Welcome to the "Z" Team!

Today’s good news to share! Foreclosure activity fell by double-digit percentages across the Sacramento region and the state in April, compared with the same month a year before, according to data released today by RealtyTrac.

In the the four-county Sacramento region, foreclosures and foreclosure filings – including the notices of default that start the repossession process – fell by more than 39 percent from April 2011 and dropped nearly 27 percent from March of this year.

Statewide, foreclosure activity decreased by 30 percent in April from the same period a year ago, the Irvine-based foreclosure clearing house reported. The latest figures continue the trend in the first quarter of 2012 of falling foreclosure rates.

The trend can be partly explained by the increasing use of short sales, in which lenders accept less than what is owed on a home, RealtyTrac CEO Brandon Moore said.

Read more at: http://By Hudson Sangree hsangree@sacbee.com

More good news to share! Mortgage applications soared 9.2 percent last week, as more Americans sought to take advantage of record low mortgage rates, according to the Mortgage Bankers Association’s weekly report. 

The surge in mortgage applications last week was attributed to a jump in refinance applications, which rose 13 percent for the week. Refinance applications make up nearly 75 percent of all mortgage applications.

Surprisingly, mortgage applications for home purchases dropped 2.4 percent last week.

“Low rates have convinced many home owners to refinance their mortgages, though tougher lending requirements still keep many prospective home buyers from taking out new debt,” The Wall Street Journal reports. We agree, your thoughts?  

Source: “Mortgage Application Volume Rose 9.2% Last Week: MBA,” The Wall Street Journal (5/16/12)

With rising rents, more renters are being swayed into home ownership. Many are finding they buy a home and get the same amount of space cheaper than renting in our region. Affordability in housing is at record highs from the combination of falling home values and record-low mortgages.

Rents are increasing at about the same pace that home values are dropping, says Stan Humphries, Zillow’s chief economist, who says, according to their surveys, home prices have dropped 3.1 percent year-over-year whereas rents have increased 2.5 percent. “Herein lie the seeds to eventually more interest in buying on the part of consumers, which will help put a floor under home prices,” Humphries told Investors Business Daily.

Recent housing surveys, including Zillow’s, are showing home prices are starting to rise in recent months. Since this varies by local areas, how’s your market doing?

Source: “Rising Rents Prompt Buys, May Help Housing Recover,” Investors Business Daily (May 10, 2012)

We enjoy sharing good news like this report! Fannie Mae, which backs the most loans in the country, announced that it would not need taxpayer aid to cover losses for the first time since the federal government took control over the mortgage giant in 2008.

Fannie posted a profit in the first quarter of the year, reporting a net income of $2.7 billion compared to a $6.5 billion loss they reported in the first quarter of 2011.

“We expect our financial results for 2012 to be significantly better than 2011,” says Susan McFarland, Fannie Mae’s chief financial officer. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business, will drive our future results.”

Freddie Mac, also a government-sponsored enterprise and mortgage giant, recently reported a profit as well — a $577 million quarterly net income for the first quarter.

Our region is showing other signs of the housing market stabilizing: The decline in home prices is slowing, more are buying homes than a year ago, and housing starts have climbed in the last year. Comments about your local market conditions improving? 

Source: “Fannie Mae Profit Signals a Stabilizing Housing Market,” The New York Times (May 9, 2012)

Thirty-three percent of Americans say they expect home prices to rise in the next 12 months, the highest level in more than a year, according to Fannie Mae’s March 2012 National Housing Survey of consumer attitudes about the housing market.

The number of people who say now is a good time to buy is also on the rise, increasing to 73 percent—also the highest level in more than a year. The percentage who said it’s a good time to sell a home also increased one point to 14 percent in March.

Meanwhile, more Americans expect rental prices to rise and are projecting an increase by 4.1 percent over the next year, the highest number recorded to date.

“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, Fannie Mae’s chief economist. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that home ownership is more compelling house choice.”

Source: “Americans’ Expectations Align to Encourage Home Buying,” RISMedia (5/6/12)

Many housing experts have been warning a foreclosure wave would soon flood several markets. But was it all a false alarm? We think it was and want to share this with you!

Recent surveys have shown that foreclosure sales have dropped to their lowest point in more than two years. And while according to March data, 8 percent more homes did enter the foreclosure process from the previous month, that number is down more than 30 percent from a year ago, according to Lender Processing Services.

CNBC real estate reporter Diana Olick notes that it could be another delay in the foreclosure system “as banks try to modify more loans to meet some of the terms of the [$25 billion] servicing settlement . The foreclosure sales decline also appears to be exclusively in private and portfolio loans, which again points to the settlement.”

Meanwhile, banks are increasing their number of short-sale transactions, and some surveys have shown that short sales are actually now outpacing foreclosure sales— the first time that’s ever occurred.

