Where Are Mortgage Rates Heading in 2014?

Where Are Mortgage Rates Heading in 2014?

Mortgage rates will likely rise above 5 percent in 2014 and average 5.3 percent by the end of 2015, according to the Mortgage Bankers Association’s forecast. 

That would mark a big jump over where mortgage rates stand now. The MBA reported this week that the 30-year fixed-rate mortgage averaged 4.33 percent, the lowest average since June. 

“We are projecting home purchase originations will increase in 2014 due largely to gains in home sales and home prices,” says Brinkmann. “We expect to see a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices.” Investors Still Flooding the National Housing Market:

Americans on the Move Again,

Americans on the Move Again,

After staying in place for years, bogged down by the financial effects of the recession, Americans are finally back on the move, according to the latest U.S. Census data.

In 2012, nearly 16.9 million people moved between counties, and 7 million made long-distance moves from one state to another. For long-distance moves, that figure was nearly 5 percent higher than 2010.

The median price of an existing-home rose to $212,100 this year compared to $166,200 in 2011, the National Association of REALTORS® reports. Many home owners “didn’t want to sell a house that they viewed as a low price,” says Jed Smith, an NAR economist. “Now that the prices are up, away we go.” Mortgage Rates Become Housing’s Thorn:

Up For Air: Big Decline In Underwater Mortgages

Up For Air: Big Decline In Underwater Mortgages

Up For Air: Big Decline In Underwater Mortgages More home owners are edging above water with their mortgages: 2.5 million U.S. properties emerged from underwater or negative equity in the second quarter. The total number of residential properties with a mortgage with equity stands at 41.5 million.  “Seeing fewer underwater mortgages is no mystery, given the continued rise in home values over the last 12 months,” credit risk practice.This is good news since these more traditional buyers will ensure the appreciation trend will continue over the near future. In addition, as long as new construction does not change the supply/demand balance in favor of excess supply, appreciation should persist until most of the underwater loans are gone.”  But 10% of Home Owners Still Underwater:

Investors Still Finding Ample Opportunities

Investors Still Finding Ample Opportunities

 In Distressed Market: Residential properties sold at a faster pace in September 

Single-family homes, condominiums, and townhomes sold at an annualized pace of 5,673,249 in September, up 2 percent from August and up 14 percent year-over-year, indicating that the market is still ripe for investors with deep pockets looking to make an imprint on regional markets. “While the institutional investors are pulling back their purchases in many of the higher-priced markets-places. They are continuing to ramp up purchases in markets where median #home prices are still below $200,000. See which states are our website.

No Federal Guarantee, No 30-Year Mortgage

No Federal Guarantee, No 30-Year Mortgage
The looming debt ceiling crisis and the federal government shutdown have pushed aside pretty much every other issue in Washington today, but it won’t be too long before one of the major real estate issues facing the federal government will be back on the agenda, and that’s reform of the secondary mortgage market. Its importance can’t be overstated, because if the government stops backing conventional, conforming loans—these are the all-important loans backed by Fannie Mae and Freddie Mac–it’s unlikely we’ll have 30-year fixed-rate mortgages in the United States anymore. Watch our video to learn more...

Freddie: Expect a Housing 'Slow Down
Not Shut Down': The pace of the housing recovery showed signs of slowing heading into the fourth quarter of the year, due to the federal government shutdown, debt ceiling issues, and the slowing economy, Freddie Mac reports in its U.S. Economic and Housing Market Outlook for October.

'The housing recovery keeps chugging along despite a constant barrage of disruptions to the broader economy,” says Frank Nothaft, Freddie Mac’s chief economist. “We're likely going to see the housing recovery slow down, but not shut down, as we close out the rest of this year due to tight inventories in many markets, rising mortgage rates, and slumping consumer confidence. Fortunately, the housing recovery should continue to absorb the economic shocks in stride and improve next year.' Read more ...

Single-Family Rentals Rising even as Price Rise

Single-Family Rentals Rising even as Price Rise

Single-family rental homes are on the rise in communities nationwide in the aftermath of the housing meltdown. 

In 32 of the country's top metropolitan regions, at least 20 percent of all occupied single-family homes were rentals in 2012. According to a USA Today analysis of U.S. Census Bureau data, that is up from just seven metros in 2006. 

