Warning of Russian Cyberattacks to Private Homes

The U.S. and Britain have issued a warning about Russian cyberattacks that could extend to individual homes. The warning was the first of its kind, The New York Times reports. The warning extends to possible cyberattacks to government and private organizations in both countries as well.

The countries are asking the public to upgrade passwords and computer security to make themselves less vulnerable. U.S. and U.K. officials are warning that Russians are tapping into internet-connected devices in homes and businesses. Hackers allegedly could secretly inserting themselves into the exchange of data between a computer or server to eavesdrop, collect confidential information, misdirect payments, etc.

The officials said that the full extent of Russia’s ability to penetrate Western computer networks is still unknown.

More information at source: “U.S.-U.K. Warning on Cyberattacks Includes Private Homes,” The New York Times (April 16, 2018)

Seniors’ Growing Debt Casts Retirement Doubts

The percentage of families in which the head of household is 75 or older and carrying debt grew by 60 percent between 2007 and 2016, according to the Employee Benefit Research Institute. In 2016, nearly 50 percent of such families had debt; the average debt was $36,757. Meanwhile, the average monthly Social Security check is $1,404, and more than 40 percent of single adults receive more than 90 percent of their income from Social Security alone, according to government data. Many may find Social Security payouts aren’t sufficient to maintain their lifestyle and pay off debt.

“To pay off the debt, you’re going to have to give up some living standards,” says Craig Copeland, a senior associate with the Employee Benefit Research Institute. For some homeowners, that may mean having to relocate to a place where the cost of living is less expensive. “They may be able to move into a retirement community, where there may be a better social aspect than living in a house in the suburbs with a bunch of young people,” Copeland says. “Or they may have to move in with a relative or friend to share living expenses.”

Source: “Growing Debt Among Older Americans Threatens Their Retirement,” CNBC (April 4, 2018)

‘Nonprime’ Loans Expand Mortgage Options

Subprime mortgages—which were blamed for sparking the last housing crisis—are reappearing, this time being dubbed “nonprime” loans. This lending option, which carries new quality standards, is growing for buyers who have damaged credit.

California-based Carrington Mortgage Services is one company expanding its nonprime loan offerings. “We believe there is actually a market today for people who want to buy nonprime loans that have been properly underwritten,” saysRick Sharga, of Carrington Mortgage Holdings, told CNBC.

Carrington Mortgage Services, which plans to manually underwrite each loan, will qualify borrowers with FICO credit scores as low as 500. The lender also will qualify borrowers who’ve had recent problems reported on their credit histories, such as a foreclosure, bankruptcy, or a history of late payments. But borrowers who are at higher risks will be required to make a bigger down payment, and the interest rate on the loan will be higher.

Other lenders also are getting into the nonprime space, including Angel Oak and Caliber Home Loans; more than 80 percent of Angel Oak loans are nonprime.

Source: “Subprime Mortgagees Make a Comeback—With a New Name and Soaring Demand,” CNBC (April 12, 2018)

Another Week of Mostly Flat Mortgage Rates

Borrowing costs haven’t budged much in recent weeks, offering some relief from the weekly rate increases that had almost become routine at the start of 2018.

“Rates have bounced around 4.4 percent since mid-February. Rates could break out and head higher if inflation continues to firm. … If inflation continues to trend higher, we may see two or three more rate hikes from the Fed this year, and mortgage rates could follow. For now, mortgage rates are still quite low by historical standards, helping to support home buyer affordability as the spring home buying season ramps up.” says Len Kiefer, Freddie Mac’s deputy chief economist.

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

  • 30-year fixed-rate mortgages averaged 4.42 percent, with an average 0.4 point, up from last week’s 4.40 percent average. Last year at this time, 30-year rates averaged 4.08 percent.
  • 15-year fixed-rate mortgages averaged 3.87 percent, with an average 0.4 point, holding the same average as last week. A year ago, 15-year rates averaged 3.34 percent.

Source: Freddie Mac

Home Loan Payments Up 13% This Year

Monthly mortgage payments have risen an average of nearly 13 percent nationwide over the last year—or an extra $168—as buyers grapple with both higher home prices and increasing mortgage rates, according to a realtor.com® analysis. Luxury buyers are feeling the worst sticker shock, paying double the rate. In the top 10 percent of the market, owners are now paying an average $241 more per/mo.

Mortgage interest rates are about a half of a percentage point higher than they were at the beginning of the year, and the Federal Reserve has signaled there are more hikes to come.

