Home Loan Interest Rates Edge Higher This Week

Mortgage rates inched upward this week, with fixed-rate mortgages returning to averages at the start of the year, Freddie Mac reports in its weekly mortgage market survey.

Still, the 30-year fixed-rate mortgage continues to average below 4 percent, a threshold it has remained below since the week ending Nov. 13, 2014, Freddie Mac reports.

Freddie Mac reports the following national averages for the week ending March 12:

  • 30-year fixed-rate mortgages: averaged 3.86 percent, with an average 0.6 point, rising from last week’s 3.75 percent average. Last year at this time, 30-year fixed-rate mortgages averaged 4.37 percent.
  • 15-year fixed-rate mortgages: averaged 3.10 percent, with an average 0.6 point, rising from last week’s 3.03 percent average. A year ago, 15-year rates averaged 3.38 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.01 percent, with an average 0.5 point, rising from last week’s 2.96 percent average. Last year at this time, 5-year ARMs averaged 3.09 percent.

Source: Freddie Mac

It’s Taking Less to Get an FHA Home Loan

First-time and low-income mortgage borrowers may have an easier time qualifying for a Federal Housing Administration loan. Ginnie Mae, a government agency that issues bonds backed by FHA loans, reports that the average credit score on FHA-backed loans fell to 680 in 2013, and the average debt-to-income ratio rose to 40.3 percent — both indicators that credit may be easing.

In comparison, Ginnie Mae reported in January 2013 that the average credit score was 701 and the debt-to-income ratio was 38 percent.

“The FHA theoretically allows credit scores as low as 580,” the L.A. Times reports. “But lenders, buffeted by defaulted loans and demands that they buy back troubled mortgages that they sold, generally have set standards higher since the mortgage meltdown.”

Source: “Average Credit Score Falls on FHA Loans,” Los Angeles Times (Feb. 27, 2014)

Teachers Can Afford Only 17% of Calif. Homes

Housing affordability for teachers is in dire straits in the Golden State, according to a new study by real estate brokerage Redfin. The study found that 83 percent of homes in California are unaffordable on a teacher’s salary. Redfin analyzed average teacher salaries in markets in California and compared them with the median home price.

Only 17 percent of all homes for sale in the state are affordable to teachers. In some cities, the problem is even worse. In San Francisco, there isn’t one house on the market that teachers can afford on their average salary, the study showed.

According to Redfin’s data, the median list price in California is $485,000. The state’s 300,000 elementary, middle, and high school teachers have an average annual salary of $69,300. Using a general guideline that a monthly home payment should not exceed 28 percent of your gross monthly income, Redfin says that a teacher would likely not want to pay more than about $1,600 a month for a home.

“Given current interest rates, property taxes, home insurance, and home owners association expenses, a teacher can afford a $260,000 single-family home or condo,” Redfin says in its report. “Of the 50,559 for sale in California, just 17.4 percent are listed below $260,000.”

Redfin says that tight housing inventories are causing home affordability to slip in California. Its report breaks down what teachers can afford by county at:  “83 Percent of California Homes Unaffordable on a Teacher’s Salary,” Redfin Research Center (Feb. 25, 2014)

Student Debt Holds Buyers Back, But Doesn’t Need To

Rising student loan debt continues to take blame for curtailing the number of young Americans from home ownership, but lenders and real estate professionals say it doesn’t have to necessarily be a deal killer in qualifying for a mortgage.

Home ownership is possible for buyers saddled with student loan debt, says John Wheaton, Redfin Open Book lender. “Many young people with student loans delay buying a home because they don’t think they can’t qualify for a mortgage,” Wheaton says. “Yet, many of them actually can. Underwriters generally treat student debt in a more positive light than credit card or auto loan debt.”

For example, Wheaton says that a person with $45,000 in student loans and a FICO score of 741 with an income of about $75,000 per year would likely qualify for a property starting at around $375,000 with a 5 percent down payment.

The National Association of REALTORS® recently reported that the share of existing home purchases by first-time home buyers has fallen to 26 percent of sales. Last year, the percentage stood at 30 percent.

Source: “Higher Education or a House: Can Young Americans Have Both?” Redfin Research Center (Feb. 24, 2014)

Men, Women Lust Over Homes Differently

Sixty-nine percent of consumers recently admitting to having a “home crush”—a property they liked so much they were drawn back to looking at it more than once online or in person, according to a new realtor.com® survey of 1,000 consumers. But men and women respond quite differently to these crushes, according to the survey.

