1st time homebuyer video by Suzi Boyle - 04/28/12 11:43 AM
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International Sales - 04/26/12 01:21 PM
Sales of U.S. residential real estate to foreigners not residing in the U.S. continue to be in the 2 percent range, http://www.realtor.org/research/research/reps. Other NAR surveys have indicated that an additional 2 to 3 percent of residential sales are made to international customers residing in the U.S. Additional information on international activities is available at http://www.realtor.org/research/research/reportsintl.
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Residential Market Improvement - 04/25/12 01:59 PM
Realtor® comments and replies to the latest Realtors® Confidence Index continued to indicate recovery in the residential markets. All real estate is local, so comments were varied depending on location. The problems noted in previous months continue. For example,
Obtaining a mortgage is reported as difficult. Bargain hunters and low-price bids continue. Pricing continues to be a challenge. The appraisal process continues to be a problem. However, fewer respondents noted major problems than had previously been the case, and a growing number of respondents in recent months have been indicating cases of multiple bidding, low inventories, a resurgence of buyer interest, … (0 comments)
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Government Home Price Data Shows National Growth - 04/25/12 01:57 PM
NAR Research’s Home Price Monitor Series reviews national home prices by examining several widely cited national measurements. It is released monthly and allows REALTORS® to gain insight into the recent performance of national prices, factors affecting that performance, and the likely direction of prices in the months ahead. The Home Price Monitor includes the same data covered in the national media that clients will expect their REALTORS® to know and be able to comment on and provides different, more complete coverage of the information all in one place. Today’s blog post focuses on the recent release of the FHFA Price Index.
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Mortgage Loan Applications - 04/25/12 01:55 PM
There was a slight gain in the number of people submitting mortgage applications to buy a home in the latest week’s data. This data, from the Mortgage Bankers Association, however, does not have any information about approval rates and misses out completely on home purchases made with all-cash. This data has also not correlated well with home sales in the past year. The number of applications for refinances declined in the past week. But refinance activity year-to-date has been much better so far compared to the same period last year. Mortgage bankers who have been making a living solely off refinances … (0 comments)
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Fannie & Freddie - 04/25/12 08:09 AM
Fannie Mae and Freddie Mac: the mere mention of them arouses passionate anger in many people. Rightly so. These two entities, which had taxpayer guarantees, ran their businesses as if they were privately owned. Fannie and Freddie made huge bets on the housing market. If it had been their money and their loss, then there would be no problem. But their mistakes took taxpayers down as well.
What went wrong and what needs to happen? Fannie Mae was born from the Great Depression in the 1930s to help bring mortgages to the ailing housing market of the time. Fannie was … (2 comments)
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Lower Air Conditioning Bills Ahead - 04/24/12 01:29 PM
Natural gas prices took a deep dive from six months ago. Last week, the price was slightly under $2 per unit. Increased ‘fracking’ has brought an abundance of new natural gas to the market in addition to bringing mining jobs to Pennsylvania, West Virginia and North Dakota. During this time last year and over the hot summer, the price was $4 to $4.50. Assuming the gas prices will not rise, because there is no imminent plan for a slowdown in fracking, the energy cost at home and in commercial buildings could be sliced in half even with the air conditioners running, provided … (0 comments)
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Rents Rising - 04/24/12 01:26 PM
By now most are aware of the rising rent phenomenon. Our Realtor® survey indicated only a sliver of the market will see falling rents, with a vast majority of areas experiencing positive though not higher than 5 percent rent growth. According to the ‘rent index’ in the consumer price index as measured by government statisticians, rents are rising by 2.5 percent. Rent growth will, more likely than not, accelerate higher. Demand for rentals has been much greater than the supply coming onto the market. It is just inevitable that rents will rise at a faster rate over the next 12 to … (0 comments)
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Rentals In College Towns - 04/24/12 01:24 PM
Many colleges and universities are already reporting record high applications and enrollments at their campuses. Unless a school is purposely trying to downsize (going for quality rather than quantity) the simple statistics of an ever-increasing number of people high school age (15-to-19 years old) assures a steady, rising stream of potential college students in the near future. The conversion rate from high school to college enrollment is no doubt rising, not because of better scholastic achievements but because of social pressure to attend college and from easier access to student loans and grants.
