Archive for June 2014

Current Mortgage Performance Rate Rises to 93%

June 30, 2014

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This is very good news for the housing industry. More people paying the mortgage payment on time with less foreclosures is always good. For a more detailed look at this subject – please read the article below.

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Mortgage performance is on the rise, and foreclosures are on the decline at the nation’s largest banks, according to the first-quarter Mortgage Metrics Report from the Office of the Comptroller of the Currency (OCC). Representing 48 percent of outstanding first-lien residential mortgages, the OCC report includes data on mortgages at the nation’s seven largest servicers, based on portfolio size, and one federal savings association.

The percentage of current, performing mortgages rose to 93.1 percent in the first quarter of this year, up from 91.8 percent in the fourth quarter of last year and from 90.2 percent a year ago, according to the OCC. The first quarter marks the sixth straight quarter of improvement in loan performance, according to OCC data.

At the same time, the number of loans in some stage of the foreclosure process at the institutions declined 52.3 percent over the year to the lowest level the OCC has recorded since September 2008. About 1.8 percent of the loans are in foreclosure as of the end of the first quarter.

The number of foreclosure starts in the first quarter is down 49.1 percent from the start of the year, while the number of foreclosures completed in the first quarter is down 33.9 percent from a year ago.

The OCC attributes declining foreclosures to a few factors, including “improved economic conditions, aggressive foreclosure prevention assistance, and the transfer of loans to servicers outside the reporting banks and thrift.”

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Mortgage Performance Rate Rises

Case-Shiller: Home Prices Fall Short of Market Expectations

June 27, 2014

grades-two-300x198Lower home price increases are not a bad thing at al. It is an indication for a more sustainable growth market . For a more detailed look at this subject – please read the article below.

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Annual home price gains pulled back sharply in April, falling short of market expectations, a report released Tuesday shows.

In its latest S&P/Case-Shiller Home Price Indices report, S&P Dow Jones Indices recorded an annual price increase of 10.8 percent among both the 10- and 20-city composites. Those figures compare to year-over-year increases of 12.6 percent and 12.4 percent, respectively.

A consensus of economists surveyed by Econoday called for a gain of 11.4 percent in the 20-city index.

Of the 20 cities tracked, 19 posted lower annual appreciation in April than in March, S&P Dow Jones reported, with only Boston coming out ahead.

“Last year some Sunbelt cities were seeing year-over-year numbers close to 30 percent, now all are below 20 percent: Las Vegas (18.8 percent), Los Angeles (14.0 percent), Phoenix (9.8 percent), San Diego (15.3 percent), and San Francisco (18.2 percent),” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Other cities around the nation are also experiencing slower price increases.”

Monthly numbers looked slightly more encouraging: In April, the 10- and 20-city composites posted respective increases of 1.0 percent and 1.1 percent, accelerating over March. Out of the 20 cities surveyed, all reported month-over-month appreciation.

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Home Prices Fall Short

Foreclosure Inventory Continues to Shrink in May

June 26, 2014

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This is a sign that home prices have gone up enough so that it makes financial good senses to finally sell the houses that the banks have been rat holing because they were too far underwater. For a more detailed look at this subject – please read the article below.

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Black Knight Financial Services released its “First Look” at May Mortgage data, which found that foreclosure inventory declined to its lowest level since July 2008. As a percentage of total inventory, foreclosure pre-sale inventory is 1.91 percent, down 5.56 percent month-over month.

The percentage of total U.S. foreclosure pre-sale inventory is down 37.23 percent year-over-year.

Foreclosure starts, however, are creeping back upwards. Foreclosure starts totaled 86,300 for the month of May, an increase of 9.52 percent from April. Yearly, foreclosure starts remain down by 26.11 percent. Overall delinquency rates remained steady, down a mere 0.01 percent to 5.62 percent in May.

The number of properties that are 30 days or more past due but not yet in foreclosure totaled roughly 2.8 million, an 18,000 property increase from the previous month yet a decline of 204,000 from the previous year.

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Inventory Continues to Shrink

FHFA: April Refinance Volume Similar to 2008

June 26, 2014

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This article brings up one major question. Why is the government spending any tax dollars (HARP) to refinance 2nd homes or investment properties. For a more detailed look at this subject – please read the article below.

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The Federal Housing Finance Agency (FHFA) released its latest Refinance Report, examining data as of the end of April 2014. The FHFA found that overall refinance volume rose slightly in April, but remained at levels more comparable to those seen in 2008.

The agency noted that mortgage rates remained between four to four and a half percent since June 2013. In April, the average interest rate on a 30-year fixed rate mortgage stayed put at March’s rate at 4.34 percent.

Roughly 20,000 refinances were completed through HARP in April, bringing the total HARP refinances to approximately 3.1 million since the program’s inception.

The government agency noted that borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers who were eligible for HARP but did not refinance through the program.

