Thursday
California Real estate prices expected to reach $523,000
California Real Estate
The median price of homes in California is expected to reach $523,150 this year, an increase of 16 percent over the 2004 median price, according to a California Association of Realtors forecast.
Existing single-family home sales are expected to reach a record 633,490 units this year, a 1.4 percent gain over the previous year's pace of 624,740 units, the association also reported.
The California state's Housing Affordability Index is projected to decline to 16 percent by the end of the year, which means that 16 percent of median-income residents in the state will be able to afford a median-priced home in the state. That compares with 20 percent last year.
While the economic fundamentals for California state – population, job and income growth – have not changed since the forecast prepared in October 2004, interest rates are expected to finish the year lower than we anticipated," according to chief economist for the association. What is expected now is the 30-year, fixed mortgage interest rate to be at 5.9 percent, and the one-year adjustable rate mortgage at 4.4 percent.
While lower than anticipated mortgage interest rates are helping offset the impact of rising realestate home prices, they also are a significant factor in driving the real estate market to new heights. Real estate home buyers concerned that today's favorable interest rate environment may not last are eager to purchase a home, while the inventory of real estate homes for sale remains low.
The median price of homes in California is expected to reach $523,150 this year, an increase of 16 percent over the 2004 median price, according to a California Association of Realtors forecast.
Existing single-family home sales are expected to reach a record 633,490 units this year, a 1.4 percent gain over the previous year's pace of 624,740 units, the association also reported.
The California state's Housing Affordability Index is projected to decline to 16 percent by the end of the year, which means that 16 percent of median-income residents in the state will be able to afford a median-priced home in the state. That compares with 20 percent last year.
While the economic fundamentals for California state – population, job and income growth – have not changed since the forecast prepared in October 2004, interest rates are expected to finish the year lower than we anticipated," according to chief economist for the association. What is expected now is the 30-year, fixed mortgage interest rate to be at 5.9 percent, and the one-year adjustable rate mortgage at 4.4 percent.
While lower than anticipated mortgage interest rates are helping offset the impact of rising realestate home prices, they also are a significant factor in driving the real estate market to new heights. Real estate home buyers concerned that today's favorable interest rate environment may not last are eager to purchase a home, while the inventory of real estate homes for sale remains low.
Wednesday
Bay Area Luxury Homes
Gilroy Reaches Real Estate Milestone
Bay Area prices continue to climb, and one city has just reached a real estate milestone -- the first million dollar home sold downtown.
The south county city of Gilroy, famous for it's garlic, cherries and outlet stores. Gilroy's lesser known goldmine is real estate.
The fact that Gilroy has reached the million dollar mark is not a surprise, and it's also for people who like that lifestyle, a very desirable place to live. So desirable, there's some 40 properties listed for more than a million dollars on Gilroy's outer edge. Eagle Ridge is full of luxury homes. But now for the first time, a home on the quaint streets surrounding the city's downtown has crossed the threshold.
As one home seller says "It's a rose garden or Palo Alto kind of house. And if you don't want these tiny lots on Eagle Ridge, this is a big lot. You have privacy, it's incredibly private."
The medium home price in Gilroy is now $705,000 and they are some of the fastest selling homes in the Bay Area.
Average time on the market is just 19 days, making this a great time to be a realtor and Gilroy a great place to be doing business.
Bay Area Realtors view it to be an awesome month and say it is definitely going to be a record June.
Bay Area prices continue to climb, and one city has just reached a real estate milestone -- the first million dollar home sold downtown.
The south county city of Gilroy, famous for it's garlic, cherries and outlet stores. Gilroy's lesser known goldmine is real estate.
The fact that Gilroy has reached the million dollar mark is not a surprise, and it's also for people who like that lifestyle, a very desirable place to live. So desirable, there's some 40 properties listed for more than a million dollars on Gilroy's outer edge. Eagle Ridge is full of luxury homes. But now for the first time, a home on the quaint streets surrounding the city's downtown has crossed the threshold.
As one home seller says "It's a rose garden or Palo Alto kind of house. And if you don't want these tiny lots on Eagle Ridge, this is a big lot. You have privacy, it's incredibly private."
The medium home price in Gilroy is now $705,000 and they are some of the fastest selling homes in the Bay Area.
Average time on the market is just 19 days, making this a great time to be a realtor and Gilroy a great place to be doing business.
Bay Area Realtors view it to be an awesome month and say it is definitely going to be a record June.
Tuesday
Fast Cash Generator
Ron LeGrand releases his newest Fast Cash Generator course
Ron Legrand's “Fast Cash Generator” has been tipped to be one of the Most Complete Introductory Real Estate Kit Ever!
Based on Ron LeGrand's nearly 23 years of doing actual deals, completing millions of dollars in transactions with over a thousand houses that he has bought and sold, all the essential elements of “quick–turn” real estate investing are explained in this simple, low-cost, easy to follow course.
Actually it’s a taped version of his all day workshop, designed to get his students through their first deal. His objective is enabling them to net at least $3,000 within 30 days of leaving the workshop…
What's included in the course:
Ron's new book "How to Be a Quick Turn Real Estate Millionaire"
CD set of Ron at a full day workshop
Two Free Tickets To A Live Seminar
Ron's Fast Start DVD
12 Monthly Conference Calls With An Expert
Bonus CD #1 – How To Get A Million Dollars In Your IRA
Bonus CD #2 – How To Find Good Deals In Hot Markets
Click here to listen to a Sample Audio from Ron LeGrand's "Fast Cash Generator"
More information and details on "Fast Cash Generator" are available here.
Ron Legrand's “Fast Cash Generator” has been tipped to be one of the Most Complete Introductory Real Estate Kit Ever!
Based on Ron LeGrand's nearly 23 years of doing actual deals, completing millions of dollars in transactions with over a thousand houses that he has bought and sold, all the essential elements of “quick–turn” real estate investing are explained in this simple, low-cost, easy to follow course.
Actually it’s a taped version of his all day workshop, designed to get his students through their first deal. His objective is enabling them to net at least $3,000 within 30 days of leaving the workshop…
What's included in the course:
Ron's new book "How to Be a Quick Turn Real Estate Millionaire"
CD set of Ron at a full day workshop
Two Free Tickets To A Live Seminar
Ron's Fast Start DVD
12 Monthly Conference Calls With An Expert
Bonus CD #1 – How To Get A Million Dollars In Your IRA
Bonus CD #2 – How To Find Good Deals In Hot Markets
Click here to listen to a Sample Audio from Ron LeGrand's "Fast Cash Generator"
More information and details on "Fast Cash Generator" are available here.
Friday
Florida real estate prices - bubble ?
Florida real estate : The median home price in Florida continued to grow significantly in May above the year-ago level, creating sustainability concerns, while home sales posted modest gains, according to the Florida Association of Realtors.
The statewide median sales price climbed 27 percent to $230,800; a year ago, it was $181,900. In May 2000, the statewide median sales price was $115,100 – a dramatic increase of about 100 percent over the five-year period, according to FAR records. Existing single-family home sales in Florida grew 7 percent in May, with a total of 24,069 homes sold statewide compared to last year's level of 22,496 homes sold, the association reported.
The acceleration in median sales prices (both for the May comparison and for the 2005 year) of approximately 27 percent is not sustainable, according to the executive director of Dr. Phillips Institute for the Study of American Business Activity and professor of finance at the University of Central Florida. Such price increases are being driven by a once-in-a-lifetime low-interest-rate environment and opportunity. Thus, this is more of an 'interest-rate bubble' than a 'housing bubble.'
