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Natural disasters from tornados, hail, winds, and floods caused widespread damage throughout the country in 2homeowner’s insurance 011, and more home owners may soon see their premiums rise because of it.

The insurance industry has faced heavy losses in recent years from natural disaster, and insurers may be forced to raise costs of premiums, particularly in the Southeast and Midwest, Robert Hartwig, president of the Insurance Information Institute, warns.

“We’ve had record losses for four straight years,” Hartwig told USA Today. “My sense is that premiums will probably rise 4 percent to 5 percent.”

The average annual cost of homeowner’s insurance in 2008 was $791 and increased to $807 in 2010, according to data by the Insurance Information Institute. Hartwig told USA Today that he predicts the average premium for 2011 will be about $840.

Source: “Home Insurance Rates Likely to Go Higher,” USA Today (Jan. 4, 2012)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

For nine consecutive weeks, the 30-year fixed-rate mortgage has been hovering at or below record lows of 4 percent, pushing housing affordability for home buyers even higher. 

But will these low rates stick around much longer? 

The Federal Reserve has vowed to keep rates low through 2013 so rates likely will hang around for a few more months, at least, but whether mortgage rates will stay at the current record-lows, many experts say it’s unlikely. 

The 30-year fixed-rate mortgage is expected to inch up to an average 4.5 percent for 2012 and increase to 5.4 percent in 2013, according to Freddie Mac economists’ forecasts. 

While that forecast means rates are expected to move higher in the coming months, the rates will still be low by historical standards, economists told the Los Angeles Times. For comparison, 30-year rates averaged more than 16 percent in 1981 and 1982. What’s more, until 2000, rates typically were above 8 percent, Freddie Mac notes. 

Despite the drop in rates, however, many home buyers have been unable to take advantage of the low rates. Lenders’ tightening of their underwriting standards for loans in the recent years following the housing crisis has shut some buyers who have poor credit, low down payments, or unsteady employment from securing a loan at today’s low rates. Freddie Mac had predicted home-purchase applications to comprise two-thirds of all mortgage applications by the end of 2011. But the Mortgage Bankers Associations says that instead about 80 percent of the mortgage applications came from home owners who wanted to refinance.  

Source: “Low Mortgage Rates Likely to Continue Through 2012, Experts Say,” Los Angeles Times (Jan. 3, 2012)

The Conference Board Consumer Confidence Index improved to 64.5 (1985=100) in December, up from 55.2 in November. The Present Situation Index increased to 46.7 from 38.3, and the Expectations Index rose to 76.4 from 66.4.

Consumers’ assessment of current conditions improved in December. Those stating business conditions are “good” increased to 16.6 percent from 13.9 percent, while those stating business conditions are “bad” declined to 33.9 percent from 38.0 percent.

Consumers’ assessment of the job market also was more positive. Those claiming jobs are “plentiful” increased to 6.7 percent from 5.6 percent, while those claiming jobs are “hard to get” decreased to 41.8 percent from 43 percent.

More information at: http://www.conference-board.org/press/pressdetail.cfm?pressid=4370

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

The multifamily market continues to post gains. 

“Rents are rising, vacancies are falling, household formations are growing and rental supply is limited,” according to a recent report, “2012: The Year of the Landlord,” issued by Morgan Stanley. “We believe the demand for rental properties will continue to grow.”

Vacancies of rental properties dropped to 9.8 percent in the third quarter of this year compared to 10.3 percent earlier this year. 

Led by strong gains in multifamily housing, groundbreaking for new-housing market soared 9.3 percent in November. Construction of multifamily homes of at least two units increased 25.3 percent in November, the Commerce Department reported last week. Starts for structures with five or more units has increased more than 30 percent from October and is nearly double year-over-year levels, Reuters reports.

Rental costs are also on their way up, increasing 2.4 percent over last year compared with an increase of 0.6 percent in 2010, Reuters reports.

Source: “America Becoming a Nation of Renters,” Reuters (Dec. 27, 2011)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador,  Sacramento Counties  of  California  at: www.sierraproperties.com or www.dougandbudzeller.com

A survey of 109 economists released this week by Zillow Inc. forecasts that U.S. home prices may fall further under the weight of foreclosures, bouncing back no sooner than 2013 even with mortgage rates at historic lows.

Zillow researchers say U.S. home values probably registered their smallest drop in four years in 2011, with prices expected to hit bottom in late 2012 or the first quarter of 2013 and begin rising by 3 percent a year through 2016.

“Negative equity, unemployment, and low consumer confidence remain the key factors delaying a true recovery,” Zillow Chief Economist Stan Humphries says.

 Source: “Foreclosures Weighing on Prices May Push Housing Rebound to 2013,” Bloomberg (Dec. 22, 2011)

More news from the “Sierra Foothills” regions of El Dorado, Placer, Amador and  Sacramento Counties, California  at: www.sierraproperties.com or www.dougandbudzeller.com

Fixed mortgage rates dropped even more this week, continuing the trend in reaching new record lows this year, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage averaged 3.94 percent this week while 15-year rates sank to 3.21 percent — both all-time lows from their previous record lows set on Oct. 6. The 5-year adjustable-rate mortgage also set a new record this week. 

