Archive for July 2013

June Marks 20 Months of Declines for Foreclosure Inventory

July 31, 2013

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This is because most of the cases of delinquent loans have already been foreclosed. Please read the article below and let me know what you think.

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Completed foreclosures and distressed inventory continued their downfall in June, CoreLogic reported Tuesday.

Data for last month showed 55,000 homes were lost to foreclosure, down 20 percent from June 2012. The decrease represents the 19th month-in-a-row completed foreclosures have ticked down. However, on a monthly basis, completed foreclosures inched up by 2.5 percent.

Since the financial crisis began in September 2008, about 4.5 million homes have been lost to foreclosure.

The level of foreclosure inventory also came down in June. According to CoreLogic’s estimate, about 1 million homes were in some stage of foreclosure, which represents a 28 percent annual decrease and a 2.9 percent decline from May 2013. The yearly decline marks the 20th consecutive month inventory has trended down.

Serious delinquencies are also posing less of a threat to distressed inventory.

“So far this year, distressed inventories have fallen dramatically, down 14.4 percent, and serious delinquencies are down 15.9 percent,” added Dr. Mark Fleming, chief economist for CoreLogic. “In the first six months of 2013, the stock of seriously delinquent mortgages has dropped by 412,000.”

Anand Nallathambi, president and CEO of CoreLogic, described June’s improvement as “broad-based,” noting 49 states have posted annual declines in foreclosure rates.

“The housing market is clearly on the mend, but we expect the ultimate conclusion of the present housing down cycle to be another several years away,” he added.

To read the complete article – please use the link below.

Declines for Foreclosure 

Weak Household Formation Hampers Housing

July 31, 2013

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Between the high number of foreclosures, lack of inventory, the increase in home prices and higher mortgage rates this is really no surprise. Please read the article below and let me know what you think.

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The number of households owning homes rose a scant 32,000 in the second quarter, but the homeownership rate remained at 65.0 percent, the lowest level in 18 years, the Census Bureau reported Tuesday.

At the same time, the Census Bureau data showed the number of new household formations dropped dramatically in the first half of the year, an average of about 500,000 new households per month compared with 1.4 million new households per month in 2012.

The homeownership rate peaked at 69.2 percent in the second quarter of 2004. The rate measures the proportion of households owning their primary residence and is computed by dividing the number of household that are occupied by owners by the total number of occupied homes.

The Census Bureau also reported the homeowner vacancy rate fell to 1.9 percent in the second quarter from 2.1 percent in the first quarter. The homeowner vacancy rate is the proportion of the homeowner inventory that is vacant and for sale.

The Census data paints a grim picture for the home sales market, which has already been struggling against mortgage restrictions and weak inventory. The Census report suggests homeownership may have lost its place in the “American dream” as a new generation of potential home buyers may have become wary of homeownership as a result of the wave of foreclosures in the last several years.

If the monthly average of new households continues for the rest of the year, it would mark the weakest year for household formation since 2010, when the monthly average was 443,500 new households.

To read the complete article – please use the link below.

Weak Household Formation

Weak Household Formation Hampers Housing

July 31, 2013

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Between the high number of foreclosures, lack of inventory, the increase in home prices and higher mortgage rates this is really no surprise. Please read the article below and let me know what you think.

The FHA Condos Approval Company, Inc.

Please +1 Us on Google, Follow Us on Twitter or Like Us on facebook

The number of households owning homes rose a scant 32,000 in the second quarter, but the homeownership rate remained at 65.0 percent, the lowest level in 18 years, the Census Bureau reported Tuesday.

At the same time, the Census Bureau data showed the number of new household formations dropped dramatically in the first half of the year, an average of about 500,000 new households per month compared with 1.4 million new households per month in 2012.

The homeownership rate peaked at 69.2 percent in the second quarter of 2004. The rate measures the proportion of households owning their primary residence and is computed by dividing the number of household that are occupied by owners by the total number of occupied homes.

The Census Bureau also reported the homeowner vacancy rate fell to 1.9 percent in the second quarter from 2.1 percent in the first quarter. The homeowner vacancy rate is the proportion of the homeowner inventory that is vacant and for sale.

The Census data paints a grim picture for the home sales market, which has already been struggling against mortgage restrictions and weak inventory. The Census report suggests homeownership may have lost its place in the “American dream” as a new generation of potential home buyers may have become wary of homeownership as a result of the wave of foreclosures in the last several years.

