More Renters Say They “Want to Own”

The majority of renters say home ownership is one of their highest priorities for their future, and more renters are saying they want to buy soon, according to the 2013 National Housing Pulse Survey, conducted by the National Association of REALTORS®. Renters are showing stronger desires for home ownership compared to recent years.

Fifty one percent of renters say that eventually owning a home is one of their highest personal priorities, up from 42 percent in the 2011 survey.

The survey found that 80 percent of the 2,000 Americans surveyed say they believe buying a home is a good financial decision. Sixty-eight percent said now is a good time to buy a home, too.

Their main motivations to home ownership: Building equity, wanting a stable and safe environment, and the freedom to choose where to live, the survey found.

Meanwhile, the main obstacles to home ownership have remained the same over the years: saving for the down payment, closing costs, low wages, and student loan debt.

More information at source: National Association of REALTORS(R)

IRS Simplifies ‘Home Office Deduction’

The number of home owners who work from home at least one day a week increased nearly 10 percent — from 9.5 million to 13.4 million — between 1999 and 2010, according to U.S. Census Bureau data. However, only 3.4 million home owners claimed deductions for business use of a home in 2010, according to the IRS.

The IRS recently announced a new safe harbor provision for home office deductions for the 2013 tax year.

“This allows at-home workers the option to simply take a deduction capped at $1,500 per year based on $5 a square foot for up to 300 square feet,” FOX Business reported. “The requirement that home office space be exclusively used for business and limitations on income earned from that business still applies, and direct business expenses unrelated to the home (advertising, supplies and wages paid to employees, etc.) are deductible.”

For more information on the deduction, visit the IRS Web site.

Source: “IRS’ Simpler Home Tax Deduction Cuts Through the Clutter,” FOX Business (July 24, 2013)

New Social Network Focuses on the “Happy Moments”

Will real estate have a presence on the latest social network that focuses on the happy things in life — say, a new home buyer showing off their new home or a home owner posting about their latest home improvement?

Happier is a new start-up social network that sets out to celebrate the happy moments in life. Users can post photos and status updates about anything that makes them happy.

The one rule: No negativity allowed.

Happier launched in February. It’s available on the Web and also has an iPhone app (no Android app as of yet). So far, a million happy moments have been posted to the site. The site has more than 100,000 users. Happy moments can be viewed by all users at the site, and a new version of the iPhone app, out in August, will default to making all posts public. Users can opt to restrict access, if they choose.

“Seeing what makes other people happier is as valuable, or maybe more valuable” than sharing your own happiness, says Nataly Kogan, co-founder and chief executive of the company.

Source: “A Social Network Dedicated to Happy Moments,” The New York Times (July 23, 2013)

Is Your Neighborhood Walkable?

Mapping data company Maponics LLC is now offering a tool that rates the walkability of neighborhoods, school attendance boundary zones, subdivisions, and other geographical areas.  The new feature adds to the Vermont-based company’s Maponics Context suite of data around the geographic units it defines using “intelligent polygons.”

“Walkability gives a geospatial meaning to the concept of ‘street smarts.’  We have over 150,000 neighborhoods that we generate the walkability rating for,” said Maponics founder and CEO Darren Clement.

Maponics researchers derive walkability ratings based on a five-point scale using a complex algorithm the company developed.  This algorithm takes into account such information as the concentration of homes in an area, number of local amenities, and the numbers and types of streets and intersections.

Source: “Maponics Now Providing ‘Walkability’ Ratings,” Inman News (July 12, 2013)

“Soaring Insurance Rates” Shock Home Owners!

Home owners who live near areas where disasters have struck, but have not been directly impacted are still seeing dramatic increases in their insurance premiums.

For example, in the wake of Hurricane Sandy, unaffected residents living near the disaster zone still saw big spikes in flood insurance premiums. FEMA has reclassified the area as a high-risk flood zone. Some residents in the Valley Stream, Long Island area of New York find their flood insurance rates soar from $400 per year to $3,400.

Home owners living out West are also reporting rising insurance premiums due to recent threats of wildfires. The rise has some home owners to go without coverage.

For example, a 63-year-old Las Vegas man is refusing to evacuate his property near growing wildfires. He’s remaining in his cabin, spraying water to keep the fires from his home, which have come within about 300 feet of the property. The man says he cannot afford homeowner’s insurance because the last wildfire ended up doubling his payments. Your comments regarding rates in your region?