Among the state's larger markets, the Tampa-St. Petersburg-Clearwater metropolitan statistical area (MSA) had the largest number of resales last month with 5,482 homes changing hands, a 27 percent increase over the 4,330 homes sold in May 2004. The market's median sales price rose 25 percent to $196,100; a year ago, it was $156,800. Other larger Florida MSAs reporting higher home sales in May include: Jacksonville, where 1,671 homes sold for a 9 percent increase; and Orlando, where 3,657 homes changed hands for a 5 percent gain. The median sales price in those markets also rose last month: in Orlando, up 35 percent to $218,600; and in Jacksonville, up 12 percent to $181,700.
Among the smaller markets across the state, Tallahassee had a strong double-digit increase in the percentage of resales last month with 513 homes changing hands for a 34 percent jump over the 384 homes sold a year ago. The market's median sales price increased 6 percent to $164,700; a year ago it was $155,800. Other smaller MSAs reporting strong sales in May include: Gainesville, where 461 homes sold for a 39 percent increase; and Naples, where 476 homes changed hands for a 14 percent rise. The median sales price also rose in those markets during the same period: in Naples, up 34 percent to $488,900; and in Gainesville, up 6 percent to $169,600.
The statewide median sales price climbed 27 percent to $230,800; a year ago, it was $181,900. In May 2000, the statewide median sales price was $115,100 – a dramatic increase of about 100 percent over the five-year period, according to FAR records. Existing single-family home sales in Florida grew 7 percent in May, with a total of 24,069 homes sold statewide compared to last year's level of 22,496 homes sold, the association reported.
The acceleration in median sales prices (both for the May comparison and for the 2005 year) of approximately 27 percent is not sustainable, according to the executive director of Dr. Phillips Institute for the Study of American Business Activity and professor of finance at the University of Central Florida. Such price increases are being driven by a once-in-a-lifetime low-interest-rate environment and opportunity. Thus, this is more of an 'interest-rate bubble' than a 'housing bubble.'
Among the state's larger markets, the Tampa-St. Petersburg-Clearwater metropolitan statistical area (MSA) had the largest number of resales last month with 5,482 homes changing hands, a 27 percent increase over the 4,330 homes sold in May 2004. The market's median sales price rose 25 percent to $196,100; a year ago, it was $156,800. Other larger Florida MSAs reporting higher home sales in May include: Jacksonville, where 1,671 homes sold for a 9 percent increase; and Orlando, where 3,657 homes changed hands for a 5 percent gain. The median sales price in those markets also rose last month: in Orlando, up 35 percent to $218,600; and in Jacksonville, up 12 percent to $181,700.
Among the smaller markets across the state, Tallahassee had a strong double-digit increase in the percentage of resales last month with 513 homes changing hands for a 34 percent jump over the 384 homes sold a year ago. The market's median sales price increased 6 percent to $164,700; a year ago it was $155,800. Other smaller MSAs reporting strong sales in May include: Gainesville, where 461 homes sold for a 39 percent increase; and Naples, where 476 homes changed hands for a 14 percent rise. The median sales price also rose in those markets during the same period: in Naples, up 34 percent to $488,900; and in Gainesville, up 6 percent to $169,600.
Wednesday
Real estate foreclosures slide
Real estate foreclosures : Late house payments and mortgage foreclosures in the first quarter of 2005 dropped compared to the same time period last year, helped by an improving economy, a mortgage survey revealed.
At the end of the first quarter, the mortgage delinquency rate was 4.31 percent, down from 4.46 percent in the same quarter of 2004 and down from 4.38 percent at the end of the fourth quarter of last year, the Mortgage Bankers Association said. "Mortgage delinquency" means late payments. The MBA's figures are seasonally adjusted and apply to one-to-four unit residential properties.
The foreclosure rate on mortgages entering the foreclosure process was 0.42 percent at the end of the first quarter, down from 0.47 percent in the year-ago quarter and 0.46 percent at the end of the fourth quarter.
During the first quarter of 2005, the U.S. economy grew at almost 3.5 percent in annualized real terms, adding 180,000 jobs a month, according to MBA's chief economist and senior vice president.
That, combined with the low interest rate environment, helped consumers strengthen their household finances, increasing the percentage of homeowners making their mortgage payments on time to nearly 96 percent.
Economic growth is expected to remain strong over the next couple of years. Likewise, job growth should be steady in the presence of modest interest-rate rises. These expectations likely mean we will continue to see moderate declines in delinquencies for the next few quarters.
The inventory of loans in the foreclosure process edged down to 1.08 percent at the end of the first quarter, from 1.29 percent in the year-ago period and 1.15 percent in the previous quarter. In the MBA's report on the fourth quarter of 2004 released in March, the seasonally adjusted rate of loans entering foreclosure was up 5 basis points from the preceding quarter, to .44 percent, suggesting that concerns about rising foreclosures in coming months might be valid. But this phenomenon did not continue, with the latest report, released today, with the seasonally adjusted rate of loans entering the foreclosure process down 4 basis points from the fourth quarter of 2004 and down 5 basis points from the previous year.
At the end of the first quarter, the mortgage delinquency rate was 4.31 percent, down from 4.46 percent in the same quarter of 2004 and down from 4.38 percent at the end of the fourth quarter of last year, the Mortgage Bankers Association said. "Mortgage delinquency" means late payments. The MBA's figures are seasonally adjusted and apply to one-to-four unit residential properties.
The foreclosure rate on mortgages entering the foreclosure process was 0.42 percent at the end of the first quarter, down from 0.47 percent in the year-ago quarter and 0.46 percent at the end of the fourth quarter.
During the first quarter of 2005, the U.S. economy grew at almost 3.5 percent in annualized real terms, adding 180,000 jobs a month, according to MBA's chief economist and senior vice president.
That, combined with the low interest rate environment, helped consumers strengthen their household finances, increasing the percentage of homeowners making their mortgage payments on time to nearly 96 percent.
Economic growth is expected to remain strong over the next couple of years. Likewise, job growth should be steady in the presence of modest interest-rate rises. These expectations likely mean we will continue to see moderate declines in delinquencies for the next few quarters.
The inventory of loans in the foreclosure process edged down to 1.08 percent at the end of the first quarter, from 1.29 percent in the year-ago period and 1.15 percent in the previous quarter. In the MBA's report on the fourth quarter of 2004 released in March, the seasonally adjusted rate of loans entering foreclosure was up 5 basis points from the preceding quarter, to .44 percent, suggesting that concerns about rising foreclosures in coming months might be valid. But this phenomenon did not continue, with the latest report, released today, with the seasonally adjusted rate of loans entering the foreclosure process down 4 basis points from the fourth quarter of 2004 and down 5 basis points from the previous year.
Tuesday
Real Estate Florida
Real Estate Florida - Housing affordability concerns
Florida residents in Orlando and Tampa have identified the lack of available, affordable housing as a major concern in their areas, according to the just-released National Housing Opportunity Pulse survey from the National Association of Realtors.
The public opinion poll, conducted for NAR by Public Opinion Strategies, found that 46 percent of Orlando residents and 36 percent of Tampa residents cited the lack of available, affordable housing as a big problem for their communities. A majority of those polled in both areas agreed that they were very concerned about the cost of all housing in their cities (Orlando, 63 percent; Tampa, 61 percent).
This survey certainly underscores what Florida Realtors know and what we have been saying to Gov. Jeb Bush and the Florida Legislature – available, affordable housing for our teachers, nurses, firefighters, police officers and other working families is imperative if we are to preserve the strength of our communities, according to the vice president of public policy Florida Association of Realtors. Realtors have been committed to this cause for years and worked to create the Sadowski Affordable Housing Trust Funds. According to the survey, residents in both cities identified having enough money for a down payment and closing costs as one of the biggest issues impacting housing in their areas: Orlando, 69 percent; Tampa, 70 percent. Also an obstacle to home ownership was being able to find a home they like and can afford (Orlando, 78 percent; Tampa, 69 percent).
A majority of Orlando (67 percent) and Tampa (66 percent) residents agreed that they were either highly concerned or moderately concerned that housing in their areas is "getting so expensive, it is widening the gap between those who can afford to buy a home and those who cannot afford to buy a home."
