Record-low mortgage rates stuck around for another week, allowing home buyers and refinancers to lock-in ultra low financing, Freddie Mac reports in its weekly mortgage market survey. 30-year and 15-year fixed-rate mortgages matched their all-time lows.
“Mortgage rates were virtually unchanged this week hovering at or near record lows and should further help to support a recovering housing market,” says Frank Nothaft, Freddie Mac’s chief economist.
Here’s a closer look at rates for the week ending June 28:
30-year fixed-rate mortgages: averaged a record low of 3.66 percent, with an average 0.7 point, holding steady at last week’s average. A year ago at this time, 30-year rates averaged 4.51 percent.
15-year fixed-rate mortgages: averaged a record low of 2.94 percent, with an average 0.7 point, dropping from last week’s 2.95 percent average. Last year at this time, 15-year rates averaged 3.69 percent.
5-year adjustable-rate mortgages: averaged 2.79 percent, with an average 0.6 point, rising slightly from last week’s 2.77 percent average. Last year this time, 5-year ARMs averaged 3.22 percent.
1-year ARMs: averaged 2.74 percent, with an average 0.4 point, holding the same as last week. A year ago, 1-year ARMs averaged 2.97 percent.
Source: Freddie Mac
State and federal laws that set out to prevent defaulting home owners from being evicted may actually be jeopardizing the housing recovery and even extending the slump, economists told Reuters.
More than 400 foreclosure laws were enacted nationwide last year, according to the National Conference of State Legislature. Many of these laws set out to help struggling home owners modify their loans and stay in their homes.
But some studies show that the laws may be delaying a full housing recovery. A study by Federal Reserve economists measured foreclosure outcomes from 2004 to 2011 for judicial foreclosure states — where foreclosures must receive court approval — and “nonjudicial” states, where foreclosures do not have to go through the courts.
The researchers found that judicial states “indiscriminately” slowed the foreclosure process and there appeared to be no benefits to the home owner or housing market from slowing the process. What’s more, the economists said that foreclosure protection laws also could lead to an increase in blight in neighborhoods, as delinquent home owners had less incentive to keep up their homes.
Prolonging the foreclosure process also seemed to scare off some potential buyers because it raised concerns on how “clean the title to a property was,” Lauren Lambie-Hanson, one of the economist researchers, told Reuters. Please provide your thoughts!
Source: “Insight: Evidence Suggests Anti-Foreclosure Laws may Backfire,” Reuters (June 27, 2012)
After seven years of declining prices and anemic sales, it’s a welcomed change. The median selling price of a county home last month was $285,000. That’s up $30,000 from April’s median of $255,000 and $35,000 or 14 percent above the median selling price in May of 2011.
The 260 homes closing escrow last month was 18 percent higher than April and 30 percent higher than May of 2011. Monthly closed sales haven’t been this high since August of 2005. So what’s up?
Home buyers, taking advantage of mortgage interest rates in the 3′s, are snapping up homes as quickly as they get listed. Half of all closed sales last month sold within the first 30 days of the listing period at 99.77 percent of the listed price. Bank REOs accounted for one in every four sales while short sales accounted for one in every five.
Investors are all in. With lenders paying miserly interest rates on their CDs and a jittery stock market, investors are buying up homes at an unprecedented pace. According to DataQuick, 30 percent of all county sales were made to investors and most were all cash sales. Investors are making between 8 and 10 percent on their money when buying rentals.
Portion of article by Ken Calhoon, Real Estate Broker, Placerville, California
The “Real World” of this new report reflects our region! Applications for government mortgage refinancing more than doubled last week, soaring 121.3 percent and reaching an all-time high, the Mortgage Bankers Association reports. The Federal Housing Authority lowered its premiums, contributing to last week’s big jump in FHA refinance volume, MBA said. FHA refinance volume was up 410.9 percent from a year ago.
“New, lower FHA premiums on streamlined refinance loans came fully into effect, and borrowers seized the opportunity to lower their mortgage rates without increasing their FHA premiums,” per Michael Fratantoni, MBA’s vice president of reserach .
Meanwhile, conventional applications for refinancing and applications for purchasing dropped 0.8 percent for the week ending June 15, despite continued low mortgage rates, the MBA reported. Loan requests for home purchases dropped 8.5 percent last week.
Source: “U.S. Mortgage Applications Fell Last Week,” Reuters (June 20, 2012)
Shadow inventory dropped nearly 15 percent year-over-year in April and is at about a four-month supply—reaching its lowest level in nearly three years, real estate data provider CoreLogic reports.
