by JASON PHILYAW
Pending home sales remain volatile, rising again in June after an 8.2% increase the prior month and a substantial decline in April, according to the National Association of Realtors.
The large trade association, which has more than 1.2 million members, said its pending home sales index, which is based on contracts signed, increased 2.4% to 90.9 for June from 88.8 for May. NAR said the index is 19.8% higher than 75.9 for the year-ago period.
NAR Chief Economist Lawrence Yun said the strong pending home sales gains of the past few months bode well for coming data on existing homes sales.
"For the majority of transactions, the lag time between pending contacts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” Yun said. "Though a higher-than-normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations."
Tightened lending standards and continued global financial uncertainty remain drags on the housing economy, according to Yun, who also wants policymakers to shy away from regulations that impact homeownership opportunities.
"The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy homebuyers can get a mortgage," he said. "Washington also should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home."
The NAR index in June fell 0.4% in the Northeast from the prior month, yet is 19.4% higher than a year ago for the region.
Pending homes sales also rose in the South with a 4.4% increase and in the West with a 6.4% gain. The NAR pending home sales index fell 3.7% in the Midwest. The index is up considerably from a year earlier in all regions of the country.
NAR expects 5 million existing home sales in 2011, a slight increase from last year.
Fannie Mae Chief Economist Doug Duncan said the pending home sales data portends a stabilizing market in coming months.
"However, caution should be exercised regarding this upward trend in contract signings, as these have not yet materialized into closings, which dropped in June for the third consecutive month. Low appraisals compared to contract prices and heightened uncertainty about the economic recovery may have led to increased numbers of contract cancellations," Duncan said.
The Fannie Mae national housing survey for June "showed the smallest share of consumers who expect home prices to go up, as well as the smallest share of those who expect mortgage rates to go up since monthly tracking began a year ago," according to Duncan.
He said Labor Department data showing weekly jobless claims fell below 400,000 for the first time in months is a good sign.
"However, we need to see sustained declines in layoffs and, more importantly, stronger hiring before the housing market can gain traction," Duncan said.
URL to original article: http://www.housingwire.com/2011/07/28/pending-home-sales-rise-2-4-in-june
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, July 28, 2011
Wednesday, July 27, 2011
Why demand for new homes will never look the same as it ever was
Source: New York Times
The New York Times N.R. Kleinfield ties one of the most important macrotrends of the era to the tale of one increasingly common, once unusual family: "Two addresses, three adults, a winsome toddler and a mixed-breed dog officially named Buck the Dog. None of this was the familial configuration any of them had imagined, but it was, for the moment, their family. It was something they had stumbled into, yet had a certain revisionist logic. Such is the hiccupping fluidity of the family in the modern world. Six years running now, according to census data, more households consist of the unmarried than the married. More people seem to be deciding that the contours of the traditional nuclear family do not work for them, spawning a profusion of cobbled-together networks in need of nomenclature. Unrelated parents living together, sharing chores and child-rearing. Friends who occupy separate homes but rely on each other for holidays, health care proxies, financial support." The upshot for home builders is that, cyclical and structural economic issues aside, one of the most important phenomena to get one's head around is a profoundly different household make-up that's evolving. Single woman headed households--17 million of them--are more than twice as common now in the United States as married-couple with one child under the age of 18.
AT the apartment in Brooklyn where George Russell spends four nights each week, he checked the clock: 7:09 p.m. Wasn’t it 7:05 about 20 minutes ago?
Never had time moved so slowly. Was the clock even working?
They had tossed the ball around, chased each other, done the book about a bear. Now the dreaded bedtime video. Every night, Griffin, who was 18 months old, insisted on this DVD about race cars, space ships and motorcycles, narrated by a saccharine pair named Dave and Becky. Mr. Russell found them galling. Once, while watching, he said, it made him “feel a profound despair like when I read ‘The Bell Jar.’ ”
He slid in the disc. Soon, his thumb was punching fast-forward. “It’s so much better at double speed, isn’t it, Griffin?”
Darkness had dropped softly. Rain drummed on Plaza Street East.