Researchers say the growth reflects changes brought by the housing bust and the enduring financial hardships ushered in by the Great Recession. Nationwide last year, 18 percent of occupied single-family homes were rentals — an increase from almost 15 percent in 2006. Here are five key indicators for the housing market from the National Association of REALTORS®'latest existing-homes report, which reflects September data:

Existing-Home Sales Slip

Existing-Home Sales Slip

With Affordability: After reportedly reaching their highest level in nearly four years in August, existing-home sales dropped in September thanks to limited inventory and rising home prices, according to the National Association of Realtors (NAR).

Total existing-home sales—measured as completed transactions of single-family homes, townhomes, condos, and co-ops—fell 1.9 percent in September to a seasonally adjusted annual rate of 5.29 million. 
Year-over-year, September transactions were up 10.7 percent, marking the 27th straight month of annual improvement.
Meanwhile, the national median existing-home price for all housing types was $199,200, up 11.7 percent—the 10th consecutive month of double-digit year-over-year gains. Watch our Video to learn more on today's Market...

High-End Home Flipping on the Rise

High-End Home Flipping on the Rise

Real estate investors made an average gross profit of $54,927 on single-family home flips in the third quarter,RealtyTrac reported.

The tracking company’s data indicates investors’ Q3 profit was up 12 percent from an average gross return of $48,893 in the third quarter of 2012. The higher gross profit was driven in part by an increase in high-end flips of homes that were sold for $750,000 or more.
“Increasing home prices over the past 18 months combined with decreasing foreclosures have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” See U.S. Home Flipping by Price Range...

Housing Moves Toward 'Healthy Equilibrium'

Housing Moves Toward 'Healthy Equilibrium'

The housing market is finding its center again, showing signs of greater balance, according to realtor.com’s latest National Housing Trend Report. The analysis finds year-over-year trends revealing strong gains in median list prices and declines in days on the market. 

“Our September data on inventory counts, median list prices, and median time on market has shown another month of steady leveling, but the recovery certainly remains uneven in some pockets,”  Some of the more industrial-based markets clearly continue to struggle, yet others are showing significant price gains over this time last year. While we are pleased to see a continued trend toward a healthy market balance, imminent economic factors could pose a significant threat to these improvements.” Freddie Mac reports the following national averages for the week ending Oct. 17:

Demand for Apartment Soars, Rents Constrained

Demand for Apartment Soars, Rents Constrained

Apartment vacancies fell by 10 basis points in the third quarter to 4.2 percent, according to a preliminary look of the ReisReports third-quarter market report for the apartment, office, and retail sectors. Asking rents increased by 0.9 percent in the third quarter. But the high demand won't automatically mean rent increases.

“Despite the persistent strength of the apartment market recovery, rent growth is being held in check by a still-weak recovery in the economy and the labor market,” according to ReisReports. “Too few jobs, many of dubious quality, and too little income growth are constraining landlords’ ability to raise rents.”

Falloff in Consumer Confidence Dampens Fannie's Outlook: On the heels of the announcement that the federal government would resume daily operations, Fannie Mae released its October forecasts for the economy and the housing industry. Read more ..

Why it may be best to buy or sell by year-end

Why it may be best to buy or sell by year-end

Is Buyer Demand Slipping? Home buyer demand is showing signs of cooling this fall, fueled by growing uncertainty in the economy, according to a new report by brokerage Redfin, which analyzes housing market demand based on the brokerage’s home tour and offer data. 

Offers slid 12 percent in September compared to August, reflecting a typical fall season slowdown but also concern over the government shutdown, according to the report. The number of offers made by clients posted its largest monthly drop this year, according to the report. 

The decline in offers from home buyers is in stark contrast to the 4.5 percent increase seen last year during this time, when the housing market was just beginning to gain momentum, the report notes. Why it may be best to buy or sell by year-end: On Jan. 1, 2014, a new provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act goes into effect. The “qualified residential mortgage,” or QRM, may have far-reaching effects that will lessen the number of people who ultimately can obtain home loans. Read more...

Home Price Gains to Decelerate in Winter

Home Price Gains to Decelerate in Winter

August marks the 18th consecutive month of rising home prices, according to FNC’s Residential Price Index released Tuesday, indicating an indisputable recovery. However, FNC, a mortgage industry technology provider, is detecting some deceleration in the recovery and declares, “It is clear that the recovery remains uneven across the nation.”

