averaged 4.11 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac
Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this years high set just three weeks ago. This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan

However, housing demand still remains weak. New home sales in January were near record lows dating back to 1963 when the data began, according to the Census Bureau Similarly, pending sales of existing homes fell for the second consecutive month in January, according to the National Association of Realtors

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Mortgage Bankers Weekly Update: Mortgage Applications Decrease

Howard Bell (www.yourpropertypath.com) — Sun, 10 Apr 2011 20:13:52 -0700

Mortgage Bankers Association for the week of 4/6/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volume, decreased 2.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.5 percent compared with the previous week

Refinance Index: decreased 6.2 percent to its lowest level since February 25, 2011, on a seasonally adjusted basis

Purchase Index: increased 6.7 percent to its highest level of the year

Refinance Share of Mortgage Activity: decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010.

Arm Share: increased to 6.1 percent from 5.7 percent of total applications from the previous week.

MBA outlook: (Excerpted from mbaa.org)
Mortgage originations

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Mortgage Bankers Weekly Update: Mortgage Applications Decrease

Howard Bell (www.yourpropertypath.com) — Thu, 31 Mar 2011 18:24:54 -0700

Mortgage Bankers Weekly Update: Mortgage Applications Decrease

Mortgage Bankers Association for the week of 3/30/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volume,decreased 7.5 percent on a seasonally adjusted basis from one week earlier

Refinance Index: decreased 10.1 percent from the previous week. The seasonally adjusted Purchase Index decreased 1.7 percent from one week earlier.

Purchase Index:  decreased 1.5 percent compared with the previous week and was 21.9 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity:  decreased 10.1 percent from the previous week

Arm Share:  decreased to 5.7 percent from 5.9 percent of total applications from the previous week.

MBA outlook: (Excerpted from mbaa.org)

MBAA makes some interesting observations amid a general optimism.  The world economy, has been growing fast boosting boost to US growth through gains in exports. Last quarters growth was just revised upward. True, housing is a laggard, but even here MBAA expressed optimism and sees growth patterns, in stark contrast to Dr. Shiller of Case Shiller.

Treasury and mortgage rates increased towards the end of last week, as global markets calmed following the recent crises in Japan and the Middle East. Refinance volume predictably fell in response to these rate increases. As rates climb back to 5 percent, fewer homeowners have both the incentive and the ability to refinance, said Michael Fratantoni, MBAs Vice President of Research and Economics

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Freddie Mac Weekly Update: 30-Year Mortgage Up Slightly for Second Week

Howard Bell (www.yourpropertypath.com) — Thu, 31 Mar 2011 18:19:32 -0700

30-year fixed-rate mortgage:
  averaged 4.86 percent with an average 0.7 point for the week ending March 31, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.08 percent.

The 15-year fixed-rate mortgage:  this week averaged 4.09 percent with an average 0.7 point, up  from last week when it averaged 4.04 percent.  A year ago at this time, the 15-year FRM averaged 4.39 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.70 percent this week, with an average 0.7 point, up from last week when it averaged 3.62 percent. A year ago, the 5-year ARM averaged 4.10 percent .

One-year Treasury-indexed ARMs: averaged 3.26 percent this week with an average 0.6 point, upfrom last week when it averaged 3.21 percent. At this time last year, the 1-year ARM averaged 4.05 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates rose slightly for a second week in a row, but continue to remain quite low. Low rates have benefited from relatively benign inflation reports. Inflation as measured by the 12 month growth in the core price index for consumer spending, a metric preferred by the Federal Reserve, is hovering near the lowest pace since 1960 when this data series began.