Mr. Russell regarded Griffin and his curly blond hair. “He looks just like me when I was little,” he said. “I don’t feel paternal toward him. Yet it’s odd when I look at him and I see me.”
The setup is complicated. Griffin’s mother, Carol Einhorn, a fund-raiser for a nonprofit group, is 48 and single. She conceived through in vitro fertilization with sperm from Mr. Russell, 49, a chiropractor and close friend. Monday, Tuesday, Thursday and Sunday nights, Mr. Russell stays in the spare room of Ms. Einhorn’s apartment. The other three days he lives on President Street with his domestic partner, David Nimmons, 54, an administrator at a nonprofit. Most Sundays, they all have dinner together.
“It’s not like Heather has two mommies,” Mr. Russell said. “It’s George has two families.”
Two addresses, three adults, a winsome toddler and a mixed-breed dog officially named Buck the Dog. None of this was the familial configuration any of them had imagined, but it was, for the moment, their family. It was something they had stumbled into, yet had a certain revisionist logic.
Such is the hiccupping fluidity of the family in the modern world. Six years running now, according to census data, more households consist of the unmarried than the married. More people seem to be deciding that the contours of the traditional nuclear family do not work for them, spawning a profusion of cobbled-together networks in need of nomenclature. Unrelated parents living together, sharing chores and child-rearing. Friends who occupy separate homes but rely on each other for holidays, health care proxies, financial support.
“Some of the strictures that were used to organize society don’t fit human change and growth,” said Ann Schranz, chairwoman of the Alternatives to Marriage Project, a 10-year-old organization. “What matters to us is the health of relationships, not the form of relationships.”
And so here on Plaza Street, four people are testing the fuzzy boundaries of an age-old institution, knowing there is no single answer to what defines family or what defines love.
Griffin, now almost 3, calls Mr. Russell “Uncle George” and Mr. Nimmons “Dave.” At some point, Ms. Einhorn intends to tell her son the truth. Mr. Russell worries about that moment. He never wanted to be a parent; he saw the sperm donation as a favor to a friend. He did not attend the birth or Griffin’s first birthday party. His four sisters were trying to figure out whether they were aunts.
Once a week, Ms. Einhorn went out, and Mr. Russell baby-sat. But only after Griffin was asleep — Uncle George was like the night watchman. Until March 2010, when Mr. Russell agreed to put Griffin to bed and see how it went.
There was a routine that had to be followed or it was tantrum world. A bath, dinner, a story, the hated video, then a circuit of the apartment to say good night to everything.
Mr. Russell loathes television, an aversion he connects to his father’s seeming to have kept it on permanently. “Carol can watch, like, 52 ‘Law & Order’s back to back to relax,” he said. “She likes shows like ‘Army Wives.’ I can’t even say the words ‘Army Wives’ without irony or cringing.” He snapped off the television and announced, “It’s time to take a walk.”
Barefoot, he hoisted Griffin into his arms and felt the pleasant response. They said good night to the kitchen.
Good night, dining room.
Good night, plant.
Good night, George’s room.
Good night, outside world.
Mr. Russell gave Griffin a bottle, and lowered him into his crib.
Not bad at all. “I certainly don’t want to be the child’s parent,” he said. Then: “What can I say, it’s lovely to hold a child in your arms.”
http://www.builderonline.com/builder-pulse/why-demand-for-new-homes-will-never-look-the-same-as-it-ever-was.aspx?cid=NWBD110727002
For further information on Fresno Real Estate check: http://www.londonproperties.com
The New York Times N.R. Kleinfield ties one of the most important macrotrends of the era to the tale of one increasingly common, once unusual family: "Two addresses, three adults, a winsome toddler and a mixed-breed dog officially named Buck the Dog. None of this was the familial configuration any of them had imagined, but it was, for the moment, their family. It was something they had stumbled into, yet had a certain revisionist logic. Such is the hiccupping fluidity of the family in the modern world. Six years running now, according to census data, more households consist of the unmarried than the married. More people seem to be deciding that the contours of the traditional nuclear family do not work for them, spawning a profusion of cobbled-together networks in need of nomenclature. Unrelated parents living together, sharing chores and child-rearing. Friends who occupy separate homes but rely on each other for holidays, health care proxies, financial support." The upshot for home builders is that, cyclical and structural economic issues aside, one of the most important phenomena to get one's head around is a profoundly different household make-up that's evolving. Single woman headed households--17 million of them--are more than twice as common now in the United States as married-couple with one child under the age of 18.
