Archives for September 2012

INTERACTIVE SALES MAP: Metropolitan Sales Areas Q2 2012

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Click on your metropolitan statistical area to get the latest quarterly median home price for your market, and its percentage change from the previous year.

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This housing data is provided by the Research division of the National Association of REALTORS®.

Economists Bullish On Housing Recovery

Home prices will see steady increases through 2016 starting this year, according to a quarterly survey of more than 100 economists, real estate experts and investment strategists.

The survey, conducted by research and consulting firm Pulsenomics LLC on behalf of real estate search and valuation portal Zillow between Aug. 30-Sept. 14, 2012, asked 113 participants to project the path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years.

The latest S&P/Case-Shiller Home Price Indices, which include data through June, show national home prices up 1.2 percent from a year ago during the second quarter. All of the markets in the S&P/Case-Shiller 20-city composite posted annual gains for the second month in a row, and all but two — Charlotte and Dallas — posted better annual returns in June compared to May.

This quarters survey results show optimism has increased among the participants, who in the second quarter had predicted a 0.4 percent dip in home prices this year, followed by modest increases starting in 2013 and through 2016.

Economists now forecast home prices will rise 2.3 percent in 2012 from fourth-quarter 2011, and see further cumulative rises of 4.7 percent in 2013, 8 percent in 2014, 11.4 percent in 2015, and 15.2 percent in 2016.

Source: Pulsenomics LLC

Thats an expected annual growth rate of 2.9 percent between 2012 and 2016, slightly under the 3.6 percent annual growth rate experienced in the prebubble years between 1987 and 1999.

The most pessimistic quartile of survey respondents expect home prices to rise 0.3 percent this year; the most optimistic, 4.4 percent.

“This is further evidence that were seeing a true recovery in the housing market,” said Stan Humphries, Zillows chief economist, in a statement.

“Not since mid-2010 — in the midst of the homebuyer tax credits — have we seen this group so bullish on housing. Its refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits.

“Source: Pulsenomics LLC

SOURCE: Realtor Magazine, Inman News


Some Markets See Inventories Cut Nearly in Half

The number of homes for sale in the last year is falling the most in California, with eight of the top 10 biggest drops in inventories in the last year from metro areas in the Golden State. Many California metros are also seeing asking prices on the rise in the last year, too.

Nationwide, inventories of for-sale homes continues to remain at historic lows with 1.84 million units for sale in August, which is down from 18.68 percent compared to a year ago, Realtor.com reports in its August housing data report.

“Low inventories, combined with stable list prices, suggest that the overall market may be poised for additional growth,” according to a Realtor.com release of the August housing data on 146 markets.

The following markets have seen the largest decreases to their inventories in the last year: 

1. Oakland, Calif.: -58.35%

2. Stockton-Lodi, Calif.: -45.03%

3. Fresno, Calif.: -43.13%

4. Sacramento, Calif.: -42.24%

5. Riverside-San Bernardino, Calif.: -41.75%

6. Bakersfield, Calif.: -41.36%

7. San Jose, Calif.: -41.10%

8. Seattle-Bellevue-Everett, Wash.: -41.07%

9. San Francisco: -40.15%

10. Atlanta: -37.02%

SOURCE: Realtor Daily News

Mortgage Rates Back To Record Lows

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates at or near their all-time record lows helping to keep homebuyer affordability high. The average 30-year fixed rate mortgage matched its all-time record low at 3.49 percent, and the average 15-year fixed fell to a new all-time record low at 2.77 percent.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.49 percent with an average 0.6 point for the week ending September 20, 2012, down from last week when it averaged 3.55 percent. Last year at this time, the 30-year FRM averaged 4.09 percent.
  • 15-year FRM this week averaged 2.77 percent with an average 0.6 point, down from last week when it averaged 2.85 percent. A year ago at this time, the 15-year FRM averaged 3.29 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.76 percent this week with an average 0.6 point, up from last week when it averaged 2.72 percent. A year ago, the 5-year ARM averaged 3.02 percent.
  • 1-year Treasury-indexed ARM averaged 2.61 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.82 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery. New construction on one-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010.”

SOURCE Freddie Mac

Hurdle cleared for SkyWest jets landing in Sun Valley

Spokeswoman says service could begin next spring

A report released earlier this month by the Federal Aviation Administration said a switch by SkyWest from turboprop planes to a certain type of regional jet at Friedman Memorial Airport would have “no significant impacts” on the surrounding area.

The report was an environmental assessment conducted by aviation consulting firm Mead and Hunt for the FAA. The assessment is required by FAA rules before the administration can approve SkyWest’s application for a set of operational specifications that would allow the airline to fly the CRJ 700, a small regional jet, into and out of the airport in Hailey.