According to the national results, the survey found that respondents are more likely to support affordable housing in their communities if they are sure it would not hurt property values, would not contribute to school overcrowding or would not make traffic worse. A majority of those polled also said they prefer affordable housing that is single-family detached housing to townhomes, low-rise or high-rise apartments. Other highlights: Seven out of 10 residents nationwide support more open space in their communities; and three out of five feel there is a need for more residential growth in their communities.
Florida residents in Orlando and Tampa have identified the lack of available, affordable housing as a major concern in their areas, according to the just-released National Housing Opportunity Pulse survey from the National Association of Realtors.
The public opinion poll, conducted for NAR by Public Opinion Strategies, found that 46 percent of Orlando residents and 36 percent of Tampa residents cited the lack of available, affordable housing as a big problem for their communities. A majority of those polled in both areas agreed that they were very concerned about the cost of all housing in their cities (Orlando, 63 percent; Tampa, 61 percent).
This survey certainly underscores what Florida Realtors know and what we have been saying to Gov. Jeb Bush and the Florida Legislature – available, affordable housing for our teachers, nurses, firefighters, police officers and other working families is imperative if we are to preserve the strength of our communities, according to the vice president of public policy Florida Association of Realtors. Realtors have been committed to this cause for years and worked to create the Sadowski Affordable Housing Trust Funds. According to the survey, residents in both cities identified having enough money for a down payment and closing costs as one of the biggest issues impacting housing in their areas: Orlando, 69 percent; Tampa, 70 percent. Also an obstacle to home ownership was being able to find a home they like and can afford (Orlando, 78 percent; Tampa, 69 percent).
A majority of Orlando (67 percent) and Tampa (66 percent) residents agreed that they were either highly concerned or moderately concerned that housing in their areas is "getting so expensive, it is widening the gap between those who can afford to buy a home and those who cannot afford to buy a home."
According to the national results, the survey found that respondents are more likely to support affordable housing in their communities if they are sure it would not hurt property values, would not contribute to school overcrowding or would not make traffic worse. A majority of those polled also said they prefer affordable housing that is single-family detached housing to townhomes, low-rise or high-rise apartments. Other highlights: Seven out of 10 residents nationwide support more open space in their communities; and three out of five feel there is a need for more residential growth in their communities.
Mortgage borrowers in for payment shock
Adjustable-rate mortgage borrowers could be in for a payment shock. Rising interest rates will likely increase the payment shock risk for mortgage borrowers in the burgeoning U.S. option adjustable-rate mortgage market, which may lead to higher defaults and losses on option ARM pools compared to interest-only or hybrid mortgage pools, according to Fitch Ratings in its revised option ARMs rating methodology report.
Fitch's analysis of the option ARM product shows that the degree of payment shock risk and loan balance growth is largely determined by the initial teaser rate, volatility of a particular index, and balance caps.
Payment shock risk is higher for option ARMs under Fitch's cash flow stresses compared to other products, but not by much in some cases, according to the MD of Fitch Ratings. The higher payment shock risk for the option ARMs is due to the minimum payment option that keeps payments low for up to five years, but then can result in a 'recast' requiring a much higher payment. The payment may reflect a larger balance because of negative amortization. The more affordable the mortgage seems at origination, the more likely the option ARM borrower will face difficulty making their loan payment when it is recast to prevailing rates. The borrower's risk of default is exacerbated in a rising rate environment.
Fitch recently completed a historical analysis of more than 65,000 negatively amortizing loans from 1994 through last year to understand when and for how long borrowers choose to incur negative amortization and their likelihood to incur payment shock at recast. Fitch found that while negative amortizing borrower repayment patterns are indeed sensitive to interest rates, a fraction of borrowers continued to negatively amortize as they approached the five-year recast, which mitigates an RMBS pool's exposure to default risk over time. Fitch also found that in recent vintages, borrowers exercised the other payment options, making interest-only payments in addition to minimum payments, as well as fully amortizing payments. Fitch's default modeling weighs the risks of borrowers making each payment type. The probability assigned to negative amortization versus interest-only versus full amortization reflects historical experience through several interest-rate cycles and various economic climates. Fitch incorporated its research with a cash flow analysis using a formal interest rate stress protocol that is consistent with other interest rate sensitive products rated by Fitch within global structured finance to determine the degree of the negative amortization and the timing of reaching the loan balance caps. The results are factored into Fitch's market value decline and loss severity analyses for option ARM pools.
Borrowers who actively manage their finances, expect to refinance or move within a short time, or have the financial wherewithal to cope with higher payments will be less likely to default when the loan payments are recast to a higher payment than borrowers who look to purchase a home they otherwise could not afford with a 30-year fixed mortgage, disclosed the director of Fitch Ratings.
Fitch's analysis of the option ARM product shows that the degree of payment shock risk and loan balance growth is largely determined by the initial teaser rate, volatility of a particular index, and balance caps.
Payment shock risk is higher for option ARMs under Fitch's cash flow stresses compared to other products, but not by much in some cases, according to the MD of Fitch Ratings. The higher payment shock risk for the option ARMs is due to the minimum payment option that keeps payments low for up to five years, but then can result in a 'recast' requiring a much higher payment. The payment may reflect a larger balance because of negative amortization. The more affordable the mortgage seems at origination, the more likely the option ARM borrower will face difficulty making their loan payment when it is recast to prevailing rates. The borrower's risk of default is exacerbated in a rising rate environment.
Fitch recently completed a historical analysis of more than 65,000 negatively amortizing loans from 1994 through last year to understand when and for how long borrowers choose to incur negative amortization and their likelihood to incur payment shock at recast. Fitch found that while negative amortizing borrower repayment patterns are indeed sensitive to interest rates, a fraction of borrowers continued to negatively amortize as they approached the five-year recast, which mitigates an RMBS pool's exposure to default risk over time. Fitch also found that in recent vintages, borrowers exercised the other payment options, making interest-only payments in addition to minimum payments, as well as fully amortizing payments. Fitch's default modeling weighs the risks of borrowers making each payment type. The probability assigned to negative amortization versus interest-only versus full amortization reflects historical experience through several interest-rate cycles and various economic climates. Fitch incorporated its research with a cash flow analysis using a formal interest rate stress protocol that is consistent with other interest rate sensitive products rated by Fitch within global structured finance to determine the degree of the negative amortization and the timing of reaching the loan balance caps. The results are factored into Fitch's market value decline and loss severity analyses for option ARM pools.
Borrowers who actively manage their finances, expect to refinance or move within a short time, or have the financial wherewithal to cope with higher payments will be less likely to default when the loan payments are recast to a higher payment than borrowers who look to purchase a home they otherwise could not afford with a 30-year fixed mortgage, disclosed the director of Fitch Ratings.
Friday
Home prices in San Francisco Bay Area dazzle
Home prices in the San Francisco Bay Area continued their upward climb last month to a new high, while sales maintained a strong pace, according to DataQuick Information Systems, a real estate information service.
The median price paid for a San Francisco Bay Area home in May was $595,000, a new record. That was up 1.5 percent from $586,000 in April, and up 17.6 percent from $506,000 for May a year ago. Year-over-year price increases hit 20.5 percent in January and have declined steadily since.
A total of 11,308 new and resale houses and condos were sold in the nine-county region last month. That was up 1.3 percent from 11,158 for April, and down 6 percent from 12,028 for May last year, DataQuick reported.
The year-ago number was the strongest for any May in DataQuick's statistics, which go back to 1988. Last month was the second-strongest. So far this year 48,748 San Francisco Bay Area homes have been sold, down 2.5 percent from last year's 49,978 for the same five-month period. Sales in 2004 were the highest on record.