AT the apartment in Brooklyn where George Russell spends four nights each week, he checked the clock: 7:09 p.m. Wasn’t it 7:05 about 20 minutes ago?
Never had time moved so slowly. Was the clock even working?
They had tossed the ball around, chased each other, done the book about a bear. Now the dreaded bedtime video. Every night, Griffin, who was 18 months old, insisted on this DVD about race cars, space ships and motorcycles, narrated by a saccharine pair named Dave and Becky. Mr. Russell found them galling. Once, while watching, he said, it made him “feel a profound despair like when I read ‘The Bell Jar.’ ”
He slid in the disc. Soon, his thumb was punching fast-forward. “It’s so much better at double speed, isn’t it, Griffin?”
Darkness had dropped softly. Rain drummed on Plaza Street East.
Mr. Russell regarded Griffin and his curly blond hair. “He looks just like me when I was little,” he said. “I don’t feel paternal toward him. Yet it’s odd when I look at him and I see me.”
The setup is complicated. Griffin’s mother, Carol Einhorn, a fund-raiser for a nonprofit group, is 48 and single. She conceived through in vitro fertilization with sperm from Mr. Russell, 49, a chiropractor and close friend. Monday, Tuesday, Thursday and Sunday nights, Mr. Russell stays in the spare room of Ms. Einhorn’s apartment. The other three days he lives on President Street with his domestic partner, David Nimmons, 54, an administrator at a nonprofit. Most Sundays, they all have dinner together.
“It’s not like Heather has two mommies,” Mr. Russell said. “It’s George has two families.”
Two addresses, three adults, a winsome toddler and a mixed-breed dog officially named Buck the Dog. None of this was the familial configuration any of them had imagined, but it was, for the moment, their family. It was something they had stumbled into, yet had a certain revisionist logic.
Such is the hiccupping fluidity of the family in the modern world. Six years running now, according to census data, more households consist of the unmarried than the married. More people seem to be deciding that the contours of the traditional nuclear family do not work for them, spawning a profusion of cobbled-together networks in need of nomenclature. Unrelated parents living together, sharing chores and child-rearing. Friends who occupy separate homes but rely on each other for holidays, health care proxies, financial support.
“Some of the strictures that were used to organize society don’t fit human change and growth,” said Ann Schranz, chairwoman of the Alternatives to Marriage Project, a 10-year-old organization. “What matters to us is the health of relationships, not the form of relationships.”
And so here on Plaza Street, four people are testing the fuzzy boundaries of an age-old institution, knowing there is no single answer to what defines family or what defines love.
Griffin, now almost 3, calls Mr. Russell “Uncle George” and Mr. Nimmons “Dave.” At some point, Ms. Einhorn intends to tell her son the truth. Mr. Russell worries about that moment. He never wanted to be a parent; he saw the sperm donation as a favor to a friend. He did not attend the birth or Griffin’s first birthday party. His four sisters were trying to figure out whether they were aunts.
Once a week, Ms. Einhorn went out, and Mr. Russell baby-sat. But only after Griffin was asleep — Uncle George was like the night watchman. Until March 2010, when Mr. Russell agreed to put Griffin to bed and see how it went.
There was a routine that had to be followed or it was tantrum world. A bath, dinner, a story, the hated video, then a circuit of the apartment to say good night to everything.
Mr. Russell loathes television, an aversion he connects to his father’s seeming to have kept it on permanently. “Carol can watch, like, 52 ‘Law & Order’s back to back to relax,” he said. “She likes shows like ‘Army Wives.’ I can’t even say the words ‘Army Wives’ without irony or cringing.” He snapped off the television and announced, “It’s time to take a walk.”
Barefoot, he hoisted Griffin into his arms and felt the pleasant response. They said good night to the kitchen.
Good night, dining room.
Good night, plant.
Good night, George’s room.
Good night, outside world.