Shadow inventory, as defined by CoreLogic, refers to properties that are seriously delinquent by 90 days or more, in the foreclosure process, and properties that have completed the foreclosure process but not yet have been listed for sale.
CoreLogic reports that “the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been approximately offset by the equal volume of distressed (short and real estate owned) sales.”
“Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent,” Mark Fleming, CoreLogic’s chief economists, says. “The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices.”
Serious delinquencies are the main driver of shadow inventory, CoreLogic notes. Serious delinquencies declined 28% in California.
More information at source: CoreLogic
Let’s share the good news! Mortgage applications for home purchases and refinancings jumped 18 percent last week, reaching the highest volume since 2009, according to the Mortgage Bankers Association’s report for the week ended June 8.
Loan requests for home purchases — which is a future gauge of home sales — ticked up 12.8 percent alone for the week. Refinancing applications climbed 19.2 percent.
“Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months,” says Michael Fratantoni, MBA’s vice president of research and economics.
Source: “Mortgage Applications Rose Last Week: MBA,” Reuters (June 13, 2012)
The number of homes on the market continues to become a shrinking pool. Inventory of for-sale single-family homes, condos, townhomes, and co-ops dropped 20 percent in May compared to year-ago levels, according to data from REALTOR.com of 146 markets.
While inventories were on the decline, the median national list price was on the rise, inching up 3.17 percent in May compared to May 2011.
“These key indicators continue to suggest that the housing market is steadily moving along a path of stabilization and gradual recovery,” Realtor.com notes. Please provide comments about your market area.
Source: Melissa Dittmann Tracey, REALTOR® Magazine, REALTOR.com
More Americans are optimistic that home prices will inch up over the next year, with expectations that prices will rise at least 1.4 percent in that timeframe. That marks the highest amount ever recorded in Fannie Mae’s monthly National Housing Survey.
Thirty-four percent — also the highest ever recorded — of the 1,000 respondents in the May housing survey say they expect to see a boost in home prices in the next year. Forty-one percent say they think mortgage rates also will rise over the next year.
“Both indicators suggest the potential that consumers may consider moving off the sidelines to purchase a home,” according to the survey.
Survey respondents also say they expect rental prices to continue to edge up over next year, projecting a 4.1 percent increase in that period.
More details at source: Fannie Mae and “Americans Expect 1.4% Increase in Home Prices: Fannie Mae” HousingWire (June 6, 2012)
A “mega-boom in home ownership” is brewing as Hispanic Americans look to join in home ownership. We agree with Movoto, a real estate brokerage in San Mateo, Calif., ”Hispanics will make up half of new home buyers nationwide by 2020.”
The growth in that time frame is expected to be big, considering that currently 75 percent of first-time home buyers are white and only 11 percent are Hispanic.
Observers say that with Hispanics’ birth rates and purchasing power drastically increasing. Hispanics are expected to be a powerful force in real estate in coming years.
More than half of all infants born in the United States last year were minorities or multiracial, according to U.S. Census data. Hispanics account for 8.9 births for every death, while whites have 1.1 births for every death. The Hispanic population in the United States has more than tripled between 1980 and 2010, according to the National Association of Hispanic Real Estate Professionals’ data.
“In general, Hispanics hold fast to the American dream,” states a recent article at Forbes. “According to national housing surveys, despite worries over jobs and the economy, they are more eager to become home owners for both emotional and financial reasons.”
Source: “American Dream: Hispanic Home Buyers on the Rise,” Forbes 5/ 3/12
It’s been mostly a “buyer’s market” in the majority of housing markets for the past few years, but more Americans are seeing home buyers’ power in home sales and negotiations slipping away. Our regional low listing inventory adds fuel to this prediction.
More Americans are reporting increased optimism when it comes to selling a home as prices take a turn upward, according to a recent survey. Does your market reflect this?
About 28 percent of Americans say it’s a good time to sell now, inching up from 13 percent last quarter, according to a survey by Redfin of more than 1,200 potential buyers in 18 metro areas.
Nearly 60 percent of the survey’s respondents say they think prices will rise this year, up from 34 percent last year.
Seventy-one percent of the respondents surveyed also said they are seeing more bidding wars and multiple bids on homes today. Please provide your comments.
Source: “Redfin: Homebuyers Think the Market is Beginning to Favor Sellers,” HousingWire (June 4, 2012)