US Mortgage Applications Fell Last Week.

US Mortgage Applications Fell Last Week

US Mortgage Applications fell last week on lower demand for both new purchase and refinance loans, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of US Mortgage Applications activity, which includes both refinancing and home purchase demand, fell 1.8 percent in the week ended Aug 3.

The MBA’s seasonally adjusted index of refinancing applications fell 1.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 1.4 percent.

The refinance share of total mortgage activity held steady at 81.2 percent of US Mortgage Applications from the week before.

Fixed 30-year mortgage rates averaged 3.76 percent in the week, up 1 basis point from 3.75 percent the week before.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Source (http://www.cnbc.com/id/48564240)

Improving Housing Markets in nearly 1/4 of the Metros.

Improving Housing Markets in nearly 1/4 of the Metros

Eighty U.S. metro areas are holding a spot in this month’s Improving Housing Markets Index, a housing index that spotlights housing markets showing gains over at least six consecutive months.

The National Association of Home Builders/First American’s August index shows that 75 metro areas kept their spot on this month’s list, with the addition of five new ones.

The five metros added to this month’s Improving Housing Markets index are:

• Miami
• Palm Bay, Fla.
• Hinesville, Ga.
• Terre Haute, Ind.
• Lubbock, Texas

The index measures improvements in housing permits, employment, and housing prices over at least six months.

“The list of improving housing markets in August includes metros across every region of the country, all of which have distinctly different characteristics in terms of their economic and employment bases as well as other factors,” says Barry Rutenberg, NAHB chairman. “One thing that most markets have in common, however, is the tight lending environment for both builders and buyers that continues to drag on their positive momentum.”

To view a complete list of the 80 metro areas on the IMI, visit www.nahb.org/imi.

Source: National Association of Home Builders

Gen Y Buyers brought to starter homes by builder.

Gen Y Buyers brought to starter homes by builder

A national home builder is wooing Generation Y renters with back-to-basics homes that offer all of the advantages of home ownership on a comfortable budget.

Chicago, San Antonio, and St. Louis are the test markets that Centex Homes is using to convert younger tenants to Gen Y Buyers. Fred Ehle, vice president of marketing for PulteGroup, Centex’s parent company, told writer Mary Umberger that the huge demographic was poised for the transition.

“We’re marketing these homes to the Gen Y Buyers, not with an advertised sales price of $130,000, but with the monthly cost of that home,” Ehle said. “Our goal in designing these houses was to make sure we could compete with local rents.

“We can tell the Gen Y Buyers, for what you’re paying in rent, you could be in a new home — this is a revelation for them, because many people in this demographic don’t think they could afford it or they don’t think they could qualify for a loan. For this reason, we offer to connect each buyer to a mortgage adviser before they sign up to buy,” Ehle added.

Source: “Builder Woos Gen Y Renters,” Chicago Tribune (Aug. 2, 2012)

Housing Crash Effects on Home Ownership Views?

Housing Crash Effects on Home Ownership Views?

Depending on how Americans’ experienced the housing crash –

—whether they were a home owner or a bystander reading about it in the news—as well as their age influenced their perceptions of home ownership today, according to a new study by economists at the Boston Federal Reserve.

Two-thirds of Americans who did not personally suffer a loss directly from the Housing Crash and who knew of the housing crisis merely from the media have not changed their views toward home ownership. They still place a high value on the American Dream, the study finds.

However, younger home owners who experienced the Housing Crash first-hand saw the most after-affects in their views of home ownership, the study found. About one-third of individuals who suffered directly from the housing crisis, such as through foreclosure or seeing their home values fall, had their confidence in home ownership shaken. However, older Americans who also suffered direct losses still mostly retained their confidence in home ownership and say they’d still choose to buy over rent.

Nevertheless, the study found that the majority of Americans still say buying a home is better financially than renting a home.

“We find that recent housing market conditions had little effect on individuals whose exposure to the Housing Crash came through only, such as media accounts,” the authors wrote in the report, Shifting Confidence in Homeownership: The Great Recession. “For individuals who were not foreclosed on, did not lose a substantial amount of money in real estate, and did not have anyone close to them who did, attitudes toward the financial soundness of buying as opposed to renting were unchanged by the magnitude of the house price decline in their area. Information alone may not be sufficient to change attitudes; rather actual experience is necessary to change attitudes.

