Mortgage Rates Ease This Week

Borrowers may be able to lock in lower interest rates this week, as the 30-year fixed-rate mortgage dips to a 3.88 percent average.

“Rates came down slightly this week, ending a brief two-week streak of increases,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie  Mac reports the following national averages for the week ending Oct. 19:

  • 30-year fixed-rate mortgages: averaged 3.88 percent, with an average 0.5 point, falling from last week’s 3.91 percent average. Last year at this time, 30-year rates averaged 3.52 percent.
  • 15-year fixed-rate mortgages: averaged 3.19 percent, with an average 0.5 point, dropping from last week’s 3.21 percent average. A year ago, 15-year rates averaged 2.79 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.17 percent, with an average 0.4 point, rising from last week’s 3.16 percent average. A year ago, 5-year ARMs averaged 2.85 percent.

Source: Freddie Mac

“Land” Is a Hot Investment Right Now!

Investors are wondering where to invest their money next? The opportunities for flipping houses or purchasing rental homes are starting to dwindle, but there’s another option that could be fruitful: investing in land. With the economy on the upward trajectory, land is rising in demand.

At the 2015 REALTORS® Conference & Expo in San Diego, Jeramy Stephens of Mossy Oak Properties offered profitable options for land investment? Find out what they are.

Or, contact us, we’ll put our 70+ years experience to work for YOU!

REALTOR® Magazine

Home Sellers Getting Ahead of Spring Rush

The spring selling rush may already be under way, as some home owners are already throwing their properties on the market to take advantage of rebounding home prices and improved equity.

Inventory shortages persisted last year, when supply was at a 12-year low leading into the spring. The shortages helped boost home prices, but gave home buyers limited choices and sparked bidding wars in many markets. New-home construction is now at a third of its 2006 peak, which likely will keep inventories tight this spring. But, economists say, improved home prices will likely convince more sellers to sell this year, and that should relieve the inventory crunch in many markets.

Inventories increased in some of the states with the tightest markets, such as Arizona, California, Georgia, and Florida. In Sacramento, Calif., asking prices rose 11 percent last year, and listings soared 58 percent in December, according to realtor.com®’s housing report. Inventories also rose by 20 percent or more in Minneapolis; Orlando, Fla.; Atlanta; Dayton, Ohio; Oakland, Calif.; and Phoenix.

“Rising inventory is the primary reason that we expect the pace of price gains to drop back,” says Paul Diggle,  economist for Capital Economics Ltd. Prices are expected to rise only 4 percent nationally this year, compared to an 11 percent gain in 2013.

Source: “U.S. Home Sellers Return for Spring as Buyers Get Relief,” Bloomberg (Feb. 7, 2014)

 

Existing Home Owners “Move in on Market”

Existing home owners are taking a bigger share of the housing market while investors—who have been the powerhouse until late—are slowly retreating.

Taking the lead: Current home owners—whether move-up, move-down, or move-over buyers—accounted for nearly 45 percent of the market share in home sales in June, up from 43.8 percent in May, reports the Campbell/Inside Mortgage Finance HousingPulse.  Recent home price gains and the return of equity is prompting more to make the move, particularly as concerns rise that mortgage rates may soon cut into housing affordability.

Meanwhile, first-time home buyers are still being held back, with a slight drop in their market share from 36 percent in May to 35.7 percent in June, according to HousingPulse. Rising housing costs and mortgage rates as well as toughening up of lending standards have continued to shut out some first-timers.

The investor share in home purchases dropped to 19.7 percent in June from 23.1 percent share in February. It’s the lowest level recorded since September 2012, HousingPulse reports.

Source: “Shifting Share of Homebuyers Supports Sustainable Recovery,” Realty Times (July 26, 2013)

More Home Owners are “Calling Remodelers”

As home prices rise, remodelers are feeling optimistic about the home improvement market, the National Association of Home Builders reports.

The second quarter Remodeling Market Index (RMI) rose six points to 55. An RMI above 50 indicates that more remodelers are reporting higher market activity, per NAHB.

“Remodelers’ positive sentiment is directly related to increased demand for their services,” said NAHB Chief Economist David Crowe. “Rising home prices are making remodeling jobs possible for more home owners while existing home sales provide additional momentum as home owners prepare their homes for market.”

The future market indicators component of the RMI increased to 56 from the previous quarter level of 48. Current market conditions rose from 50 in the previous quarter to 54. All of the indicators of future activity — such as calls for bids, work committed for three months, backlog, and appointments — were over 50 for the first time in eight years.

“The RMI future market results are especially promising,” said NAHB Remodelers Chairman Bill Shaw, a remodeler from Houston. “Not only do remodelers have projects booked for the next few months, but they also have more work coming in the door.”

For more information about remodeling, visit www.nahb.org/remodel.

Source: National Association of Home Builders

Refinancing Demand “Slips to 2-Year Low”

Mortgage rates are on the rise, prompting fewer home owners to refinance their mortgages, but the increase doesn’t appear to deter home buyers yet.

