Mortgage Rates Stay Near Yearly Lows

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 05, 2014

For the third consecutive week, the 30-year fixed-rate mortgage held steady, with borrowing costs for home buyers and refinancers remaining near its lows for the year.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 4:

• 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, holding the same as last week. Last year at this time, 30-year rates averaged 4.57 percent.
• 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.5 point, dropping from last week's 3.25 percent average. A year ago, 15-year rates averaged 3.59 percent.
•  5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, holding the same average from last week. Last year at this time, 5-year ARMs averaged 3.28 percent.
• 1-year ARMs: averaged 2.40 percent, with an average 0.4 point, rising from last week's 2.39 percent average. A year ago, 1-year ARMs averaged 2.71 percent.

Source: Freddie Mac

http://realtormag.realtor.org/daily-news/2014/09/05/mortgage-rates-stay-near-yearly-lows

www.RebeccaSellsAZ.com

Where Homes Are Most Affordable

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 05, 2014

Home affordability varies greatly depending on where a buyer lives, as well as other factors. Using RealtyTrac's income-to-price affordability ratios from more than 2,000 counties, 24/7 Wall St. pinpointed where home affordability is highest. In fact, in some markets, home owners may need to use only about 3 percent of their income to afford a median-priced home.

The Affordability Crisis

• Spring Sees Dive in Housing Affordability
• Brown, Castro Discuss Housing Affordability and Access
• 'Affordability Issues Are Real, Major Hurdle'

Unsurprisingly, San Francisco County in California had the least number of affordable homes in the nation. In San Francisco, the median selling price for houses and condos recently reached the million-dollar mark. 

But on the opposite end of the spectrum, the following seven markets are considered some of the most affordable in the nation. (The affordability rate is the percentage of the county's estimated median household income needed to make monthly payments — including mortgage, property taxes, and homeowners insurance — on a median-priced residential property.)

1. Chattooga County, Ga.
   Affordability rate: 3.75%
   Household median income: $41,864
2. Lake County, Tenn.
   Affordability rate: 5.75%
   Household median income: $33,512
3. Edgecombe County, N.C.
   Affordability rate: 6.17%
   Household median income: $40,726
4. Upson County, Ga.
   Affordability rate: 6.31%
   Household median income: $37,601
5. Barnwell County, S.C.
   Affordability rate: 6.81%
   Household median income: $35,219
6. Obion County, Tenn.
   Affordability rate: 6.88%
   Household median income: $45,919
7. Lamar County, Ga.
   Affordability rate: 6.92%
   Household median income: $33,661

Source: “The 10 Most Affordable Markets in America,” 24/7 Wall St. (Sept. 4, 2014)

http://realtormag.realtor.org/daily-news/2014/09/05/where-homes-are-most-affordable

www.RebeccaSellsAZ.com

Where Autumn is Hot for House Hunting

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 04, 2014

Home searches often slow down in the autumn season, but not everywhere.

A new study by Trulia shows that of the 500 largest U.S. metros, some markets see house-hunting pick up in the fall — particularly markets in New England, the San Francisco Bay area, and New York state.

A fall home-sale surge? Find out why this brokerage is predicting one.

In analyzing home searches on its site, Trulia found the following metros often have the highest numbers in autumn:

1. Peabody, Mass.
2. Worcester, Mass.
3. San Francisco
4. Oakland, Calif.
5. Seattle
6. San Jose, Calif.
7. Albany, N.Y.
8. Long Island, N.Y.
9. Buffalo, N.Y.
10. Gary, Ind.

Some smaller markets also find autumn to be their prime house-hunting season, particularly counties in vacation spots near mountain or forest attractions and ski resorts. Some of the smaller markets to see a boost in the autumn are Lincoln, N.M.; Teton, Wyo.; and Watauga, N.C.

Meanwhile, the housing markets that often see search activity drop the most in the autumn tend to be in college towns, such as College Station-Bryan, Texas; Columbia, Mo.; and Iowa City, Iowa. Also, search activity often slows in Florida vacation spots in autumn, such as Key West, Punta Gorda, and Naples-Marco Island, according to the analysis.

