The Kallhoff Team

Friday, June 7, 2013

Most Renters Plan to Buy, But Fear Lending Standards

DAILY REAL ESTATE NEWS | FRIDAY, JUNE 07, 2013

Ninety percent of renters say they expect to buy a home in the future, but the majority are fearful of their ability to qualify for a mortgage at today’s stringent underwriting standards, according to a new survey conducted by Fannie Mae. In fact, 42 percent of those who intend to buy a home one day say they don’t think they’ll be able to do so for at least five years.

"Younger renters who prefer to own are much more likely than their older counterparts to say that they are renting mainly to make themselves financially ready to own," according to the survey.

The majority of renters surveyed said that if they had trouble qualifying for a mortgage, they would take steps to improve their credit score or financial situation, or consider buying a less expensive home. Only a quarter of renters said that if they were denied a mortgage, they would stop pursuing a mortgage altogether.

The survey showed that renters believe home ownership is better than renting in terms of privacy, security, and for raising a family. Fifty-one percent of renters say that owning makes more sense than renting when comparing both the financial and lifestyle benefits, according to the survey.

"The strength of the economy, particularly job creation and real income growth, as well as the favorability of credit conditions should play significant roles in determining if and when many of these renters will see the fruit of their efforts to become home owners," says Sarah Shahdad, analyst of Economic & Strategic Research at Fannie Mae.

Source: “Renters pursue the American Dream of homeownership,” HousingWire (June 6, 2013)

http://realtormag.realtor.org/daily-news/2013/06/07/most-renters-plan-buy-fear-lending-standards

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Thursday, June 6, 2013

Return to 'Buyer's Market' Still Years Away

DAILY REAL ESTATE NEWS | THURSDAY, JUNE 06, 2013

It may be two to three more years before prospective home buyers get a break from escalating property prices and tight supply, according to experts speaking at a National Association of Real Estate Editors conference Wednesday.

That is the time frame for institutional speculators, who currently are dominating the market, to pull out of their investments and still make a profit, explained Bill Rayburn of the mortgage technology firm FNC. The market also will need to see the return of individual home buyers in order to normalize, he said, which will be propelled by employment gains.

Source: "Better Times for Home-Buyers Will Take a Few Years, Experts Say," Los Angeles Times (June 5, 2013)

http://realtormag.realtor.org/daily-news/2013/06/06/return-buyers-market-still-years-away

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Wednesday, June 5, 2013

Home Prices Soar to Largest Gain in 7 Years

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 05, 2013

The housing recovery has picked up speed, as home prices posted their highest year-over-year gain since February 2006, according to the latest housing data from CoreLogic.

CoreLogic's home price index climbed 12.1 percent in April over year-ago levels. Home prices have been on the rise for more than a year.

"The pace of the housing market recovery quickened in April as home prices rose across the U.S.," says Anand Nallathambi, CoreLogic's chief executive officer. "We expect this trend to continue, bolstered by tight supplies and pent-up buyer demand."

CoreLogic economists predict home prices will rise another 2.7 percent in May.

The following five states had the largest price gains over the past year:

Nevada: +24.6%
California: +19.4%
Arizona: +17.3%
Hawaii: +17%
Oregon: +15.5%

Source: “April home prices see biggest yearly gain in seven years: CoreLogic,” Reuters (June 4, 2013) and “U.S. Home Prices In April Jumped Most in 7 Years,” The Associated Press (June 4, 2013)

http://realtormag.realtor.org/daily-news/2013/06/05/home-prices-soar-largest-gain-in-7-years

Tuesday, June 4, 2013

Downsizing Trend Reverses, Americans Want Big Homes Again

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 04, 2013

For the past three years, the average size of new homes has been on the rise. The median new-home size in 2012 reached a record high at 2,306 square feet, according to newly released data from the Census Bureau. That is an 8 percent increase from 2009.

During the Great Recession, Americans showed a preference for smaller homes, and many housing experts were saying it meant the end of the McMansion.

But Jeffry Roos, a regional president for homebuilder Lennar, told CNNMoney that it wasn’t that Americans wanted less space, they just couldn’t afford more space at the time.

Now, they’re upsizing again. A spokeswoman for GL Homes says that the builder has been selling homes that average 7 percent larger than during the first five months of 2012.

Some consumers are choosing to buy larger because they have more people under their roof. Lennar offers homes known as Next Gen, which feature separate suites for a mother-in-law or college grad who has moved back home.

Home shoppers tend to buy bigger than what they originally plan, Fred Cooper, a spokesman for Toll Brothers, told CNNMoney.

"In the downturns, in upturns, whenever, our customers typically added another 18 to 20 percent of floor space onto what already was a very nice house to begin with," Cooper says.