Sales of distressed properties continue to place downward pressure on house prices. In January, these homes accounted for 37 percent of existing home sales and rose to 39 percent in February, based on figures from the National Association of Realtors. House prices were down 3.1 percent in January from the same month last year according to the S&P/Case-Shiller Home Price Indices

Multi Famiily Rentals Improve

Tenant Selection Checklist

Multi Family: A Recovery In Place

Howard Bell (www.yourpropertypath.com) — Wed, 30 Mar 2011 18:41:59 -0700

Multi Family
A Recovering Market

We all know whats happening to the single family home markets. Over supply and shadow inventory and the subsequent price declines will continue until fear is overcome and inventory is soaked up.

The kinds of issues that led to a boom bust in housing did not take place with multi family. There was no build out leading to over supply and the lender market was much more rationlized. Little of the kind of lending that led to so many foreclosures, ultimately driving home prices down.

Lack Of Supply In The Rental Market
From 1997 to 2006, multifamily construction was about 342,000 new units per year, but by 2010 they new construction declined 66%. Government estimates indicate we will need 1.5 million additional units annually just to keep up with population growth. Quite a shortfall, indeed

Lack Of Lender Interest In Funding Any Real Estate
Adding to a undersupply is a real lack of lender interest in more housing of any kind. Although this appears to be a negative, it protected the sector from the boom mania and has kept the multi family market on a sound footing.

Foreclosure
Realty Trac reports annual foreclosure filings spiked from 1 million in 2006 to 3.9 million in 2009, and were about the same number in 2010. Finally, the huge foreclosure debacle is making renters out of all of us.

Demographics
The combination of immigration, retirees moving back in and a new generation up will equal the size of the boomers,creating a large pool of new renters. Now thats huge!

A Solid Market
The national vacancy rate for rentals fell 17% last year to 6.6%, according to Reis. And rents jumped. In New York, up 9% on average in the last five years; in San Jose, they're up 8% San Francisco, one of the best rental markets in the country has seen its vacancy rates drop as rentals in all neighborhoods post new highs.

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Green Landlording: Getting Tenants to Go Green

Howard Bell (www.yourpropertypath.com) — Wed, 23 Mar 2011 17:26:43 -0700

Getting Tenants to Go Green.

As property managers, we can't insist on behavioral changes. Going green can be a tough sell to a renter. After all, a building is only as green as the people who manage and live in it. Managers are key players and can encourage activities that reduce consumption and waste. The catalyst is education.

We Are All Stakeholders
You need to demonstrate the benefits. Tenants can be inspired to go green by emphasizing a better living environment and eco citizenship. Getting to that point, begins at the leasing process. Educate tenants on easy, cost effective ways to help the environment. Tips such as using compact fluorescent lights, unplugging electrical devices or recycling. That way both tenants and owner/managers can capture the benefits of saving money and natural resourcesGo for the easy things.

Its Good Business
An apartment.com study reports found tenants want to live a more sustainable lifestyle. More than 25% said they would pay more in rent to save money on energy costs. So set the tone for sustainability by making environmentally-friendly choices. Here are some easy, inexpensive ways that go a long ways towards a more sustainable healthier environment. For more energy saving ideas go here

Low Flow Toilets - Cost - $150-1500.00
If you decide that it is time for a toilet replacement, you reduce water use and bank teh savings. Replacing a 18 litre per flush toilet with an ultra-low-volume 6 litre flush model represents a 70% savings in water flushed. You can save as much as 7500 gallons of clean, fresh water annually

Shower Heads - Cost - $15-100.00
Conventional showerheads have flow rates up to 4 to 5 gallons per minute. A good low-flow showerhead can reduce water use by 50% and still provide a good shower

Faucets -
Leaky Faucet: One drop per second can waste as much as 10 gallons of water each week. Deferring basic maintenance can be costly.

Faucets Aerators - Cost - Less than $5.00
Conventional faucets have an average flow rate of almost 4 gallons per minute. Faucet aerators can reduce your home water consumption as much as 50%, and reduce your heating costs as a bonus.