Market trends are remarkably stable. There are still more home buyers out there than there are home sellers, putting upward pressure on prices. The only change that can be seen for the immediate future is a slowing rate of appreciation.
The median price paid for a San Francisco Bay Area home in May was $595,000, a new record. That was up 1.5 percent from $586,000 in April, and up 17.6 percent from $506,000 for May a year ago. Year-over-year price increases hit 20.5 percent in January and have declined steadily since.
A total of 11,308 new and resale houses and condos were sold in the nine-county region last month. That was up 1.3 percent from 11,158 for April, and down 6 percent from 12,028 for May last year, DataQuick reported.
The year-ago number was the strongest for any May in DataQuick's statistics, which go back to 1988. Last month was the second-strongest. So far this year 48,748 San Francisco Bay Area homes have been sold, down 2.5 percent from last year's 49,978 for the same five-month period. Sales in 2004 were the highest on record.
Market trends are remarkably stable. There are still more home buyers out there than there are home sellers, putting upward pressure on prices. The only change that can be seen for the immediate future is a slowing rate of appreciation.
Thursday
Real estate rates jump after Greenspan's comments
Despite recent lackluster economic news, mortgage rates shot higher this week, according to surveys conducted by Freddie Mac and Bankrate.com.
In Freddie Mac's survey, the 30-year fixed-rate mortgage averaged 5.63 percent for the week ended today, up from last week when it averaged 5.56 percent. The average for the 15-year fixed-rate mortgage is 5.22 percent, up from last week when it averaged 5.14 percent. Points on both the 30- and 15-year averaged 0.5.
Five-Year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.1 percent this week, with an average 0.5 point, also higher from last week when they averaged 5.01 percent. One-year Treasury-indexed adjustable-rate mortgages averaged 4.25 percent this week, with an average 0.7 point, up slightly from last week when they averaged 4.21 percent.
"Although the 30-year mortgage rate ticked up this week, which wasn't completely unexpected, it is still below last year's annual average and well below where it was at this time last year," according to Freddie Mac vice president and chief economist. "Driven by low mortgage rates, recently released single-family housing starts for May continued to advance.
"Additionally, applications for home purchase were the highest ever recorded last week, according to the Mortgage Bankers Association, which also reported that refinancing activity reached almost 50 percent of applications over the same period. The housing industry continues to amaze us."
In Bankrate.com's survey, mortgage rates increased after a three-month low. The average 30-year fixed-rate mortgage rose from 5.61 percent to 5.73 percent, according to Bankrate.com's weekly national survey of large lenders. The mortgages in this week's survey had an average of 0.32 discount and origination points.
The 15-year fixed-rate mortgage, popular for refinancing, climbed 9 basis points from 5.24 percent to 5.33 percent. The average rate for the jumbo 30-year fixed-rate mortgage increased from 5.88 percent to 5.97 percent. This week, the average 5/1 adjustable-rate mortgage rose from 5.15 percent to 5.23 percent, while the one-year ARM increased 15 basis points from 4.49 percent to 4.64 percent.
This week's substantial rise in mortgage rates can be attributed to Alan Greenspan, chairman of the Federal Reserve, Bankrate.com reported. Early this year, he called it a "conundrum" that long-term rates had fallen since last June, even as the Fed had raised short-term rates. He said something similar in congressional testimony last week, when he called the decline in long-term interest rates among "the biggest surprises of the past year" and "without recent precedent."
Wall Street thought about Greenspan's comments overnight, and bond yields and mortgage rates rose the next morning, according to Bankrate.com. They kept rising in the following days, even in the face of weaker-than-expected economic data.
The following is a sampling of Bankrate's average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.
New York - 5.73 percent with 0.2 point
Los Angeles - 5.79 percent with 0.46 point
Chicago - 5.8 percent with 0.01 point
San Francisco - 5.78 percent with 0.25 point
Philadelphia - 5.63 percent with 0.37 point
Detroit - 5.7 percent with 0.25 point
Boston - 5.76 percent with 0.11 point
Houston - 5.73 percent with 0.64 point
Dallas - 5.77 percent with 0.5 point
Washington, D.C. - 5.65 percent with 0.44 point
In Freddie Mac's survey, the 30-year fixed-rate mortgage averaged 5.63 percent for the week ended today, up from last week when it averaged 5.56 percent. The average for the 15-year fixed-rate mortgage is 5.22 percent, up from last week when it averaged 5.14 percent. Points on both the 30- and 15-year averaged 0.5.
Five-Year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.1 percent this week, with an average 0.5 point, also higher from last week when they averaged 5.01 percent. One-year Treasury-indexed adjustable-rate mortgages averaged 4.25 percent this week, with an average 0.7 point, up slightly from last week when they averaged 4.21 percent.
"Although the 30-year mortgage rate ticked up this week, which wasn't completely unexpected, it is still below last year's annual average and well below where it was at this time last year," according to Freddie Mac vice president and chief economist. "Driven by low mortgage rates, recently released single-family housing starts for May continued to advance.
"Additionally, applications for home purchase were the highest ever recorded last week, according to the Mortgage Bankers Association, which also reported that refinancing activity reached almost 50 percent of applications over the same period. The housing industry continues to amaze us."
In Bankrate.com's survey, mortgage rates increased after a three-month low. The average 30-year fixed-rate mortgage rose from 5.61 percent to 5.73 percent, according to Bankrate.com's weekly national survey of large lenders. The mortgages in this week's survey had an average of 0.32 discount and origination points.
The 15-year fixed-rate mortgage, popular for refinancing, climbed 9 basis points from 5.24 percent to 5.33 percent. The average rate for the jumbo 30-year fixed-rate mortgage increased from 5.88 percent to 5.97 percent. This week, the average 5/1 adjustable-rate mortgage rose from 5.15 percent to 5.23 percent, while the one-year ARM increased 15 basis points from 4.49 percent to 4.64 percent.
This week's substantial rise in mortgage rates can be attributed to Alan Greenspan, chairman of the Federal Reserve, Bankrate.com reported. Early this year, he called it a "conundrum" that long-term rates had fallen since last June, even as the Fed had raised short-term rates. He said something similar in congressional testimony last week, when he called the decline in long-term interest rates among "the biggest surprises of the past year" and "without recent precedent."
Wall Street thought about Greenspan's comments overnight, and bond yields and mortgage rates rose the next morning, according to Bankrate.com. They kept rising in the following days, even in the face of weaker-than-expected economic data.
The following is a sampling of Bankrate's average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.
New York - 5.73 percent with 0.2 point
Los Angeles - 5.79 percent with 0.46 point
Chicago - 5.8 percent with 0.01 point
San Francisco - 5.78 percent with 0.25 point
Philadelphia - 5.63 percent with 0.37 point
Detroit - 5.7 percent with 0.25 point
Boston - 5.76 percent with 0.11 point
Houston - 5.73 percent with 0.64 point
Dallas - 5.77 percent with 0.5 point
Washington, D.C. - 5.65 percent with 0.44 point
Tuesday
Real Estate Loan break
Real Estate Loan break - Freddie Mac said this week it is requiring its 2,300 mortgage servicers to automatically extend forbearance to borrowers recently released from active duty with the U.S. armed forces. The move aims to help returning service personnel facing financial problems to avoid foreclosure on their homes.
The Service Members Civil Relief Act protects servicemen and women from creditors only when they are on active duty. Freddie Mac's new policy would give extra protection.
"We're extending this forbearance to make sure that lenders do not initiate or resume foreclosure for at least 90 days from a borrower's release date," according to Freddie Mac's vice president of default asset management. "This change gives lenders more time to work with servicemen and women and explore all relief options available."
The new policy appears in a June 10 update to Freddie Mac's Single-Family Seller/Servicer Guide.
A service member needing assistance under the Freddie Mac policy should contact their mortgage servicer, the company said. The servicer will then assess the borrower's individual circumstances to determine the most suitable relief option. Freddie Mac is one of the nation's largest investors in residential mortgages.