Since the beginning of the program, roughly 2.6 million loans refinanced through HARP were for primary residences, with approximately 100,000 for second homes and 395,000 for investment properties.

HARP refinances continued to represent a significant portion of homes that are deeply underwater. The FHFA noted that 10 percent of loans refinanced through HARP had a loan-to-value ratio greater than 125 percent. Borrowers with a loan-to-value ratio greater than 105 percent made up 30 percent of the volume of HARP loans.

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April Refinance Volume

Freddie Mac Scales Back Expectations for 2014

June 24, 2014

Fannie Freddie Bailout

Scaling back forecasts is an indication of steady growth at a sustainable rate .  This is a good sign for the housing market. Freddie Mac’s earlier outlook was more wishful thinking than anything. For a more detailed look at this subject – please read the article below.

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Despite a disappointing first quarter and a mediocre second quarter, Freddie Mac still expects the economy to improve throughout the second half of 2014. The company is, however, tempering its New Year’s optimism.

In its June U.S. Economic and Housing Market Outlook, Freddie offers a mid-year assessment that sees more humble growth in gross domestic product that mirrors the 2 to 2.5 percent growth that the economy has seen the past few years.

Contributing to this modest growth will be an upswing in the workplace. U.S. unemployment is down from 6.7 to 6.3 percent, and May showed the fourth straight month in which 200,000 new jobs were created.

For housing, the even-better news is that construction jobs are picking up, particularly in the residential building and specialty trade sector. These areas are averaging about 9,500 jobs per month so far this year.

Still, there’s hardly cause for joy bells just yet. “Construction has rebounded over the past two years but is still significantly below the levels one would expect to see given projections of household formations,” said Frank Nothaft, Freddie Mac’s chief economist.

Nothaft is also tenuous in his view of the overall housing picture. “We’re nearly half way through the year and single-family housing remains weaker than we projected six months ago, while multifamily appears to be right on track,” he said.

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Freddie Mac Scales Back Expectations

Cash Sales Decline; Still Dominate Lower-Priced Homes

June 23, 2014

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As home prices rise the interest of investors, the majority of cash buyers, wanes and therefore cash sales decline.    For a more detailed look at this subject – please read the article below.

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Home purchases made with cash are on the decline across the country, according to Zillow, but cash sales still make up a significant portion of the lower-priced home market in many areas.

Cash sales declined year-over-year in the first quarter in 102 of the 126 metro areas Zillow observes. Zillow chalked up the decline to waning investor demand and a resurgence of traditional buyers in the market.

“[I]t’s heartening to see more buyers armed with traditional financing begin to enter the market,” said Stan Humphries, chief economist at Zillow. “This is a critical step on the way back to a more normal, balanced housing market.”

However, despite the recent trend, “it’s pretty clear that cash is still king, especially at the lower end of the market,” according to Humphries.

In fact, in the overwhelming majority of the top 30 metro areas—27 markets—Zillow found more than one third of home purchases in the lowest priced third of the market were made with cash.

Furthermore, in three of these markets, more than 80 percent of home purchases in the bottom segment were made with all cash. In Miami, 84.7 percent of low-priced home sales were cash deals. Detroit was close behind with 83.2 percent of low-priced home sales coming in as cash deals, while in Tampa, Florida, 81.4 percent of low-priced home purchases were made with cash.

Across the full price spectrum, the three metros ranking highest for proportion of cash deals in the first quarter were Miami (64.9 percent), Tampa (57.1 percent), and Cleveland (54.2 percent).

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Cash Sales Decline

Home Sales Continue Growth Streak in May

June 23, 2014

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This is another  indication of a growing economy. As long as prices do not rise greatly the housing market should stay strong.  For a more detailed look at this subject – please read the article below.

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The National Housing Report from RE/MAX found that for the third month in a row, home sales in May rose higher than sales in the previous month. May sales were 11.5 percent higher than in April, but stubbornly remained below the same period last year by 9.9 percent.

Of the 52 metros included in the study, a mere three experienced lower sales than the previous month. Overall, home prices continued to rise higher in May, with a 7.7 percent increase over the previous year.

“The usually strong spring selling months appear to be following traditional growth patterns. We’ve now seen three straight months of increased sales over the previous month—although we may not match the growth rates we saw last year, we are seeing significant increases in both sales and prices and that’s a positive sign,” said Margaret Kelly, RE/MAX CEO.

The National Housing Report commented that while both credit availability and inventory remain tight, May was the sixth consecutive month with fewer year-over-year inventory losses than the previous month. The month’s supply of inventory dropped to 3.8—a supply of six months indicates an equally balanced market between buyers and sellers.

RE/MAX found that in the 52 metro areas studied, the median sales price of all homes sold during May was $198,750, 4.6 percent higher than the median price in April and 7.7 percent higher than the median price last year. Home prices have risen continuously for 28 months. The report notes that although prices continue to rise due to limited inventory, prices are not rising as rapidly as the 10.8 percent increase seen in May 2013.

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Home Sales Continue Growth