That means buying a rental property in … (0 comments)
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Comments at Federal Home Loan Bank Meeting - 04/24/12 01:22 PM
Jed Smith discussed the real estate outlook and associated economic risks at the Federal Home Loan Bank of Chicago’s meeting of the Mortgage Partnership Finance and Advisory Council on April 18 in Chicago. Smith indicted that the current economic expansion is expected to continue for the next several years, but the current expansion is the weakest since the Great Depression and is characterized by high unemployment and underemployment, limited job growth, difficult credit conditions, and continued concern over a variety of basically unpredictable economic factors such as oil prices, sovereign state credit issues, and government deficits.
The good news is … (0 comments)
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Fannie & Freddie Mistakes - 04/24/12 12:12 PM
Fannie Mae and Freddie Mac: the mere mention of them arouses passionate anger in many people. Rightly so. These two entities, which had taxpayer guarantees, ran their businesses as if they were privately owned. Fannie and Freddie made huge bets on the housing market. If it had been their money and their loss, then there would be no problem. But their mistakes took taxpayers down as well.
What went wrong and what needs to happen? Fannie Mae was born from the Great Depression in the 1930s to help bring mortgages to the ailing housing market of the time. Fannie was … (0 comments)
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March Existing Home Sales - 04/19/12 01:53 PM
Existing home sales (single-family plus condos), which measure actual closings, decreased 2.6 percent in March to a seasonally adjusted annual rate of 4.48 million units pace. Even with the decrease, the first quarter average of 4.57 million is the strongest first quarter in 5 years.
Compared to one year ago, existing home sales were higher by 5.2 percent. This represents nine straight months of year-over-year gains.
The national median existing home sales price in March was $163,800, which is an increase of 2.5 percent from one year ago. Part of the reason for the price lift is due to … (2 comments)
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New Mortgage Applications - 04/18/12 02:12 PM
Mortgage applications for home purchases declined notably by 11 percent in the past week according to the Mortgage Bankers Association. The data does not appear to jive with increased home sales across many parts of the country. The rather big decline is coming off of several consecutive weeks of moderate increases. Despite some mild swings, this data has been moving mostly sideways (neither consistently rising nor falling) over the past 18 months. Home sales by contrast have been consistently up by 5 to 10 percent in 2012. One has to be mindful that home sales closings and mortgage applications can diverge, … (0 comments)
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Housing Starts - 04/17/12 01:22 PM
Data on housing starts and permits were released this morning by the US Census. Starts eased for the second consecutive month, 5.8% from February to March on a seasonally adjusted and annualized basis, but remain stronger than the same month last year by 10.3%. The bulk of the decline was on the multifamily side, 19.8%, but single family starts eased modestly. Analysts had hoped for stronger numbers for starts in March, but the consecutive declines from January’s strong pace suggests that the unseasonably good weather over the winter may have pulled some building forward. However, the steady year-over-year strength in starts … (0 comments)
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Small Changes in Mortgage Insurance Make a big difference - 04/17/12 09:40 AM
On April 9th, the FHA made another round of changes to the mortgage insurance premiums that it charges. The FHA has increased its premiums as a means of shoring up its books in light of high delinquency and foreclosure rates on legacy lending programs. While the increases to the MIPs are small on their face, combined with the recent expiration of the deduction on mortgage insurance, they add up to not-so-small amounts.
The FHA increased its upfront mortgage insurance premium (UFMIP) from 1.0% to 1.75%, while the annual premium was increased from 1.15% to 1.25% for borrowers putting less … (2 comments)
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64% of Purchasers make small downpayments - 04/17/12 09:37 AM
According to information in the latest Realtors® Confidence Index, a total of 32 percent of residential home purchasers were reported as making an initial down payment of 20 percent or more in February 2012 among those obtaining a mortgage. Approximately 64 percent of purchasers obtaining mortgages were reported as making down payments less than 11 percent.