Programmable Thermostats - Cost - $50-150.00
Tenants save up to 20% of total energy costs using a programmable thermostat by reducing temperature 5 degrees at night and 10 degrees during the day, whenever possible.
Start small and do the easy things first. Talk up green living at the lease signing and be a partner in creating a safer and healthier living environment. There is no better way to change behavior then by setting a good example. And by the way, reducing operating costs is good business. Save money and do well by doing good.

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Fannie and Freddie To Fade Away: Your Costs To Rise

Howard Bell (www.yourpropertypath.com) — Thu, 03 Mar 2011 18:24:15 -0800

The White House has a strategy to close shop. Fannie and Freddie will go away quietly and permanently. They are hoping to phase out the two GSE's within about seevn years. The Obama admiministration proposed three
approaches to wind down the two agencies. This is a delicate decision because they now control about 90% of the housing market and the private markets are virtually gone. So, tehy have to receed without creating a funding gap

Weening Us Off The Federal

The administartion will take baby steps designed to begin to turn us away from Government help. The politics that had treatd home ownerships as a right has learned its lesson.

1. To shrink the Government mortgage portfolio by at least 10 percent a year.

2. Create an insurance fund for mortgages supported by premiums paid by lenders, just like bank deposit insurance.

3. Getting out of government subsidies of mortgages by raising fees charged to cover the risk of defaults

4. Limiting the government’s role in housing finance to FHA backed mortgages, turning most of the market over to the private sector.

5. Phasing in a 10% down payment requirement for government guaranteed loans.

The Future For Real Estate Markets

more costly transactions

Right now, the private markets cant compete with cheap Govt money and so that market barely exisits. Increasing the private sector means allowing it to charge more for risk than Govt programs do.

Creating a government-run mortgage guarantee fund similar to bank deposit insurance, paid for by lenders does get the Government out of the susidy business, but that cost to lenders will likely be passed onto buyers, making homes more costly

Eliminating all government guarantees against default would also raise the cost of borrowing, potentially depressing the housing market. Higher borrowing costs will likely put pressure on lower priced markets including first-time buyers. Read higher costs to borrow making it more difficult to buy. And when willing buyers cant, its generally price that comes down to meet demand.

The Winner

The Government wants to increase federal subsidies for rental housing. Shaun Donovan, the secretary of the Department of Housing and Urban Development, said Friday that half of renters spend more than one-third of their income on housing, and one-quarter of renters devoted more than half, according to HUD research.

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Freddie Mac Weekly Update: 30-Year Fixed-Rate Mortgage Drops to 5 Percent

Howard Bell (www.yourpropertypath.com) — Thu, 24 Feb 2011 20:51:04 -0800

30-year fixed-rate mortgage:
  A veraged 4.95 percent with an average 0.6 point for the week ending February 24, 2011, down from last week when it averaged 5.0 percent. Last year at this time, the 30-year FRM averaged 5.05 percent. .

The 15-year fixed-rate mortgage: A verage 0.7 point, down from last week when it averaged 4.27 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: A veraged 3.8 percent this week, with an average 0.6 point, down from last week when it averaged 3.87 percent. A year ago, the 5-year ARM averaged 4.16 percent.

One-year Treasury-indexed ARMs: A veraged 3.40 percent this week with an average 0.6 point, up from last week when it averaged 3.39 percent. At this time last year, the 1-year ARM averaged 4.15 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates eased again this holiday week amid mixed inflation data reports. Although the  core consumer price index for January rose slightly above the market consensus, house prices fell 4.1 percent in the fourth quarter of 2010 compared to the same period in 2009, according to the  S&P/Case-Shiller National Index In addition, the level of the index was the lowest since the fourth quarter of 2002

Low mortgage rates and home prices are sustaining affordability in the housing market. Existing home sales rose for the third consecutive month in January and were at the strongest pace in eight months, the  National Association of Realtors reported; only the Northeast region experienced a slowdown in sales

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Is Search An Early Market Indicator

Howard Bell (www.yourpropertypath.com) — Wed, 23 Feb 2011 18:32:16 -0800

Real Estate Porn
The search bunny keeps on going

Its interesting that online search for real estate is as strong as ever. Sales are miserable, people are afraid to buy. They no longer know what value and they have no job security. So, why is search so strong. Realtor.com President, Errol Samuelson notes that Online search is a critical measure of interest in real estate, especially now that more than 90 percent of buyers search for their homes online. So what can we glean from data mining search. Well, it turns out quite a lot.