Source: “New Flood Insurance Rates Leave Homeowners With Sticker Shock,” AOL Real Estate (July 10, 2013) and “Man Refuses to Evacuate Home on Mount Charleston,” ABC 13 News (Las Vegas) (July 10, 2013)

Don’t Let Credit Checks Derail Buying a Home

Since 2010, mortgage giant Fannie Mae has mandated that lenders recheck a borrower’s credit prior to closing on a mortgage. If anything new arises in the credit re-check, lenders may want to delay the closing to verify the borrower can still afford the mortgage. In some cases, the lenders may even cancel the mortgage prior to closing, which could mean a higher interest rate on a new loan.

During the credit re-check prior to closing, lenders will scan for any new credit card accounts that have been opened as well as any new credit inquiries. For example, a credit inquiry from a car company may indicate to a lender that the buyer is in the market for a new car, which could send up a red flag if the buyer is going to take on more debt.

Fannie Mae’s maximum debt-to-income ratio is 45% — a maximum of 45% of a gross monthly income can be allocated for mortgage and housing expenses and other debt.

To avoid delays, lenders recommend that borrowers check with their lender before taking on any new debt. Borrowers should also notify any lenders about any changes in employment or job loss. Lenders will reverify borrowers’ employment status prior to closing, and even a change in the company’s name by the borrower’s employer has the potential to delay closing.

Source: “Pre-Closing Credit Checks,” The New York Times (July 5, 2013)

Federal Stimulus Program ‘May End in 2014’

Federal Reserve Chairman Ben Bernanke said that the Fed will begin later this year to ease up on its controversial stimulus program, which has helped to keep mortgage rates low. Bernanke said that the program—which includes buying up $85 billion a month in U.S. bonds and mortgage-backed securities to help strengthen the economy—may end entirely by the middle of 2014.

The Fed has signaled that it will end the “quantitative easing” program if unemployment falls to under 7 percent. Unemployment is projected to reach 6.5 percent in 2014, according to the Fed’s projections. Currently, unemployment stands at 7.6 percent.

Bernanke said that the Fed will “ease the pressure on the accelerator” if the economy continues to show improvement. The Fed has kept interest rates low to stimulate the economy and the low rates have helped boost housing affordability.

“The fundamentals look a little better to us, in particular the housing sector,” Bernanke said about the decision. “State and local governments are now coming to a position where they don’t have to lay off a lot of workers. The economy is improving.”

Bernanke said the Fed will adjust accordingly if the economy veers from projections.

Source: “Fed sets road map for end of stimulus,” CNNMoney (June 19, 2013)

 

Mortgage Rates Continue to “Climb Upward”

For the fifth consecutive week, mortgage rates continued to rise, as the economy showed signs of strengthening. Concerns are growing that the Federal Reserve will soon slow its bond purchase program, which has been keeping rates near record lows for months, Freddie Mac reports in its weekly mortgage market survey.

For the first time since May of last year, the 15-year fixed-rate mortgage rose above 3 percent this week. Freddie Mac reports the following national averages with mortgage rates for the week ending June 6:

  • 30-year fixed-rate mortgages averaged 3.91 percent, with an average 0.7 point, increasing from last week’s 3.81 percent average. A year ago at this time, 30-year rates averaged 3.67 percent.
  • 15-year fixed-rate mortgages averaged 3.03 percent, with an average 0.7 point, rising from last week’s 2.98 percent average. Last year at this time, 15-year rates averaged 2.94 percent.
  • 5-year adjustable-rate mortgages averaged 2.74 percent, with an average 0.5 point, rising from last week’s 2.66 percent average. Last year at this time, 5-year ARMs averaged 2.84 percent.

Source: Freddie Mac

’15-Year Home Loan Rates’ Sink to New Low of 2.65%

Fixed-rate mortgages pushed lower for the fifth-consecutive week, with low mortgage rates further driving the housing recovery over the near term, says Frank Nothaft, Freddie Mac’s chief economist.

This week, the 30-year fixed-rate mortgage hovered near its all-time record low, while 15-year rates set a new record.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 2, 2013:

  • 30-year fixed-rate mortgages: averaged 3.35 percent, with an average 0.7 point, just shy of its 3.31 percent record set during the week of Nov. 21, 2012. A year ago at this time, 30-year rates averaged 3.84 percent.
  • 15-year fixed-rate mortgages: sank to an all-time record low of 2.56 percent, with an average 0.7 point, dropping from last week’s previous record of 2.61 percent. Last year at this time, 15-year rates averaged 3.07 percent.
  • 5-year adjustable-rate mortgages: averaged 2.56 percent, with an average 0.5 point, dropping from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.85 percent.

Source: Freddie Mac

‘Home Prices’ could Rise 10% this Year?

Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive.

Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets.

About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes. “But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”

Source: “The Housing Market: Not Your Analyst’s Oldsmobile?” The Wall Street Journal (April 23, 2013)