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Strategic Defaulters vs Strategic Modifiers - 04/17/12 09:34 AM
In FHFA acting director Ed DeMarco's speech on Tuesday, he discussed the risk of "strategic modifiers". Felix Salmon and I have been discussing this via email. Here is Salmon's post this morning: Ed DeMarco and the spectre of strategic modifiersA couple of definitions: A "strategic defaulter" is a borrower who is underwater on their home mortgage (they owe more than the house is worth), and who is willing to walk away from their home, even though they have the capacity to make the payments. Strategic defaulters intend to go to foreclosure - and probably will - even if offered a modification.A … (0 comments)
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We Stand @ The Door of a Foreclosure-Then We Go In - 04/17/12 09:27 AM
In Florida, the foreclosure process takes 861 days, on average.
That means houses often sit in limbo for more than two years after the owner stops paying the mortgage. Maybe the homeowner is still living in the house. Maybe he's renting it out. Maybe squatters are living there, or maybe it's empty and falling down.
Marc Joseph's job is to find out.
Joseph is a real estate agent. On the day I tag along with him, he's representing a bank that had repossessed a concrete block home in Cape Coral, Fla.
"The assignment for this property came out auto-generated through … (0 comments)
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Below Market Prices for Distressed Sales - 04/17/12 09:18 AM
According to information in the latest Realtors® Confidence Index, distressed properties sell below the market price of comparable, non-distressed properties; the discount level fluctuates depending on sales location and types of properties. Foreclosures have been selling at approximately 20 percent below market. Short Sales have been selling at approximately 15 percent below market.
The discount to market is affected by property condition. Well maintained properties tend to sell at a lower discount than is the case for properties in poor condition. The graph below is based on data from November 2011 to February 2012.
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Consumer Price Index Sentiment - 04/17/12 09:14 AM
Consumer prices rose 0.3 percent in March and have increased 2.7 percent in the last year according to data released today. Core prices, prices of goods except food and energy, rose 0.2 percent in March and 2.3 percent from one year ago. These monthly and year over year price increases are somewhat high, but not high enough to prompt the Fed to adjust its current monetary policy position of keeping interest rates low through late 2014. As for consumers, they may feel a pinch, particularly in paying for food and energy for which prices have risen 3.3 and 4.6 percent respectively … (0 comments)
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when Uncle Sam Plays Banker - 04/17/12 09:12 AM
Today’s lesson on How America Really Works begins with a question: What is the largest and most influential financial institution in the world? It’s not J.P. Morgan, or even Goldman Sachs. It’s the U.S. government.
That’s the verdict of Brookings Institution banking expert Douglas J. Elliott, and the numbers back him up. By the end of 2011, the federal government’s housing, farm, business and educational credit programs had $2.7 trillion in loans and guarantees outstanding. That’s not counting the $5 trillion-plus, mostly related to housing giants Fannie Mae and Freddie Mac, that Washington took on its books amid the financial crisis … (0 comments)
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Where are Home Sizes Going? - 04/17/12 08:15 AM
Much has been made of the death of the McMansion, but new trends are questioning whether that pronouncement was made too early. its steep decline during the latter part of the past decade, it took home sizes with it. While there was much to bemoan about the state of the industry, among designers and architects it seemed the one bright spot was what appeared to be the demise of the McMansion and an increased focus on efficient functionality. Between 2007 and 2010, the average size of a new, single-family home in the U.S. fell from 2,504 square feet to 2,381 … (2 comments)
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Home Tenure - 04/15/12 08:25 AM
The typical home seller has owned their home for nine years. The median tenure in home has progressively increased over the last several years from a low of 6 years in 2007. Sellers of detached single-family homes, which account for the largest share of homes sold, owned their home for a median of 10 years. Younger sellers tend to have the shortest tenure in the home – those aged 18 to 34 sold their home within six years, compared to those aged 65 to 74 who sold their home after a tenure of 14 years. Sellers with no children in the … (4 comments)