Source: “House Hunters Head for the Hills After Labor Day,” Trulia Trends (Sept. 2, 2014)

http://realtormag.realtor.org/daily-news/2014/09/04/where-autumn-hot-for-house-hunting

www.RebeccaSellsAZ.com

Student Debt Burden Holding First-Time Buyers Back

DAILY REAL ESTATE NEWS | WEDNESDAY, SEPTEMBER 03, 2014

Carrying student loan debt is making it more difficult for many young professionals to qualify for a mortgage. Recent college graduates with student loan debt who want to own a home will need to earn about one-third more annually — or $8,969 more — than those who are debt-free, according to new research by the real estate data firm RealtyTrac.

The Student Loan Debt Crisis

Student Loans Causing Housing Shift, CFPB Says

Study: Student Debt Holds Buyers Back, But Doesn't Need To

5 States with the Highest Levels of Student Debt

The Plight of First-Time Buyers

“To overcome the additional debt from student loans, indebted college graduates need to make more income than college graduates without student loans to be able to afford a home,” says Daren Blomquist, a vice president at RealtyTrac. For its analysis, RealtyTrac factored in the median home price for each state and county and calculated the minimum amount of income needed to qualify for a loan to purchase a home at that price.

RealtyTrac found that graduates with student loans who are earning the median U.S. household income can afford to make the monthly payments on a median-priced home in 96 percent of the 494 county markets it analyzed.

But many graduates with student loans are saddled with high debts and are struggling to break ahead.

The average graduate in 2014 carried $33,000 in debt, an amount that has tripled over the last 20 years, according to Edvisors.com, a network of websites about planning and paying for college. The average starting salary for an employee holding a bachelor’s degree is around $45,000.

“The average student loan debt varies from state to state, and somewhat counterintuitively, some of the most expensive states for housing also have the lowest average student loan debt,” Blomquist says. For example, while California has one of the lowest levels of student loan debt, it boasts some of the highest home prices in the nation.

In some cases, college grads with student loan debts are having to earn a lot more money than their debt-free counterparts if they want to buy a home. According to RealtyTrac’s analysis, the following states are where recent graduates with student loans need to make even more income to match the purchasing power of students without loans:

• Connecticut: 58%
• Rhode Island: 56%
• Michigan: 55%
• Ohio: 52%
• Pennsylvania: 49%

Student loan debt is a pressing hurdle for graduates not only in purchasing a home but also in building wealth over the long term. For example, households headed by young, college-educated adult without any student debt have about seven times the typical net worth ($64,700) than households headed by young, college-educated adults with student debt ($8,700), according to data from the Pew Research Center. About a quarter of households headed by an adult under 40 has student debt, a record high, according to Pew.

Source: “College Grads Face High Hurdles to Buying First Homes,” MarketWatch/The Wall Street Journal (Aug. 28, 2014)

http://realtormag.realtor.org/daily-news/2014/09/03/student-debt-burden-holding-first-time-buyers-back

www.RebeccaSellsAZ.com

Sluggish Housing Market Blamed for Drop in Title Insurance Volume

DAILY REAL ESTATE NEWS | WEDNESDAY, SEPTEMBER 03, 2014

Title insurance premium volume has fallen 16.6 percent during the second quarter of this year compared to last year, according to the American Land Title Association.

“A lackluster spring homebuying season that was weaker than anticipated, coupled with a substantial decline in refinance activity, resulted in the drop in title insurance premium volume,” says Michelle Korsmo, ALTA’s CEO. “Despite the lull in the housing market, the title insurance industry remains in a strong financial position posting more than $90 million in net income this quarter. … For more than a century, title insurance companies have protected the interests of home buyers through a process that has given Americans a sense of security in what is almost always their most significant investment – their homes.”

Capitalizing on Titles

Title Defects Can Haunt Transactions

Survey Tracks Where Closing Costs Are Highest, Lowest

During the second quarter of 2014, the title insurance industry generated $2.7 billion in title insurance premiums, compared with $3.3 billion during the second quarter of 2013, according to ALTA.

The title insurance companies that have the largest market share in the industry are Fidelity Family (34%); First American Family (27%), and Old Republic Family (14%).

