Consumer confidence and home sales surge, hinting at a big 2015 for housing

By Schuyler Velasco

New home sales surged 11.6 percent last month to a 481,000 annualized pace, according to data released Tuesday by the Commerce Department. That was well above economists’ expectations of a 450,000 December pace and a bounce back from November, which was revised downward to a 431,000 pace.

It was the best December for the new home market in nearly six years.

Home prices, too, are going up across the US, albeit more slowly than they were a year ago. In a report also released Tuesday, prices on S&P/Case Shiller’s national index inched up 0.8 percent in November and 4.7 percent year-over-year. But slower price increases, analysts say, should not be interpreted as a sign of lessening demand. 

“This number paints a misleading picture of the housing market,” IHS Global Insight economists Patrick Newport and Stephanie Karol write in an e-mailed analysis. “All in all, evidence suggests that demand is strong nationwide: both the S&P/Case-Shiller national index and the FHFA measure [another leading index] showed yearly home price growth accelerating in November. By these more comprehensive measures, price growth is stabilizing in the 4-5 percent range: a healthy sign.”

Recent sales numbers, too, seem to bear out that logic. New home sales make up a relatively small portion of the overall market, but the much-larger pre-owned market also perked up in December, rising 2.4 percent on the month.

Both gains capped off a relatively lackluster 2014 (new home sales improved just 1.2 percent over 2013), and gave economists more evidence that 2015 could be a big improvement for the housing market. Both builders and consumers are growing more and more confident about the economy overall; in data also released Tuesday, The Conference Board’s index of US consumer confidence surged to 102.9 in January, blowing past expectations of a 95.5 reading. Monthly gas prices at or below $2.00 per gallon in most of the country, a strong dollar, a healthy job market, a pickup in wages (finally), and new rules easing up on FHA mortgage insurance premiums that could benefit first-time buyers all portend a much more buyer-friendly market in the coming year.

Earlier this month, measures of builder optimism and housing starts also came in strong, suggesting that the construction industry is readying for a pickup in housing demand in the coming months.

Economists caution that one strong month is hardly a trend, especially in the case of a small, sometimes-volatile measure like new home sales. But December’s data is reason for cautious optimism.

“As more first-time buyers are empowered to purchase an existing home, the sellers of those homes will be in a better position to put down a deposit on a new one,” Newport and Karol write. “Since we expect wage growth to support additional household formation in 2015, these forces will help to clear some important obstacles which have restrained demand in recent years.”

$15,000 Down Payment Grants Available 11/21/2014 & 11/22/2014 Only

Home buyers can apply for a $15,000 dollar down payment grant Friday and Saturday at the Duke Energy Center as part of the Wells Fargo NeighborhoodLIFT program.

More than 700 prospective Home buyers have registered to attend the event. With the NeighborhoodLIFT program, the $15,000 dollars in down payment assistance will help low to moderate income people with their dream of owning a home.

As of this month, Wells Fargo and Neighbor Works America have helped more than 8,000 low to moderate income families become homeowners. The program started in 2012 and has invested $220 million in down-payment assistance, community grants and 30 housing markets across the country impacted by the housing downturn.

The program can be used with any approved lender and for 203K renovation loans to make improvements as part of a new mortgage purchase loan. Applicants must complete a home buyer education and have a contract to purchase a home to be eligible. About two-thirds of LIFT program Home buyers earn 80% or less than the area median income.

Friday’s event begins at 10 a.m. and runs through 7 p.m. It will be held inside the grand ballroom at the Duke Energy Center. The program also runs Saturday and walk-ins are welcome. You can find more information on the NeighborhoodLIFT program here.

Some Major Benefits of Using a Real Estate Agent

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The transactions in real estate are not very easy and simple for people at times. So, using the services of real estate agents is utmost essential for all types of property needs because they can take away all the stress involved in the process. The good Surrey estate agent will always work in coordination with their clients and assist them in each step of property transaction. If you don’t want to face any kind of issue while selling or buying property, then ensure to use the services of real estate agents. There are many benefits of using estate agents while making any property transactions. Some of the benefits of mentioned below.

They have specialization in Industry

The real estate agents have expertise and specialization in the industry which can be beneficial in all your property transactions. They have the skills to estimate the real value of the property and understand the real estate market better than anyone can. They also have the negotiation skills required during any real estate transaction.