Furthermore, the effects of the crisis seem to be confined to attitudes toward buying a home, and do not extend to attitudes to other home ownership decisions, such as … general risk aversion.”

Source: “Boston Fed Study: Home Ownership Values Unchanged Among Most Americans,” RISMedia (Aug. 5, 2012)

Mortgage Closing Costs on the Decline.

Mortgage Closing Costs on the Decline

Mortgage Closing costs have dropped by 7 percent over the last year, according to an annual survey on closing costs conducted by Bankrate.com. Closing costs average $3,754 nationwide.

Title insurance and other third-party fees also saw a drop in the last year, falling 12 percent, and origination fees fell 1 percent, according to Bankrate.com’s survey.

“This is the second year in which lenders are required to estimate third-party fees within 10 percent of the final cost. It seems like they’re getting more accurate, which helps explain the sharp decrease in these fees over the past year,” Greg McBride, Bankrate.com’s senior financial analyst, said in a statement. “The main lesson of this survey for consumers is to shop around for at least three different estimates. While no one is going to move to a new state just because closing costs are lower, it’s important for people to realize that there is variation even within their neighborhood, and that they can save by being an educated consumer.”

5 States With Highest Average Mortgage Closing Costs

1. New York: $5,435
2. Texas: $4,619
3. Pennsylvania: $4,467
4. Florida: $4,395
5. Oklahoma: $4,352

5 States With the Lowest Average Mortgage Closing Costs

1. Missouri: $3,006
2. Kansas: $3,193
3. Colorado: $3,199
4. Iowa: $3,257
5. Arkansas: $3,325

View the survey, which contains all states’ average Mortgage Closing Costs.

Source: Bankrate.com

Housing Is on the Mend…

Housing Is on the Mend

Some Americans are still jittery over the housing market, but here are eight positive signs that should quell some of their fears.

1. Housing prices are on the rise across the country.
2. Foreclosures have slowed. Analysts suggest that as the supply of distressed homes slows, buyers will be forced into higher-price properties too.
3. Inventories of for-sale homes on the market are decreasing. In fact, inventories of for-sale homes have dropped 24 percent from a year ago.
4. Mortgage rates are at ultra record level lows, for those who can qualify
5. Housing starts rose 6.9 percent in June. Also, existing-home sales were up 4.5 percent higher in June compared to one year ago.
6. Home building stocks are on the rise.
7. For investors who are buying homes, rents are soaring, allowing them to cash in on their investments. Rental prices are at a 10-year high as median units rent for $710 a month.
8. Home affordability is at record highs for the median income family, due to falling home values and super low mortgage rates. In fact, a recent study found that it is cheaper to buy a home than rent in basically ever major city in the U.S. For those who buy, you can save the cost of renting by owning the home for five years or less.

But while the signs point to a housing market on the mend, some Americans still remain hesitant. Many Americans are still underwater on their mortgage, owing more on their home than it is currently worth. Also, the economy continues to weigh on the recovery, particularly a dampening employment outlook, which analysts see as tied to housing.

Still, The Wall Street Journal concludes in a recent article that if you take into account all the positive signs lately in the housing market, “housing presents an attractive long-term investment that should hold steady or even have upside surprise in the short term.”

Source: “Finally, It Is Time to Buy a House,” The Wall Street Journal (Aug. 1, 2012)

Stigmatized Properties Can Offer Big Bargains.

Stigmatized Properties Can Offer Big Bargains

Home buyers who can stomach some misfortune in a home’s past may be able to find big discounts. For example, buyers can expect to pay 10 percent to 25 percent off the regular market home price for Stigmatized Properties, according to real estate consultant Randall Bell of Bell Anderson & Saunders. And depending on how bad the crime was that occurred at the home, the more a home buyer can expect in discount to the price.