On a monthly basis, prices rose 0.6 percent in August, according to FNC’s composite of 100 large metropolitan areas. On a yearly basis, the increase is 5.3 percent. The monthly gain in August was smaller than the gains accrued over the two previous months. Strategic Defaulters in Fannie and Freddie's Crosshairs:Fannie Mae and Freddie Mac are looking to collect unpaid mortgage debt from “strategic defaulters,” those underwater home owners who skipped out on their mortgages even though they had the ability to pay. If a home is sold at foreclosure but the proceeds don't cover the outstanding balance of the home owner's loan, the mortgage giants can pursue judgments against the home owner forcing him or her to pay the deficiency. Read more....

Shadow Inventory Falls to Lowest Level

Shadow Inventory Falls to Lowest Level

Since August 2008: Overall residential shadow inventory, as of July 2013, was 1.9 million homes, according to CoreLogic. That’s the lowest shadow inventory tally reported since August 2008.

The industry’s current shadow inventory carries a value of $293 billion by CoreLogic’s assessment, down from $380 billion in July 2012.

It represents 3.7 months’ of supply and accounts for 85 percent of the 2.2 million properties that were seriously delinquent, in foreclosure, or bank-owned at July month-end. Overall residential shadow inventory, as of July 2013, was 1.9 million #homes, See the  Cheapest Places to Retire:

Mortgage Rates Rise for First Time in 5 Weeks

Mortgage Rates Rise for First Time in 5 Weeks

Mortgage rates were on the rise slightly this week, following more than a month of declines after the Federal Reserve announced it would delay tapering its $85 billion per month bond purchasing program. 

Freddie Mac reports the following national averages with mortgae rates for the week ending Oct. 10. 

NAR on FHFA’s Loan Limits: Don't Drop Them: The National Association of REALTORS® is garnering media attention for its call urging the Federal Housing Finance Agency to delay reducing the loan limits. The Wall Street Journal recently spotlighted NAR’s position on the issue.  Read more...

Buy a Home Now or Pay More Later?

Buy a Home Now or Pay More Later?

Mortgage rates are nearing the 5 percent mark, prompting many home buyers to rush to take advantage of rates while they’re still low. 

“Most people agree it is only a matter of time before rates hit 5 percent,”
“The housing market has clearly turned the corner in most areas. I think a year from now, people will look back and realize that this was a great buying opportunity.”

Some forecasts show rates could edge even higher to 5.5 percent or even 6 percent in 2014. The Federal Reserve has announced that it will soon start tapering its $85 billion monthly bond-purchasing program, which is expected to send mortgage rates rising from recent record lows. Read more....

Freddie Mac's Plan to Stall Impact of Shutdown

Freddie Mac's Plan to Stall Impact of Shutdown
Second week shutdown, Freddie Mac has issued intermediate guidelines to lending institutions for approving home loans and modifications to keep the housing market from grinding to a halt.

Freddie Mac is allowing lenders to approve mortgages for those borrowers — even in the absence of steady income — assuming they meet other loan requirements and plan to return to work once the government reopens.  

Housing Market Running at 85% of Normal, Pre-Recession Activity: A new index from National Association of Home Builders (NAHB) suggests that about one in seven housing markets have returned to or surpassed their pre-recessionary levels of activity. Read more....

Delinquencies Plummet & Foreclosure Inventory Down

Delinquencies Plummet & Foreclosure Inventory Down

Delinquent mortgages dropped to their lowest level since November 2008 according to recent research.

At the end of August, the company found there were approximately 2.1 million mortgages, or 5.3 percent of all outstanding home loans, in serious delinquency (defined as 90 days or more past due, including those loans in foreclosure or REO). The rate of seriously delinquent mortgages is at its lowest level since December 2008.
Also reported a drop in completed foreclosures in August of 34 percent year-over-year. Foreclosures were only 1.3 percent higher from the previous month. The data shows 48,000 foreclosures were completed in August. Foreclosure Inventory Down 33%

Housing Will Strengthen in 2014

Housing Will Strengthen in 2014

As most housing metrics turned around last year, one vital statistic stayed down: the homeownership rate. However, one analyst at Fannie Mae says that low homeownership—when put in context with other data—might indicate a promising trend in sustainability.