Search As An Economic Indicator

Studys that indicate that the answer is yes, search can indicate future interest. The National Academy of Sciences of the United States of America (PNAS) recently published a study and concluded that predictive power of search can predict activity several weeks in advance.

Where Are The Top Ten
Sun Belt Still Strong

The top 10 most searched real estate markets in 2010 were established based on the number of visitors that viewed properties in each Metro Service Area (MSA) in the United States from January 2010 to December 2010 on Realtor.com. Despite changing market conditions in 2010, the nation’s top search destinations remained remarkably stable and focused on the sunshine states of California, Nevada, Florida, Texas and Arizona.

Bottom Fishing?
Or Just Entertainment?

Despite changing market conditions in 2010, the nation’s most searched destinations remained remarkably consistent, focusing on the sunshine states of California, Nevada, Florida, Texas and Arizona. Whether the strong interest in Real Estate is just window shopping or whether these states will seriously pop first when the buying public feels this is the bottom remains to be seen. Be interesting to see if the heavy search points to an early opportunity.

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Freddie Mac Weekly Update: 30-Year Fixed-Rate Mortgage Drops to 5 Percent

Howard Bell (www.yourpropertypath.com) — Thu, 17 Feb 2011 16:29:35 -0800

30-year fixed-rate mortgage: A veraged 5.0 percent with an average 0.7 point for the week ending February 17, 2011, down from last week when it averaged 5.05 percent. Last year at this time, the 30-year FRM averaged 4.93 percent.

The 15-year fixed-rate mortgage: Averaged 4.27 percent with an average 0.7 point, down from last week when it averaged 4.29 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 3.87 percent this week, with an average 0.6 point, down from last week when it averaged 3.92 percent. A year ago, the 5-year ARM averaged 4.12 percent.

One-year Treasury-indexed ARMs: Averaged 3.39 percent this week with an average 0.6 point, up from last week when it averaged 3.35 percent. At this time last year, the 1-year ARM averaged 4.23 percent.

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates eased slightly this week and continue to be very affordable. Prior to 2009, interest rates for 30-year fixed-rate mortgages had never been at 5 percent since our survey began in April 1971. In both 1981 and 1982, the rates were over three times as high as they are today.

The housing market is struggling to regain traction despite still historically low rates. New construction on one-family homes dipped slightly in January to an annualized pace of 413,000 units, which was the fewest number since May 2009. In addition, homebuilder confidence didnt improve for the third consecutive month in February.

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Mortgage Bankers Weekly Update: Mortgage Applications Decrease as Rates Jump

Howard Bell (www.yourpropertypath.com) — Thu, 17 Feb 2011 16:25:38 -0800

Mortgage Bankers Association for the week of 2/16/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volume, decreased 9.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7.9 percent compared with the previous week.

Refinance Index: decreased 11.4 percent from the previous week and is the lowest Refinance Index recorded in the survey since the week ending July 3, 2009.

Purchase Index: decreased 5.9 percent from one week earlier. The unadjusted Purchase Index decreased 0.9 percent compared with the previous week and was 18.2 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity: decreased to 64.0 percent of total applications from 66.6 percent the previous week. This is the fourth straight week the share has declined.

Arm Share: increased to 6.0 percent from 5.9 percent of total applications from the previous week.

MBA outlook: (Excerpted from mbaa.org)

Mortgage rates remained above 5% last week, up almost a full percentage point from their October lows, and refinance volume continued to drop, said Michael Fratantoni, MBAs Vice President of Research and Economics. Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced
affordability, to some extent .

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