Mr. Russell gave Griffin a bottle, and lowered him into his crib.
Not bad at all. “I certainly don’t want to be the child’s parent,” he said. Then: “What can I say, it’s lovely to hold a child in your arms.”
http://www.builderonline.com/builder-pulse/why-demand-for-new-homes-will-never-look-the-same-as-it-ever-was.aspx?cid=NWBD110727002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Distressed sales keep up a wide gap between resales and new orders
Source: Calculated Risk
The volume of distressed sales of residential properties as a percentage of total transactions is strong, and not likely to weaken so soon. Calculated Risk's Bill McBride updates a monthly horizontal analysis of the concurrent trend in existing home sales (which include distressed deals) and new home sales (orders). He writes, "The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders can't compete with the low prices of all the foreclosed properties. I expect this gap to close over the next few years once the number of distressed sales starts to decline." Over the next few years.
Then along came the housing bubble and bust, and the "distressing gap" appeared due mostly to distressed sales. The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders can't compete with the low prices of all the foreclosed properties.
I expect this gap to close over the next few years once the number of distressed sales starts to decline.
Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different. Also the National Association of Realtors (NAR) is working on a benchmark revision for existing home sales numbers and I expect significant downward revisions to sales estimates for the last few years - perhaps as much as 10% to 15% for 2009 and 2010. Even with these revisions, most of the "distressing gap" will remain.
URL to original article: http://www.builderonline.com/builder-pulse/distressed-sales-keep-up-a-wide-gap-between-resales-and-new-orders.aspx?cid=NWBD110727002
For further information on Fresno Real Estate check: http://www.londonproperties.com
The volume of distressed sales of residential properties as a percentage of total transactions is strong, and not likely to weaken so soon. Calculated Risk's Bill McBride updates a monthly horizontal analysis of the concurrent trend in existing home sales (which include distressed deals) and new home sales (orders). He writes, "The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders can't compete with the low prices of all the foreclosed properties. I expect this gap to close over the next few years once the number of distressed sales starts to decline." Over the next few years.
Then along came the housing bubble and bust, and the "distressing gap" appeared due mostly to distressed sales. The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders can't compete with the low prices of all the foreclosed properties.
I expect this gap to close over the next few years once the number of distressed sales starts to decline.
Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different. Also the National Association of Realtors (NAR) is working on a benchmark revision for existing home sales numbers and I expect significant downward revisions to sales estimates for the last few years - perhaps as much as 10% to 15% for 2009 and 2010. Even with these revisions, most of the "distressing gap" will remain.
URL to original article: http://www.builderonline.com/builder-pulse/distressed-sales-keep-up-a-wide-gap-between-resales-and-new-orders.aspx?cid=NWBD110727002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications fall 5% as interest rates rise
by KERRI PANCHUK
Mortgage applications declined 5% last week as interest rates spiked across the United States, an industry trade group said Wednesday.
The slowdown follows a week of robust activity, with mortgage applications rising more than 15% a week earlier on increased refinacing activity.
The Mortgage Bankers Association said its market composite index, a measure of loan mortgage application volume, dropped 5% on a seasonally adjusted basis and 4.9% on an unadjusted basis when compared to a week earlier.
The refinance index and the seasonally adjusted purchase index fell 5.5% and 3.8%, respectively, from a week ago, while the unadjusted purchase index declined 3.4%.
The four-week moving average for the purchase index dropped 0.5% this past week, while the four-week moving averages for the refinance index and market index declined by 0.3% each.
Refinance activity made up 69.6% of total application volume, down from 70% a week prior.
The interest rates for a 30-year, fixed-rate mortgage rose to 4.57% last week from 4.54% a week earlier. The average 15-year, fixed-rate mortgage increased slightly to 3.67% from 3.66%.
URL to original article: http://www.housingwire.com/2011/07/27/mortgage-applications-fall-5-as-interest-rates-rise
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications declined 5% last week as interest rates spiked across the United States, an industry trade group said Wednesday.
The slowdown follows a week of robust activity, with mortgage applications rising more than 15% a week earlier on increased refinacing activity.
