Housing affordability reaches record in first quarter

Housing affordability reaches record in first quarter

WASHINGTON – May 17, 2012 – Housing affordability reached a milestone in the first quarter, according to the National Association of Realtors® (NAR).



NAR’s composite quarterly Housing Affordability Index rose to a record high of 205.9 in the first quarter of 2012. The Index provides a quick look at affordability and is calculated by the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.



The first quarter marks the first time the quarterly index broke the 200 mark since NAR recordkeeping began in 1970.



“For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” says NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami and 2002 president of Florida Realtors.



Veissi thinks things could be even better if lending standards would return to normal.



“Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means,” he says. “This is especially true for self-employed buyers.”



The index finds that a median-income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter – more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.



A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter. Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a downpayment of 10 percent. In the first quarter, the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.



“It’s never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better,” Veissi says.



Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no downpayment.



Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home. For all of 2012, the index is projected to set an annual record, averaging 191 for the year.



© 2012 Florida Realtors®

Real estate market is picking up, but foreclosures expected to surge

Real estate market is picking up, but foreclosures expected to surge GARFIELD HEIGHTS, Ohio – April 5, 2012 – Even as real estate sales are picking up across most of the country, a painful second act of the housing slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures. "We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio. “Last year was an anomaly, and not in a good way.”

In 2011, the “robo-signing” scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

Five major banks eventually struck that settlement with 49 states in February. Signs are growing that the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

More conclusive national data are not yet available. But watchdog group 4closurefraud.org, which helped uncover the “robo-signing” scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash.

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo’s rose 68 percent, and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold – 251 starts vs. 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

According to Moody’s Analytics, sales of repossessed properties probably will rise 25 percent this year from 1 million in 2011, Bloomberg News reported. Prices for the foreclosed homes could drop as much as 10 percent because they deteriorated as they were held in reserve during the investigations by state officials resolved in February, according to online foreclosure marketplace RealtyTrac. That month, 43 percent of foreclosures were delinquent for two or more years, from a 21 percent share in 2010, according to Lender Processing Services.

“The longer a foreclosed home is in the mill, the bigger the losses,” Todd Sherer, who manages distressed mortgage investments for Dalton Investments, a Los Angeles-based hedge fund, said in an interview with Bloomberg News. “We have a bulge of these properties coming through the system.”

Real estate company Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.


washingtonpost.com; Nick Carey, Reuters.

Pending sales nationwide jump 9 percent

Pending home sales nationwide were 9.2 percent above February 2011, reports the National Association of REALTORS®. Lawrence Yun, NAR chief economist, says we’re seeing the continuation of an uneven but higher sales pattern. "The spring home-buying season looks bright because of an elevated level of contract offers so far this year,” he says. "If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that’s what we’re expecting with sales rising 7 to 10 percent in 2012.” -Orlando Realtors

 

It is now cheater to buy then to rent! Buying vs. Renting.

It is now cheater to buy then to rent! Buying vs. Renting.

According to Zillow.com, the average rental property in the U.S is $1,300 a month. The average or the median represent the middle, there will still be some properties lower and some higher, but on average properties are renting for 1,300 dollars a month.  Overall, with the exception of Los Angeles, the median price for rental has rose 2.8% since 2010.

So, what kind of home could be purchased in the current market for 1,300 a month?    Well, because interest rates are only 4%, a home for $200,000 will cost around $920.00 a month. Good news buyers, there’s currently over 700 central Florida properties listed for 200,000.

Image monthly payments of a little more than $700.00, wow, that’s what it would cost after buying a home for $150,000 at 4% in interest. There is currently over 800 central Florida properties list at that price. Surely, there no need to keep doing the math here; buying a home is sufficiently cheaper than renting.

What is a Short Sale? title

What is a Short Sale?

In a short sale is when the servicer allows the homeowner to list and sell the mortgaged property and agrees to accept the net proceeds from the sale, even if the proceeds are less than the total amount due on the mortgage.

Under HAFA, after a short sale or deed-in-lieu is successfully completed, a homeowner is cleared of all remaining debt and obligations on their first lien mortgage to their mortgage servicer, and is eligible for $3,000 to help with moving expenses. For many homeowners, these solutions are the safest way to transition to more affordable housing

For many homeowners,

To learn more about the potential impact of a short sale or a deed-in-lieu on your credit report, visit: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm.

call 407-683-0106 and ask for Clark the short sale specialist or email @ Kendrick.clark@floridamoves.com

 

Florida lawmakers consider accelerating foreclosures

It takes roughly two years to push a foreclosure through Florida’s clogged court system. In a state with a backlog of 368,000 cases and a quarter of the country’s foreclosures, that means a housing crisis with no end in sight. Read more....

http://tinyurl.com/7ob3djt

null

What is the average down payment on a house? You will be surprised.

