‘Energy Efficiency’ Weighted More in Appraisals

Energy efficiency scores will soon be included on appraisal forms in a handful of states. Builders are applauding the change, saying that will help give more credit for energy-saving features.

The Home Energy Rating System (HERS) Index is a numerical rating system that measures energy consumption compared to a standard house. The standard house has a score of 100. But a house that has a HERS index of 70, for example, would use 30 percent less energy. A home with a HERS index of 130, on the other hand, would consume 30 percent more energy. As such, the lower the HERS score, the lower the energy costs. The HERS score will be added to an existing green-building addendum that appraisers use.

More details at this source: “A Move Toward More Helpful Appraisals,” Greenbuildingadvisor.com (March 16, 2017)

 

This Could Boost Millions of Credit Scores

Equifax, Experian, and TransUnion announced they will soon remove tax lien and civil judgment data from some consumer credit records. The reason for this change is that many liens and most judgments fail to include vital pieces of information. Beginning on July 1, the public records data the firms use must include these data points: the consumer’s name, address, and either a social security number or a date of birth. Existing reports that fail to comply will be struck from the consumer’s credit record and new data that does not have that information will not be added.

Credit scores are weighed carefully by lenders in making decisions about loan terms and how much consumers can borrow, and can be very important in securing a sustainable mortgage. FICO estimates the changes will cause an improvement to about 12 million consumer scores; however the boost will be modest, likely less than 20 points.

In recent months, several lawsuits brought by states have been pushing credit reporting companies to remove some categories of negative data from credit score reports, such as information related to library fines or gym memberships. But some experts fear removing negative public record information could pose a greater risk to lenders.

Source: “Reporting Change Could Raise Credit Scores, Risk,” Mortgage News Daily (March 14, 2017)

Home Loan Interest Rates Hit 2017 High

For the first time in weeks, the 30-year mortgage rate moved with treasury yields and jumped 11 basis points to 4.21 percent. The strength of Friday’s employment report and the outcome of next week’s FOMC meeting are likely to set the direction of next week’s survey rate.

Freddie Mac reports the following national averages rates for the week ending March 10:

  • 30-year fixed-rate mortgage (FRM) averaged 4.21 percent with an average 0.5 point for the week ending March 9, 2017, up from last week when it averaged 4.10 percent. A year ago at this time, the 30-year FRM averaged 3.68 percent.
  • 15-year fixed-rate mortgage  (FRM) this week averaged 3.42 percent with an average 0.5 point, up from last week when it averaged 3.32 percent. A year ago at this time, the 15-year FRM averaged 2.96 percent.

Source: Freddie Mac

How Will Housing Fare In the Next Decade?

Housing demand over the next decade will be significantly higher than it is today, predicts Lawrence Yun, the chief economist of the National Association of REALTORS®, in his latest column at Forbes.com. Rising populations and a growth in the job market likely will release a pent-up demand in housing over the next 10 years, he says.

The ages you’ll need to watch for in the housing market over the next decade: those in their 30s and 40s. The population of people in their 30s is expected to grow by 5 million over the next decade, reaching 48 million. Yun says that 12 percent increase likely will lead to more first-time home buyers. Plus, the number of Americans in their 40s will increase by 3 million, and he predicts they’ll be looking to trade up in real estate.

Overall, Yun notes, “Within reasonable parameters of economic growth and interest rate movements, home sales should do well over the next decade, clocking in at around 6 million a year.” The ages we’ll need to watch for in the housing market over the next decade: those in their 30s and 40s. The population of people in their 30s is expected to grow by 5 million over the next decade, reaching 48 million. Or course, every region will vary, what’s predicted for your market?

Source: “Housing Demand Over the Next Decade,” Forbes.com (March 2, 2017)

 

Mortgage Rates Move Lower This Week

Mortgage rates broke a month long holding pattern and inched lower this week.

Freddie Mac reports the following national averages rates for the week ending March 2:

  • 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, dropping from last week’s 4.16 percent average. A year ago, 30-year rates averaged 3.64 percent.
  • 15-year fixed-rate mortgages: averaged 3.32 percent, with an average 0.5 point, falling from last week’s 3.37 percent average. Last year at this time, 15-year rates averaged 2.94 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.14 percent, with an average 0.4 point, falling from last week’s 3.16 percent average. A year ago, 5-year ARMs averaged 2.84 percent.

