|
Jennifer's Blog
Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.
Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.
Source: Washington Post, Dina ElBoghdady (06/25/10)
|
|
|
Economic forecasters appear to be split on the outlook for residential real estate values.
The news this week regarding new- and-used home sales in May seems to support the views of bears like Dean Baker, co-director of the Center for Economic and Policy Research. Baker projects that home prices will decline 12 percent in 2010.
Meanwhile, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York, predicts a gain of 2.5 percent.
Terry Loebs, managing director of MacroMarkets, which creates securities that allow investors to hedge their housing bets, says, The width of that spread is a byproduct of uncertainty in the market.
Source: Bloomberg, Kathleen M. Howley (06/24/2010)
|
|
|
At a recent meeting of the Urban Land Institute of Minnesota, Senior Fellow John McIlwain said "a new normal" will be created in the housing market over the next 10 years, and he marked the end of "the suburban century."
He noted that markets offering "a vibrant 24/7 lifestyle" will see the most robust activity, "net-zero-energy" units will become the norm, and the rental market will expand as homeownership rates fall to more historic levels.
Suburban town centers will gain popularity among those wanting an urban lifestyle without living in a big city.
Over the next decade, McIlwain said four demographic groups will fuel the housing market. He said older baby boomers increasingly are moving back to the central city, while younger baby boomers are finding it more difficult to relocate for jobs because they cannot sell their suburban houses. Meanwhile, millennials are more environmentally aware and will seek urban lifestyles, and immigrants who cannot afford large suburban houses to shelter multiple generations will increase demand for rentals.
With 1.5 million housing units per year needed to accommodate the shift to normal levels of household formation, McIlwain said zoning, financing, and regulations need to be rethought to meet housing demand.
Source: minnpost.com, Brad Allen (06/21/2010)
|
|
|
The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction. The extension was added to a bill to pay for jobless benefits, which still must pass.
The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.
The overall bill, once it passes the Senate, must be approved by the House.
Source: Associated Press, Andrew Taylor (06/16/2010)
|
|
|
Some recovery in the labor market and record low mortgage rates could help offset some of the pressures on the housing market, according to a new study released by the Joint Center for Housing Studies at Harvard University.
"Right now, economists expect the unemployment rate to stay high, but if employment growth surprises on the upside or downside, housing numbers could too," Eric Belsky, executive director of the center, said in a statement.
Home owners' level of debt relative to equity stood at a record 163 percent at the beginning of the year, and housing costs have become a severe burden for more borrowers, the center adds.
Source: Reuters, Al Yoon (06/14/10)
|
|
|
The National Association of REALTORS® applauded the House for overwhelming passage of FHA reform legislation that would allow the Federal Housing Administration to adjust monthly premiums on mortgage insurance.
This bill, H.R. 5072, FHA Reform Act of 2010, would strengthen the FHA loan insurance program while keeping it available and affordable to responsible home buyers. Allowing FHA to raise the monthly insurance premium would let FHA lower the up-front premium that places a burden on cash-strapped borrowers at closing.
As the leading advocate for homeownership and housing issues, NAR is very pleased that FHA will be allowed to play its intended countercyclical role to provide qualified borrowers with access to prime credit. FHA is a critical part of our nations economic recovery, said NAR President Vicki Cox Golder.
En route to passage, the House defeated an amendment that would have increased the FHA down payment from 3.5 percent to 5 percent, which would have disenfranchised more than 300,000 potential homeowners and would not have contributed significantly to FHA cash reserves.
The current 3.5 percent down payment represents a significant financial commitment and sufficient investment to insure a borrowers seriousness about homeownership, said Golder. The proposed change could have an especially harsh impact on African American and Hispanic borrowers, who traditionally have much lower accumulated wealth and have benefited from the opportunities offered by fully documented, standard FHA loans with low down payments.
She also praised FHAs aggressive efforts to protect taxpayers and manage credit risk.
- NAR
|
|
|
Homeownership rates are down 2 percentage points from their 2006 peak, but could fall another 5 percentage points in the next couple of years, according to a study by the Federal Reserve Bank of New York.
The study subtracts the number of home owners who are underwater from the official homeownership rate calculated quarterly by the U.S. Census Bureau.
Officially, homeownership was 67.2 percent at the end of 2009, but the report says that effectively the rate is about 62 percent if those home owners likely to lose their homes are subtracted from the total.
Cities cited as having very low effective homeownership rates include Las Vegas, Phoenix, San Diego, Los Angeles, San Francisco, Miami, Tampa, Detroit, and Washington, D.C.
Source: The Wall Street Journal, Nick Timiraos (06/07/2010)
|
|
|
Economists speaking at the recent annual meeting of the National Association of Real Estate Editors said the housing market likely will not recover until 2013.
Stan Humphries, Zillow chief economist, said home prices continue to decrease, and he sees the "tremendous amount of shadow inventory" delaying recovery. "We think the market will be flat in nominal terms for three to five years," remarked Humphries. "We are not going to hit bottom and see a V-shaped recovery."
Meanwhile, Fannie Mae chief economist Doug Duncan said it will be another three years before new household formation and housing starts pick up. Duncan believes home prices will fall another 1 percent to 3 percent before bottoming out in the third quarter.
Both Humphries and Duncan said the federal home buyer tax credits shifted demand so that buyers took action earlier than they would have otherwise. "We're going to see a payback in July and August," noted Humphries.
Source: Inman News, Glenn Roberts Jr. (06/07/10)
|
|
|
The U.S. House of Representatives voted Sunday to approve health care reform legislation designed to provide coverage to more than 32 million uninsured Americans.
After the bill was signed by President Obama Tuesday, it was sent back to Congress for a package of "fixes," which tacked-on student financing reform, stopping private banks from originating student loans subsidized by the government in favor of direct government lending. The measure passed both the House and Senate Thursday.
The bill, which pledges more than $1 trillion of taxpayer funding over the next decade, passed the House 219 to 212 on Sunday. No Republicans voted for it, and 34 Democrats voted against the main legislation. The second version passed the House 220 to 207, and the Senate 56 to 43, with all voting Republicans and three Democrats voting "no."
President Obama is expected to sign the new version of the bill early next week.
Source: Los Angeles Times, Noam N. Levey and Janet Hook (03/22/2010) and The Associated Press, Erica Werner (03/26/2010)
|
|
|
President Obama is announcing an expansion of foreclosure-prevent tactics, including a plan to reduce principal balances and special aid for unemployed borrowers.
The bulk of the responsibility for carrying out the new program will be assigned to the Federal Housing Administration, which will insure lenders against part of the losses.
The plan asks banks to write down loan balances to less than the value of the home. If there is both a first and second mortgage, the combined total would have to be no more than 115 percent of the homes value.
The Treasury would pay part of unemployed homeowners loans for three months while they job hunt.
Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (03/25/2010)
|
|
|
|
|
|
253-630-1828
Equal Housing Opportunity.