The Service Members Civil Relief Act protects servicemen and women from creditors only when they are on active duty. Freddie Mac's new policy would give extra protection.
"We're extending this forbearance to make sure that lenders do not initiate or resume foreclosure for at least 90 days from a borrower's release date," according to Freddie Mac's vice president of default asset management. "This change gives lenders more time to work with servicemen and women and explore all relief options available."
The new policy appears in a June 10 update to Freddie Mac's Single-Family Seller/Servicer Guide.
A service member needing assistance under the Freddie Mac policy should contact their mortgage servicer, the company said. The servicer will then assess the borrower's individual circumstances to determine the most suitable relief option. Freddie Mac is one of the nation's largest investors in residential mortgages.
Monday
Home sales in the Greater Nashville
Home sales in the Greater Nashville, Tennessee, area climbed in May, according to figures provided by the Greater Nashville Association of Realtors.
There were 3,600 home closings reported last month, up 8.7 percent from the 3,311 closings reported in May 2004.
Year-to-date closings totaled 14,286, which is up 3.5 percent from the 13,794 closings reported through the same period last year.
The median residential price for a single-family home during May was $159,900, and for a condominium it was $135,000. This represents a 7.7 percent increase from May 2004's single-family median home price of $148,385 and a 3.9 percent gain over May 2004's median condo price of $129,900.
Inventory at the end of May was 13,927, down from the 15,374 reported in May of 2004. The average number of days on the market for a single-family home was 66 days, a full week shorter than the 73-day average for May 2004.
There were 3,600 home closings reported last month, up 8.7 percent from the 3,311 closings reported in May 2004.
Year-to-date closings totaled 14,286, which is up 3.5 percent from the 13,794 closings reported through the same period last year.
The median residential price for a single-family home during May was $159,900, and for a condominium it was $135,000. This represents a 7.7 percent increase from May 2004's single-family median home price of $148,385 and a 3.9 percent gain over May 2004's median condo price of $129,900.
Inventory at the end of May was 13,927, down from the 15,374 reported in May of 2004. The average number of days on the market for a single-family home was 66 days, a full week shorter than the 73-day average for May 2004.
Sunday
Las Vegas real estate reaches another milestone
Real Estate homes sales in Las Vegas reached another milestone last month, with median prices for homes sold by Realtors hitting $300,000, according to the Greater Las Vegas Association of Realtors.
The median price, which includes new and used homes sold in Las Vegas through the Multiple Listing Service, represents a 1 percent increase from April and a 12.8 percent increase from the same month a year ago.
The $300,000 milestone is confirmed by other real estate figures. Median prices for new homes in Las Vegas reached $304,734 in March, excluding condominium conversions, according to president of Home Builders Research. They rose to $310,000 in April 2005.
Home Builders Research uses recorded deeds from the Clark County Assessor's Office to calculate its numbers, while the Greater Las Vegas Association of Realtors' numbers are based on new and existing homes sold by member agents. The data are deemed reliable, but not guaranteed. They do not account for new homes sold by local builders, sales by owners and other transactions not handled by Realtors.
It was the third straight month of median price increases reported by the Realtors association. Last year, Las Vegas led the nation in housing price appreciation at more than 50 percent, the National Association of Realtors reported.
A slight correction of prices in Las Vegas had been observed and it had taken home sellers about five or six months to realize that the market has stabilized. The buying frenzy in 2004 that brought multiple offers above list prices subsided as investors moved on to Arizona and other states. The median price is high, but not as high as other areas. There is still room for upward mobility. And there's no indication of being in a bubble.
People have been relocating, jobs are plentiful, the tax structure and climate are extremely desirable. This level (of price increase) is exactly what the has been experiencing. And it's seen as normal. Homes continue to sell more quickly than they did earlier in the year, with 48.5 percent selling in 30 days or less in May, compared with 37.6 percent in January. The number of available homes listed for sale in May grew to 15,066, up 1.6 percent from April and 50 percent from a year ago.
Las Vegas has been an anomaly when compared with other housing markets around the country for the last 15 to 20 years, benefiting from strong job and population growth, a growing segment of retirees and billions of dollars in gaming expansion. A strong California housing market translates to equity-rich consumers that like to spend some of that money in Las Vegas. Things are still looking good in California, and many of the country's hottest housing markets are in the Golden State.
The June issue of Money magazine disclosed median prices of single-family homes stood at $554,000 in San Diego, $750,000 in San Francisco, $610,000 in Orange County and $442,000 in Los Angeles-Long Beach. Some markets are cheaper than Las Vegas, including Fresno ($243,000), Bakersfield ($195,000) and Chico-Paradise ($250,000).
The median price, which includes new and used homes sold in Las Vegas through the Multiple Listing Service, represents a 1 percent increase from April and a 12.8 percent increase from the same month a year ago.
The $300,000 milestone is confirmed by other real estate figures. Median prices for new homes in Las Vegas reached $304,734 in March, excluding condominium conversions, according to president of Home Builders Research. They rose to $310,000 in April 2005.
Home Builders Research uses recorded deeds from the Clark County Assessor's Office to calculate its numbers, while the Greater Las Vegas Association of Realtors' numbers are based on new and existing homes sold by member agents. The data are deemed reliable, but not guaranteed. They do not account for new homes sold by local builders, sales by owners and other transactions not handled by Realtors.
It was the third straight month of median price increases reported by the Realtors association. Last year, Las Vegas led the nation in housing price appreciation at more than 50 percent, the National Association of Realtors reported.
A slight correction of prices in Las Vegas had been observed and it had taken home sellers about five or six months to realize that the market has stabilized. The buying frenzy in 2004 that brought multiple offers above list prices subsided as investors moved on to Arizona and other states. The median price is high, but not as high as other areas. There is still room for upward mobility. And there's no indication of being in a bubble.
People have been relocating, jobs are plentiful, the tax structure and climate are extremely desirable. This level (of price increase) is exactly what the has been experiencing. And it's seen as normal. Homes continue to sell more quickly than they did earlier in the year, with 48.5 percent selling in 30 days or less in May, compared with 37.6 percent in January. The number of available homes listed for sale in May grew to 15,066, up 1.6 percent from April and 50 percent from a year ago.
Las Vegas has been an anomaly when compared with other housing markets around the country for the last 15 to 20 years, benefiting from strong job and population growth, a growing segment of retirees and billions of dollars in gaming expansion. A strong California housing market translates to equity-rich consumers that like to spend some of that money in Las Vegas. Things are still looking good in California, and many of the country's hottest housing markets are in the Golden State.
The June issue of Money magazine disclosed median prices of single-family homes stood at $554,000 in San Diego, $750,000 in San Francisco, $610,000 in Orange County and $442,000 in Los Angeles-Long Beach. Some markets are cheaper than Las Vegas, including Fresno ($243,000), Bakersfield ($195,000) and Chico-Paradise ($250,000).
Thursday
California real estate purchase power dips
California real estate, The percentage of households in California able to afford a median-priced home fell to 17 percent in April, a 3 percentage-point decrease compared with the same period a year ago, according to a report released today by the California Association of Realtors. The April housing affordability index declined 1 percentage point from March, when it stood at 18 percent.
The minimum real estate household income needed to purchase a median-priced home at $509,230 in California in April was $120,290, based on an average effective mortgage interest rate of 5.92 percent, assuming a 20 percent down payment, and assuming the monthly payment for principal, interest, taxes and insurance is no more than 30 percent of a household's income. April's minimum required income was up from $102,350 in April 2004, when the median price of a home was $452,680 and the prevailing interest-rate was 5.42 percent.