If the monthly average of new households continues for the rest of the year, it would mark the weakest year for household formation since 2010, when the monthly average was 443,500 new households.

To read the complete article – please use the link below.

Weak Household Formation

Report: GSE Reform Won’t Take Shape for Another Few Years

July 30, 2013

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Now that the GSE is profitable it will be business as usual until they are losing money again.  Please read the article below and let me know what you think.

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Although policymakers have been busy introducing legislation to diminish the role of the GSEs, analysts at Moody’s Investors Service “believe GSE reform will not take place for at least a few more years.”

In June, Senators Bob Corker (R-Tennessee) and Mark Warner (D-Virginia) led efforts to introduce legislation to wind down Fannie Mae and Freddie Mac in five years.

The Senate bill proposes to replace the GSEs with a federal agency called the Federal Mortgage Insurance Corporation (FMIC) that would provide an explicit government guarantee on mortgage securities. Though, not all loans will receive the government guarantee, and companies that do must take at least a first loss position on 10 percent of the security to be eligible.

Then came the Protecting American Taxpayers and Homeowners Act (PATH) from the House of Representatives Financial Services Committee in July.

The act also aims to dissolve the GSEs in five years while creating a housing finance system that is supported by the private sector. The act passed the House Financial Services Committee last week.

Unlike the bill from Corker and Warner, PATH would not have a federal agency replace the GSEs, but instead create a non-government nonprofit called the National Mortgage Market Utility (NMMU). The utility would develop “best practices” for the origination, servicing, pooling and securitization of residential loans. The utility would not originate, service, or guarantee any MBS. The utility will also take over the single mortgage securitization platform that the GSEs and the FHFA are developing, Moody’s explained in its most recent ResiLandscape report.

Despite efforts from legislators, Moody’s does not foresee GSE reform happening within the next few years, stating “catalysts for near-term reform are not very strong, especially now that the GSEs have returned to profitability.”

Moody’s analysts also noted broad political support for an alternative is lacking, while the GSEs’ mission to provide stability and affordability to the mortgage market does receive support.

“Furthermore, the alternative approaches have focused on re-shaping the $10 trillion residential mortgage market, which will be difficult given its size and importance to the US economy,” Moody’s stated.

To see the original article – please use the link below.

GSE Reform

Pending Home Sales Index Falters in June

July 30, 2013

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This is just a case of normal rise and fall in a recovering home market. It is not something to be overly concerned about. Please read the article below and let me know what you think.

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Responding to higher mortgage rates, the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI) slipped 0.4 percent in June to 110.9, the group reported Monday.

Economists had expected the index to drop to 110.7, which would have been a 1.4 percent decline from May’s originally reported 112.3. The May index was revised down to 111.3.

With the revision, the May index, originally reported as the highest in six years, matched the level of April 2010.

The index covered the same month in which new home sales, reported last week by the Census Bureau and HUD, surged to a five year high. New home sales are tracked when buyers sign contracts, just as the pending home sales index is compiled for contracts on existing single-family homes. New home sales rose as prices slipped; prices of existing single-family homes have been increasing even as mortgage rates have also been rising.

Indeed, the higher mortgage rates were seen as one factor in the increase in new home sales as potential purchasers rushed to lock in loans before mortgage rates rose further. That appeared to not be the case with existing homes.

The dip in the June index continued a monthly pattern of alternating increases and decreases in the PHSI, which has increased in odd-numbered months and decreased in even-numbered months since last December, though it also fell in November.

The PHSI is considered an indicator of home sales (closings) reported by the NAR. Existing-home sales fell in June as the PHSI for April dropped. The index rose in March, and home sales increased in May.

Even with the monthly decline, the PHSI was up 10.9 percent over June 2012, the 26th straight month of year-over-year increases. New home sales have been up on a yearly basis for 21 straight months and in 24 of the last 25 months.

The index improved in June in only one of the four Census regions, increasing 3.3 percent in the West to 114.2 on the heels of a 16.8 percent spike in May. The index in the West is up 4.4 percent in the last year.

The index was flat at 87.2 in the Northeast, up 12.2 percent in the last 12 months. The index fell 2.1 percent to 118.3 in the South—up 9.5 percent since June 2012—and dropped 1.0 percent to 114.3 in the Midwest, 19.5 percent ahead of a year ago.

The PHSI is based on a sample of about 20 percent of transactions for existing-home sales. An index of 100 is equal to the average level of contract activity during 2001, the base year.

