The Kallhoff Team

Friday, July 12, 2013

Mortgage Rates Continue to Rise, Fed Eases Fears

DAILY REAL ESTATE NEWS | FRIDAY, JULY 12, 2013

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.

On Wednesday, Bernanke said that unemployment is still high and inflation too low. He said the Fed would not raise short-term rates until the unemployment rate reaches 6.5 percent. The jobless rate is currently 7.6 percent. The Fed has been buying $86 billion a month in government bonds to hold down long-term interest rates, which have helped mortgage rates in recent months reach all-time lows.

Freddie Mac reported the following national averages with mortgage rates 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.
1-year ARMs: averaged 2.66 percent, with an average 0.5 point, holding steady from last week’s average. A year ago at this time, 1-year ARMs averaged 2.69 percent.

Source: Freddie Mac and “Bernanke: Economy still needs Fed stimulus,” The Associated Press (July 10, 2013)

http://realtormag.realtor.org/daily-news/2013/07/12/mortgage-rates-continue-rise-fed-eases-fears

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Thursday, July 11, 2013

Soaring Insurance Rates Shock Home Owners

DAILY REAL ESTATE NEWS | THURSDAY, JULY 11, 2013

Home owners who live near areas where disasters have struck, but have not been directly impacted by them 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. As such, some residents in the Valley Stream, Long Island area of New York are seeing 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 prompted 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.

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)

http://realtormag.realtor.org/daily-news/2013/07/11/soaring-insurance-rates-shock-home-owners

Tuesday, July 9, 2013

Survey: Americans Upbeat About Home Prices

DAILY REAL ESTATE NEWS | TUESDAY, JULY 09, 2013

Fifty-seven percent of Americans believe home prices will increase within the next year, an all-time high for Fannie Mae’s National Housing Survey, which was created in 2010. Meanwhile, 7 percent of those surveyed say they believe home prices will drop.

The majority of Americans — also 57 percent — believe that mortgage rates will increase as well, reaching the highest level since the survey was created.

"The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy," says Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers may recognize that today’s still favorable mortgage rates and home ownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence."

Seventy-two percent of Americans say now is a good time to purchase a home, according to the survey. The survey also found that 37 percent of Americans say now is a good time to sell, a slight fall from 40 percent in May.

Source: “Majority of Americans expect housing fundamentals to rise,” HousingWire (July 8, 2013)

Read More

5 Ways to Keep a Positive Outlook

http://realtormag.realtor.org/daily-news/2013/07/09/survey-americans-upbeat-about-home-prices

Monday, July 8, 2013

Where Cost Per Square Foot is Skyrocketing

DAILY REAL ESTATE NEWS | MONDAY, JULY 08, 2013

The list price per square foot is gaining in many areas, rising to $181 in June, according to real estate brokerage Movoto’s national housing report.

The increase in list price per square foot was the most dramatic in Sacramento, where it rose from $91 per square foot in June 2012 to $153 per square foot last month—about a 68 percent increase.

The following cities have seen the largest year-over-year increases (June 2012 to June 2013) in price per square footage:

Sacramento: $153 (a 68.1 percent year-over-year increase)
Phoenix: $126 (+44.8% year-over-year)
Oakland, Calif.: $304 (+37.6% year-over-year)
Mesa, Ariz.: $118 (+37.2% year-over-year)
Los Angeles: $435 (+28.3% year-over-year)
Long Beach, Calif.: $342 (+26.2% year-over-year)
Las Vegas: $105 (+22.1% year-over-year)
San Diego: $359 (+20.1% year-over-year)
Boston: $468 (+19.1% year-over-year)
Jacksonville, Fla.: $90 (+18.4% year-over-year)
Atlanta: $148 (+18.4% year-over-year)

The only two cities to see a decrease in price per square foot were Chicago and New Orleans, according to Movoto.

Source: “Increased inventory raises price per square foot,” HousingWire (July 2, 2013)

http://realtormag.realtor.org/daily-news/2013/07/08/where-cost-square-foot-skyrocketing

Wednesday, July 3, 2013

Home Prices Post Biggest Jump in 7 Years

DAILY REAL ESTATE NEWS | WEDNESDAY, JULY 03, 2013

Home prices are moving up at a quicker pace, rising in May by their largest annual amount in more than seven years with more to come, according to the latest report released by CoreLogic.