The lower refinance demand caused overall mortgage applications to drop 2.6 percent last week, the Mortgage Bankers Association reported Wednesday. The MBA’s survey covers about 75 percent of the residential mortgage market.

Meanwhile, loan applications for home purchases — viewed as an indicator of future home sales — inched up slightly by 0.5 percent for the week ending July 12.

Mortgage rates were at a two-year high last week, with the 30-year fixed-rate’s averaging 4.68 percent — the highest level since July 2011, the MBA reports.

Source: “Higher mortgage rates push refinancing applications to 2-year low,” Reuters (July 17, 2013)

Housing Inventories Rising ‘Faster Than Usual’

The number of homes for sale rose 4.3 percent in June to 1.9 million—the highest level in the past year. These gains are also higher than usual for this time of year, according to newly-released housing data from realtor.com®.

Following two years of declines, housing inventory is finally reversing course. More home owners are seeing rising prices and may be more apt to try to sell their homes.

The number of homes for sale has risen the most in the past year in areas that had seen the largest declines, such as Sacramento, Calif. (up 11 percent), Atlanta (up 10.9 percent), Phoenix (up 6.2 percent), and Miami (up 2.2 percent). From May to June, inventories soared by the highest month-over-month amounts in Southern California, with inventories up 51.5 percent in Orange County, 45.7 percent in Los Angeles, and 18.1 percent in San Diego, according to realtor.com®.

Source: “Housing Listings Multiply in June,” The Wall Street Journal (July 15, 2013)

Mortgage Rates Continue to Rise, ‘Fed Eases Fears’

Mortgage rates moved higher again this week as speculation continued about whether the Federal Reserve will end its future bond purchases, which have kept rates at historical lows, Freddie Mac reports in its weekly mortgage market survey. But remarks by Federal Reserve Chairman Ben Bernanke on Wednesday may indicate that the Fed won’t be ending its program immediately.

Freddie Mac reported the following national averages for the week ending July 11:

  • 30-year fixed-rate mortgages: averaged 4.51 percent, with an average 0.8 point, rising from last week’s 4.29 percent average. A year ago at this time, 30-year rates averaged 3.56 percent.
  • 15-year fixed-rate mortgages: averaged 3.53 percent, with an average 0.8 point, increasing from last week’s 3.39 percent average. Last year at this time, 15-year rates averaged 2.86 percent.
  • 5-year adjustable-rate mortgages: averaged 3.26 percent, with an average 0.7 point, up from 3.10 percent last week. Last year at this time, 5-year ARMs averaged 2.74 percent.
Source: Freddie Mac and “Bernanke: Economy still needs Fed stimulus,” The Associated Press (July 10, 2013)

Generational “Home Buying Trends”

At 31 percent, Gen X comprises the largest group of recent home buyers, according to NAR’s Home Buyer and Seller Generational Trends report released today. Gen Xers were followed in numbers by Gen Y buyers (28 percent), and then younger Baby Boomers (18 percent), older Baby Boomers (14 percent), and the Silent Generation (10 percent). The Greatest Generation, also known as the G.I. Generation, represented less than 1 percent of recent buyers.

The report — a compilation of survey data from 8,501 recent home buyers — also shows that 80 percent of buyers who are aged 57 and younger bought a detached single-family home in 2012. Buyers over 57 are increasingly purchasing townhouses and condos.

The report also found that among all generations of home buyers, the first step in the home buying process is looking online for properties for sale.

Older buyers are less likely to finance their home purchase in comparison to younger buyers; when they do finance, the share of the home they financed is typically smaller.

Survey respondents cited benefits from working with a real estate professional. Among age groups, younger buyers are more likely to want their agent to help them understand the process as they are more likely to have never purchased a home before. Additionally, younger sellers are more likely to use the same real estate agent or broker for their future home purchases than older sellers.

When it comes to selling, Gen X is the largest group who are recent home sellers followed by both younger Baby Boomers and older Baby Boomers, the Silent Generation, and Gen Y. The G.I. Generation represented less than 1 percent of recent sellers.

Source: National Association of Realtors (NAR)

Is a Neighbor Hurting your Home’s Value?

Next-door nuisances could reduce your home value by 5 percent or more, according to the Appraisal Institute, which spells trouble for the 60 percent of Americans who say they have an issue with a neighbor in a recent survey by Harris Interactive and State Farm Insurance.

A recent survey by Harris Interactive and State Farm Insurance found that 60% of Americans have a pet peeve with someone who lives nearby.

A bad neighbor “can make your life a total nightmare,” says Bob Borzotta, managing editor of NeighborsFromHell.com, whose message boards contain more than 42,700 posts on unfriendly neighbor behavior.

At the extreme, certain next-door nuisances — such as annoying pets, unkempt yards, foul odors, and dangerous trees — could reduce your home value by 5% or more, according to the Appraisal Institute.

Source: http://money.cnn.com/2013/07/01/news/home-value.moneymag/index.html