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Mortgage Rates Hold at Yearly Low This Week

August 29 2014

The 30-year fixed-rate mortgage is heading into the holiday weekend at its yearly low, giving home shoppers and home owners another opportunity to snag the lowest rate of the year,  weekly mortgage market surveys in its weekly mortgage market survey.

“Mortgage rates were little changed following mixed housing news,” says Frank Nothaft, Freddie Mac’s chief economist. “Existing-home sales rose for the fourth consecutive month to an annualized pace of 5.15 million, the highest of the year. On the other hand, new-home sales fell for the third consecutive month to an annualized rate of 412,000 units.”

Freddie Mac reports the following national averages for the week ending Aug. 28:

  • 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, holding the same as last week’s new low for 2014. A year ago at this time, 30-year rates averaged 4.51 percent.
  • 15-year fixed-rate mortgages: averaged 3.25 percent, with an average 0.6 point, rising from last week’s 3.23 percent average. Last year at this time, 15-year rates averaged 3.54 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, rising from last week’s 2.95 percent average. Last year at this time, 5-year ARMs averaged 3.24 percent.

Source: Freddie Mac

Lower Rates Give Loan Demand Slight Boost

August 27 2014

After several weeks of drops in interest rates, mortgage applications finally got a modest lift as refinancers and home buyers took advantage of the dip, CNBC reports.

The Mortgage Bankers Association’s weekly mortgage market index showed that total mortgage application volume rose 2.8 percent during the week ending Aug. 22 compared to a week earlier.

Broken out, applications for refinancings increased 3 percent last week but remain 25 percent below a year ago — even when mortgage rates were higher, MBA reports. Home-purchase mortgage applications also rose 3 percent during the week and remain 11 percent below its rate last year at this time.

The 30-year fixed-rate mortgage fell to 4.28 percent during the week from 4.29 percent the prior week, MBA reports.

Source: “U.S. Mortgage Volume Ekes Out Gain on Tiny Drop in Rates,” CNBC (Aug. 27, 2014)

Days to Close a Home Loan Drops to New Low

August 25 2014

Both closing times and credit requirements are dropping, according to the latest report from Ellie Mae. The mortgage industry services provider states in its Origination Insight Report that the average number of days to close a loan has dropped to 37 in July, compared to 41 days in June. Ellie Mae notes that’s the the lowest average they’ve seen since they began tracking. On average, it took 38 days to close a FHA loan, 36 days to close a conventional loan, and 38 days to close a VA loan in the month of July.

The report also notes that the average FICO score fell one point to 727 in July, reversing a four-month trend of increases. Researchers also noted another “sign of easing” is that 32 percent of closed loans had an average FICO score under 700 last month, compared to only 25 percent one year ago.

Meanwhile, the purchase market climbed in July, as the share of closed purchase loans hit 67 percent, up 2 percent from June – and the highest percentage since Ellie Mae began tracking the data in 2011. Refinanced loans took up the remaining 32 percent of closed loans.

The report focuses on loans that closed or were denied over the course of a month, comparing the data to other time frames, according to Ellie Mae.

Source: “Ellie Mae Releases July 2014 Origination Insight Report,” (August 20, 2014)

Mortgage Rates Sink to a ‘New Low for 2014′

August 22 2014

Despite predictions that mortgage rates were to inch up in the second half of this year, fixed-rate mortgages continue to tumble.

Borrowing costs moved lower this week, as the 30-year fixed-rate mortgage dipped to a 4.10 percent average, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgages previous low average for the year was 4.12 percent.

Freddie Mac reports the following average mortgage rates for the week ending Aug. 21:

  • 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, dropping from last week’s 4.12 percent. Last year at this time, 30-year rates averaged 4.58 percent.
  • 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.6 point, dropping from last week’s 3.24 percent average. A year ago, 15-year rates averaged 3.60 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.95 percent, with an average 0.5 point, dropping from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.21 percent.

Source: Freddie Mac

Refis Tick Up Loan Demand in Latest Week

August 20 2014

A drop in mortgage rates renew home owners’ interest in refinancing their mortgage.

The rise in refinancing applications helped to give overall loan demand a boost for the week ending Aug. 15, the Mortgage Bankers Association reports in its weekly mortgage market survey, which reflects 75 percent of the residential mortgage market.

Mortgage application activity, including both loans for refinancings and home purchases, increased 1.4 percent during the week.

Broken out, refinancing applications increased 2.7 percent, while loans for home purchases, viewed as a leading indicator of future home sales, fell 0.4 percent.

The 30-year fixed-rate mortgage averaged 4.29 percent during the week, down 6 basis points from the prior week, the MBA reports.

Source: “U.S. Mortgage Applications Rise in Latest Week: MBA,” Reuters (Aug. 20, 2014)

‘City Design’ Linked to Residents’ Health

August 17 2014

Older cities are generally healthier than many newer cities because compact street networks promote more walking and biking, according to researchers at the University of Colorado Denver and the University of Connecticut.

The study’s co-authors looked at 24 medium-sized California cities with populations between 30,000 and just over 100,000, examining street network density, connectivity, and configuration. They studied how street design correlates with obesity, diabetes, high blood pressure, heart disease, and asthma rates collected by the California Health Interview Survey since 2003.

The report concluded that more intersections in a city leads to a reduction in obesity at the neighborhood level, as well as a reduction of obesity, diabetes, high blood pressure, and heart disease at the city level. The study also found a correlation between wider streets with more lanes and increased obesity and diabetes rates.