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Real Estate Rockin' in 2014 - 04/15/12 08:21 AM
Housing starts will nearly double and home prices will begin to rise in 2013, with prices increasing significantly in 2014. Those rosy predicitons come from a new semi-annual survey of 38 of the nation's leading real estate economists and analysts by the Urban Land Institute's Center for Capital Markets and Real Estate. The economists foresee broad improvements for the nation's economy, real estate capital markets, real estate fundamentals and the housing industry through 2014.. These strong projections are based on a promising outlook for the overall economy. The improving economy however, will likely lead to higher inflation and interest rates, which … (2 comments)
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US Housing Policies did not Cause subprime Crisis - 04/11/12 08:40 AM
Text Size PrintE-mailReprintsShare:More > FacebookTwitterLinkedInRedditStumbleUponDiggDeliciousGoogle +1It’s one of the biggest misconceptions about the housing crisis: the belief that the government’s policies to promote affordable housing — particularly through Fannie Mae and Freddie Mac — fanned the flames of the subprime mortgage market, ultimately bringing down the entire economy. In fact, a growing body of independent research confirms that it wasn’t the affordable housing mandate that led to the proliferation of risky mortgages. And the most recent evidence comes from the St. Louis Federal Reserve Bank. (Joshua Roberts - Bloomberg) Over the past few decades, the federal government has tried to promote … (4 comments)
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Usa-The Most Affordable Housing in the World? by Mike Wheatley - 04/11/12 08:35 AM
The experts tell us that housing is more affordable now than it has been for, well, donkey’s years. Property prices in the US have tumbled like never before as the economy stops and starts and never really quite gets going. Indeed, this is the same the world over, which poses an interesting question… Just how affordable is housing in the US at the moment, and how does it compare to other countries in the world?
Flying the flag for housing affordability. Image by Floris M. Oosterveld
It’s difficult to assess just how affordable housing is, as there are so many factors … (2 comments)
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Consumer Attitudes Stabilize, Positivity Spreads - 04/10/12 12:19 PM
Americans' concerns about key economic and housing issues are beginning to subside, according to results from Fannie Mae's February 2012 National Housing Survey. Consumers' attitudes have stabilized across most indicators--including personal finances, housing, and employment--demonstrating their sense that downside risks have abated somewhat compared to late summer and fall of 2011. While Americans confidence in the direction of the economy has been the most pronounced , back up again; their confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. At the same time, Americans concern about loosing … (0 comments)
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Wall Street Stampede to Rentals - 04/10/12 11:32 AM
It’s a “Twilight Zone” kind of plot twist that even Rod Sterling could not have imagined. Wall Street’s biggest names are rushing to jump into the single family rental market in a big way. They believe that there are “fat profits” to be made in the rental property business, and many of the same firms that played a part in the housing boom and bust are now planning to become landlords.
The Federal Reserve and the Obama administration have been pushing for months for some kind of program to move these properties and help the GSE’s get rid of them … (0 comments)
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Angry Priest Scatters the Lenders - 04/10/12 11:27 AM
Father Robert Rien, of St Ignatius at Antioch, a Catholic church east of San Francisco, speaks with a crisp buoyant voice that belies his 65 years. When he is angry it fairly crackles.
This Lenten season he is angry at America's big banks, so angry he has pulled all his parish's money out of the Bank of America and opened accounts at a small local bank.
He has called on his flock to do the same and joined a nationwide interfaith movement dedicated to divesting from the major banks. They see Lent as the perfect time to spread the word.Ad
''We … (0 comments)
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50 Amazing Numbers About Today's Economy - 04/10/12 11:23 AM
50 Amazing Numbers About Today's Economy By Morgan Housel | More Articles April 2012 |
In no particular order, here are 50 things about our economy that blow my mind:
50. The S&P 500 is down 3% from 2000. But a version of the index that holds all 500 companies in equal amounts (rather than skewed by market cap) is up nearly 90%.
49. According to economist Tyler Cowen, "Thirty years ago, college graduates made 40 percent more than high school graduates, but now the gap is about 83 percent."