Source: Freddie Mac

Homeowners Living Farther From Their Work

The typical American commute continues to get longer and longer. The average commute time grew to 26.4 minutes, according to the latest numbers from the U.S. Census Bureau. Multiplied out, the average American spends about three hours and 20 minutes longer getting to and from work than they did in 2014. Our ‘Sierra Foothills’ locations are great for Sacramento commuters! (See our Videos)

Even longer commutes than that are the norm for many workers. The number of workers with 45-minute commutes increased to 3.5 percent and the number of hour-long commutes increased to 5.1 percent. Workers with extreme commutes — 90 minutes or more — grew by the fastest rate of all, to 8 percent.

One potential future bright spot for workers faced with longer commute times is the gradual growing acceptance of remote working. About 4.6 percent of workers, or 6.8 million, worked from home in 2015, according to U.S. Census data. That is a 5 percent increase since 2014.

Source: “The American Commute Is Worse Today Than It’s Ever Been,” The Washington Post (Feb. 22, 2017)

Home Loan Interest Rates in Holding Pattern?

Good news for now! Mortgage rates continue to defy expectations, with the 30-year fixed-rate mortgage rate barely budging for the fourth consecutive week.

Freddie Mac reports the following national averages for the week ending Feb. 23:

  • 30-year fixed-rate mortgages: averaged 4.16 percent, with an average 0.5 point, rising from last week’s 4.15 percent average. Last year at this time, 30-year rates averaged 3.62 percent.
  • 15-year fixed-rate mortgages: averaged 3.37 percent, with an average 0.5 point, increasing slightly from last week’s 3.35 percent. A year ago, 15-year rates averaged 2.93 percent.

Source: Freddie Mac

Existing-Home Sales Reach Decade High

Existing-home sales in January reached their fastest pace in nearly a decade, with all major regions except the Midwest posting gains last month, the National Association of REALTORS® reports.

Total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—rose 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January. That’s 3.8 percent higher than a year ago and marks the strongest month since February 2007, according to the NAR chief economist Lawrence Yun.

The REALTORS® Affordability Distribution Curve and Score, a new measurement of homebuying activity created by NAR and realtor.com®, revealed that the combination of higher mortgage rates and home prices made active listings less affordable for households in more than half of all states last month.

Source: National Association of REALTORS®

 

Mortgage Rates: Is It a ‘Year Full of Surprises’?

Interesting thought of the week with this real estate opinion:  “For the last 46 years, the 30-year mortgage rate has been almost perfectly correlated with the yield on the 10-year Treasury, but not this year,” says Sean Becketti, Freddie Mac’s chief economist. “From Dec. 29, 2016, through today, the 30-year mortgage rate fell 17 basis points to this week’s reading of 4.15 percent. In contrast, the 10-year Treasury yield began and ended the same period at 2.49 percent. While we expect mortgage rates to fall into line with Treasury yields shortly, this just may be a year full of surprises.”

Freddie Mac reported the following national averages for the week ending Feb. 16:

  • 30-year fixed-rate mortgages: averaged 4.15 percent, with an average 0.5 point, dropping from last week’s 4.17 percent average. Last year at this time, 30-year rates averaged 3.65 percent.
  • 15-year fixed-rate mortgages: averaged 3.35 percent, with an average 0.5 point, falling from last week’s 3.39 percent average. A year ago, 15-year rates averaged 2.95 percent.

Source: Freddie Mac

Don’t Underestimate Power of Pets

Pets are having more of an influence in home buying and selling as well as renovation, a new study by the National Association of REALTORS® shows. Eighty-one percent of Americans say that animal-related considerations play a role when deciding on their next living situation, according to the 2017 Animal House: Remodeling Impact report.

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership ” says NAR President William E. Brown. “REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

99 percent of pet owners say they consider the animal part of the family. Eighty-nine percent of respondents say they would not give up their animal because of housing restrictions or limitations. Home owners are willing to move for their pets too. Twelve percent of pet owners have moved to accommodate their animal; 19 percent would consider moving to accommodate their animal in the future.

Source: National Association of REALTORS®