Minimize your risk

Another advantage of hiring real estate agent is that they reduce your risk of making mistake in purchase process. If you hire the services of any reliable and experienced real estate agent then it will minimize the risk of getting caught in any type of property fraudulent and thefts. They will also help you to find the best property available for you, which is fairly priced and safe for you.

Removes all headache and hassle

The most important advantage that one can enjoy by hiring a real estate agent is that they take away all the hassles and stress involved in the process of selling and buying property. Experienced estate agent has in-depth knowledge about the market and let you know the correct time to invest in property. If you hire their services then all the efforts required for understanding and collection information will be saved.

Offers customized services

Apart from offering property related services, they also offer you customized services to suit your needs. They will listen to your specific need and offer you services accordingly to suit your need and budget, thus offering you a satisfactory service.

So, these were some of the advantages of hiring the services of a real estate agent. But, it is very crucial for you to ensure that the estate agent you have hired is reliable and experienced in the field of real estate and understands the market well.

Lock in or Float?

What should a borrower do?

John Stearns, a senior mortgage banker with American Fidelity Mortgage near Milwaukee, expects rates to stay low through the fall and winter as a way for lenders to entice people to buy during the traditionally slow time of year. Already, demand is falling off.

The volume of loan applications dropped by 7.2 percent this week from the prior week, to the lowest level in almost 14 years, according to the Mortgage Bankers Association.

Stearns’ advice is to lock any mortgage rate if you plan on closing in a week or two. “Anything longer than that, float,” he says. “I don’t see rates going up anytime soon.”

Pava Leyrer, manager of training and implementation for Northern Mortgage Services in Grandville, Michigan, and Norris both recommend a rate lock to keep the guessing and stress out of an already stressful situation, especially for those borrowers who have a payment that is at the upper end of their budget. One small move could mean a larger monthly payment or could require more cash at the table to close.

“If the market takes a dramatic change lower, most lenders will work with you if you’re in a lock,” says Leyrer. “You’re hedged each way. So move on and get your loan done.”

Hubdin App

Hubdin App is changing the way we search for homes

  on Tuesday, 02 September 2014      

Finding your next home is never an easy process. The real estate searching tools out there effectively provide users with the means to do just that, search. However, we believe that there is much left out in the experience of home-buying/renting.  Hubdin is introducing a better way to find a home, by making the experience a social one. This free app allows users to search for their next home utilizing social media metrics to match them with the perfect “Hub.”

The Hubdin App let’s you:

  • Home Search – View properties using search filters including price, bedrooms, bath, for sale/rent, etc.
  • HubGrade – Hubdin gives each home seeker a unique neighborhood or city score based on their lifestyle and social activity.
  • Connections – Users can see where in the area their friends have been and ask them about the local scene directly from the app.
  • Neighborhood Discovery – Hubdin shows important neighborhood information, like local job openings, nearby restaurants and average property values.
  • Accurate Listings – All homes listed on Hubdin come from MLS services and are refreshed multiple times a day, meaning they are 100 accurate.
  • Commute Times – Users can calculate what their commute time would be like from a potential new home to important places like work or school.
  • Tagging – Sharing homes becomes simple. Users can tag friends, family and roommates directly in a listing.
  • RelocateMe – Enter what’s important to you in a city and Hubdin will match you with the top 10 cities that are a match for you.

Avoiding A Low Appraisal On Your Home

Written by Sheila Newton

on Monday, 01 September 2014

There are things owners can do to avoid having their home appraised at a lower value than the selling price.  Owners should take the time to understand the things they can do to influence the appraisal and decrease the odds of a lower appraisal than selling price. Here are a few ways that home owners can help their appraisal instead of hurting it.
• Leave the home tidy. Having an unkept exterior or interior can cause an appraiser to decrease the value on the appraisal. Sellers should remember that  curb appeal is also important for an appraisal ( not just for the buyers).

 

• Complete all remodeling projects.  If there are any projects started, they must get done before the appraisal. If there is no way for that to happen, make sure to let the appraiser know what is being done and when it will be completed. Otherwise, the project will hurt the appraisal instead of helping it.

 

• List improvements or upgrades made to the home. Make a list of all upgrades and home improvements made to the home and make sure the appraiser has a copy of it. Some items, like a new roof, may not necessarily help raise the appraised value, it does help the appraiser to know how new an item is… also, other items might actually increase the value so it never hurts to include them.

Four reasons to buy a home now

Thinking of buying a home? Keep reading to find out why you should take action sooner rather than later.

