Posts Tagged ‘El Dorado County California’

Mortgage Rates Dip Below 4% Threshold

October 17 2014

Borrowing costs sank to the lowest amounts in more than a year as the 30-year-fixed rate mortgage averaged 3.97 percent this week, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage is at its lowest average since the week of June 20, 2013, when it averaged 3.93 percent.

“Mortgage rates were down sharply following the decline in the 10-year Treasury yield for the second straight week,” says Frank Nothaft, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.97 percent, with an average 0.5 point, posting a big drop from last week’s 4.12 percent. A year ago, 30-year rates averaged 4.28 percent.
  • 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, dropping from last week’s 3.30 percent average. Last year at this time, 15-year rates averaged 3.33 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.5 point, dropping from last week’s 3.05 percent average. A year ago, 5-year ARMs averaged 3.07 percent.

Source: Freddie Mac

‘Small Lenders Bend’ for Risky Borrowers

October 15 2014

Borrowers with minor imperfections on their credit applications — like a brief loss of employment or a temporary dip in their credit score — are starting to have better luck at snagging a loan with smaller lenders, Bloomberg reports. At least 15 smaller firms this year are offering slightly riskier mortgages, which in some cases come with higher interest rates and larger down payment requirements and aren’t backed by the government.

“Some lenders became afraid of their own shadows,” RPM Mortgage Inc. Chief Executive Officer Rob Hirt told Bloomberg. The bank started a program this summer for borrowers who have higher debt burdens or who had sold a home for less than the outstanding mortgage. “The market is beginning to realize that if you make smart and sound loans to people who don’t fit in the narrow box, it doesn’t make them a worse risk.”

On the other hand, larger banks, like Bank of America and JPMorgan Chase & Co., have generally tightened their credit standards over the last few years. The average score on mortgages that government-controlled Fannie Mae and Freddie Mac bought now stands at about 740 – well above the 660 level that is considered subprime.

“To us, it’s common sense,” says Jeff Seabold, chief lending officer at Banc of California. “There’s quite a few people who are boxed out that shouldn’t be.”

Source: “You Don’t Need to Be Perfect to Get a U.S. Loan Anymore,” Bloomberg Businessweek (Oct. 13, 2014)

Landscaping Boosts Home Values Up to 12%

October 14 2014

You might want to take a closer look at your listing’s curb appeal: Upgrading a home’s landscape from average to excellent can raise its overall value by 10 percent to 12 percent, according to research from Virginia Tech.

Researcher Alex X. Niemiera with the Department of Horticulture at Virginia Tech found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 by adding a landscape with color and large plants.

“The most preferred landscape included a sophisticated design with large deciduous, evergreen, and annual color plants and colored hardscape,” according to Niemiera. Adding different plant sizes to a front yard, for example, can boost curb appeal, as well as mixing fruit trees and flowers for added color.

“Survey results showed that relatively large landscape expenditures significantly increase perceived home value and will result in a higher selling price than homes with a minimal landscape,” Niemiera writes in the paper. “Design sophistication and plant size were the landscape factors that most affected value. The resulting increase in ‘curb appeal’ of the property may also help differentiate a home in a subdivision where house styles are similar and thereby attract potential buyers into a home. This advantage is especially important in a competitive housing market.”

Source: “Does Landscaping Increase Your Homes Value?” Realty Times (Oct. 13, 2014)

30-Year Mortgage Rates ‘Fall Back’ to Yearly Lows

October 10 2014

Borrowing costs were down once again this week, giving home buyers another opportunity to lock in some of the lowest rates of the year.

Freddie Mac reported the following rate averages for the week ending Oct. 9:

  • 30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.5 point, dropping from last week’s 4.19 percent average. Last year at this time, 30-year rates averaged 4.23 percent.
  • 15-year fixed-rate mortgages: averaged 3.30 percent, with an average 0.5 pont, dropping from last week’s 3.36 percent average. Last year at this time, 15-year rates averaged 3.31 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.05 percent, with an average 0.5 point, dropping from last week’s 3.06 percent average. A year ago, 5-year ARMs averaged 3.05 percent.

Source: Freddie Mac

Home Owners are Tapping Into Equity, Again!

October 9 2014

Home equity lines of credit surged nearly 20 percent compared to a year ago and are now at the highest level since the 12 months ending in June 2009, according to RealtyTrac’s Home Equity Line of Credit (HELOC) Trends Report. HELOC originations comprised 15.4 percent of all loan originations nationwide during the first eight months of the year, the highest percentage since 2008.

“This recent rise in HELOC originations indicates that an increasing number of home owners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” says Daren Blomquist, vice president at RealtyTrac.

Nearly 10 million home owners nationwide, representing 19 percent of all home owners with a mortgage, have regained at least 50 percent equity in their homes, RealtyTrac data shows. Meanwhile the percentage of home owners with severe negative equity has fallen from 29 percent in the second quarter of 2012 to 17 percent in the second quarter of this year, Blomquist notes.

Despite home equity lines of credit rising significantly in the past year, they still remain 76 percent below the 2006 peak reached during the housing boom, RealtyTrac notes.