48. Of all non-farm jobs created since June 2009, 88% have … (0 comments)
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End of Fed Bond Buying will cause interest rates to rise - 04/10/12 11:11 AM
Mortgage rates and other long-term interest rates are bound to rise measurably in the second half of this year, if not earlier. The Federal Reserve has been aggressive in buying U.S. government bonds as part of Quantitative Easing and has tried to hold down the long-term rates with Operation Twist. But both measures will soon be coming to an end. Furthermore, there will inevitably be a reversal of these policies at some point, which means the Federal Reserve will be selling back the bonds it had already purchased and sitting on the balance sheet, probably at the same time the U.S. … (0 comments)
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Tenure In Home - 04/10/12 11:08 AM
The typical home seller has owned their home for nine years. The median tenure in home has progressively increased over the last several years from a low of 6 years in 2007. Sellers of detached single-family homes, which account for the largest share of homes sold, owned their home for a median of 10 years. Younger sellers tend to have the shortest tenure in the home – those aged 18 to 34 sold their home within six years, compared to those aged 65 to 74 who sold their home after a tenure of 14 years. Sellers with no children in the … (0 comments)
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FICO Scores & Mortgages - 04/10/12 10:20 AM
A number of Realtors® responding to the February 2012 Realtors Confidence Index survey, indicated that prospective home buyers had difficulty in qualifying for a loan. Although interest rates are currently low, some prospective purchasers are reported as having problems in qualifying. A comparison of FICO scores for transactions as reported by Realtors® responding to the RCI compared with FICO scores reported by Fannie Mae’s “Acquisition Profile by Key Product Features” shows that credit availability to lower scoring applicants seems to have declined.
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Housing Recovery Helps Retail Sales - 04/10/12 09:56 AM
The recovering housing market is showing some impact in the retail sector. Furniture stores are reporting an 11 percent increase in sales recently from a low point two years ago. A stronger 22 percent in gains are occurring at building supply and gardening stores.
In addition to the visible impact to retail sales in stores directly related to housing, there is always a further multiplier effect even in areas such as restaurant spending and electronics as people earn more income from improved home sales.
The housing component to the broader economy (GDP) in the past years has not … (0 comments)
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Unemployment claims continue to drop - 04/10/12 09:53 AM
The number of people filing for unemployment checks for the first time fell again and is now at the lowest level in President Obama’s Presidency. The current weekly figure implies a much slower rate of job cuts. If sustained, it would generally correspond to about 2.5 to 3 million net new jobs for the year. Even during a booming economy, American dynamism goes hand-in-hand with some getting fired or laid off while other companies hire new workers. Though the lay-off pace is evidently falling, there are still a sizable number of people who are long-term unemployed. There are over 5 million … (0 comments)
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Investment Property Purchases - 04/04/12 01:44 PM
In 2011 there was an increase in the number of investment properties purchased and a decline in the number of principal residences purchased. Investment properties purchased jumped to 27% in 2011 of the market from 17% of the market in 2010. 41% of investment buyers purchased more than 1 property in 2011. Vacation properties purchased have remained nearly flat since 2009. 11% of properties purchased in 2011 were vacation homes. For more on the 2012 NAR Investment And Vacation Home Buyers Survey, click here and here.
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Real Estate Will Rock in 2014 - 04/03/12 06:18 PM
Housing starts will nearly double and home prices will begin to rise in 2013, with prices increasing significantly in 2014. Those rosy predicitons come from a new semi-annual survey of 38 of the nation's leading real estate economists and analysts by the Urban Land Institute's Center for Capital Markets and Real Estate. The economists foresee broad improvements for the nation's economy, real estate capital markets, real estate fundamentals and the housing industry through 2014.. These strong projections are based on a promising outlook for the overall economy. The improving economy however, will likely lead to higher inflation and interest rates, which … (5 comments)
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Reports Foreshadow Improved Supply Conditions - 04/03/12 06:08 PM
According to a report from the Office of the Comptroller of the Currency (OCC) on Wednesday, March 28th, short sales rose by more than 10% from the 3rd quarter of 2011 to the 4th quarter reaching a record of 63,257. The potential for more distressed properties, longer time in the costly foreclosure process, and heightened oversight has resulted in more interest on the part of banks, investors, and the GSEs in this alternative to foreclosure. The trend toward short sales is important as academic research suggests that a short sale has no impact on the sale prices of non-distressed homes in … (0 comments)
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Latest 2012 Housing Outlook - 04/03/12 06:05 PM
The housing market forecast has been modestly upgraded based on better than expected inflowing data. Here is the latest 2012 Economic and Housing Outlook from NAR Chief Economist Lawrence Yun. The full 15 slide PowerPoint looks at economic indicators such as existing home sales, new home sales, housing starts, GDP, payroll jobs and more.