The process began earlier this year when SkyWest airlines expressed interest in replacing its turboprop Embraer 120 with CRJ 700 regional jets, which would result in fewer total flights coming into the valley without a loss in available seats.

The report states that if SkyWest were to begin flying CRJ 700 aircraft into Friedman, flight frequency would drop from six daily flights in high season to three, but would add 220 seats annually.

The Embraer 120 holds 30 passengers, while the CRJ 700 carries 65. The report also states that currently, 24,000 SkyWest seats on flights into the airport every year are vacant, and that the difference in the number of available seats is not expected to have an impact on the community.

The report also states that jet service is likely to be more reliable than service with turboprop planes. Though the report does not specify, Baird said in an interview that the regional jets perform better and faster than the current aircraft.

“The CRJ 700 is a super-performing aircraft,” he said. “The anticipation is that it will be able to descend lower in the future [below cloud cover, if needed] and still meet all FAA requirements for climb-out.”

Baird said the jet is also capable of flying faster, and therefore might have more time to wait on the ground for a break in the weather before a flight might be cancelled or diverted.

Brad Rolfe, spokesman for Mead and Hunt, said air quality is not expected to be impacted significantly by the jets, as the valley’s air quality is so good and the number of flights is so low that there is likely to be no significant change.

Rolfe also said the overall impact of noise was likely to be less, due to the fact that the number of daily flights would be cut in half.

“There will be a slight reduction in total noise,” he said, but added that he did not know if the CRJ 700, as an aircraft, was quieter than the Embraer 120.

The report is available for public review and comment through Oct. 12, when Baird will collect comments and send them to the FAA. Comments can be sent to rick@flyfma.com or in writing to Rick Baird, Friedman Memorial Airport, Box 929, Hailey, ID 83333.

After all comments are submitted, the FAA will come out with a final environmental assessment. If approved, the report would be added to SkyWest’s application for an approval of operational specifications, which also must be approved before the CRJ 700 can begin flying into the valley. The operational specifications, if approved, would not give the green light to other airlines to fly the CRJ 700 into Sun Valley, nor would it allow other types of regional jets to begin using Friedman Memorial Airport.

Pate and Baird said that it’s up to the airline when the jet, if approved, would begin flying into the airport. Pate said it could be as early as next spring, but Baird was more hesitant to comment.

“It’s completely up to the company business plan when they start,” he said. “[The report] is another step in the process.”

SOURCE: Idaho Mountain Express

US Existing Home Sales Jump to 2-Year High

The pace of U.S. home resales rose in August to its fastest in over two years and groundbreaking on new homes also climbed, hopeful signs that a budding housing market recovery is gaining traction.

The National Association of Realtors said on Wednesday that existing home sales increased 7.8 percent last month to an annual rate of 4.82 million units last month.

That was the fastest annual rate since May 2010 and well above analysts’ expectations of a 4.55 million-unit rate.

While the broader U.S. economy appears to be losing steam, housing has gained traction and has become a relative bright spot.

“Today’s data are another indication of improvement in the U.S. housing market which, for really the first time post-recession, is becoming a positive for economic growth,” said Andrew Grantham an economist at CIBC World Markets in Toronto.

Nationwide, the median price for a home resale rose to $187,400 in August, up 9.5 percent from a year earlier as fewer people sold their homes under distressed conditions.

The nation’s inventory of homes — those for sale on the market — rose 2.9 percent during the month to 2.47 million.

The price increase is measured against August 2011, and since then distressed sales have fallen to 22 percent of total sales from 31 percent. Distressed sales also fell in August of this year compared to the prior month.

U.S. stocks edged higher following the existing home sales data, while prices of U.S. government debt trimmed gains.

A separate report from the Commerce Department showed U.S. housing starts rose last month to a seasonally adjusted annual rate of 750,000 units. That was less than expected, as groundbreaking on multifamily home projects fell. Still, the trend in housing starts continued to point to recovery and many economists think home building will boost economic growth this year for the first time since 2005.

Starts were up 2.3 percent from the prior month. July’s starts were revised to show a 733,000-unit pace instead of the previously reported 746,000.

Economists polled by Reuters had forecast groundbreaking in residential construction rising to a 765,000-unit rate. Compared to August last year, residential construction was up 29.1 percent.

“We continue to see positive signs emerging from the housing market, suggesting that the entire market, not just individual submarkets, are stabilizing and steadying themselves for future growth,” said John Tashjian, Principal at Centurion Real Estate Partners in New York.

Housing starts are now a third of their 2.27 million-unit peak in January 2006. The housing market, the Achilles heel of the recovery from the 2007-09 recession, is on the mend.

Sales have been creeping up and the house price decline has bottomed, with a tightening supply of properties on the market raising prices in some metropolitan areas. In addition, home-builder sentiment touched a six-year high in September.

