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Category Archives: Buyers
Surprising Foreclosure Hot Spots
While housing markets across the country are recovering from the deepest throes of the foreclosure crisis, others are just stumbling into it — and they aren’t exactly the places you’d expect.
States like Maryland, Oregon and New Jersey, which maintained relatively stable markets after the housing bubble popped, saw new foreclosure filings climb by double- and triple-digit percentages in July, according to RealtyTrac.
Home Buyers Face Higher Closing Costs
Rising mortgage rates aren’t the only problem house hunters are facing. Closing costs for loan origination and other fees have increased 6 percent in the past year, according to a survey by Bankrate.com.
Borrowers with stellar credit who are making a 20 percent down payment are still forking over an average of $2,402 in closing costs on a $200,000 loan.
The U.S. Housing Market and Its Huge Geographic Differences
The U.S. housing market can no longer be painted with one brush, as the housing recovery is playing out very differently across the country. Here are some anecdotes gleaned from a consulting team…
Home Prices Climb in Seattle and Beyond
Home prices in 20 major U.S. cities increased 12.2 percent in May compared to a year ago, according to the Standard & Poor’s/Case-Shiller home price index released on Tuesday.
And according to the Northwest Multiple Listing Service, prices locally continue to rise. The median price for last month’s closed sales area-wide was $279,950, which is about 9.8 percent higher than the year-ago.
The red hot housing market is prompting some realtors to get creative to satisfy eager home buyers that are tired of losing bids on their home of their choice.
New figures from the MLS also show pending sales during June jumped 10.6 percent from twelve months ago as buyers scrambled to lock in loan rates and bid on a limited supply of homes.
Building the Foundation for Successful Housing Reform
According to David Stevens, President and CEO of the Mortgage Bankers Association:
“The U.S. housing market is showing definite signs of recovery with purchase originations beginning to increase and more liquidity in the market. The recent “good times” can be attributed to two factors – the federal government’s Quantitative Easing (QE) program which created extremely low interest rates, and refinancing ease of negative equity loans due to HARP.
Now that these programs have almost run their course and given a much-needed boost to the marketplace, as anticipated, the federal government is beginning to plan for reducing the QE program and the refinance boom is coming to an end, causing overall market contraction. When the market contracts we can see the true operational impacts of regulations.”
More Homes Coming To Market
Bidding wars aren’t over, but the number of homes listed for sale is increasing, by quite a bit in some of the tightest markets.
According to the latest National Housing Trend Report by Realtor.com, the number of homes listed for sale grew 4.26% from May to June, with a total of 1.93 million listed for sale nationwide.
The number of homes for sale grew significantly more in some areas where the inventory shortage had become the most acute, particularly in California.
Higher Mortgage Rates Don’t Mean Higher Home Prices
Mortgage rates have climbed by more than a percentage point since late April.
If history is any indication, the recent spike in mortgage rates is going to have little to no impact on home prices, according to a new report from Fannie Mae.
After looking at mortgage rates going back to 1990, Fannie Mae’s researchers came to the surprising conclusion that while rising rates were likely to hurt the number of home sales, they had virtually no impact on home prices.
Inventory Shortages Ease
Inventory shortages that constrained home sales this spring are beginning to ease, with the number of homes listed for sale trending upwards in June, according to realtor.com data, The Wall Street Journal reports.
The total number of listings rose by 4.3 percent from May to June, to 1.9 million homes. While that’s down by 7.3 percent from the same time a year ago, inventory was off 18.6 percent year over year in February, the newspaper said.
Real estate industry observers have speculated that home price gains might spur more homeowners to put their properties up for sale — and for builders to break ground on more new homes.
With the latest CoreLogic Home Price index showing a 12.2 percent year-over-year gain in home prices in May, the recent uptick in listings — though bolstered by a normal seasonal increase — suggests that these market reactions may be starting to play out.
Interest Rate Increases May Have Silver Lining
Though a recent surge in interest rates may dissuade some consumers from buying homes, the development also could have a silver lining for the real estate market: making mortgages available to more people.
With the recent spike in interest rates, refinances have plummeted. In the last week of May, shortly after Fed officials hinted that the Fed may scale back its stimulus program later this year, refinance applications dropped to their lowest level since November 2011, the Mortgage Bankers Association (MBA) reported.
With the average rate on a 30-year fixed-rate mortgage continuing to push higher, they have trended lower since then.
That’s chipping away at banks’ profits. JPMorgan and Wells Fargo recently reported that their earnings from refinances have dropped significantly in recent months.
Managing The Real Estate Details 