“Lenders are increasingly recognizing that short sales may be a better alternative for them than foreclosure,” RealtyTrac’s Daren Blomquist told CNBC. “This trend began in markets with stronger demand and where the distressed inventory tends to be newer homes (Phoenix, Los Angeles, Las Vegas), but the trend appears to be spreading to other markets like Atlanta and Detroit.” Please provide thoughts about your local market.

Source: “Flood of Foreclosures Still Fails to Materialize,” CNBC (May 2, 2012)

Let’s look at the total picture of reality as it relates to today’s family home dreams!

 About 8 million children have been hurt by foreclosure, according to a newly-released report by First Focus, a bipartisan advocacy group for families. “Children are the often invisible victims of the foreclosure crisis,” says Julia Isaacs, the author of the report.

The report highlights the widespread affect the foreclosure crisis has had on the nation’s children: About 2.3 million children have lived in homes lost to foreclosure; 3 million have lived in homes at-risk of foreclosure; and another 3 million have lived in rental homes lost to foreclosure or currently live in rentals that are at-risk of foreclosure.

The foreclosure impact has been greatest on children in Nevada, where nearly one in five — or 20 percent — of children lived or live in a home that was lost to foreclosure or is at-risk of being lost to foreclosure. In Florida, 15 percent of children have been affected by foreclosure, followed by Arizona (14%) and California (12%).

Foreclosures have been found to hamper children’s performance at school. Children who have been affected by foreclosure often see math and reading scores drop as much as if they’d missed school for a month, Isaacs says. Please provide your comments.

Source: “Report Estimates 8 Million Children Hurt by Foreclosures”  USA Today (4/18/12)

The nationwide inventory of residential homes for-sale dropped 21 percent in March compared to a year ago, according to newly released housing data from Realtor.com, tracking 146 metro markets. Nearly all 146 markets posted a drop in their inventory!

Other good news, the nationwide median list price in March also saw improvement, increasing more than 5 percent last month compared to last year at this time.

Our area housing picture is much different than last year at this time, when inventory was up around 25 percent and list prices were down about 5 percent.

“If the market continues to hold its own, 2012 could well mark the beginning of a broad-based housing recovery,” according to Realtor.com. Let’s hope this becomes reality.

The California regions posting the biggest drops in the top 12, last year were:

1. Oakland, Calif.: -51.91 percent year-over-year drop in total listings

2. Bakersfield, Calif.: -50.35 percent

4. Fresno, Calif.: -45.56 percent

12. Stockton-Lodi, Calif.: -36.18 percent

Source of data: Melissa Dittmann Tracey, REALTOR® Magazine Daily News

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A “hardest hit” fund to help 18 states that were most battered in the mortgage crisis isn’t meeting its goals of helping underwater home owners, according to a report by the Special Inspector General for the Troubled Asset Relief Program (TARP).

Three percent of the $7.6 billion in the Hardest Hit Housing program has been used by the states since Dec. 31, 2011, but most of those funds so far have gone to help the unemployed and not underwater home owners, according to the report.

According to the report, more than 75 percent of the funds have gone toward shoring up states’ unemployment programs, such as by paying the mortgages of unemployed home owners. But the money was supposed to also be used for loan modifications and principal reductions to help underwater home owners as well, the report says.

The 18 states participating in the hardest hit program were selected due to having the highest number of home owners in negative equity and unemployed.

The Treasury department maintains the fund is serving its purpose. The program provides states the ability to “leverage their unique understanding of the conditions in their communities to create effective, locally-tailored programs,” Timothy Massad, assistant secretary for financial stability, wrote in a letter to Romero about the fund.

Source: “Watchdog Blasts Housing Program for ‘Hardest Hit,’” CNNMoney (4/12/12)

Our tax updates for sharing! With the April 17 tax deadline less than a week away, you still have time to take advantage of the valuable tax benefits home ownership affords. The National Association of REALTORS®’ consumer site, HouseLogic.com, can help.

“Our government encourages home ownership because it benefits families, communities, and our nation’s economy; home ownership is an investment in our collective futures,” says NAR President Moe Veissi. “HouseLogic.com helps home owners identify the benefits that will save them money today and plan ahead for future savings, as well.”

HouseLogic.com provides tips and tools for home owners, and devotes an entire section of its site to tax incentives for the home. Check out A Home Owner’s Guide to Taxes to find helpful articles you can pass along , such as 10 Easy Mistakes Home Owners Make on their Taxes, 12 Tough Questions (and Answers) About Home Office Deductions, and 6 Deduction Traps and How to Avoid Them that provide consumers with a wealth of information to ensure they get the maximum return to which they’re entitled.

Tax benefits that encourage home ownership include mortgage interest deduction, deductions for property taxes, and tax credits for energy-efficient remodeling projects and heating and cooling systems.

For more information on tax deductions and preparation as well as articles you can add to your blog or Web site, visit www.houselogic.com.  Article data source: NAR