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 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)
In some parts of the country, energy efficient and eco-friendly homes are easier to find. The real estate brokerage Redfin recently ranked cities that have the greenest homes, basing its rankings on the number of homes for sale that boast green features—such as solar panels, LEED certification, and Energy Star appliances—as well as taking into account each city’s carbon-dioxide emissions ranking.
“The residents of these cities are reducing their environmental footprint and saving money at the same time” by lowering their monthly utility bills, says Julie Jacobson, a real estate agent with Redfin.
The 3 cities emerged on the top of the list for greenest cities for homes:
- San Francisco
- Washington, D.C.
- Sacramento, Calif.
Source: “10 Cities With the Greenest Homes,” AOL Real Estate (April 19, 2013)
Average fixed-rate mortgages moved lower this week amid data showing weaker consumer spending, Freddie Mac reports in its weekly mortgage survey. It marked the third-consecutive week that mortgage rates went down.
Freddie Mac reports the following national averages in rates for the week ending April 18:
- 30-year fixed-rate mortgages: averaged 3.41 percent, with an average 0.7 point, dropping from last week’s 3.43 percent average. A year ago at this time, 30-year rates averaged 3.90 percent.
- 15-year fixed-rate mortgages: averaged 2.64 percent, with an average 0.7 point, dropping from last week’s 2.65 percent average. Last year at this time, 15-year rates averaged 3.13 percent.
- 5-year adjustable-rate mortgages: averaged 2.60 percent, with an average 0.5, dropping from last week’s 2.62 percent average. Last year at this time, 5-year ARMs averaged 2.78 percent.
Source: Freddie Mac
Young generations were badly hit in the recession, and it could have widespread effects on their lives, from delaying home ownership to starting a family and having children to even one day eventually retiring.
A new study from the Urban Institute shows that those under the age of 40 have accumulated less wealth than their parents did at the same age. That coincides with a time when the average wealth of Americans has doubled over the last quarter-century , according to the study.
“In this country, the expectation is that every generation does better than the previous generation,” Caroline Ratcliffe, an author of the study, told The New York Times. “This is no longer the case. This generation might have less.”
Young adults are facing stagnant pay, a tough job market, soaring student loan debt, and some who did own a home may have faced lost equity or even foreclosure during the housing crisis.
Will younger adults ever be able to catch up?
More about the study at source: “Younger Generations Lag Parents in Wealth-Building,” The New York Times (March 14, 2013)
The U.S. Department of Housing and Urban Development has announced a free mobile app that allows users to instantly file housing discrimination complaints.
“Having this first fair housing mobile application equips people everywhere with the information they need to combat housing discrimination,” says John Trasviña, HUD assistant secretary for fair housing and equal opportunity. “We are maximizing the latest technology to make the process for filing fair housing complaints faster and easier and arming our fair housing partners with the information they need to understand their fair housing rights and responsibilities.”
The app, available for the iPhone and iPad, includes information about the Fair Housing Act, HUD’s fair housing toll-free discrimination hotline, and information on housing rights following a natural disasters.
Source: “HUD rolls out fair housing mobile app,” Inman News (March 5, 2013)
Changes to the tax code for 2013 earnings largely left real estate untouched. The mortgage interest tax deduction (MID) is still safe and sound, just as sacred as ever. The Mortgage Forgiveness Debt Relief Act (Debt Relief Act) was extended for another year, ensuring short sales will continue at pace.
Although income tax breaks were extended for the middle class, the payroll tax break was allowed to expire. The payroll tax increased by two percentage points for middle income earners in 2013. This increase has noticeably diminished the take-home pay of approximately 77% of American households.
Many first tuesday readers believe that this will negatively affect home sales volume in 2013. We disagree.
While consumer spending may suffer, buyer purchasing power will remain strong through 2013. Buyer purchasing power is determined by interest rates and a buyer’s gross income, which obviously has not been affected by the increased payroll tax. This is tracked monthly by first tuesday’s Buyer Purchasing Power Index (BPI).
Results of vote and more information at source: http://firsttuesdayjournal.com/the-votes-are-in-2013-tax-code-is-no-good-for-real-estate-sales/
With the U.S. housing market finally picking back up, the National Association of Home Builders (NAHB) conducted a large study to pinpoint how recession may have influenced consumers’ lifestyle preferences and home wish lists. Released this month, the survey found that Americans desire:
- Energy Star appliances above all else
- energy-efficient laundry rooms
- high-end amenities such as kitchens with double sinks, French doors, and whole-house technology
What homeowners and buyers do not want, meanwhile, are:
- golf course homes
- laminate countertops
NAHB also determined that the outer suburbs are favored when it comes to home location, with just 8 percent of those queried citing a preference for living in a city center. That is a departure from what those in the apartment sector believe: that recession and escalating gasoline prices are creating demand for urban lifestyles.
“What Home Buyers Want,” CNBC Europe (Feb 25, 2013)
Moves across county and state lines are falling, with the 2007-2009 recession blamed for changing Americans’ moving patterns, according to an analysis of census data through 2010. The Great Recession caused more Americans to move because they could no longer afford to remain where they were. That’s a big change in what traditionally motivates Americans to move — a bigger home or higher paying job, USA Today reports about the analysis.
Nine percent of Americans stayed local with their moves during 2007-2009 period — the highest in a decade.
“Typically, over the last couple of decades, when Americans moved, they moved to improve their lives,” says Michael Stoll, author of the research and chairman of UCLA’s public policy department. “This is the shock: For the first time, Americans are moving for downward economic mobility. Either they lost their house or can’t afford where they’re renting currently or needed to save money.”
More than 23 percent moved for more affordable housing during the recession. Prior to the recession, that percentage stood at 20.8 percent.
Also, prior to the recession, 41.3 percent of Americans moved in order to own a home or settle into a better neighborhood. However, during the recession, that percentage dropped to 30.4 percent.
Source: “Americans on the Move Start Moving Down, Not Up; Setback in Upward Mobility Hits Blacks, Sun Belt Spots Hardest,” USA Today (Feb. 20, 2013)
After a meteor struck western Siberia and more meteors threatened the entire globe on Friday, CNNMoney asked the question: Who pays for damage to a home if hit by a space object?
Rest easy, “your insurance covers falling objects,” says Robert Hartwig, president of the Insurance Information Institute. In the rare events when meteors have crashed through home owners’ roofs over the years, insurers have paid the damage for those insured, Hartwig says.
“Blue ice” — the frozen sewage that sometimes falls from airplanes — is more common and is also covered if it falls from the sky onto your home, Hartwig told CNNMoney.
A remnant of a meteor struck in the Urals region of western Siberia Friday injuring more than 700 people and damaging nearly 300 buildings. It was referred to as a “once-in-a-century” event.
“The earth is pelted with 40 tons of space debris a year,” says Laurie Leshin, a former NASA scientist. “Most of that is in teeny dust particles” and rarely does it injure people or damage property.
Source: “Who Pays for Damage From a Meteor?” CNNMoney (Feb. 15, 2013)