For example, the survey found that women are more likely than men to have a crush on a home that was out of their financial league. Forty-one percent of women revealed their home crush is out of their price range, compared to only 30 percent of men.

Men were more likely than women to move from one home crush to another. Thirty-six percent of men surveyed say they find a new house crush weekly, compared to 29 percent of women.

But when it comes to true love, the sexes agreed on one thing that makes them most fall in love with a home: outdoor living space. Both men and women identified this feature as the top attribute in a home.  Women’s hearts tended to be set a-flutter by open floor plans, great curb appeal, and appliances and fixtures, while men said they swooned over good garage space, curb appeal, and open floor plans.

Source: “Realtor.com Survey: Men, Women Dig on Digs Differently,” realtor.com® (Feb. 6, 2014)

‘Housing Recovery Threatened’ by Flat Wages

While job growth is picking up nationally, wages remain flat, which is holding back a more robust recovery, the National Association of Home Builders wrote in a recent blog post.

“A significant amount of pent-up housing demand exists, but for it to be unlocked more rapidly, additional gains in wages must be realized,” NAHB economists wrote.

During the recession, all age groups saw a decline in incomes, with the exception of the 65-and-older cohort. Since 2000, those under the age of 24 have seen the largest reductions in income, followed by people ages 45 to 54 (the top-earning age group), NAHB’s analysis shows.

First-time home buyers remain a shrinking number in the housing market. They accounted for 27 percent of existing-home purchases in December, down from 30 percent a year earlier, according to the National Association of REALTORS®.

Many young adults are facing high student loan debt, stifling their wage growth and ability to qualify for a mortgage, according to NAR’s Economists’ Outlook blog.

—By REALTOR® Magazine

New Way to Sell a Home: Arrange a Sleepover

One of the fun parts of searching for a home to buy is visualizing living in it. Will your furniture fit? Is the kitchen big enough for all of your kids? Imagining your belongings and your family living in the home can make the buying decision easier.

When checking out a house, some buyers take the extra step of spending the night. It’s a simple yet effective way to kick the tires and test-drive a prospective home. Along the way you’ll have an opportunity to check for noisy neighbors, test the water pressure, and inadvertently, for one couple — learn how concerned the neighbors are and even how quickly the police respond.

HGTV’s “Sleep On It,” which follows potential buyers as they stay overnight in two homes with the sellers’ approval before deciding which one to buy, hasn’t seemed to spark a national trend. But it has prompted such proposals to surface more often.

Source: “When Homebuyers Insist on Staying the Night,” U.S. News (2/3/14)



‘Apple Hill’ activities open for Labor Day Weekend

You can smell the pies in the oven and the apples ripening on the branches!

A family trip to Apple Hilll® means so much more than just apples and pies.  It’s memories that’ll last a lifetime!  Memories of the amazing baked goods whose aromas make patience a sincere challenge on the jaunt home.  It’s fine wines and handcrafted beers in an incredible Sierra-soaked setting.  It’s Christmas trees for as far as your group can wander … with a roaring fire to bring them back.  Yes, Apple Hill® is a year-round experience for everyone!

Insider Tip:  Use our free trolley shuttle service in October and leave your car behind.

Visit El Dorado County, California the Sierra Foothills  http://www.applehill.com/

See more at: http://www.inedc.com/1-5864#sthash.ONp1nGxP.dpuf



Big Discounts on Foreclosures Fading

Home buyers may not get as great of a deal on a foreclosure as they once did, according to Paul Diggle from Capital Economics in a new report.

Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen.

The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.

“Ultra-low mortgage interest rates and steady, if not spectacular, job creation could mean that the delinquency rate and foreclosure start rate are falling quickly,” Diggle writes.

Source: “Those Amazing Deals on Foreclosed Homes Are Disappearing,” Business Insider (March 7, 2013)

U.S. Household Wealth “Regains Peak”

Federal Reserve research shows that surging stock prices and steady home appreciation have finally allowed Americans to recover the $16 trillion in wealth they lost during the Great Recession. The gains are helping to bolster the U.S. economy and could lead to additional spending and growth.

Most of the recovered wealth has come from higher stock prices that have been flowing mainly to wealthier Americans. By comparison, the middle class derives the bulk of its wealth in the form of home equity, which has risen much less.

According to the Fed, household wealth totaled $66.1 trillion as of Dec. 31 — 98 percent of the pre-recession peak. Further increases in stock and home prices this year mean that Americans’ net worth has since topped the pre-recession peak of $67.4 trillion, private economists report.

Source: “US Household Wealth Regains Pre-Recession Peak,” Associated Press (March 8, 2013)