Home Asking Prices Zoom to Record Highs

A robust spring market is causing sellers to up their asking prices, according to a preliminary analysis of May data from realtor.com®. Great news, California has dominated the hot list for some months.

“This spring real estate market is coming in strong, just as we expected,”says Jonathan Smoke, realtor.com®’s chief economist. “Pent-up demand and low mortgage rates are driving consumers into the market with urgency. However, the recurring issue of limited supply is leading to higher prices.”

Source: “America’s 20 Hottest Real Estate Markets for May 2016,” realtor.com® (May 26, 2016)

How’s Your City’s Well-Being?

Good news if you live in Florida, California, Colorado, or Texas – your residents display a high sense of well-being, according to the Gallup-Healthways Well-Being Index. These four states alone account for 14 of the top 20 well-being communities in the latest report.

To measure well-being, researchers weighed purpose, social, financial, community, and physical data-points of 190 communities across the country.

Download a copy of the full report to see where your city ranks.

Source: Gallup-Healthways Well-Being Index

Fewer Home Buyers Are Bringing All-Cash to Buy!

One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to new data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year, down from 46.6 percent in January 2011.

The number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.

Sharp declines in REO sales is the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.

Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)

Mortgage Rates Set New High for the Year

Fixed-rate mortgages reversed course this week and rose toward the highest level this year, amid ongoing volatility in the bond markets, Freddie Mac reports survey.

The average rate on the 30-year fixed-rate mortgage increased five basis points this week, averaging 4.09 percent, the highest level since October of last year.

Freddie Mac reports the following national averages for the week ending July 16:

  • 30-year fixed-rate mortgages: averaged 4.09 percent, with an average 0.6 point, rising form last week’s 4.04 percent average. Last year at this time, 30-year rates averaged 4.13 percent.
  • 15-year fixed-rate mortgages: averaged 3.25 percent, with an average 0.6 point, increasing from last week’s 3.20 percent average. A year ago, 15-year rates averaged 3.23 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.96 percent, with an average 0.5 point, increasing from last week’s 2.93 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent.

Source: Freddie Mac

Economy Will Lift More Housing Markets Soon

Many housing markets remain weak overall, but those with stronger economies and favorable demographics are improving at a much stronger pace, per Freddie Mac’s latest Multi-Indicator Market Index. The so-called MiMi monitors the stability of the nation’s single-family housing market by looking at home purchase applications, payment-to-income ratios, on-time mortgage payments, and the local employment picture.

Overall, the index indicates a weak housing market (at 73.7) in June, the latest month measured, with only slight improvement month-over-month. Since reaching its lowest value of 59.8 in September 2011, the housing market has made a 23.3 percent rebound.

“As we see the economy slowly normalizing we’re starting to see its effects in the housing market as well, albeit very slowly,” says Frank Nothaft, Freddie Mac’s chief economist. “The good news is the big housing markets, of which some were also the hardest hit, continue to improve.”

For example, compared to the same time last year, California is up 12 percent and every market the MiMi tracks in the state is improving, Nothaft notes. Also, Florida is up nearly 15 percent, and Illinois is up nearly 13 percent over the past year.

“Likewise, the stalwarts of the recovery continue to be those states in the North Central section of the country, places like North Dakota, Montana, Wyoming, and then south to Texas and Louisiana,” Nothaft says. “In these areas not only are markets producing jobs, but better paying jobs that translate into workers taking out applications to purchase a home and income growth that keeps homebuyer affordability strong.”

Source: Freddie Mac

Mortgage Rates Roll Back to Yearly Low

Mortgage rates continue on a low streak this week, with the 30-year fixed-rate mortgage averaging its low for the year, 4.12 percent. It’s the same low the 30-year rate mortgage reached in May as well as during a week in July, Freddie Mac reports in its weekly mortgage market survey.

Fixed-rate mortgage started the year at 4.5 percent, and have countered many forecasters expectations so far by not rising, but instead dropping.

Freddie Mac reports the following national averages for the week ending Aug. 14:

  • 30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.6 point, dropping from last week’s 4.14 percent average. Last year at this time, 30-year rates averaged 4.40 percent.
  • 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.6 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 3.44 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, falling from last week’s 2.98 percent average. Last year at this time, 5-year ARMs averaged 3.23 percent.

Source: Freddie Mac and “Mortgage Rates at Low for Year; 30-Year Averages 4.12%,” Los Angeles Times (Aug. 14, 2014)

Moving from ‘Renting to Homeownership’ could get easier!

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

New-Home Sales Surge Nearly 19%

After a sluggish start to 2014, new-home sales posted a strong rebound in May. Sales of newly built single-family homes soared to the highest rate since May 2008, jumping 18.6 percent last month, according to data released Tuesday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“This increase is a welcome sign after a slow start to 2014,” says David Crowe, chief economist of the National Association of Home Builders. “As job creation continues, we can expect further release of pent-up demand and continued gradual growth in the housing recovery.”

Across the country, regions posted big gains in new-home sales, with the Northeast leading the pack. Sales of new-homes jumped 54.5 percent in the Northeast, 34 percent in the West, 14.2 percent in the South, and 1.4 percent in the Midwest.

Inventory levels mostly stayed flat, as builders continue to be cautious about overbuilding. The inventory of new homes for sale held steady at 189,000 units in May, representing a 4.5-month supply at the current sales pace.

Source: National Association of Home Builders

Foreclosures Jump in Northeast, West Coast

Nationwide, foreclosures dropped 26 percent in May compared to year-ago levels, reaching the lowest monthly level since December 2006. However, that does not reflect the recent foreclosure activity in Northeastern and West Coast markets, according to the latest report from RealtyTrac.

“It’s not surprising that some of the states with the longest foreclosure timelines are those with markets still dealing with increasing foreclosure activity even as the country as a whole continues to hit new lows,” says Daren Blomquist, vice president at RealtyTrac. “On the other hand, the increase in bank repossessions in some states with shorter foreclosure timelines like California and Oregon demonstrates there is still some pent-up foreclosure activity in those states as well.”

Bank repossessions were up by the largest amounts year-over-year in New York (up 117 percent), New Jersey (up 96 percent), Connecticut (up 85 percent), Maryland (up 40 percent), Oregon (up 29 percent), and California (up 26 percent).

Source: “Foreclosures Skyrocket in Northeast, West Coast,” HousingWire (June 10, 2014)

Home Prices Likely to Moderate Soon?

Home owners have been enjoying big home price rises across the country, but those increases – often by double-digit percentages – will likely level off soon, according to CoreLogic’s latest Home Price Index, which reflects February data. The index, which also includes distressed sales, was up 12.2 percent in February compared to year-ago levels.

“As the spring home-buying season kicks off, house price appreciation continues to be strong,” says Mark Fleming, CoreLogic’s chief economist. “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”

The National Association of REALTORS®’ most recent existing-home sales report showed that the median existing-home price for all housing types was $189,000 in February, a 9.1 percent rise over February 2013. “Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,” Lawrence Yun, NAR’s chief economist, said in a statement.

Source: CoreLogic and “Home Prices Will Keep Rising, But Level-Off Soon,” Mortgage News Daily (April 1, 2014)