Different generations of home buyers may have varying tolerance levels for mortgage rate fluctuations. Millennials are pursuing homeownership at a time when interest rates are at historic lows, averaging in the 4 percent range, while older buyers remember when they were in the double digits. So for millennials, “even a minor upswing [in interest rates] may seem significant,” The Wall Street Journal reports.

Source: “Rising Interest Rates Squeeze Homeowners’ Budgets,” The Wall Street Journal (April 4, 2018) [Log-in required.]

Desperate Buyers ‘Snag Homes Sight Unseen’

Some home shoppers are feeling hopeless this spring and making competitive moves in order to get a home. They’re reportedly rushing to making offers without seeing homes first, bidding well above the asking price, or waiving inspections entirely to get sellers to find their offer the most alluring.

Record low supplies of homes for sale are driving up prices across the country.

As for sellers, they may find some big profits when they do sell. “It’s going to have the feel of a hot market” with multiple offers and bidding wars, says Lawrence Yun, the chief economist for the National Association of REALTORS®. Still, Yun expects sales to be flat compared to a year ago due to the shortage of homes for sale as well as reduced affordability for many house hunters.

Source: “Home Buying Market so Brutal, Some Home Buyers Make Offer Sight Unseen,” USA Today (April 5, 2018)

Mortgage Interest Rates Ease This Week

Borrowers found some relief for the second consecutive week with lower mortgage rates.

“After dropping earlier this week on trade-related anxiety in financial markets, the benchmark 10-year Treasury stabilized on Wednesday, but at a level slightly lower than from the start of last week,” explains Len Kiefer, Freddie Mac’s deputy chief economist.

Freddie Mac reported the following national averages for the week ending April 5:

  • 30-year fixed-rate mortgages: averaged 4.40 percent, with an average 0.5 point, dropping from last week’s 4.44 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
  • 15-year fixed-rate mortgages: averaged 3.87 percent, with an average 0.4 point, dropping from last week’s 3.90 percent average. A year ago, 15-year rates averaged 3.36 percent.

Source: Freddie Mac

Homeowner Equity Is Hitting a Record High

Homeowners are getting richer, thanks to rising home values. The amount of equity that homeowners can tap into is now at the highest level on record, according to Black Knight Financial Services, a mortgage and finance industry solution provider.

The amount a borrower can take out of a home—while still leaving 20 percent in it—increased by a collective $735 billion during 2017. That is the largest annual increase by dollar value on record, according to Black Knight. The collective amount of tappable equity now stands at $5.4 trillion, 10 percent more than the prerecession peak in 2005.

The amount of homeowner equity varies depending on location. Thirty-nine percent of the nation’s total tappable equity is in California alone. Seattle and Las Vegas have also seen large increases in home equity, Black Knight notes.

Source: “Homeowners Are Sitting on $5.4 Trillion in Ready Cash, the Most Ever,” CNBC (April 2, 2018)

Home Loan Rates Ease Slightly This Week

“Treasury yields fell from a week ago, helping to drive mortgage rates modestly lower,” asys Len Kiefer, Freddie Mac’s a economist. “The yield on the 10-year Treasury dipped below 2.8 percent for the first time since early February of this year. The decline in Treasury yields comes as investors move into safer assets amid increased trade tensions. Following Treasury yields, mortgage rates fell slightly.”

Freddie Mac reports the following national averages for the week ending March 29:

  • 30-year fixed-rate mortgages: averaged 4.44 percent, with an average 0.5 point, dropping from last week’s 4.45 percent average. Last year at this time, the 30-year fixed-rate mortgage averaged 4.14 percent.
  • 15-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, dropping from last week’s 3.91 percent average. A year ago, 15-year rates averaged 3.39 percent.

Source: Freddie Mac

Will ‘Granny Flats’ Resolve Housing Shortages?

Some housing economists believe that “granny flats” could be the key to alleviating housing shortages across the country, and they are calling on more municipalities to ease up the rules to allow such dwellings to be built on or into more single-family homes. Nicknamed “granny flats,” these accessory dwelling units tend to be separate, cottage-like structures, but may be a converted garage or basement that houses an extra living area.

In California, three new zoning laws in 2017 allowed for expanded development of granny flats. California has since seen a 63 percent increase in the number of building permits for these units—more than any other state, according to ATTOM Data Solutions, a real estate data firm. But many counties either still have zoning restrictions that don’t allow these units, or they are making the building permit process difficult.

Source: “Could ‘Granny Flats’ Be the Solution to America’s Affordable-Housing Crisis?” MarketWatch (March 26, 2018)