The Summary Forecast Table is also pasted below.
Link to the full PDF can be found here.
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Rising Residential Rates - 04/03/12 06:03 PM
According to information in the latest Realtors® Confidence Index, higher residential rents in February compared to a year ago were reported by 51 percent of Realtors®, up from 44 percent a year ago. Lower rents were reported by 11 percent of Realtors®, down from 17 percent a year ago. This trend reinforces the longer term desirability of owning a home.
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Principle Reductions Grow - 04/03/12 06:01 PM
There were several interesting insights published in last week’s report from the Office of the Comptroller of the Currency. In particular, the share of loan modifications that incorporate principle reduction has grown steadily over the last year.
Typically an investor, bank or agency will choose a combination of changes to a loan in an attempt to ease the burden on the homeowner and improve the likelihood of payment. Those changes include, in order, capitalizing late fees or charges into the principle, a reduction in the mortgage rate, a rate freeze, a term extension, deferring the principle, and lastly a reduction of … (0 comments)
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Today's Realtor Confidence Index - 04/03/12 05:59 PM
According to information in the latest Realtors® Confidence Index, Realtor® comments continued to indicate recovery in the residential markets. All real estate is local, so comments were varied depending on location:
Pricing:Respondents noted that properties priced at or below market value tend to sell quickly. Properties priced below market tend to be bid up to market value. Properties priced above market value receive little customer interest and ultimately tend to be sold below market value. Short Sales:Although the short sale process is slow, it has speeded up slightly in recent months according to a number of respondents. Nevertheless, short sales are viewed … (2 comments)
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Mortgage Performance & Modifications - 04/03/12 05:56 PM
First it was the boom, then it came the bust, and now it’s the bear market. Despite the massive liquidity injected by the Fed, overall the U.S. real estate has yet to experience more bearish seasons. But there is one branch of the real estate sector that appears to be exempt from the deflationary pressures of our economy. Apartment buildings are gaining popularity due to exceptional levels of high occupancy. Therefore many investors have made the decision to park their money in this kind of investment.
If you’re new to multifamily investing you will most likely want to know as much … (0 comments)
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the facts on FHA-by the FHA commissioner - 04/03/12 05:50 PM
The health of the FHA and management of its business have been frequent topics of discussion in the media and among our stakeholders in recent months. Certainly, these are important issues – to the ongoing recovery of our economy, to the future of our housing finance system, and to American taxpayers. We welcome a robust and healthy discussion of ways to further strengthen FHA, but such an exchange is only possible when it is based upon accurate information. Today, we have posted Myths and Facts Regarding the FHA Single-Family Loan Guarantee Portfolio to address a range of questions and concerns regarding … (2 comments)
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Personal Income, Consumer Sentiment - 04/03/12 05:47 PM
Personal Income and disposable personal income each increased by 0.2 percent in February, a good but not overly strong increase. At the same time, personal consumption expenditures increased by 0.8 percent. This brought the personal saving rate down to 3.7 percent in February from 4.3 percent in January. Separately, consumer sentiment improved, perhaps explaining the increase in consumption and slippage in savings rate. The index of consumer sentiment rose from 75.3 in February to 76.2 in March and is nearly 13 percent higher than the reading one year ago. The increase in sentiment was driven largely by an improvement in consumers’ … (0 comments)
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