By contrast, the minimum real estate household income needed to purchase a median-priced home at $206,000 in the U.S. in April 2005 was $48,660. At 34 percent, the High Desert region was the most affordable in the state, followed by the Sacramento region at 21 percent. The Northern Wine Country region was the least affordable in the state at 8 percent.
The minimum real estate household income needed to purchase a median-priced home at $509,230 in California in April was $120,290, based on an average effective mortgage interest rate of 5.92 percent, assuming a 20 percent down payment, and assuming the monthly payment for principal, interest, taxes and insurance is no more than 30 percent of a household's income. April's minimum required income was up from $102,350 in April 2004, when the median price of a home was $452,680 and the prevailing interest-rate was 5.42 percent.
By contrast, the minimum real estate household income needed to purchase a median-priced home at $206,000 in the U.S. in April 2005 was $48,660. At 34 percent, the High Desert region was the most affordable in the state, followed by the Sacramento region at 21 percent. The Northern Wine Country region was the least affordable in the state at 8 percent.
Wednesday
Low mortgage interest rates forecast to push home sales
Lower-than-expected mortgage interest rates are forecast to push home sales to a fifth consecutive record in 2005, the National Association of Realtors reported today.
According to David Lereah, chief economist for the association not only have mortgage interest rates declined, but an expected rise in the second half of the year will be slower than in earlier projections. As a result, we now expect to set records for both existing and new home sales this year. The 30-year fixed-rate mortgage should rise slowly to only 6.1 percent in the fourth quarter, and reach 6.5 percent by the end of 2006. Last week, Freddie Mac reported the 30-year fixed rate dropped to 5.62 percent.
Existing-home sales are forecast to rise 1.6 percent to a total of 6.89 million this year from a record 6.78 million in 2004, while new-home sales are expected to grow 3.2 percent to 1.24 million in 2005. At the same time, housing starts are projected to increase 3.4 percent to just over 2.02 million units, the highest level since 1973.
The national median existing-home price for all housing types is expected to rise 8.8 percent in 2005 to $201,500, while the typical new-home price should increase 5.7 percent to $233,600.
Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said a rapid growth in the number of mortgage products and loan options is helping buyers to overcome down-payment hurdles. However, some of these loans come at a price of increased risk to the borrower. In today's competitive market, it is even more important to consult with a professional who can assess loan risks and help buyers find both a home and a loan that is well suited to their personal situation.
The U.S. gross domestic product is expected to grow 3.5 percent in 2005, with the unemployment rate holding around 5.2 percent for the rest of the year. Inflation should remain modest with the Consumer Price Index rising 3 percent in 2005. Inflation-adjusted disposable personal income is seen to grow 3.3 percent in 2005, while the consumer confidence index is expected to rise to 104 in the second half of the year.
According to David Lereah, chief economist for the association not only have mortgage interest rates declined, but an expected rise in the second half of the year will be slower than in earlier projections. As a result, we now expect to set records for both existing and new home sales this year. The 30-year fixed-rate mortgage should rise slowly to only 6.1 percent in the fourth quarter, and reach 6.5 percent by the end of 2006. Last week, Freddie Mac reported the 30-year fixed rate dropped to 5.62 percent.
Existing-home sales are forecast to rise 1.6 percent to a total of 6.89 million this year from a record 6.78 million in 2004, while new-home sales are expected to grow 3.2 percent to 1.24 million in 2005. At the same time, housing starts are projected to increase 3.4 percent to just over 2.02 million units, the highest level since 1973.
The national median existing-home price for all housing types is expected to rise 8.8 percent in 2005 to $201,500, while the typical new-home price should increase 5.7 percent to $233,600.
Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said a rapid growth in the number of mortgage products and loan options is helping buyers to overcome down-payment hurdles. However, some of these loans come at a price of increased risk to the borrower. In today's competitive market, it is even more important to consult with a professional who can assess loan risks and help buyers find both a home and a loan that is well suited to their personal situation.
The U.S. gross domestic product is expected to grow 3.5 percent in 2005, with the unemployment rate holding around 5.2 percent for the rest of the year. Inflation should remain modest with the Consumer Price Index rising 3 percent in 2005. Inflation-adjusted disposable personal income is seen to grow 3.3 percent in 2005, while the consumer confidence index is expected to rise to 104 in the second half of the year.
Real estate refinancings jump
Real estate refinancings is at a 3-month high
Overall mortgage applications increased last week, rising 6.5 percent on a seasonally adjusted basis from the week before, according to the Mortgage Bankers Association’s weekly survey. The MBA seasonally adjusted purchase index went up by 3.6percent to 479.3 from 462.7 percent the previous week. The seasonally adjusted refinance index increased by 10.3percent to 2,362.1 from 2,142.1 one week earlier.
With the 30-year fixed-rate mortgage rate declining to 5.55 percent, the refinance share of applications has increased to 42.9 percent, a level last seen in March of this year, according to senior director of single-family research and economics.
The refinance share of mortgage activity increased to 42.9 percent of total applications, from 41.2 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 31.7 percent of total applications, from 33.3 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.55 percent from 5.61 percent one week earlier. Points including the origination fee decreased to 1.12 from 1.07 for 80 percent loan-to-value loans. The average contract interest rate for 15-year fixed-rate mortgages remained at 5.13 percent. Points including the origination fee decreased to 1.11 from 1.17 for 80 percent loan-to-value loans. The average contract interest rate for one-year adjustable-rate mortgages remained at 4.09 percent. Points including the origination fee increased to 1 from 0.92 for 80 percent loan-to-value loans.
Overall mortgage applications increased last week, rising 6.5 percent on a seasonally adjusted basis from the week before, according to the Mortgage Bankers Association’s weekly survey. The MBA seasonally adjusted purchase index went up by 3.6percent to 479.3 from 462.7 percent the previous week. The seasonally adjusted refinance index increased by 10.3percent to 2,362.1 from 2,142.1 one week earlier.
With the 30-year fixed-rate mortgage rate declining to 5.55 percent, the refinance share of applications has increased to 42.9 percent, a level last seen in March of this year, according to senior director of single-family research and economics.
The refinance share of mortgage activity increased to 42.9 percent of total applications, from 41.2 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 31.7 percent of total applications, from 33.3 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.55 percent from 5.61 percent one week earlier. Points including the origination fee decreased to 1.12 from 1.07 for 80 percent loan-to-value loans. The average contract interest rate for 15-year fixed-rate mortgages remained at 5.13 percent. Points including the origination fee decreased to 1.11 from 1.17 for 80 percent loan-to-value loans. The average contract interest rate for one-year adjustable-rate mortgages remained at 4.09 percent. Points including the origination fee increased to 1 from 0.92 for 80 percent loan-to-value loans.
Tuesday
Making money with "Seized Properties"
What exactly are seized properties ?
A seized property is basically a home that has been repossessed by the lender because the owners have failed to pay the mortgage - this is called foreclosure. Hundreds of thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Due to a variety of circumstances, hundreds of people or businesses default on their mortgages every day, and as a result have their properties seized by banks or other private and government institutions. Because of the constant influx of new seized properties and the enormous amount of money and time required to maintain and market them, the banks attempt to recover at least some of the money by conducting public seized property auctions.
Recently launched SeizedRealestate.com boast their site members can access fresh listings nationwide and have an exclusive ability to buy directly from the banks and other institutions, for up to 90% off the actual market value of any property. Find virtually any type of real estate within their network: single-family houses, multi-unit houses, apartments/townhouses, commercial properties, mobile homes, land, timeshares, vacation and rental properties.
Many people have been making money reselling these properties since a long time now, building their wealth and net worth in the process, buying and selling seized properties. More and more properties become repossessed every month thus providing a constant variety and a growth factor to this market sector. SiezedRealestate.com allows it's members to acquire properties through their website and can sell them immediately for their current going market value. Site members are allowed to pocket all the profit which typically could range anywhere from tens to hundreds of thousands of dollars. Well there's one catch though.. You've got to buy smart!