To see the original article – please use the link below.

Sales Index Falters

Eight in 10 Americans Say Owning Is a Good Financial Decision

July 29, 2013

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This goes hand in hand with an improving housing market. As prices go up so does owner optimism. Please read the article below and let me know what you think.

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Americans hold a more positive view of the housing market, while an increasing share of renters plan to own, according to the 2013 National Housing Pulse Survey from the National Association of Realtors (NAR).

Of those surveyed, 80 percent said they believe buying a home is a good financial decision, up by 8 points from 2011.

Over the last two years, the market has also seen an increase in renters who are interested in owning.

In the recent survey, 36 percent of renters said they are thinking about buying, up from 25 percent in 2011, while 51 percent of renters also said that owning in the future is one of their highest personal priorities. Overall, 79 percent of renters said owning is a priority in general.

Meanwhile, the percentage of those who say they prefer to rent over buying dropped 6 points since 2011 to 25 percent.

Americans also perceive their market as being stronger, with 38 percent stating they believe activity in their local market has increased in the past year, up sharply from 11 percent in 2011.
Another 49 percent believe prices in their neighborhood are more expensive than they were a year ago.

This view was especially strong in the West, with 62 percent of respondent in the Pacific West stating this and 60 percent in the Mountain West region.

Not only are attitudes toward housing improving, but Americans are also less concerned when it comes to job security.

The share of respondents who expressed concern over job layoffs and unemployment decreased from 61 percent in 2011 to 48 percent in the most recent survey.

Concern over home foreclosures eased as well. In 2013, 29 percent said foreclosures are a “very” or “fairly” big problem, down from 47 percent in 2011.

However, Americans did express concern over the direction of nation, with 58 percent stating the country is on the wrong track, barely changed from 57 percent two years ago. According to the survey, the numbers were influenced by partisanship, with 84 percent of Republicans holding the view compared to 36 percent of Democrats.

Nearly two thirds (64 percent) of respondents also shared concerns over the high prices for homes and rent, little changed from 62 percent in 2011.

Also, 69 percent said they are concerned about people in their area falling behind on their
mortgages.

Despite the increase in prices the housing market has recently witnessed, respondents were completely invulnerable.

More than half (58 percent) of said they are very or somewhat concerned about the drop in overall home values, though the concern has decreased from 70 percent in 2011.
Also, 44 percent of homeowners said they do not think they could sell their house for what they paid for it.

The survey was conducted by American Strategies and Myers Research & Strategic Services.

To see the original article – please use the link below.

Owning Is a Good Financial Decision

Survey Reveals ‘Aggressive’ Tactics Worried Buyers Are Willing to Use

July 29, 2013

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The lack of homes for sale and rising interest rates makes today’s real estate environment a true sellers market. Please read the article below and let me know what you think.

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Low inventory coupled with rising mortgage rates and home prices are leading prospective buyers to consider using “aggressive” tactics such as overbidding to obtain a home, according to recent survey from Trulia.

In order to secure the desired home, 25 percent of prospective buyers in the survey said they were willing to bid 1 to 5 percent above the seller’s asking prices.

“Although buying a home is still much cheaper than renting, it’s a stressful time to be a homebuyer,” said Jed Kolko, Trulia’s chief economist. “Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale”

When it came to overbidding, younger buyers (aged 18 to 34) are more likely to use the strategy.

According to Kolko, Millennials are “more willing than their parents’ generation to outbid, borrow, or make a personal plea to get the house they want.”

For example, another 9 percent of respondents said they were willing to bid 6 to 10 percent over the asking prices, while 12 percent of younger respondents said the same.

Just 4 percent said they were willing to go 10 percent above the asking prices, while 7 percent of younger respondents were willing to go to that length.

Twenty-five percent of respondents also said they were willing to pay for the seller’s closing costs to get the home they want, though for Millennials, the share was 30 percent.

Additionally, the survey showed 17 percent of buyers would write a personal letter to the seller, while 23 percent of Millennials said the same.

The survey, conducted by Harris Interactive, also examined top worries and found rising mortgage rates weighed on the minds of 41 percent of potential buyers.

Another 37 percent cited rising home prices as the top concern, while 36 percent said they were worried about not finding a home for sale they would like.

Other worries in the top five were concerns of not qualifying for a mortgage (30 percent) and competing with many other buyers (27 percent).

To see the original article – please use the link below.

‘Aggressive’ Tactics