Source: RealtyTrac

 

30-Year Mortgage Rate Sinks to 4.19% This Week

October 3 2014

Mortgage rates are falling, despite the cuts to the Federal Reserve’s monthly bond purchases that were expected to send long-term rates higher.  The 30-year fixed-rate mortgage, the most popular choice among home buyers, averaged 4.19 percent this week, down from a 4.53 percent average at the start of the year, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reports the following national averages for the week ending Oct. 2:

  • 30-year fixed-rate mortgages: averaged 4.19 percent, with an average 0.4 point, dropping from last week’s 4.20 percent average. Last year at this time, 30-year rates averaged 4.22 percent.
  • 15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, holding the same average as last week. A year ago, 15-year rates averaged 3.29 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.06 percent, with an average 0.5 point, dropping from last week’s 3.08 percent average. Last year at this time, 5-year ARMs averaged 3.05 percent.

Source: Freddie Mac (Oct. 2, 2014)

First Comes Income Gains, Then Comes Housing?

October 1 2014

If income growth is key for greater household formation, housing analysts say some recent progress on the salary front may soon unleash pent-up housing demand among younger adults.

“For individuals in the key household formation period of age 25 to 34, a 0.87 percent decline in median income in 2012 reversed to a 1.1 percent increase in 2013,” notes economist Robert Dietz on the National Association of Home Builders’ blog. “If these improvements continue, it will be good news for housing demand going forward.”

Indeed, in recent commentary, a Fannie Mae economist notes an improving financial picture for young adults that could help jump-start household formations.

“The Great Recession and housing bust hit young adults hard,” writes Patrick Simmons, director of strategic planning for the economic research group at Fannie Mae. “The unemployment rate for 25- to 34-year-olds more than doubled between 2007 and 2010, and real median household income for this group fell by nearly 10 percent during the downturn. As economic conditions deteriorated, young-adult household formation and home ownership fell sharply. In recent years, however, young Americans’ economic circumstances have begun to brighten, with the unemployment rate for 25- to 34-year-olds dropping and their income stabilizing.”

“The continued slide in household formation and home ownership among young adults suggests that more robust labor market improvements, among other factors, are needed for young Americans to get a stronger foothold in the housing market,” Simmons says. “The large decline in home owner affordability problems among young adults indicates that substantial housing market changes in the wake of the housing bust have created a generation of young home owners who have housing costs that are much better aligned with incomes.”

Source: “Income Growth Key for Housing,” National Association of Home Builders’ Eye on Housing (Sept. 30, 2014) and “Young-Adult Housing Demand Continues to Slide, But Young Home Owners Experienced Vastly Improved Affordability,” Fannie Mae (Sept. 30, 2014)

 

 

When Mortgage Rates Rise…

September 29 2014

Mortgage rates have hovered around yearly lows for weeks. But with rate-hike forecasts looming, can buyers count on borrowing costs to stay low?

Many economists are predicting the average 30-year fixed-rate mortgage to reach 5% by the middle of the next year, The New York Times reports.  Freddie Mac reported the 30-year fixed-rate mortgage averaging 4.20 percent. The hike in rates is partially due to the Federal Reserve’s plan to withdraw from buying mortgage-backed securities.

Economists note that while a 5 percent mortgage rate is low by historical standards, such an increase still has the potential of reducing buying power in a home purchase. According to some estimates, a 1 percent increase in interest rates can raise a monthly mortgage payment on a typical home by more than $700 in pricier parts of the country. The increase would likely be much more modest in other, less expensive markets.

Source: “When Mortgage Rates Rise,” The New York Times (Sept. 25, 2014)

Nearly 1 Million Homes Regain Equity

September 27 2014

Nearly 950,000 homes returned to positive equity in the second quarter, now bringing the total number of residential homes with equity nationwide to more than 44 million, according to CoreLogic’s Equity Report.

“The increase in borrower equity of $1 trillion from a year earlier is evidence that things are moving solidly in the right direction,” says Sam Khater, deputy chief economist for CoreLogic. “Borrower equity is important because home equity constitutes borrowers’ largest investment segment and, as a result, is driving forward the rise in wealth for the typical home owner.”

Still, home price rises are needed to help more home owners feel more confident in their equity position. Of the 44 million properties with positive equity, about 9 million – or 19 percent – have less than 20 percent equity (labeled “under-equitied”), and 1.3 million have less than 5 percent (considered “near-negative equity”), according to CoreLogic.

“Many home owners across the country are seeing the equity value in their homes grow, which lifts the economy as a whole,” says Anand Nallathambi, president of CoreLogic. “With more and more borrowers regaining equity, we expect home ownership to become an increasingly attractive option for many who have remained on the sidelines in the aftermath of the Great Recession. This should provide more opportunities for people to sell their homes, purchase a different home or refinance an existing mortgage.”

Source: CoreLogic

Borrowing Costs Ease Slightly This Week

September 26 2014

Fixed-rate mortgages dropped slightly from the previous week, holding near yearly lows, Freddie Mac reports in its weekly mortgage report.

Freddie Mac released the following mortgage rates for the week ending Sept. 25:

  • 30-year fixed-rate mortgages: averaged 4.20 percent, with an average 0.5 point, dropping from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
  • 15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, dropping from last week’s 3.37 percent average. A year ago, 15-year rates averaged 3.37 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.08 percent, with an average 0.4 point, rising from last week’s 3.06 percent average. Last year at this time, 5-year ARMs averaged 3.07 percent.

Source: Freddie Mac