Though residential construction accounts for only about 2.5 percent of GDP, economists estimate that for every new house built, at least three new jobs are created.

A Missing Piston

The Federal Reserve moved last week to bolster the economy, announcing it would buy $40 billion in mortgage-backed securities per month until the outlook for employment improved significantly.

The Fed said it hoped the purchases would in part help to unstick a housing sector that Fed Chairman Ben Bernanke called “a missing piston” in the U.S. recovery.

Analysts believe the third round of bond purchases, dubbed QE3 on Wall Street, will support the housing market.

“Now it’s up to the banks to stop sitting on their hands and start lending. While rates are at historical lows, borrowers still have a very difficult time accessing the mortgage markets,” said Tashjian.

A separate report from the Mortgage Bankers Association showed applications for loans to buy homes fell last week, but record low mortgage rates boosted demand for refinancings.

Last month, groundbreaking for single-family homes, the largest segment of the market, rose 5.5 percent to a 535,000-unit pace — the highest level since April 2010. Starts for multi-family homes fell 4.9 percent.

Building permits slipped 1 percent to a 803,000-unit pace in August after surging the prior month to the highest in four years. July’s permits were unrevised at 811,000 units. Economists had expected permits to fall to a 796,000-unit pace.


VIDEO: Robert Shiller Not Ready To Call Housing Bottom Yet

Robert Shiller says things are improving, but he will have to see one full year of appreciation before he will call a bottom to the housing market.

Why you shouldn’t pay down your mortgage faster

The impulse to pay off your mortgage more quickly than you need to is understandable, especially these days.

Interest rates are near historic lows, so it’s possible to replace a 30-year mortgage with a 15-year loan and still afford the monthly payments. Or, if you’ve already refinanced at a dirt-cheap rate, you can take those savings and pay down your principal faster.

But the allure is more emotional than financial. Mortgage debt provides great financial flexibility, and paying it down fast probably isn’t the best way to grow your nest egg.

“Generally speaking, there’s no advantage to paying down a mortgage earlier than you need to,” says Greg McBride, senior financial analyst at Bankrate.com

That’s because the interest on mortgages is low, it helps lower your taxes, and paying less every month gives you chance to reinvest the savings in more productive ways. Among the better options: paying down higher-interest credit cards, or saving for retirement.

Start with rates on 30-year mortgages. The average rate is 3.66 percent, close to the lowest level since the 1950s.

But in reality you pay an even lower rate when factoring in tax breaks. The federal government gives borrowers a break by allowing them to deduct mortgage interest from their income. And if instead of using the extra cash to pay down your mortgage you put it in a tax-advantaged retirement fund like a 401(k), your taxes are reduced even further.

Jim Sharvin, a certified public accountant with the firm McDowell Dillon & Hunter in Torrance, Calif. says if you are thinking of paying down the principal of a mortgage more quickly than necessary — either by switching to a shorter-term loan or sending extra principal payments to the bank — consider first doing the following:

* Pay down all high-interest debt, like a credit card. It’s the first priority because it’s very expensive debt, and it has no tax or other financial benefit.

* Build a cash cushion to cover unexpected expenses or loss of income.

* Bolster your retirement savings by putting the maximum amount allowed by law into a tax-sheltered plan such as a 401(k), a 403(b), or IRA. This also reduces your taxes.

* Fund a college savings program such as a 529 plan for your children, especially if you live in a state with an income tax. These programs shelter the money from state and local income taxes.

Once these priorities are taken care of, the next step is a matter of preference.

You could take the money you borrowed at 3 percent and try to reinvest it in a way that earns more than that. If you have time to ride out ups and downs of the market, 3 percent should be relatively easy to beat.

Or you could pay down your mortgage quickly. If you are just going to park your money in money market funds or certificates of deposit that yield less than 3 percent, it makes sense to pay down that mortgage debt. And it sure would be nice to have no mortgage when you retire.

There are other situations where it’s smart to pay down a mortgage early.

The first scenario is when you’re trying to eliminate the cost of private mortgage insurance, or PMI. That’s the insurance you must carry if you put down less than 20 percent on your home. It makes sense to speed up payments on your principal until you’re allowed to drop the insurance.

It’s also good to pay down your mortgage if you don’t have the discipline to reinvest extra money wisely. Handing the money to your mortgage company is one way to protect you from yourself.

Even if paying down a mortgage fast is the best choice, there are smarter ways than opting for a 15-year loan. That’s because the shorter term locks you into a higher payment, and that can become a burden if money gets tight.

A 30-year loan gives you options. If find yourself with extra money, then pay down the principal as aggressively as you like. But if you’re short, scale back to the regular monthly amount. That flexibility is probably worth the slightly higher interest rate on the 30-year loan these days, Sharvin says.