A seized property is basically a home that has been repossessed by the lender because the owners have failed to pay the mortgage - this is called foreclosure. Hundreds of thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Due to a variety of circumstances, hundreds of people or businesses default on their mortgages every day, and as a result have their properties seized by banks or other private and government institutions. Because of the constant influx of new seized properties and the enormous amount of money and time required to maintain and market them, the banks attempt to recover at least some of the money by conducting public seized property auctions.
Recently launched SeizedRealestate.com boast their site members can access fresh listings nationwide and have an exclusive ability to buy directly from the banks and other institutions, for up to 90% off the actual market value of any property. Find virtually any type of real estate within their network: single-family houses, multi-unit houses, apartments/townhouses, commercial properties, mobile homes, land, timeshares, vacation and rental properties.
Many people have been making money reselling these properties since a long time now, building their wealth and net worth in the process, buying and selling seized properties. More and more properties become repossessed every month thus providing a constant variety and a growth factor to this market sector. SiezedRealestate.com allows it's members to acquire properties through their website and can sell them immediately for their current going market value. Site members are allowed to pocket all the profit which typically could range anywhere from tens to hundreds of thousands of dollars. Well there's one catch though.. You've got to buy smart!
FHA-insured loans become more attractive
The Federal Housing Administration's new streamline 203(k) Home Repair program will make FHA-insured loans even more attractive by allowing sellers to market their property in "as-is" condition and sell homes to FHA borrowers without making any repairs to their property provided that less than $15,000 in repairs are needed.
In the past, some sellers and Realtors have not encouraged prospective borrowers to utilize FHA financing because of concerns about FHA's pre-sale repair requirements. The Streamline(K) Limited Repair program, which became effective today, will help alleviate those concerns by permitting the borrower to add $5,000 to $15,000 to the loan amount and make the required repairs after loan closing. The new product can also be used for other repairs that the new homeowner wants to accomplish without the need for an additional loan.
The Department is committed to making FHA better, more modern, and more streamlined, according to the U.S. Housing and Urban Development Secretary. This new mortgage product will help achieve that goal by enabling FHA borrowers to roll into the mortgage both the cost of the home and limited repairs.
FHA's Streamline(k) is intended to assist homeowners with basic repairs and was developed in response to the call for a purchase-rehabilitation loan alternative which is easier to administer, provides shorter processing time frames, and expedites cost estimates and approval.
HUD's original Section 203(k) home rehabilitation program is FHA's primary tool for the repair of single-family properties. Because the 203(k) program has seen success in helping homeowners rehabilitate their homes, the Department has developed a streamline version to help even more Americans.
The Streamline(K) option does not replace the standard 203(k) program, but delivers an alternative for those homeowners who seek to make the type of uncomplicated repairs which may be accomplished successfully without paid consultants, engineers or plan reviewers.
Repairs under the Streamline(K) program do not require documentation from the borrower other than written estimates from appropriate licensed contractors. To ensure repairs under this program are expedited, Streamline(K) repairs are restricted to those repair categories such as: roof replacement, heating system replacement, exterior painting and other such repairs which do not require professional assistance to evaluate the need, feasibility or quality of work.
In addition, since FHA encourages borrowers to obtain a home inspection, the Streamline(K) will permit borrowers whose inspectors identify property conditions in need of repair to obtain financing to undertake the work needed.
In the past, some sellers and Realtors have not encouraged prospective borrowers to utilize FHA financing because of concerns about FHA's pre-sale repair requirements. The Streamline(K) Limited Repair program, which became effective today, will help alleviate those concerns by permitting the borrower to add $5,000 to $15,000 to the loan amount and make the required repairs after loan closing. The new product can also be used for other repairs that the new homeowner wants to accomplish without the need for an additional loan.
The Department is committed to making FHA better, more modern, and more streamlined, according to the U.S. Housing and Urban Development Secretary. This new mortgage product will help achieve that goal by enabling FHA borrowers to roll into the mortgage both the cost of the home and limited repairs.
FHA's Streamline(k) is intended to assist homeowners with basic repairs and was developed in response to the call for a purchase-rehabilitation loan alternative which is easier to administer, provides shorter processing time frames, and expedites cost estimates and approval.
HUD's original Section 203(k) home rehabilitation program is FHA's primary tool for the repair of single-family properties. Because the 203(k) program has seen success in helping homeowners rehabilitate their homes, the Department has developed a streamline version to help even more Americans.
The Streamline(K) option does not replace the standard 203(k) program, but delivers an alternative for those homeowners who seek to make the type of uncomplicated repairs which may be accomplished successfully without paid consultants, engineers or plan reviewers.
Repairs under the Streamline(K) program do not require documentation from the borrower other than written estimates from appropriate licensed contractors. To ensure repairs under this program are expedited, Streamline(K) repairs are restricted to those repair categories such as: roof replacement, heating system replacement, exterior painting and other such repairs which do not require professional assistance to evaluate the need, feasibility or quality of work.
In addition, since FHA encourages borrowers to obtain a home inspection, the Streamline(K) will permit borrowers whose inspectors identify property conditions in need of repair to obtain financing to undertake the work needed.
Friday
West Coast real estate price growth fastest
West Coast real estate prices grow fastest! For the eighth consecutive quarter, the Pacific states led the nation in annual house price appreciation, growing at 19.2 percent from the first quarter of 2004 through the first quarter of 2005, according to Freddie Mac's Conventional Mortgage Home Price Index.
The CMHPI, which monitors detached, single-family homes in nine Census divisions, continues to show strong growth primarily along the coasts – areas where populations are growing rapidly, jobs growth is strong and land scarcity is pushing up the cost of housing.
Nationally, the index rose 9.6 percent on an annual basis, down from a revised fourth-quarter 2004 annualized rate of 9.7 percent and a third-quarter 2004 rate of 17.6 percent.
Once again the South Atlantic states were second, with a growth rate of 15.3 percent, followed again by the Middle Atlantic states, which grew at a slightly slower pace of 14.7 percent for the year. The New England states came next with growth at an annual appreciation rate of 13.4 percent.
The Mountain states followed New England, posting an annual home-price growth rate of 11.9 percent. After the Mountain states, the West North Central states saw an increase of 7.1 percent, while the East North Central states showed an increase of 6.7 percent. Finally, the East South Central states had gains of 5.7 percent, and the West South Central states had the slowest annual appreciation of 3.7 percent annually
National annual home-price growth is likely to slow in 2005, according to Freddie Mac vice president and chief economist. Our best estimate is that house-price growth will moderate to between 6 percent and 9 percent as interest rates climb higher. We are already seeing some slowing in the quarterly growth rates relative to autumn of last year when home prices were growing at nearly double the current rate.
Nationally, home values increased 11.8 percent on an annual basis, from the first quarter of 2004 through the first quarter of 2005.
The first quarter of 2005 was the 39th consecutive quarter in which all nine regions of the United States had positive annual home price growth, noted Freddie Mac deputy chief economist. We are starting to see the impact of the manufacturing job losses on house prices in smaller metro areas covered by the CMHPI. The question remains as to how long the streak of positive growth in all regions will last if interest rates rise sharply and economic growth stagnates or the public loses some of its enthusiasm for real estate.
The fastest-growing areas are attracting population due to strong jobs growth and secular migration to the Sun Belt. For instance, Nevada added 72,600 nonfarm, payroll jobs over the 12 months ended in the first quarter 2005, a 6.5 percent increase in employment and the largest percentage gain of any state. Nevada also enjoyed the strongest annual house-price appreciation in the nation at 29.7 percent. In contrast, Michigan lost 17,800 payroll jobs, a 0.4 percent employment decline, and house prices grew statewide at 4.9 percent over the year.
The CMHPI, which monitors detached, single-family homes in nine Census divisions, continues to show strong growth primarily along the coasts – areas where populations are growing rapidly, jobs growth is strong and land scarcity is pushing up the cost of housing.