The Mortgage Bankers Association said its market composite index, a measure of loan mortgage application volume, dropped 5% on a seasonally adjusted basis and 4.9% on an unadjusted basis when compared to a week earlier.
The refinance index and the seasonally adjusted purchase index fell 5.5% and 3.8%, respectively, from a week ago, while the unadjusted purchase index declined 3.4%.
The four-week moving average for the purchase index dropped 0.5% this past week, while the four-week moving averages for the refinance index and market index declined by 0.3% each.
Refinance activity made up 69.6% of total application volume, down from 70% a week prior.
The interest rates for a 30-year, fixed-rate mortgage rose to 4.57% last week from 4.54% a week earlier. The average 15-year, fixed-rate mortgage increased slightly to 3.67% from 3.66%.
URL to original article: http://www.housingwire.com/2011/07/27/mortgage-applications-fall-5-as-interest-rates-rise
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, July 26, 2011
CoreLogic: Nondistressed home prices stabilizing
by KERRY CURRY
URL to original article: http://www.housingwire.com/2011/07/26/corelogic-nondistressed-home-prices-stabilizing
For further information on Fresno Real Estate check: http://www.londonproperties.com
Nondistressed home prices are stabilizing, and auction filings and the declining shadow inventory should lead to a lower level of distressed sales and less downward pressure on prices going forward, according to a report out Tuesday from CoreLogic.
The report also notes that while mortgage performance is improving, it is not improving nearly as much as other consumer debt performance.Despite, a bit of positive news in the report, CoreLogic notes that negative equity will remain a strong influence on the market for an extended period of time.
In May 2011, the “excluding distressed sales” home price index only dropped 0.4% from a year ago, compared to a decline of 7.4% for the all transactions HPI."Another very positive sign is that even while including distressed sales, the HPI increased between March and April — the first time in more than six months — and was up again between April and May. These increases represent the resumption of seasonality in home prices and are a positive sign for the market."
Despite the whipsaw impact of the federal homebuyer tax credit, state credits and increases in Federal Housing Administration premiums, nondistressed median existing and new prices are back to 2009 levels. On the other hand, median prices for REO and short sale transactions continue to decline and have fallen 10% since 2009, the report said.
Price discounts on distressed sales remain high, however, a major impediment to price stabilization, but the good news is that new auction filings have been down significantly since October 2010.
Residential shadow inventory — the estimated number of pending supply of distressed properties — declined to 1.7 million units in April 2011, down from 1.9 million units a year ago and down nearly 20% from its peak."Given that the recent declines in auction filings and current shadow inventory levels are the drivers of future distressed sales, the level of distressed sales should, all things equal, begin to decline late in 2011 and into 2012," the report said.
CoreLogic also noted that the geographical sources of distressed properties are shifting and becoming more dispersed. As of December 2008, four of the top five largest distressed sales markets were all located in California and the top five markets averaged a distressed sale share of 68%. As of April 2011, only two of the top five markets are in California and the top five average distressed share was 56%.Miami leads the way in REO price discounts with a 62% REO price discount, followed by Chicago (60%), Detroit (60%), St. Louis (60%) and West Palm Beach (58%).
CoreLogic also notes that depreciation in home prices during the last four years has reduced home equity by more than half to $6.1 trillion and caused a rapid increase in the number of foreclosures. Through May 2011, home prices have declined 33% on a cumulative basis since the peak in the spring of 2006.Nearly 11 million, or 23%, of all residential properties with mortgages were in negative equity at the end of the first quarter of 2011, and the negative equity share has been fairly stable over the last year. An additional 2.4 million borrowers had less than 5% equity.
Nevada had the highest negative equity percentage with 63% of all mortgaged properties, followed by Arizona (50%), Florida (46%), Michigan (36%) and California (31%).The average negative equity borrower was upside down by $65,000.
