Welcome to the "Z" Team!

The housing market is heating up, yet many house hunters are not prepared to take on the biggest purchases of their lives.

When it comes to mortgages, home buyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to an April survey of more than 1,000 current and prospective homeowners by real estate website Zillow.

Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what the term “annual percentage rate” (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.

“All too often buyers focus on negotiating a lower home price and ignore the importance of finding the right loan,” said Erin Lantz, director of mortgages for Zillow. “Buyers should always shop multiple lenders and compare rates and fees and read lender reviews in order to find the best loan for their situation.”

Source: http://money.cnn.com/2013/05/09/real_estate/homebuyers-mortgages/index.html?hpt=hp_t2

Talking Points:

For the first time in six weeks, fixed-rate mortgages reversed course and climbed higher this week, Freddie Mac reports in its weekly market survey.

“Fixed mortgage rates edged up following a solid employment report for April,” says Frank Nothaft, Freddie Mac’s chief economist. “The economy gained 165,000 new jobs on net last month, more than the market consensus forecast and the largest monthly increase this year.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 9:

• 30-year fixed-rate mortgages: averaged 3.42 percent, with an average 0.7 point, rising from last week’s 3.35 percent average. A year ago at this time, 30-year rates averaged 3.83 percent.
• 15-year fixed-rate mortgages: averaged 2.61 percent, with an average 0.7 point, rising from last week’s 2.56 percent average. Last year at this time, 15-year rates averaged 3.05 percent.
• 5-year adjustable-rate mortgages: averaged 2.58 percent this week, with an average 0.5 point, climbing from last week’s 2.56 percent average. Last year at this time, 5-year ARMs averaged 2.81 percent.

Source: Freddie Mac

The number of homes for sale is at the lowest point in more than 10 years, but with buyer demand still high, many markets are seeing bidding wars. A TIME magazine article recently asked: “Are buyers being manipulated into overbidding for the relatively few attractive homes on the market?” Some real estate professionals say that homes are being underpriced in order to ignite a bidding war.

“Most people are not pricing at market value,” a real estate professional told the San Francisco Chronicle. “Even in this market, you don’t want to overprice.”

Bidding wars have become commonplace in markets like Denver, where half of the new homes on the market are selling in less than 30 days. In Northern and Southern California nine in 10 homes are attracting bidding wars, as well as two-thirds of the homes for sale in Boston, New York City, Seattle, and Washington, D.C., the TIME magazine article notes.

“The only question is not whether a new listing will get multiple bids but how many it will get,” says a Sacramento, Calif.-based real estate professional.  Your comments!?!

Source: “Forget Lowballing: Bidding Wars Return in Hot Housing Markets,” TIME (April 30, 2013)

Fixed-rate mortgages pushed lower for the fifth-consecutive week, with low mortgage rates further driving the housing recovery over the near term, says Frank Nothaft, Freddie Mac’s chief economist.

This week, the 30-year fixed-rate mortgage hovered near its all-time record low, while 15-year rates set a new record.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 2, 2013:

• 30-year fixed-rate mortgages: averaged 3.35 percent, with an average 0.7 point, just shy of its 3.31 percent record set during the week of Nov. 21, 2012. A year ago at this time, 30-year rates averaged 3.84 percent.
• 15-year fixed-rate mortgages: sank to an all-time record low of 2.56 percent, with an average 0.7 point, dropping from last week’s previous record of 2.61 percent. Last year at this time, 15-year rates averaged 3.07 percent.
• 5-year adjustable-rate mortgages: averaged 2.56 percent, with an average 0.5 point, dropping from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.85 percent.

Source: Freddie Mac

Sixty-five percent of the millennial generation, ranging in age roughly from 18 to 34, say that their intention to purchase a house has significantly increased in the past year, according to a survey from PulteGroup.

“As the economy continues to stabilize, more young adults will wean off of mom and dad and start to live on their own, spurring added economic growth,” HousingWire reports.

Nearly 20 percent of men ages 25 to 34 reportedly live with their parents, while 9.7 percent of women that age still live at home.

As this generation gains greater financial security, more millennials will begin to embark on their own.

A recent article from Barron’s notes that Generation Y could surprise the nation in upcoming years with their spending power and economic growth. The generation is 7 percent larger than the baby boom generation.

“Millennials have witnessed the housing boom and bust, but still believe home ownership is a good investment,” says Fred Ehle, vice president for PulteGroup.

Source: “Millennials Rightly Positioned to Boost Economy,” HousingWire (April 29, 2013)

The 15-year fixed-rate mortgage reached a new all-time record low this week, averaging 2.61 percent, Freddie Mac reports in its weekly mortgage market survey. The 5-year adjustable-rate mortgage also reached a new record low this week of 2.58 percent.

This marked the fourth-consecutive week mortgage rates inched lower.

“The housing market is getting a boost with mortgage rates hovering at or near record lows,” says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for mortgage rates for the week ending April 25:

• 30-year fixed-rate mortgages: averaged 3.40 percent, with an average 0.8 point, dropping from last week’s 3.41 percent average. A year ago at this time, 30-year rates averaged 3.88 percent.
• 15-year fixed-rate mortgages: averaged the new low of 2.61 percent, with an average 0.7 point. The previous record low for 15-year rates was set the week of Nov. 21, 2012, when 15-year rates averaged 2.63 percent. A year ago at this time, 15-year rates averaged 3.12 percent.
• 5-year adjustable-rate mortgages: also averaged a new all-time record low of 2.58 percent this week, with an average 0.5 point, dropping from last week’s 2.60 percent average. Last year at this time, 5-year ARMs averaged 2.85 percent.

Source: Freddie Mac

Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive.

Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets.

About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes. “But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”

Source: “The Housing Market: Not Your Analyst’s Oldsmobile?” The Wall Street Journal (April 23, 2013)

In some parts of the country, energy efficient and eco-friendly homes are easier to find. The real estate brokerage Redfin recently ranked cities that have the greenest homes, basing its rankings on the number of homes for sale that boast green features—such as solar panels, LEED certification, and Energy Star appliances—as well as taking into account each city’s carbon-dioxide emissions ranking.

“The residents of these cities are reducing their environmental footprint and saving money at the same time” by lowering their monthly utility bills, says Julie Jacobson, a real estate agent with Redfin.

The 3 cities emerged on the top of the list for greenest cities for homes:

1. San Francisco
2. Washington, D.C.
3. Sacramento, Calif.

Source: “10 Cities With the Greenest Homes,” AOL Real Estate (April 19, 2013)

Average fixed-rate mortgages moved lower this week amid data showing weaker consumer spending, Freddie Mac reports in its weekly mortgage survey. It marked the third-consecutive week that mortgage rates went down.

Freddie Mac reports the following national averages in rates for the week ending April 18:

• 30-year fixed-rate mortgages: averaged 3.41 percent, with an average 0.7 point, dropping from last week’s 3.43 percent average. A year ago at this time, 30-year rates averaged 3.90 percent.
• 15-year fixed-rate mortgages: averaged 2.64 percent, with an average 0.7 point, dropping from last week’s 2.65 percent average. Last year at this time, 15-year rates averaged 3.13 percent.
• 5-year adjustable-rate mortgages: averaged 2.60 percent, with an average 0.5, dropping from last week’s 2.62 percent average. Last year at this time, 5-year ARMs averaged 2.78 percent.

Source: Freddie Mac