Investors Back Away From Home Flipping

Investors are retreating from flipping houses, showing skepticism that the practice will continue to pay off. About 43,615 single-family homes and condos were flipped in the first quarter of 2017, down 8 percent from the previous quarter and 6 percent from a year ago, according to ATTOM Data Solutions’ Q1 2017 U.S. Home Flipping Report. It represents the lowest number of flips in two years. ATTOM Data Solutions defines a flip as a home that has been sold twice within a 12-month period.

Home flips accounted for 6.7 percent of all single-family and condo sales for the quarter, one-third of which were purchased with financing. That’s up from 31.9 percent that were financed in the fourth quarter of 2016, setting the highest level since the third quarter of 2008.

More interesting ‘Home Flipping’ information at: ATTOM Data Solutions/RealtyTrac

Mortgage Rates Hit Lowest Averages of the Year

“As we predicted, the 30-year mortgage rate fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending May 25:

’30-year fixed-rate’ mortgages: averaged 3.95 percent, with an average 0.5 point, falling from last week’s 4.02 percent average. Last year at this time, 30-year rates averaged 3.64 percent.

’15-year fixed-rate’ mortgages: averaged 3.19 percent, with an average 0.5 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 2.89 percent.

Source: Freddie Mac

Foreclosures Plunge to Lowest Level Since 2005

Foreclosure filings—which include default notices, scheduled auctions, and bank repossessions—are down 23 percent from a year ago and have hit their lowest level since November 2005, according to the April 2017 U.S. Foreclosure Market report, released Thursday by ATTOM Data Solutions.

A total of 34,085 properties started the foreclosure process in April, well below the pre-recession average of more than 77,000 foreclosure starts per month between April 2005 and November 2007, according to the report.

More details at ATTOM Data Solutions and source: RealtyTrac

The Housing Market Is Outperforming Forecast

The housing market has been off to a roar this spring. In fact, the market is performing so strongly that the National Association of REALTORS® has upgraded its forecast for the year.

At the start of the year, home sales were expected to match last year’s pace due to higher mortgage rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR’s chief economist. He now predicts existing-home sales to rise by 3.5 percent, and home prices likely will increase 5 percent this year.

“With no imminent threat of a recession, the housing market’s strong first quarter sets the foundation for continued gains the rest of the year,” Yun writes.

Source: “First Quarter GDP May Be Cool, But Housing Market Downright Balmy,” The Hill (May 1, 2017)

Poll: More Expect Home Prices to Keep Rising

Sixty-one percent of U.S. adults believe home prices in their local area will rise over the next 12 months, the highest percentage since Gallup began collecting such data in 2005. Marking a difference between 2008 and 2012, when one-third of Americans believed home prices would increase.

Residents in the western region of the U.S. are the most optimistic, with nearly three-quarters of residents saying they expect price increases compared to slightly more than half of Midwestern and Eastern residents, according to the Gallup poll. With mortgage rates sitting below 4 percent, consumers may have more incentive to act now before home prices rise even more.

Sixty-seven percent of U.S. adults say now is a good time to purchase a home, which is down slightly from the 2012-to-2014 period when at least 70 percent said so. Unsurprisingly, homeowners (74 percent) are more likely than renters (56 percent) to say it’s a good time to purchase a home, according to the poll. Higher home prices and declining views of homeownership may be behind the dip in those who say it’s a good time to buy, Gallup researchers note.

Source: “More in U.S. Expect Local Home Values to Rise,” Gallup.com (April 24, 2017)

More Homeowners Tackle Renovation Projects

Homeowners are sprucing up their properties and undertaking more remodeling and repair projects, according to a recent study.

The Leading Indicator of Remodeling Activity, released by the Joint Center for Housing Studies at Harvard University, shows an annual growth in home improvement and repair expenditure this year that will remain above its long-term trend of 5 percent. Index authors, however, foresee a steady decline from 7.3 percent in the first quarter to 6.1 percent by the first quarter of 2018.

The National Association of Home Builders’ Remodeling Market Index also showed an increase in the first quarter of 2017, marking the highest reading in activity since 2015. The NAHB’s index shows that more remodelers are reporting that activity is higher now compared to the prior quarter. “A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” says Dan Bawden, the chairman of NAHB Remodelers. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.”

—Melissa Dittmann Tracey, REALTOR® Magazine

Mortgage Rates Set a New 2017 Low This Week

The 30-year fixed-rate mortgage continues to drop this week, setting a new low for 2017, Freddie Mac reports in its weekly mortgage market survey. For the fourth consecutive week rates have fallen.

Freddie Mac reports the following national averages for the week ending April 13, 2017:

  • 30-year fixed-rate mortgages averaged 4.08 percent, with an average 0.5 point, falling from last week’s 4.10 percent average. A year ago, 30-year rates averaged 3.58 percent.
  • 15-year fixed-rate mortgages averaged 3.34 percent, with an average 0.5 point, falling slightly from last week’s 3.36 percent average. Last year at this time, 15-year rates averaged 2.86 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.18 percent, with an average 0.4 point, falling from last week’s 3.19 percent average. A year ago, 5-year ARMs averaged 2.84 percent.

Source: Freddie Mac

Owners Question Appraised Values: Too Low?

Homeowners say their homes are worth more than what appraisers say they’re worth, and the gap between the values is growing, according to Quicken Loans’ latest Home Price Perception Index.

Appraisals, on average, were 1.77 percent lower than what homeowners expected, according to the index. This marks the fourth consecutive month in which the gap between homeowner estimates and appraiser opinions has widened.

That said, appraisals are showing higher values than what homeowners expected in some of the hottest housing markets, mainly on the West Coast, according to the index reading for March.

Source: Quicken Loans

‘Mortgage Rates Surprise’ They Near 2017 Low!

tThe 30-year fixed-rate mortgage dropped lower for the third consecutive week and neared its low for 2017, Freddie Mac reports in its weekly mortgage market survey.

“After three straight weeks of declines, the 30-year mortgage rate is now barely above the 2017 low. Next week’s survey rate may be determined by Friday’s employment report and whether or not it can sustain the strength from earlier this year.” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending April 6, 2017:

30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, falling from last week’s 4.14 percent average. Last year at this time, 30-year rates averaged 3.59 percent.
15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, dropping from last week’s 3.39 percent average. A year ago, 15-year rates averaged 2.88 percent.

Source: Freddie Mac

Study: Millennials Hold Off on Big Life Choices

Baby boomers and millennials have different attitudes when it comes to marriage, children, and home ownership. Researchers with the National Center for Family and Marriage Research at Bowling Green State University compared adults who were 25 to 34 years old in the 1980’s with those who are in that age group today. One difference they found is that millennials are getting married later in life. In 1980, two-thirds of 25- to 34-year-old’s were married; in 2015, just two in five were married.

Because baby boomers were more likely to get married younger, they generally left their parents’ home much earlier than millennials. Americans in their late 20s and early 30s who live with their parents or grandparents have more than doubled since 1980, notes researcher Lydia Anderson. In 1980, only 9 percent of 25- to 34-year-olds were living with parents or grandparents compared to 22 percent in 2015.

Millennials are also putting off having children and buying a home. Plus, lag behind baby boomers when it comes to marriage, children, and home ownership, they are more likely to obtain a college degree, the study notes.

Source: “Young Americans Are Killing Marriage,” Bloomberg (April 4, 2017)