Nationally, the index rose 9.6 percent on an annual basis, down from a revised fourth-quarter 2004 annualized rate of 9.7 percent and a third-quarter 2004 rate of 17.6 percent.
Once again the South Atlantic states were second, with a growth rate of 15.3 percent, followed again by the Middle Atlantic states, which grew at a slightly slower pace of 14.7 percent for the year. The New England states came next with growth at an annual appreciation rate of 13.4 percent.
The Mountain states followed New England, posting an annual home-price growth rate of 11.9 percent. After the Mountain states, the West North Central states saw an increase of 7.1 percent, while the East North Central states showed an increase of 6.7 percent. Finally, the East South Central states had gains of 5.7 percent, and the West South Central states had the slowest annual appreciation of 3.7 percent annually
National annual home-price growth is likely to slow in 2005, according to Freddie Mac vice president and chief economist. Our best estimate is that house-price growth will moderate to between 6 percent and 9 percent as interest rates climb higher. We are already seeing some slowing in the quarterly growth rates relative to autumn of last year when home prices were growing at nearly double the current rate.
Nationally, home values increased 11.8 percent on an annual basis, from the first quarter of 2004 through the first quarter of 2005.
The first quarter of 2005 was the 39th consecutive quarter in which all nine regions of the United States had positive annual home price growth, noted Freddie Mac deputy chief economist. We are starting to see the impact of the manufacturing job losses on house prices in smaller metro areas covered by the CMHPI. The question remains as to how long the streak of positive growth in all regions will last if interest rates rise sharply and economic growth stagnates or the public loses some of its enthusiasm for real estate.
The fastest-growing areas are attracting population due to strong jobs growth and secular migration to the Sun Belt. For instance, Nevada added 72,600 nonfarm, payroll jobs over the 12 months ended in the first quarter 2005, a 6.5 percent increase in employment and the largest percentage gain of any state. Nevada also enjoyed the strongest annual house-price appreciation in the nation at 29.7 percent. In contrast, Michigan lost 17,800 payroll jobs, a 0.4 percent employment decline, and house prices grew statewide at 4.9 percent over the year.
California real estate surge has generated $1 trillion
California's real estate housing surge has generated $1 trillion in increased home-equity since 2000 and pumped billions of dollars into the state's economy, the California Building Industry Association reported today.
The report was prepared by chief economist for the association. The study, released at builders conference in San Francisco, found that the 2.5 million homes purchased since 2000 have increased in value about $378.7 billion, while the 4.3 million homes owned but not sold in that time period have increased in value by $641 billion. The total gain in home-equity was $1.02 trillion. Real estate homes sold in the San Francisco Bay Area and Los Angeles County have appreciated the most $83.24 billion and $82.16 billion, respectively.
It was indicated that despite the steep increases in home values a housing bubble was not forseen as some have speculated, because the underlying demand for homes remains strong while the supply – constrained by governmental barriers, slow-growth pressures and other factors – remains inadequate to meet the demand. But the rate of appreciation slowing to more sustainable and healthier levels.
Real estate rates of gain will not go up as fast as they have in the last three years. It is anticipated that over the next three years, the real estate appreciation rate will be in the 5 to 8 percent range per year.
The report was prepared by chief economist for the association. The study, released at builders conference in San Francisco, found that the 2.5 million homes purchased since 2000 have increased in value about $378.7 billion, while the 4.3 million homes owned but not sold in that time period have increased in value by $641 billion. The total gain in home-equity was $1.02 trillion. Real estate homes sold in the San Francisco Bay Area and Los Angeles County have appreciated the most $83.24 billion and $82.16 billion, respectively.
It was indicated that despite the steep increases in home values a housing bubble was not forseen as some have speculated, because the underlying demand for homes remains strong while the supply – constrained by governmental barriers, slow-growth pressures and other factors – remains inadequate to meet the demand. But the rate of appreciation slowing to more sustainable and healthier levels.
Real estate rates of gain will not go up as fast as they have in the last three years. It is anticipated that over the next three years, the real estate appreciation rate will be in the 5 to 8 percent range per year.
Thursday
Wisconsin residential home sales on a roll
The Wisconsin residential home sales market remained on a record pace in the first quarter, according to the most recent analysis by the Wisconsin Realtors Association. Statewide, homes sales increased 3.1 percent over the level established in the first quarter of 2004, setting a Wisconsin first-quarter record of 29,450 home sales.
Sales figures for the first quarter were up in five of the six regions of the state, based on Multiple Listing Service data for Wisconsin counties, and the growth rate for Q1 2005 over Q1 2004. Specifically, sales volume in the Northern part of the state was up substantially (+24.8 percent), followed by solid growth in the Central region (+10 percent). The more urban regions of the state also experienced solid growth with the South Central region up 6.8 percent, the Southeast region increasing 5.3 percent, and the Northeast region increasing more moderately (+2.7 percent). Only the Western region experienced a reduction in sales volume (-9 percent over the period), due primarily to reductions in sales volume in some of the larger counties.
Housing sales in 2005 are starting out where 2004 left off – in record-setting territory according to the WRA Chairman. There are many factors that contribute to this excellent market, not the least of which is the continued low mortgage rates and solid labor market. The 30-year fixed rate mortgage averaged 5.8 percent for the quarter, and the state continued to add jobs in the quarter, specifically, comparing the first quarter of this year with the first quarter of last year, the state created about 26,000 additional jobs, including 3,600 manufacturing jobs.
Home prices in the first quarter of the year also experienced significant growth, according to the WRA's report. As compared to Q1 2004, median home prices were up 10.3 percent to $152,700, with five of the six regions enjoying price growth.
Median housing prices rose in five of the six regions of the state when comparing Q1 2005 with the same quarter last year. Median home-price appreciation was up 14.1 percent in the West, and it was nearly as high (+12.4 percent) in the Southeast region. Also strong was the South Central region, which advanced 8.7 percent over Q1 2004, followed by the Central and Northeast regions, which grew at 4.1 percent and 3.1 percent respectively. Only the Northern region experienced a decline, falling 10.6 percent.
Sales figures for the first quarter were up in five of the six regions of the state, based on Multiple Listing Service data for Wisconsin counties, and the growth rate for Q1 2005 over Q1 2004. Specifically, sales volume in the Northern part of the state was up substantially (+24.8 percent), followed by solid growth in the Central region (+10 percent). The more urban regions of the state also experienced solid growth with the South Central region up 6.8 percent, the Southeast region increasing 5.3 percent, and the Northeast region increasing more moderately (+2.7 percent). Only the Western region experienced a reduction in sales volume (-9 percent over the period), due primarily to reductions in sales volume in some of the larger counties.
Housing sales in 2005 are starting out where 2004 left off – in record-setting territory according to the WRA Chairman. There are many factors that contribute to this excellent market, not the least of which is the continued low mortgage rates and solid labor market. The 30-year fixed rate mortgage averaged 5.8 percent for the quarter, and the state continued to add jobs in the quarter, specifically, comparing the first quarter of this year with the first quarter of last year, the state created about 26,000 additional jobs, including 3,600 manufacturing jobs.
Home prices in the first quarter of the year also experienced significant growth, according to the WRA's report. As compared to Q1 2004, median home prices were up 10.3 percent to $152,700, with five of the six regions enjoying price growth.
Median housing prices rose in five of the six regions of the state when comparing Q1 2005 with the same quarter last year. Median home-price appreciation was up 14.1 percent in the West, and it was nearly as high (+12.4 percent) in the Southeast region. Also strong was the South Central region, which advanced 8.7 percent over Q1 2004, followed by the Central and Northeast regions, which grew at 4.1 percent and 3.1 percent respectively. Only the Northern region experienced a decline, falling 10.6 percent.
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