Yahoo Homes

By Danielle Blundell                                 August 6, 2014 8:29 PM
                                  

Four reasons to buy a home nowFour reasons to buy a home now

If you’re thinking about purchasing a home, sooner might be better than later when it comes to favorable conditions for buyers.

Buying a home is a major financial decision that you shouldn’t rush into. But that doesn’t mean you should take your sweet time either. The real estate market is volatile, and truth be told, this year might be your last chance to affordably buy a home for awhile.

“If you qualify for a mortgage and choose not to buy now, you will be kicking yourself in 12 months,” says Anthony VanDyke, president of ALV Mortgage in Utah.

Thanks to a dearth of inventory, home prices are projected to increase by 6.3 percent nationwide from April 2014 to April 2015, according to a recent study by Corelogic, a leading global property information, analytics, and data-enabled services provider.

Just how much could that increase cost you? More than you might think.

“On a $300,000 house today, the same house will cost you $318,000 in one year,” says Vandyke.

The difference isn’t mere pocket change. So if you’re in the market to buy a home, read on for more reasons why this year could be a prospective homeowner’s last chance to buy an affordable home.

Reason to Buy Now #1: Low for-sale inventory means homes will become more expensive

A low inventory of homes for sale keeps house prices up, according to California-based mortgage banker, Michael Regan, of the Regan Team.

“It’s simple supply and demand,” says Regan. “The less you have of something, the more expensive it will become.”

Just how did we get into this increasingly low-supply, high-price environment? According to Regan, there are a few causes.

“With the limited housing inventory in many markets, and with last year’s home price increases, many people couldn’t afford to buy a home and rented instead,” he says. “Because of the Great Recession, the building of new homes and rental units was almost nonexistent for years and didn’t keep up with population growth.”

With a shortage of housing and rental units available, Regan says housing prices and rents have increased, leading to affordability issues. The good news is that this supply and demand issue will solve itself once more housing units are built to accommodate the population growth and young families looking for homes, says Regan. But the bad news is that it could take a while, and prices will climb until then. So now might be a good time to buy, before prices peak, he explains.

Reason to Buy Now #2: The Fed plans to taper off bond-buying program in October

With the economy improving and the unemployment rate dropping, the Federal Reserve tentatively plans to end their bond-buying program in October. The end of the program, which was aimed to keep interest rates low, is expected to result in higher interest rates, and any increase in interest rates could create even less favorable conditions for buyers, says Van Dyke.

According to the MBA Mortgage Finance Forecast, interest rates on 30-year fixed-rate mortgages are projected to jump half a percentage point in early 2015 from the year before.

On a 30-year conventional mortgage of $300,000, an increase from 4.4 to 4.9 percent means paying an extra $90 each month or more than $30,000 in interest over the life of the loan. So that half point difference can translate into a hefty chunk of cash for any home buyer.

“Rising rates can have just as big an impact on affordability as does rising prices due to low housing inventory,” says Ellen Davis, a Maryland-based senior mortgage loan originator with Corridor Mortgage Group.

When mortgage rates increase, Davis says borrowers experience greater difficulty qualifying for a home loan.

“Higher interest rates increase a borrower’s overall debt to income ratio, and depending on their current situation, they may end up no longer qualifying based on underwriting guidelines. Even if they do qualify, they may not be comfortable with the higher monthly debt payment and may choose to reduce the amount of home they are willing to purchase or put off the purchase indefinitely,” says Davis.

So what’s the take home here?

“While you’ve missed the bottom of the market with home prices, interest rates are still very low,” according to Regan. Don’t risk rates going up, he says, which can ultimately cost you big on your home’s price tag.

Reason to Buy Now #3: The current economy’s flat wages threaten to make homes less affordable

When was the last time you heard of companies giving out big bonuses and substantial salary raises? Save a few high-growth industries, flat wages have been the rule, not the exception. If home prices continue to increase, housing could in theory become less affordable if your take-home pay doesn’t keep up with its growth.

“History has shown us that there is always the chance that home prices are pushed out of reach when wages are flat,” says Davis. “Then at some point, some sort of correction in wages or housing occurs, and the correlation between the two sectors becomes more sustainable.”

The question then becomes, when will this tipping point occur, and can you afford to wait?

According to Davis, homes will be more affordable once all areas of the market – stocks, bonds, home prices, wages, government spending and debt, etc. – are working together to create jobs. And better employment figures translate into more income, leading to wealth, economic growth, and ultimately consumer confidence, which in large part helps drive home purchases, she explains.