Source: “McMansions are making a comeback,” CNNMoney (June 4, 2013)

http://realtormag.realtor.org/daily-news/2013/06/04/downsizing-trend-reverses-americans-want-big-homes-again

Monday, June 3, 2013

Make an Offer That Sellers Can't Refuse

DAILY REAL ESTATE NEWS | MONDAY, JUNE 03, 2013

With shrinking inventories, many home buyers are finding only competitive offers will win them the house they want. A recent article by Kiplinger’s Personal Finance highlighted several ways that home buyers can make more competitive “irresistible” offers.

1. Be preapproved: About three or four months before home buyers even shop for a home, they should review their credit reports to make sure they’re accurate and take short-term steps to improve their credit score, says Michael Corbett, author of Before You Buy! Corbett says buyers then should get a bank’s preapproval. While that won’t guarantee they’ll get the loan, it shows sellers that a lender has verified the buyer’s income and credit score to determine that she can afford payments on a mortgage for a certain amount.

2. Don’t lowball: Buyers may only get one chance to get the home they want in a competitive market. They may not get a second try to sweeten the deal later, so a lowball offer the first time around could cause them to lose out. Buyers should use sales prices of comparable properties in the neighborhood to submit their best offer the first time around.

3. Consider an escalator clause: These purchase contract clauses are becoming more popular again. This is when the buyer agrees to increase their offer if there’s a higher bid from another buyer.

4. Add earnest money: The extra deposit can show sellers how serious the buyer is. Some buyers may even double the amount that the seller requests to show their commitment in purchasing the home.

5. Keep contingencies to a minimum: Sellers prefer no contingencies, but buyers want to protect their interests too. “Offset a financing contingency with preapproval and a strong earnest money deposit,” Kiplinger’s Personal Finance reports. “If you have enough cash, temper an appraisal contingency by assuring sellers that if the appraisal comes in lower than the purchase price, you'll pay the difference or split it with them (up to a certain amount).”

6. Write a letter: Personal love letters about the home addressed to the sellers are winning over some hearts lately. The letters tell the seller about the buyer (e.g. “We’re relocating from ...”) and what drew the buyer to the home (e.g. “We especially love ...”).

Source: “Making an irresistible home offer,” Kiplinger’s Personal Finance (May 31, 2013)

http://realtormag.realtor.org/daily-news/2013/06/03/make-offer-sellers-cant-refuse

Friday, May 31, 2013

Mortgage Rates Climb to Highest Level in Year

DAILY REAL ESTATE NEWS | FRIDAY, MAY 31, 2013

Fixed-rate mortgages soared higher this week, reaching their highest averages in a year, Freddie Mac reports in its weekly mortgage market survey.

The 30-year fixed-rate mortgage -- the most popular choice among home buyers -- has climbed nearly half a percentage point since the beginning of this month -- from 3.35 percent to 3.81 percent this week.

"Fixed mortgage rates followed long-term government bond yields higher, following a growing market sentiment that the Federal Reserve may lessen its accommodative policy stance,” says Frank Nothaft, Freddie Mac’s chief economist. “Improving economic data may have encouraged those views.”

Despite the uptick, mortgage rates remain low by historical standards, Freddie Mac reports.

The mortgage giant reports the following national averages with mortgage rates for the week ending May 30:

30-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.8 point, rising from last week’s 3.59 percent average. A year ago at this time, 30-year rates averaged 3.75 percent.
15-year fixed-rate mortgages: averaged 2.98 percent, with an average 0.7 point, rising from last week’s 2.77 percent average. Last year at this time, 15-year rates averaged 2.97 percent.
5-year adjustable-rate mortgages: averaged 2.66 percent, with an average 0.5 point, also up from last week’s average of 2.63 percent. Last year at this time, 5-year ARMs averaged 2.84 percent.
1-year ARMs: averaged 2.54 percent, with an average 0.5 point, dropping from last week’s 2.55 percent average. A year ago, 1-year ARMs averaged 2.75 percent.

Source: Freddie Mac

http://realtormag.realtor.org/daily-news/2013/05/31/mortgage-rates-climb-highest-level-in-year

Thursday, May 30, 2013

Mortgage Applications Drop 9% Last Week

DAILY REAL ESTATE NEWS | WEDNESDAY, MAY 29, 2013

Interest rates soared to their highest level in a year while mortgage applications fell again last week by 9 percent, the Mortgage Bankers Association reports.

For the third consecutive week, refinance applications dropped, falling 12 percent for the week ending May 24. That marked the single largest weekly drop this year for refinance applications. Refinance applications are at their lowest level since December.

Meanwhile, applications for purchases -- viewed as a leading gauge of future home sales -- rose 3 percent last week, the MBA reported.

The average 30-year fixed-rate mortgage rose to 3.9 percent -- the highest since May 2012, the MBA reported. The average 15-year fixed-rate mortgage was also on the rise, increasing to 3.1 percent from 2.96 percent the week before.

Source: “U.S. mortgage applications down 9% last week: MBA,” The Wall Street Journal (May 29, 2013)

http://realtormag.realtor.org/daily-news/2013/05/29/mortgage-applications-drop-9-last-week