According to recently published data from the Census Bureau’s American Community Survey (ACS), the homeownership rate was down in 2012 for the fifth consecutive year, falling to 63.9 percent—the lowest rate recorded since the survey was fully implemented in 2005 and lower than any rate recorded in any decennial census since 1970. Salt Lake City 1 of 10 Best Cities for Apartments With Luxe Kitchens: As the holidays draw near, many renters may be looking for a place that will make hosting a little easier. A new study from Apartment Guide examines which cities have the best selection of apartments with excellent kitchen amenities.Apartment kitchens are notoriously skimpy, but they don't have to be.

Does the math still work on buying rentals

Does the math still work on buying rentals

Investors are starting to retreat from the single-family rental market, as the number of foreclosures dries up and projections for home appreciation expected to stay flat in 2014. 

'I think the investor market is largely past us,' Doug Lebda, chief executive of Lending Tree. 

'People were buying investment properties three, four, five years ago. What I hear is that's slowing now.' Investors cooling on 'REO-to-rent') Apartment demand keeps climbing) Watch our Video and learn more on today's market...

Banks Scale Back on Crucial Step in Home Buying

Banks Scale Back on Crucial Step in Home Buying

Banks are reportedly losing favor of mortgage pre-approvals, which are often viewed as an important first step in the home buying process.

Mortgage preapprovals are a written commitment from lenders outlining the loan amount and interest rate that home buyers qualify for. They give buyers an indication of how much they can afford on their home purchase, as well as show sellers their commitment to purchase. 

Shutdown Pushes Mortgage Rates Down: As a result of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week, Freddie Mac reports, ending at their lowest averages in nearly four months.

Rental Vacancy Rate Lowest in More Than a Decade

Rental Vacancy Rate Lowest in More Than a Decade

The U.S. apartment vacancy rate fell to its lowest level in more than a decade during the third quarter, according to a new report by real estate research.

It was down to 4.2 percent, the lowest vacancy rate since the third quarter of 2001, when it stood at 3.9 percent. 'Demand has been so strong to push vacancy rates to such a low level, yet we haven't seen rent growth of the magnitude we would normally expect, ' With such low vacancy, rents normally would grow by about 4 percent to 5 percent year-over-year, Severino says. Stagnant job and income growth are what has held rents back, he added. Will Hottest Housing Markets Cool in 2014?

The older the home buyer, the pickier

The older the home buyer, the pickier

Older home shoppers are more picky in their home purchases than younger buyers, according to a survey of nearly 94,000 recent home buyers and sellers.

About half of the those surveyed who were age 58 and older say they made no compromises during their recent home purchase. On the other hand, only 28 percent of the youngest home buyers surveyed said they didn’t compromise, according to the survey.

For the most part, younger home buyers reported having to compromise on price, lot size, distance from job, and style of home. Home prices nationwide continue to rise, Read more..

Diminished Bidding Activity

Diminished Bidding Activity

Competition for homes decreased in August for the fifth month in a row according to data compiled by the Research Center.

The report concluded that the diminishing number of bidding wars indicates that the housing market is shifting away from one that favors sellers toward a more balanced environment.
“Tight inventory conditions mean that across 22 markets, most customers making offers at the end of the summer faced competing bids,” “Lower mortgage rates this month could spur a slight boost in bidding wars in October,” Read more ..

HUD Proposes New Definition of Qualified Mortgage

HUD Proposes New Definition of Qualified Mortgage

HUD proposed a new definition of “qualified mortgage” (QM) in a statement released Monday. 

To meet the new QM requirements, a mortgage will have to require periodic payments, have terms not exceeding 30 years, limit upfront points and fees to no more than three percent with adjustments to facilitate smaller loans, and be insured or guaranteed by FHA or HUD.

The Dodd–Frank Act required HUD to propose a QM definition that is aligned with the ability-to-repay criteria set out in the Truth-in-Lending Act (TILA) as well as the department’s historic mission to promote affordable mortgage financing options for qualified lower income borrowers. HUD said the new rules serve to provide credit access to creditworthy, but underserved borrowers.Read more ....