Home prices increased 2.6 percent in May over April and have shot up 12.2 percent compared to last year’s prices. CoreLogic economists are predicting that home prices will rise by another 2.9 percent in June, making the yearly price gain 13.2 percent year-over-year.

Tight inventories of homes for sale across the nation have pushed home prices higher, according to CoreLogic.

“Home price appreciation, particularly in much of the western half of the U.S., is increasing at a torrid pace,” says Anand Nallathambi, president and CEO of CoreLogic. “Across the country, pent-up demand and continued low interest rates are fueling strong demand for a limited inventory of properties. We expect that trend to continue to drive up prices throughout the balance of the summer months.”

When including distressed sales, the following five states have seen the highest home appreciation in the past year, according to CoreLogic:

Nevada: +26%
California: +20.2%
Arizona: +16.9%
Hawaii: +16.1%
Oregon: +15.5%

Source: CoreLogic and “Home prices rise by most in seven years in May: CoreLogic,” Reuters (July 2, 2013)

http://realtormag.realtor.org/daily-news/2013/07/03/home-prices-post-biggest-jump-in-7-years

Tuesday, July 2, 2013

Are Rising Prices Tempting More Home Owners?

DAILY REAL ESTATE NEWS | TUESDAY, JULY 02, 2013

With rising home prices, more home owners are finding they can sell without fear that their mortgage is worth more than their house. The number of sellers coming onto the market is serving as a relief to home buyers who were becoming increasingly frustrated at the lack of inventory and increased bidding wars, the Associated Press reports.

It’s a “virtuous circle,” says Mark Fleming, chief economist of CoreLogic, a real estate data provider. “The fact that house prices have increased so dramatically ... has unlocked a lot of that pent-up supply.”

From January to March, about 19.8 percent of homes nationwide with a mortgage are considered “underwater” -- that’s a drop from 23.7 percent a year earlier.

The largest percentage of underwater homes in the nation are often found in the markets with the lowest supply of homes for sale, according to CoreLogic. Tampa Bay, Fla., and Miami have the highest number of underwater mortgages of metro areas at 41.1 percent and 40.7 percent, respectively.

Housing inventories remain constrained in many markets. As of May, there’s a 5.2-month supply of existing homes for sale nationwide, according to the National Association of REALTORS®. One year earlier, the supply of homes stood at 6.4 months.

Some home owners may continue to resist selling despite regaining equity, believing that home prices may rise even more if they wait, economists say. However, economists predict that as inventories increase, home price increases will moderate.

Source: “Home price gains bring ‘underwater’ sellers off sidelines, relieving frustrated buyers,” The Associated Press (June 30, 2013)

http://realtormag.realtor.org/daily-news/2013/07/02/are-rising-prices-tempting-more-home-owners

Monday, July 1, 2013

Will Rising Rates Lead to Buyer Rush?

DAILY REAL ESTATE NEWS | MONDAY, JULY 01, 2013

Mortgage rates soared to a two-year high last week, rising by the largest pace since 1987. Freddie Mac reported the average 30-year fixed-rate mortgage climbed from 3.93 percent to 4.46 percent last week. Some economists are predicting 30-year rates to climb to 4.5 percent and 5 percent over the next 12 months, following the Federal Reserve’s recent announcement that it will soon end a program that has kept interest rates near all-time lows for months.

Home buyers may be concerned that the rising rates will dampen housing affordability. But economists say that rising rates shouldn’t derail the housing market recovery.

"Some people might decide to buy a smaller house in a different area, but you won't see a big decline based just on interest rates," says Jay Brinkmann, the Mortgage Bankers Association’s chief economist. "In the past, you would see a rise in homebuying activity with rate increases. People who are on the fence about buying a home get off the fence in a hurry when rates start to go up.”

As rates have edged up recently, pending home sales have moved up too. They rose 6.7 percent in May from April—at the highest rate since late 2006, the National Association of REALTORS® recently reported.

Analysts also point out that mortgage rates are still low by a historical perspective, even if they do tick up to 5 percent.

"Anything below 6 percent is historically favorable," says Keith Gumbinger, vice president of HSH, a mortgage data publisher.

Source: “Mortgage Rates Won't Derail Housing Recovery, Analysts Say,” Investors Business Daily (June 27, 2013)

http://realtormag.realtor.org/daily-news/2013/07/01/will-rising-rates-lead-buyer-rush