Sounds ideal, right? Well, don’t hold your breath. It’s impossible to predict when this synergy will take place, so now is as good a time as any to buy a home you can comfortably afford, says Davis.

Reason to Buy Now #4: Beat other home buyers to the punch before competition heats up

Maybe you’ve been renting and managed to save up a nice nest egg. Or maybe you’ve just outgrown your current space. Well, you might want to take the plunge and buy a home once you’ve found something that you can afford.

Why now? Because the housing market is about to get even more competitive. According to Davis, the pent-up demand of younger professionals, who moved back in with their parents during the recession, is about to explode. And as these young people move out and form new households of their own, they will drive up housing demand, she explains.

This eager subset of buyers will create some steep competition for homes, especially if they have been saving up to make larger down payments or high ticket offers, says Davis.

“If the current homes on the market have more potential buyers, bidding wars develop, and the purchase prices are driven up,” says Davis. While the competition helps the overall home values in the area, it also inflates prices to the point where homes are no longer affordable for a large percentage of potential home buyers, she explains.

And it’s only going to get worse as more and more young professionals feel ready to buy, so it’s a smart move to buy now and avoid the potential price gouging altogether. Once you’re officially a homeowner, you can welcome rising prices, because your home’s value will shoot up, according to Davis. “This is good for the individual homeowner as well as for the broader economy,” she says.

Mortgage Interest Rates In Favor of Buyers at Bank of America, Wells Fargo, and SunTrust

Bank of America agreed to  a settlement worth $650 million on Tuesday with the American International Group for resolving the claims of residential mortgage-backed securities. All these legal costs reduced the bank’s income from $4 billion (2013) to $2.3 billion in 2014.

Bank of America

The 30 year fixed rate home loan packages are coming out at an interest rate of 4.125% and are backed by an annual percentage rate of 4.281%. The mortgage provider highlights the popular 15 year fixed rate mortgage deals in its loan books at an interest rate of 4.000% and an APR yield of 4.187%. 5 year adjustable rate mortgage home loan packages, are now traded at a starting rate of 3.375% and an annual return of 3.554%.

30 year fixed rate mortgage loans are being advertised at an interest rate of 4.250% and an APR yield of 4.364% today. The relatively shorter, 15 year refinancing fixed rate mortgage options are now up for grabs at a lending price of 4.125% and an APR yield of 4.271% for the initial years of the home loan period. The seekers of variable interest rates can opt for the ideal 5 year refinancing adjustable rate mortgage plans, which are now traded at a starting interest price of 3.375% and are carrying an annual return rate equivalent to 3.619% on the initial amount of the loan secured from the bank.

Wells Fargo

30 year fixed rate mortgage loans are being advertised at a lending rate of 4.375% and are backed by an annual percentage rate of 4.586%. 15 year fixed rate mortgage home loans are traded at an interest price of 3.625% and an APR yield of 3.835% on July 18, 2014.

30 year fixed rate mortgage home loans can be spotted at a lending rate of 4.250% and an APR yield of 4.335% today. The 15 year refinancing fixed rate mortgage plans can now be locked in at an interest rate of 3.500% and an annual percentage rate of 3.647%.

SunTrust

30 year fixed rate mortgage home loan deals are traded at an interest rate of 4.375% and an annual percentage rate of 4.4853%. 15 year fixed rate mortgage packages are traded at an interest rate of 3.300% and an APR yield of 3.5109% today.

The 5 year adjustable rate mortgage home loans are priced at a starting interest rate of 3.200% and an APR yield of 3.0908% to start with. The more flexible, 7 year adjustable rate mortgage home loans can be locked in at an interest rate of 3.750% and an APR yield of 3.3954% this Friday.

Disclaimer: The rates quoted above are basically the average advertised by a particular lending company. No guarantee of taken from the lender’ aspect whether the borrower will qualify for the mortgage rates mentioned in the article. The lenders dole out interest depending upon various facets, some of which may be unique to the borrower. This website does not engage in the sale or promotion of financial products and makes no claims as to the accuracy of the quotation of interest rates.

May/June 2014 Market Pulse

A look at the major economic indicators heading into the summer months.

May 2014

Spring is in the air and so is increased confidence in housing markets. But REALTORS® say tight inventories and hard-to-get credit remain drags on business. Two factors hurting credit availability are federal mortgage rules (qualified mortgage ability-to-repay rules) that took effect at the beginning of the year and increases in FHA premiums. On the plus side, fewer transactions are hitting snags because of appraisal problems.