“In large, it all comes down to finding the right discount to entice a buyer to accept the Stigmatized Properties along with its tainted history,” Bell told AOL Real Estate.

But for some, the crime that happened may be too much to stomach, regardless of the big discount. Some buyers worry about the resale value and what others will think too. Also, homes where crimes took place tend to linger on the market from two to seven years longer than they would without a tainted past, according to Bell.

For example, a Southern California mansion that was the place where 39 cult members from Heaven’s Gate killed themselves sold for $668,000 two years following the suicides, which was less than half of the $1.6 million list price before the suicides occurred. Also, the home where O.J. Simpson’s ex-wife Nicole Brown Simpson and her friend Ronald Goldman was killed lingered on the market for two years before selling for $590,000—$200,000 less than the initial asking price.

However, some buyers say they are willing to overlook a home’s shady past. “It may have a terrible history,” says Chris Butler, who purchased a split-level ranch nestled in a forest in Akron, Ohio, that once belonged to serial killer Jeffrey Dahmer and was the site of Dahmer’s first murder. “But the house didn’t kill anybody.”

Source: “Jeffrey Dahmer, Andrea Yates, the Lemp Family: Life Inside Homes Where Grisly Deaths Took Place,” AOL Real Estate (Aug. 2, 2012)

Mortgage Rates Inch Up After Record Streak.

Mortgage Rates Inch Up After Record Streak

Following a 13-week record-low streak, 30-year Mortgage Rates—the most popular choice among home buyers—started moving back up this week, according to Freddie Mac’s weekly mortgage market survey. The average 30-year mortgage had dropped or matched record lows in 13 of the last 14 weeks. But this week, mixed economic news prompted mortgage rates to rise higher.

“Recent announcements of additional debt relief for the Eurozone and mixed domestic economic indicators added upward pressure on Treasury yields as well as mortgage rates this week,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at how mortgage rates fared for the week ending Aug. 2:

• 30-year fixed-rate mortgages averaged 3.55 percent, with an average 0.7 point, up from last week’s all-time record average of 3.49 percent. A year ago at this time, 30-year rates averaged 4.39 percent.
• 15-year fixed-rate mortgages averaged 2.83 percent, with an average 0.6 point, also edging up from its all-time low posted last week of 2.8 percent. Last year at this time, 15-year rates averaged 3.54 percent.
• 5-year adjustable-rate mortgages averaged 2.75 percent this week, with an average 0.6 point, up slightly from last week’s 2.74 percent average. Last year at this time, 5-year ARMs averaged 3.18 percent.
• 1-year ARMs averaged 2.7 percent this week, with an average 0.4 point, dropping from last week’s 2.71 average. A year ago, 1-year ARMs averaged 3.02 percent.

Source: Freddie Mac

Home Ownership Unswayed.

Eighty-five percent of Americans say they prefer home ownership over renting, according to a newly released Fannie Mae national housing survey of more than 12,000 interviews from 2011. The study finds that the housing and financial crisis has not been a big factor in Americans’ decisions to rent or buy.

“The non financial benefits that people derive from the consumption of housing mitigate the negative financial experiences that many home owners have had,” says Steve Deggendorf, one of the authors of the study.

Instead, “for a large number of people, emotions rule. We need to think about how they approach the housing decision and think about the kind of help that they may need [in the process].”

The researchers note that it’s important to help Americans take a more conscious approach in their Home Ownership decisions, assisting them to better balance their “wants” in a home with what they can actually afford. The researchers add that buyers’ emotions often lead them to ignore their practical ability to buy a home at all.

“Our study shows that the negative housing events of the past few years have not discouraged people from wanting to own a home,” according to the study. “Exposure to mortgage default, perceived home value appreciation/depreciation, and self-reported underwater status are not significant factors in the models in predicting individuals’ intentions for Home Ownership for their next move.”

Instead, 33 percent of current renters say demographics like employment, age, income and marital status are important drivers for them on whether they will continue to rent or purchase a home. Only 25 percent of those surveyed cited financial attitudes as having an impact on their next housing decision.

Source: “People Still Want to Buy Homes: Fannie Mae,” HousingWire (Aug. 2, 2012)