Rents are increasing at about the same pace that home values are dropping, says Stan Humphries, Zillow’s chief economist, who says, according to their surveys, home prices have dropped 3.1 percent year-over-year whereas rents have increased 2.5 percent. “Herein lie the seeds to eventually more interest in buying on the part of consumers, which will help put a floor under home prices,” Humphries told Investors Business Daily.

Recent housing surveys, including Zillow’s, are showing home prices are starting to rise in recent months. Since this varies by local areas, how’s your market doing?

Source: “Rising Rents Prompt Buys, May Help Housing Recover,” Investors Business Daily (May 10, 2012)

The agency is proposing a ban on mortgage companies from charging origination fees, which can fluctuate with a loans amount, The New York Times reports. The fees can often get confused with upfront discount points that borrowers often pay.

The agency is also looking at implementing a new rule that would require lenders to offer a reduced interest rate when a borrower chooses to pay discount points on a loan upfront. Lenders would be required to offer a loan option to not include any points.

“Mortgages today often come with so many different types of fees and points that it can be hard to compare offers,” Richard Cordray, the director of the consumer bureau, told The New York Times. “We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.” What are your thoughts for this being transparency for the housing recovery in your local market?

Source: “New Rules May Curtail Some Fees in Mortgage, ” The New York Times 5/9/12)

The real estate markets expected to see the biggest increases in home prices will likely be those hardest hit the last few years by foreclosures, such as in Phoenix and Las Vegas, and areas where prices have fallen the most, according to Fiserv’s forecast.

Housings rising affordability mixed with falling inventories of for-sale homes are the main factors driving the expected price increases, according to Fiserv.

Initially, investors are expected to help drive most of this price increase, and then followed by first-time and trade-up buyers as they re-emerge in bigger numbers to the market. Please provide your comments in regards  to your local market reflections!

Source: “U.S. Home Prices Could Rise 4% a Year, Forecast Says,” USA Today (5/8/12)

The number of people who say now is a good time to buy is also on the rise, increasing to 73 percent—also the highest level in more than a year. The percentage who said it’s a good time to sell a home also increased one point to 14 percent in March.

Meanwhile, more Americans expect rental prices to rise and are projecting an increase by 4.1 percent over the next year, the highest number recorded to date.

“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, Fannie Mae’s chief economist. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that home ownership is more compelling house choice.”

Source: “Americans’ Expectations Align to Encourage Home Buying,” RISMedia (5/6/12)

“Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at average rates for the week ending May 3:

•30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.8 point, reaching a new historical low. The previous record for 30-year rates was 3.87 percent, which was set on Feb. 9 of this year. A year ago at this time, rates averaged 4.71 percent.

•15-year fixed-rate mortgages: averaged 3.07 percent, with an average 0.7 point, another historical low. The previous record for 15-year rates was 3.11 percent set on April 12 this year. A year ago at this time, 15-year rates had averaged 3.89 percent.

•5-year adjustable-rate mortgages: averaged 2.85 percent, with an average 0.7 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 3.47 percent.

Source: Freddie Mac

Windows XP laptops and Android smartphones — even when reset to their original factory settings — were found to be the most vulnerable and still contained sensitive personal information that could be uncovered on the devices, Robert Sicilliano, a McAfee identity theft expert, told USA Today.

Sicilliano purchased 30 used devices off Craigslist. He found that half the devices were clean, but 15 of the devices still contained a lot of personal information. He was able to find bank account numbers, Social Security numbers, work documents, and court records on some of the devices.

Apple’s iPhone and iPad as well as Research in Motion’s BlackBerry were found to not pose the same risks as Android smartphones, Sicilliano notes (although he still recommends users reset the devices before giving them away).

Mary Ann Miller, financial fraud expert at Nice Actimize, told USA Today that device makers need to provide more guidance on how to responsibly get rid of old electronic devices to prevent security breeches.

Until then, Sicilliano says: “I would beat the thing to death.” What are your thoughts?

Source: “Discarded Digital Devices can Retain Sensitive Data,” USA Today (May 2, 2012)

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Our suggestions are in line with a recent article at Money Magazine highlighting some of the following tips when shopping for a mortgage:

1. High credit scores count. The lowest mortgage rates go to home shoppers with credit scores of 760 or higher. Avoid opening new lines of credit or loans for at least three months prior to getting a loan. Also, on your open accounts, try to pay off those balances. “One large balance — even if it’s paid off at the end of the month — can ding your score by 20 points or more,” according to the article at Money Magazine.

2. Gather plenty of quotes. Most experts say shopping around can pay off. Gather at least six quotes from lenders on mortgage rates because they can vary quite a bit from lender to lender. Request quotes from local and regional lenders as well as national ones for comparison. Be sure to ask about estimated closing costs, too, which can be anywhere from 2 percent or more of the loan balance.

3. Ask about lock-ins. To make sure the rate doesn’t go up when you’re under contract, ask about a lock-in period on the loan, in which lenders agree to not raise the interest rate within a certain time period. Home shoppers should ask their lender and REALTOR® how long it takes to close loans similar to theirs and see how long they can lock a rate in for. Some lenders will charge several hundred dollars to extend a lock-in agreement, so experts recommend learning the lock-in terms beforehand when shopping for the best mortgage deal.

Source: “6 Ways to Get a Great Mortgage Deal,” Money Magazine (April 30, 2012)

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Some of the consequences of foreclosures are obvious: family displacements, crime in vacant properties, ruined credit, and the loss of equity. Other, less obvious consequences have emerged as well. About 8 million children could be affected, including kids of home owners and renters who were evicted due to a foreclosure. Julia Isaacs of the Brookings Institution calls these children the “invisible victims” of the foreclosure crisis, as foreclosures not only can cause emotional trauma, but also interfere with a child’s educational development.

Researchers also have found a connection between rising foreclosures and an increase in medical visits for mental health, such as anxiety, or preventable conditions such as high blood pressure. Plus, let’s don’t forget possible job related problems. 

Our region is strapped because of a loss of property tax revenue caused by foreclosures, which can lead to cuts in services — including fire protection, senior centers, and local law enforcement. Please provide comments about your local market contitions. 

Source: “Three Hidden Costs of the Foreclosure Crisis,” MarketWatch (4/ 24/12)

According to a survey this March of 4,500 agents and brokers, no REALTORS® complained about low-ball offers. The main problem nowadays: The sudden drop in inventory of for-sale homes has led to fewer homes available to sell.

For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price, the Los Angeles Times reports. Please comment, is your local market reflecting similar changes?

Source: “Low-ball Offers Decline in Some Housing Markets,” Los Angeles Times (4/22/12)

So why are banks getting more agreeable to short sales? Banks are realizing that short sale transactions usually sell for higher prices than foreclosures. In fact, foreclosed homes tend to sell for 29 percent less, on average, than comparable non-distressed properties. Short sales tend to sell at a 23 percent discount, according to Lending Processing Services data from January.

Banks and government agencies in recent weeks have taken steps to speed up the short sale process, setting new timelines for how long mortgage servicers have to respond to short sales offers. Also, some banks, such as Wells Fargo and JPMorgan Chase, are even offering some home owners cash incentives — up to $35,000 — if they agree to do a short sale instead of let the home fall into foreclosure.

Source: “Short Sales Surpass Foreclosures as Banks Agree to Deals,” Bloomberg News (April 17, 2012)