Meanwhile, the following states generated the most title insurance premiums in the second quarter of 2014:

• Texas: $430 million, down 1.5% from the second quarter of 2013
• California: $354 million, down 21.5%
• Florida: $264 million, down 10%
• New York: $225 million, down 0.6%
• Illinois: $101 million, up 2.9%

Source: American Land Title Association

http://realtormag.realtor.org/daily-news/2014/09/03/sluggish-housing-market-blamed-for-drop-in-title-insurance-volume

www.RebeccaSellsAZ.com

FHFA Seeks to Expand Mortgage Access

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 02, 2014

The Federal Housing Finance Agency announced that it wants housing finance giants Fannie Mae and Freddie Mac to provide greater support to low-income mortgage borrowers and refinancers.

FHFA, which is the regulator for Fannie Mae and Freddie Mac, outlined goals for 2015-2017 aimed at advancing that goal. It wants to ensure that low-income families account for 23 percent of the GSE’s purchases of single-family home mortgages. Also, the agency seeks to ensure that the firms raise the share of their purchases that back mortgages in low-income areas with large minority populations. FHFA has charged the firms with raising the share of their mortgage refinance operations that target low-income Americans, Reuters reports.

Find out why first-time and low-income mortgage borrowersmay have an easier time qualifying for a Federal Housing Administration loan.

More specifically, FHFA has charged Freddie Mac with gradually expanding the number of loans it backs for low-income multifamily buildings, such as apartment buildings. It wants Freddie Mac to expand such loans to 230,000 by 2017; currently it’s target for this year is 200,000.

Some lawmakers may view FHFA’s move as controversial, with critics saying that boosting the support of mortgage access for low-income borrowers is what led to the housing bubble that burst in 2006, Reuters reports.

Source: “U.S. Housing Regulator Seeks More Support for Poor Borrowers,” Reuters (Aug. 29, 2014)

http://realtormag.realtor.org/daily-news/2014/09/02/fhfa-seeks-expand-mortgage-access

www.RebeccaSellsAZ.com

Why Redfin Is Predicting a Home Sales Surge

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 02, 2014

A slowdown in home price growth and a shift in pricing power from sellers to one that more closely aligns with buyers expectations will “drive an unusual surge in home sales this fall,” predicts analysts at the real estate brokerage Redfin in its latest housing report.

“Home buyers who have been willing to wait for better deals are starting to be rewarded for their patience, as sellers drop listing prices to meet buyers’ more value-focused expectations,” Redfin notes in its latest report.

Reason for Optimism? 

Why the Second Half of 2014 Will Be Better Than the First

Altos: Critics Are Wrong About Where Housing Is Headed

Builder Confidence Rises Above Key Benchmark

The number of homes that sold above list price in July was down nearly 7 percent to 20.1 percent from 26.8 percent a year ago, according to Redfin’s analysis.

“Sellers are finally catching on that it’s not a seller’s market anymore,” says Jeremy Cunningham, a Redfin real estate professional in Virginia.

Sellers are adjusting their prices, particularly in markets that have seen a large increase in for-sale inventories or big increases in home price appreciation over the past year.

According to Redfin, Denver is the metro that has registered the largest percentage of listing price drops. Its median sales price has increased by 15 percent year-over-year compared with an average of 5.5 percent for all metros.

On the other hand, Ventura County and Sacramento, Calif., have seen more moderate price growth year-over-year but have seen their for-sale inventories rise by 25.6 percent and 18.3 percent, respectively. The two metros had the second and third largest percentage of homes for sale with price drops in July, according to Redfin.

Some of the metros with the fewest price drops tended to have smaller increases in median home prices and for-sale inventories, analysts note. On the other hand, some West Coast markets like San Francisco, San Jose, Los Angeles, and Seattle continue to sell for more than list price.

Get Ready for a Hot Fall?

Redfin analysts are predicting a surge in home sales in September and October.

“We continue to see strong buyer demand as we head into fall,” according to Redfin’s housing report, which shows the number of tours and offers picking up from July and into August. “The buyer fatigue from competing against multiple offers, bidding wars. and tight inventory is diminishing. Additionally, the widespread increase in price drops is likely to give buyers even more confidence that they have regained some of the bargaining power lost last year.”

Also, analysts note that borrowing costs still remain attractive, which will help buyers off the fence.Mortgage rates continue to hover near yearly lows. 

Source: “Listing Price Drops Will Help Drive a Fall Surge in Home Prices,” Redfin (Aug. 29, 2014)

http://realtormag.realtor.org/daily-news/2014/09/02/why-redfin-predicting-home-sales-surge

www.RebeccaSellsAZ.com