There's a range of home loan options available. The most important step is to talk a trusted bank, credit union or a mortgage broker to find out which loans option is offered to you. Remember, there's no one loan fits all solution, your loan will be customized to fix your situation.

On the other hand, there is zero down loan options offered by USDA and VA (Veterans Affairs) backed loans. Those seeking loans through USDA or VA must meet certain guidelines

There are also FHA loans with the minimum of 3.5% down. So what does that mean to those seeking a FHA loan? That means, the down payment on a FHA loan for $150,000 will be a minimum of $5,250, that is, 3.5%. In some cases, lenders are asking for 5% 10% and 20% down. Again, the most important step is to talk to a trusted professional

What do mortgage RATES have to do with “ME”?

What do mortgage RATES have to do with “ME”?

Forget the professionals, asks any homeowner how important it is to get a good interest rate, and they will be delighted to school you.  In 2007 the median interest rate was 6.4% on a 30 year fix. While that seem like a deal back in the day, let's do the math. Presently you can find the median interest rate around 4% on the same 30 year fix rate.  So, a home that cost $200.000 in 2007 at 6.4% interest cost the buyer $1250(not including taxes and insurance) a month. However, today a home that cost $200.000 at 4% interest will cost the buyer $954.00(not including taxes and insurance) a month

Therefore if we took $1,250.00 and subtract $954.00 it would = $296.00 So, what do mortgage rated have to do with you? It means money saved. Lower prices and lower rates, is the recipe to buy.

“Mortgage rates are rising. The rate on a 30-year fixed mortgage has increased to 4.07%, up from 3.85% on March 12. Fueling the increase: a jump in Treasury yields driven by signs the economy is picking up as well as worries the Federal Reserve won't take further steps to lower interest rates. While rising, rates remain below the 4.79% level from a year ago.”- Wall Street Journal

 http://blogs.wsj.com/economics/2012/03/22/vital-signs-climbing-mortgage-rates/

The one number to watch for a housing recovery

FORTUNE – Over the past few months, many economists have concluded that that the U.S. housing market has reached a turning point and is healing. This may sound hard to believe, since home prices have continued their downward trend. In 2011, prices fell by 4% following nearly a 30% decline since the property bubble paeked in June 2006. They ended the year at a 10-year low.

Indeed, prices aren't likely going to rise for a while. But this might not necessarily mean the housing market isn't on the mend. Perhaps we're looking at the recovery all wrong, says Paul Dales at Capital Economics. In a report to clients recently, the economist said higher prices won't be the sign that tells us there's a real recovery under way. Rather, the recent pick-up in sales is what we should pay attention to.

After all, prices tend to be a lagging indicator. It could take six months for any improvements to show in the market, if not longer.

"Even if the asking price is at the right level when the home is first listed, it may still take a few months to find a buyer and another month or so before the contract is closed," Dales wrote to clients last week. "The selling price that is registered at the end of this process therefore relates to the market conditions somewhat earlier."

Sales have risen recently, reaching a few milestones.

In 2011, existing home sales climbed to 4.26 million – higher than the 4.19 million sales in 2010. Needless to say, this is far below the market's peak of 7.1 million sales amid the housing boom in 2005. But it's worth noting that for the past two years, sales have crept up from the market's low of 4.1 million sales when the market collapsed in 2008. In particular, in the past six months, total homes sales have risen by 13% as borrowing costs for home mortgages continue to fall to record lows and investors making up the bulk of sales find opportunities in heavily discounted properties after foreclosures and short sales.

And a series of home sales data released later this week is expected to show that home purchases probably climbed in February to their highest level in nearly two years, according to forecasts in a Bloomberg survey. Sales of new and previously-owned properties combined are expected to rise to an annual rate of 4.93 million – the strongest since May 2010, and up from 4.89 million in January.

The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won't happen for another few years.

The inventory of unsold homes has dwindled, falling in January to 6.1 month's worth of supply – its lowest level since March 2005. A supply of six months is generally considered ideal for a healthy housing market, but there continue to be several headwinds at play that could weigh down prices.

The most immediate threat is the $25 billion settlement that federal and state officials recently reached with five banks to end investigations into abusive foreclosures practices. The agreement, which had stalled pending foreclosures nationwide for more than a year, will probably add more properties into the market. Dales at Capital Economics estimates additional 3 million homeowners might succumb to foreclosure over the next few years.

And then there's the longer-term threat to prices, which some experts say could arise when the Federal Reserve raises interest rates later. The inevitable move could potentially make the cost of home purchases more expensive relative to stagnant incomes.

So if anyone is looking at prices for signs of a recovery, it's likely that they'll miss it.

Posted in: housing, Macro

Tree Pruning Dos and Don'ts

Tree Pruning Dos and Don'ts

Springtime brings forth yard maintenance, and you might be wondering if you should prune your landscape trees. It depends.