Fannie, Freddie’s ‘Holiday Gift’

No Foreclosures! Mortgage financing giants Fannie Mae and Freddie Mac announced a nationwide suspension of eviction lockouts on foreclosures for the holiday season. The foreclosure moratorium will last from Dec. 17 to Jan. 2, 2019, and applies to all foreclosed occupied homes owned by Fannie Mae and Freddie Mac.

The moratorium, however, does not apply to other pre- or post-foreclosure activities. Legal and administrative proceedings for evictions can continue, but families will be able to remain in their home during the holiday moratorium.

Source: Freddie Mac and Fannie Mae

California Passes Solar Panel Law

Starting in 2020, all new homes constructed in California will be required to have between 2 kilowatts and 3 kilowatts of electricity sourced directly from solar panels. State legislators, whom have been considering such a measure for some time, officially voted recently to amend state building codes.

The new mandate, however, won’t be cheap to homeowners. The upfront costs of installing typical solar panels ranges from $8,000 to $12,000. The timing of the move also worries residents who lost their homes in recent wildfires in California because the mandate will add to their rebuilding costs.

House Hunts Are Lasting Longer

Buyers are spending significant time trying to find the perfect home. Fifty-four percent of active buyers say they’ve been trying to find the right home for three months or longer, according to the National Association of Home Builders’ Housing Trends Report poll.

Buyers say the biggest delays that are stretching out their home search is they can’t find a home at an affordable price (49%), followed by not being able to find a home with the desired features they want (40%) or in their ideal neighborhood (38%).

Source: “Active Home Buyers Are Spending Significant Amounts of Time Looking for the Right Home,” National Association of Home Builders’ Eye on Housing blog 12/4/18

More Buyers Turn to ARM Loans

Rising interest rates are prompting more home buyers to turn to adjustable-rate mortgages—which come with potential financial risks. Though these mortgages typically come with lower interest rates initially, they reset to market rates after five or seven years, potentially shocking borrowers with much higher costs.

“As interest rates continue to rise, the percentage of adjustable-rate mortgages is increasing, as home buyers are looking to take advantage of the best rates from their lenders,” says Jonathan Corr, president and CEO of Ellie Mae.

Source: “Ellie Mae Origination Insights Report: October 2018,” Ellie Mae (Nov. 21, 2018)

Mortgage Rates Take a Breather

Mortgage rates mostly held stable this week, a welcome relief .

“Despite recent market volatility, mortgage rates remained steady this week,” says Sam Khater, Freddie Mac’s chief economist. “The stability in mortgage rates reflects the moderation in inflationary pressures in the economy due to the lower oil prices and subdued wage growth. On the margin, lower energy costs are a positive for the home sales market, particularly for lower-middle income suburban buyers who spend proportionately more income on transportation costs.”

Freddie Mac reports the following rates for the week ending Nov. 15:

  • 30-year fixed-rate mortgages: averaged 4.94 percent, with an average 0.5 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 3.95 percent.
  • 15-year fixed-rate mortgages: averaged 4.36 percent, with an average 0.4 point, increasing slightly from last week’s 4.33 percent average. A year ago, 15-year rates averaged 3.31 percent.
Source: Freddie Mac

Homes with Patios now Popular

More new homes are being built with patios, as homeowners show a greater craving for more outdoor space. About 58.6 percent of new single-family homes started in 2017 included a patio, according to an analysis by the National Association of Home Builders. That makes patios more common than decks (23.8 percent), but still shy of the popularity of porches (64.7 percent).

The Annual Builder Practices Survey, conducted by Home Innovation Research Labs, shows that the average size of a patio on a new home is about 260 square feet. Poured concrete is the most often material used for the surface, followed by concrete pavers, natural stone, and brick pavers.

Read more ideas about getting the most out of a patio space: That Small Backyard Can Still Be a Selling Point and 5 Biggest Yard and Patio Staging Mistakes

Why Home Buyers Need to Hurry

While there have been signs recently that the market may be shifting toward the favor of home buyers, prices are still on the rise in many areas around the country. The median sales price in July was $230,411, up 5.8 percent year over year.

The typical mortgage payment jumped 13.1 percent over that same one-year period, due to a nearly 0.6 percentage point increase in mortgage rates, according to new data from CoreLogic, a real estate research firm.

Rates are expected to increase by about 0.43 percentage points between July 2018 and July 2019. Housing forecasters predict median home sale prices to continue to rise by 1.8 percent in real terms over that same period.

With these projections, CoreLogic researchers predict the inflation-adjusted typical monthly mortgage payment to rise from $937 in July 2018 to $1,003 by July 2019.

Source: “Homebuyers’ ‘Typical Mortgage Payment’ Rising at Twice the Rate of Prices,” CoreLogic Insights Blog (Oct. 17, 2018)

Zero-Down Home Loan Program

A new effort is underway to raise the low rate of home ownership among under served groups of home buyers. The Neighborhood Assistance Corp. of America is hosting several events across the country, helping borrowers with low credit scores to apply for 15- or 30-year mortgages with cheaper interest rates.

NACA CEO Bruce Marks told CNBC. “There have been zero foreclosures among the loans that we’ve originated in the past six years.”

Borrowers are required to go through an education session about the program, as well as counseling for budget planning to make sure they can afford a mortgage payment. They also must still submit all necessary documents, such as income statements amd phone bills. The program serves only those who are buying a primary residence, not an investment property.

Foreclosures Sink to 13-Year Low

Foreclosures are disappearing from most community listings. Foreclosure filings—default notices, scheduled auctions, or bank repossessions—fell 6 percent in the third quarter, dropping to the lowest level since the fourth quarter of 2005. Foreclosure activity in the third quarter is now 36 percent below the pre-recession average of 278,912 properties with foreclosure filings, according to ATTOM Data Solutions’ latest report.

Properties that were foreclosed in the third quarter are seeing a slightly shorter process. The foreclosure process is averaging 713 days, which is down from 899 days a year ago. The states with the longest average timelines for foreclosed homes are Hawaii (1,491 days); Indiana (1,295 days); Florida (1,177 days); Utah (1,170 days); New Jersey (1,137 days); and New York (1,092 days).

Home Loan Interest Rates ‘Drop Slightly’

Borrowers saw a slight cool down in mortgage rates this week following last week’s seven-year high. The 30-year fixed-rate mortgage dipped for the first time after five consecutive weeks of increases.

“The strength in the economy has failed to translate to gains in the housing market as higher mortgage rates have contributed to the decrease in home purchase applications, which are down from a year ago,” says Sam Khater, Freddie Mac’s chief economist. “With mortgage rates expected to track higher, it’s going to be a challenge for the housing market to regain momentum.”

Freddie Mac reports the following national averages for the week ending Oct. 4:

  • 30-year fixed-rate mortgages: averaged 4.71 percent, with an average 0.4 point, falling slightly from last week’s 4.72 percent average. Last year at this time, 30-year rates averaged 3.85 percent.
  • 15-year fixed-rate mortgages: averaged 4.15 percent, with an average 0.4 point, decreasing from last week’s 4.16 percent average. A year ago, 15-year rates averaged 3.15 percent.
Source: Freddie Mac