To compare a 15- and 30-year mortgage, consider this example: One homeowner with a $200,000 loan chooses a 3.75 percent 30-year mortgage, which costs $926 per month. Another chooses a 3 percent, 15-year mortgage, which costs $1,381 per month.

The homeowner with the 30-year loan ends each year with $5,460 in savings from lower payments and a tax break of about $770. He puts all that money into a 401(k), saving himself an additional $1,560 in taxes. That’s a total annual savings of about $7,800. If he earns a 5 percent return over 15 years, the homeowner will have accrued $170,000.

The homeowner with the 15-year loan will have no extra savings after 15 years. But then his mortgage payments will end. He’ll try to catch up, but he’s starting from so far behind that by the time 30 years are up – and both loans are paid off – the homeowner with the 30-year loan will have $124,000 more in savings.

SOURCE: Associated Press

Mortgage fees could go up in some states

Borrowers in some states may face additional mortgage fees depending on what a federal housing regulator will say in a report expected to be released as soon as this week.

The Federal Housing Finance Agency plans to release a paper that examines whether it will change the way it collects fees for guaranteeing credit risk into one that depends on state-specific mortgage default risks, a situation that could also impact investor appetite in the mortgage market.

Fannie Mae and Freddie Mac buy whole mortgages from banks and other direct lenders and package them into bonds and mortgage-backed securities.

They charge investors a “guarantee fee” in return for backing the bonds they sell. The agency last month hiked the across-the-board fee they charge on single-family mortgages by an average of 10 basis points.

The fee changes are intended to limit credit risk after costing taxpayers $188 billion.FHFA acting director Edward DeMarco said last week that the agency will release a study and seek input from observers about whether it makes sense to impose an upfront fee on mortgages Fannie and Freddie buy in states where the two firms are “likely to incur default-related costs that are significantly higher” than the national average.

The shift would be a major change from the way the guarantee fee currently works, which seeks to smooth out regional differences in mortgage guarantee pricing.

Thomas Cronin, managing director at the Collingwood Group in Washington, said that in states such as New York, a so-called judicial state because it allows court processes for borrowers in foreclosures, it may take three years for a foreclosure to be completed. Meanwhile, states such as California, a non-judicial state that does not permit court-supervised reviews of foreclosures, a foreclosure can clear in months.

Idaho is a non-judicial state.

Cronin notes that because Fannie Mae and Freddie Mac must take much longer to recover their investment in a judicial state, the cost of foreclosure is much higher there, and therefore the fee the firms charge for guaranteeing a mortgage in such states should be higher.

For example, Fannie and Freddie could charge an estimated 10 basis points in guarantee fees equal to $200 more a year to guarantee a $200,000 mortgage in a judicial state – a cost that will be passed on to borrowers, Cronin said.However, Susan Wachter, professor of real estate and finance at the University of Pennsylvania, said that state-by-state variations in guarantee risk pricing would be driven much more by large differences in each state’s housing market and economy than by foreclosure rules. She said that a regional risk-based system will hike mortgage interest rates even more in some states and could create a much more volatile system nationally.

SOURCE: Wall Street Journal

Stocks: Attention shifts to housing

Investors will look toward the housing market this week, after the Federal Reserve announced it would buy $40 billion of mortgage-backed securities each month until conditions improve.

The central bank hopes that the much-anticipated quantitative easing, or QE3, will “put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” according to the Fed’s official statement issued Thursday.

Housing legitimately was recovering before, but now it’s going to go up much quicker

Housing data will take center stage, especially with so much of the Fed’s emphasis placed on bolstering the housing market. Investors will digest reports on mortgages, housing starts, building permits and existing home sales.

The housing market has been gaining strength in recent months. Home values are back to levels not seen since the beginning of the Obama administration and the number of homeowners who are underwater on their mortgage is down 11% since last year, according to a Department of Housing and Urban Development (HUD) and Department of the Treasury report out last week.

While QE3 won’t impact the data coming out this week, analysts say that the anticipated good news will foreshadow even better news that may come once the Fed’s plan kicks in.

“Housing legitimately was recovering before, but now it’s going to go up much quicker,” said Uri Landesman, president of Platinum Partners. “People are going to look forward to the coming numbers after the Fed starts buying bonds.”

Investors will also be keeping an eye on housing stocks, which rallied last week on the Fed news. Shares of homebuilders Hovnanian (HOV), Pulte Group (PHM), Lennar (LEN) and Toll Brothers (TOL) got a boost from the Fed’s announcement.


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Market Statistics

  • 12.74,11.73,10.7,9.6,9.29,9.02,8.54,8.22,7.85,7.78,8.81,8.94

Information is deemed to be reliable, but is not guaranteed. © 2018