“Over the course of the 20th century, we did a great job of engineering utilitarian active transportation out of our daily lives,” said Wesley Marshall, study co-author and assistant professor of engineering at CU Denver. “While they were well-intentioned design decisions, they effectively forced people to make an effort to seek out exercise and we are now seeing the health implications of these designs.”

“Taken together, these findings suggest a need to radically re-think how we design and build the streets and street networks that form the backbone of our cities, towns, and villages,” said Norman Garrick, co-author and associate professor of engineering at the University of Connecticut. “This research is one more in a long line that demonstrates the myriad advantages of fostering walkable places.”

Source: “Study Shows Links Between City Design And Health,” University of Colorado Denver (Aug. 11, 2014)

Is the Entry-Level Home Vanishing?

August 13 2014

For-sale inventories may be at nearly a two-year high, but first-time home buyers are still finding themselves shut out of the housing market, being outbid and still not finding enough choices in their price range, Reuters reports.

A decline among inventories for entry-level homes has worsened during the past year as discount foreclosures have faded and investors have continued to buy up low-priced homes and turn them into rentals through all-cash deals. Also hampering the inventory picture, lower-priced properties are more likely to have home owners with underwater mortgages, preventing them from moving on and putting their homes on the market, Reuters reports.

“It’s bad news for people looking for a starter home that all the choices are disappearing,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “People shouldn’t expect inventory to show up on the low end. It’s not available.”

The number of homes for sale below $198,000, considered the bottom third of the market, dropped 17 percent in June compared to a year earlier, according to an analysis by the real estate brokerage Redfin, which tracked 31 of the largest U.S. metro markets. On the other hand, inventories rose 3 percent in the middle of the market and soared 15 percent at the top, according to the analysis.

First-time home buyers are often drawn to the lower-priced homes, and their dwindling numbers in recent years have reflected some of the struggles in finding an affordable home. First-time home buyers accounted for 28 percent of all sales of previously owned homes in June, which is down from a historical average of about 40 percent, according to NAR research.

Source: “First-Time Buyers Shut Out of Expanding U.S. Home Supply,” Bloomberg News Online (Aug. 12, 2014)

 

 

2014 Expected to Have ‘Strong Finish’

August 9 2014

Despite hitting a soft spot in the first quarter, home sales are expected to make a strong showing in the second half of 2014, NAR’s Chief Economist Lawrence Yun told brokers at the Broker Summit in Atlanta Thursday.

Yun called the past few years of economic recovery “difficult but meaningful.” Unit sales are currently down 5 percent year-over-year, but he expects 2014 to end up close to last year’s totals at a little more than 5 million units sold.

Looking at the economy is a good way to see what will happen in housing, Yun says. Gross domestic product (GDP) was negative in the first quarter, but bounced back in the second. Although Yun would like to see consistent economic growth above 3 percent – it’s currently around 2 percent. “It’s moving in the right direction,” he says. “We’ve recovered all the jobs lost in downturn and new jobs are being created.”

Declining unemployment is a good sign for housing. However,more people are claiming disability, and rarely do they return to the workforce, Yun says. What’s more, the unemployment statistics are not considering Americans who aren’t collecting unemployment and who have essentially dropped out of the labor force.

Another piece of good news for real estate is that inventory is heading up nationwide, Yun says. Thetotal housing inventory at the end of June rose 2.2 percent to 2.30 million existing homes for sale. Research shows that consumers feel more confortable visiting 10 to 15 homes before making a purchase decision, Yun says, and as inventories come back, so will buyer confidence and sales.

Source: Erica Christoffer, REALTOR® Magazine

Moving from ‘Renting to Homeownership’ could get easier!

August 7 2014

Adding in rental history to a credit score could make all the difference for potential homeowners, according to an article in Businessweek.

Experian published an analysis on almost 20,000 people in government-subsidized housing who pay their monthly rent on time. The survey found that before adding in rental history, 11% of the same had no credit file at all, which makes it extremely hard to get loans. However, once the rental history was included, 59% of that group had prime credit scores, and another 38% had “nonprime” scores, while only 3% were considered subprime.

As reported back in June, mortgage lenders might start considering rent payment history in credit scores. In the current system, years of monthly payments to landlords do not show up on credit-bureau files.

Two of the national bureaus — Experian and TransUnion— have begun incorporating verified rental-payment data into credit files where it can be included in the computation of consumers’ scores when they apply for a mortgage.

Source: Businessweek

$22B Still Unclaimed in Government Mortgage Relief

July 30 2014

Nearly $22 billion remains available to help struggling home owners reduce their monthly mortgage payments and avoid foreclosure through the government’s Making Home Affordable program, according to a quarterly report by the special inspector general for the Troubled Asset Relief Program. TARP has only spent $12.8 billion to date of the $45.6 billion in funds it’s been allocated for housing programs. An additional $3.4 billion is still available for the Hardest Hit Funds Program as well.

The “Treasury should improve coordination between these programs so that they work together as seamlessly as possible to provide effective, sustainable mortgage relief to as many struggling home owners as possible,” the report states.

HAMP has suffered from low participation. Only 1 in 6 home owners who have applied for HAMP have received a permanent loan modification, according to the report. The program has had a high redefaulting rate. To date, 389,222 home owners who have participated in HAMP have not been able to keep up with their new modified mortgage payments. Twenty-nine percent of home owners who qualified for HAMP have had to drop out of the program.

Many home owners are soon set for an increase in their rate. After five years, the rate on HAMP loans rises 1 percent until reaching its previous rate prior to the loan modification.

Source: “$22B in Government Mortgage Relief Still Left for Struggling Homeowners,” Housingwire (July 30, 2014)