The Federal Reserve at a meeting this week reaffirmed its commitment from this summer that it would keep interest rates low for the next two years.

Here’s a closer look at rates for the week ending Dec. 15.

• 30-year fixed-rate mortgages: averaged 3.94 percent — a new record low — with an average 0.8 point, dropping from last week’s 3.99 percent average. A year ago, 30-year rates averaged 4.83 percent.
• 15-year fixed-rate mortgages: averaged 3.21 percent — also a new record low — with an average 0.8 points, a drop from last week’s 3.27 percent average. Last year at this time, 15-year rates averaged 4.17 percent. 
• 5-year adjustable-rate mortgages: averaged 2.86 percent this week, with an average 0.6 point, dropping from last week’s 2.93 percent average. Last year at this time, 5-year ARMs averaged 3.77 percent. 
• 1-year ARMs: averaged 2.81 percent with an average 0.6 point, inching up slightly from last week’s 2.80 percent average. Last year at this time, 1-year ARMs averaged 3.35 percent. 

 Source: Freddie Mac

More financing news from El Dorado, Placer, Amador or Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

The government isn’t doing enough to help home owners at risk of default, foreclosure, and underwater on their homes, a majority of Americans say in the Home Horizons 2012 study, a survey conducted by Yahoo! Real Estate of 1,500 current and aspiring home owners. 

Fifty-one percent of home owners say the government needs to pass more legislation to help home owners who are at risk of losing their house. About two-thirds of Americans surveyed say the government needs to offer more assistance like low-cost loans to help home owners more.

Four out of five adults polled say the 2012 presidential election will have a small or large influence on the housing market, with 43 percent predicting it will have a large impact. However, one-third of those surveyed doubt either party — Republican or Democrat — will have either a positive or negative impact on the real estate market.

“A large-scale government policy that’s going to fix all of this — no one has seen such a thing,” Stan Humphries, chief Yahoo! Study, told Yahoo! Real Estate.

Source: “Yahoo! Study: Home Owners Want Political Action,” Yahoo! Real Estate (Dec. 12, 2011)

Other information from El Dorado, Placer, Amador or Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

Some lenders may be more willing to reduce the mortgage principal than grant a short sale for borrowers under the Home Affordable Modification Program (HAMP). The principal reduction can mean big savings for home owners too — the average amount reduced on a principal reduction is more than $65,000, or 31 percent of the unpaid balance on the mortgage, according to new Treasury Department data.

“The median loan-to-value ratio on modifications that went through principal reduction was 158 percent,” HousingWire reports in a recent article. “After the workout was complete, the borrower held an LTV of 115 percent, meaning he or she owed 15 percent more on the mortgage than the home was worth rather than being 58 percent underwater.”

Banks may find a principal reduction is better for them financially too. Banks report an average loss rate of 60 percent whenever borrowers complete a short sale, and an average 70 percent loss for homes in the foreclosure or REO process, according to Moody’s Investors Service. 

Source: “Principal Reduction Outpaces Short Sales Under HAMP,” HousingWire (Dec. 12, 2011)

More financing news about El Dorado, Placer, Amador or Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

The number of borrowers behind on their mortgage payments is expected to drop sharply by the end of next year, according to a new report released by TransUnion. 

Mortgage delinquency rates reflect the ratio of borrowers 60 or more days behind on their loan payments. Rates are expected to rise to about 6 percent during the first three months of 2012 before dropping to 5 percent by the end of the year, TransUnion forecasts. At its peak in the fourth quarter of 2009, mortgage delinquencies stood at a 6.89 percent rate. 

An improving jobs picture, along with a stabilizing housing market, are expected to be the main contributors in curtailing mortgage delinquencies in 2012, TransUnion says. 

But there’s still a long way to go. Even at a 5 percent rate forecasted for 2012, mortgage delinquencies will still be well above the pre-recession average of 1.5 to 2 percent, according to TransUnion. 

“We have a long way to go to get back,” Steven Chaouki, a TransUnion vice president, told the Associated Press.

Source: “Mortgage Delinquency to Drop Sharply in 2012, Report Says,” Associated Press (Dec. 7, 2011)

Let’s hope this occurs in your area and our Sierra Foothills, El Dorado, Placer, Amador and Sacramento Counties of California.

More “accidental” landlords are surfacing as home owners turn their underwater homes into rentals to try to come up with some extra cash. But some of these accidental landlords are still unable to keep up with their mortgage payments and may become delinquent on their mortgage. So what’s this mean for the person renting their property? 

Some renters may suddenly be served with an eviction notice when they discover the property they are renting is being foreclosed upon, and only having days to vacate. 

One new Web site, CheckYourLandlord.com, allows renters to check rental properties in the U.S. to see if there are any notices of default filed against the property.

Renters, or real estate professionals who represent them, can also stop at the county recorder’s office to check the status of a property. 

Source: “Renters Can Search Their Home for Foreclosure Notices for Free at CheckYourLandlord.com,” Marketwire (Nov. 30, 2011)

 For assistance in the Sierra Foothills, El Dorado, Placer, Amador or Sacramento Counties of California visit: www.sierraproperties.com or www.dougandbudzeller.com