"Going forward, negative equity will primarily decline by a combination of foreclosures, amortization and, to a lesser extent, price increases," the report said. "While price declines have been a large driver of negative equity, price improvements will most likely not be the antidote anytime soon. …"While the worst is over, it means many of these borrowers will be upside down for an extended period of time, which will result in a long tail of mortgage distress."URL to original article: http://www.housingwire.com/2011/07/26/corelogic-nondistressed-home-prices-stabilizing
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, July 25, 2011
Government mulls going into rentals with some of its foreclosure properties
Source: Wall Street Journal
The Wall Street Journal's Nick Timiraos reports on an idea gaining traction on Capitol Hill that would see the government simply take some of its stock of foreclosed homes and rent them out at prevailing market rates rather than sell them for a song. Timiraos writes, "Critics worry about the risk of the government as landlord. One solution: sell federally backed foreclosures to investors who would have to agree to rent them out for a to-be-determined period of time. Investors would rehab the properties, fill them with tenants, and hire a national property management firm to oversee the day-to-day landlord needs. Supporters say while the government isn’t set up to be a landlord, neither is it any better prepared to sell thousands of foreclosed properties — something it’s already doing anyway."
There’s an 800-pound gorilla in the nation’s hardest-hit housing markets: hundreds of thousands of foreclosed properties are selling, and there’s four times as many potential foreclosures behind them.
The Journal writes today that one idea gaining support in Washington is an effort to pull some of those properties off the market and rent them out, either on homes owned by federal agencies or loan giants Fannie Mae and Freddie Mac.
These firms and U.S. banks currently own more than 500,000 foreclosed homes, and there’s another 2 million loans in some stage of foreclosure. The high share of distressed sales in many struggling markets is contributing to continued declines in home prices.
“Can we find a way to try and reduce that overhang or to try to provide incentives for investors to covert them?” said Federal Reserve Chairman Ben Bernanke in testimony to Congress last week.
Critics worry about the risk of the government as landlord. One solution: sell federally backed foreclosures to investors who would have to agree to rent them out for a to-be-determined period of time. Investors would rehab the properties, fill them with tenants, and hire a national property management firm to oversee the day-to-day landlord needs.
Supporters say while the government isn’t set up to be a landlord, neither is it any better prepared to sell thousands of foreclosed properties — something it’s already doing anyway. “Putting these homes in the hands of people who can take care of them and rent them out” would save taxpayer money, says John Burns, who runs a home-building consulting firm in Irvine, Calif.
So far, the Fannie and Freddie have disappointed institutional investors by resisting selling homes in bulk at deep discounts. Instead, foreclosures are either sold through regular retail listings or in public auctions, known as trustee or sheriff sales. Those auctions have attracted primarily mom-and-pop investors but also include hedge fund-backed debt buyers.
Two years ago, investors increasingly scooped up cheap properties at auctions in the hopes of rehabbing and quickly reselling them for a profit. But declining home values — and increased competition from investors — has made that much harder.
Meanwhile, the discounts for foreclosed properties in some markets are so attractive “that it looks like the cash flow investors are getting [on rentals] is awfully good,” says Thomas Lawler, an independent housing economist in Leesburg, Va.
One sign that investor demand has picked up for cheap properties that can be rented: in Phoenix, the number of homes selling below $100,000 was up 41% from one year ago in May, while all other sales were down 11.3%, according to DataQuick, a real-estate data firm.
“It doesn’t take too long as an investor to recognize the opportunity: home prices are less, but rents are more,” says Eric Peterson, a former homebuilder and co-founder of Praxis Capital, which has launched a $10 million fund focused on renting out foreclosures. Once prices stabilize and begin rising in a few years, “we’ll be holding a fair amount of inventory, and we’ll be ready to sell.”
The idea has won backing from a number of influential private sector minds. Rental programs could “solve a couple of policy problems with one solution” by also extending qualified tenants an option to one day purchase the homes, said mortgage-bond pioneer Lewis Ranieri in a recent paper with Kenneth Rosen, a housing economist at the University of California at Berkeley.
URL to original article: http://www.builderonline.com/builder-pulse/government-mulls-going-into-rentals-with-some-of-its-foreclosure-properties.aspx?cid=NWBD110725002
For further information on Fresno Real Estate check: http://www.londonproperties.com
The Wall Street Journal's Nick Timiraos reports on an idea gaining traction on Capitol Hill that would see the government simply take some of its stock of foreclosed homes and rent them out at prevailing market rates rather than sell them for a song. Timiraos writes, "Critics worry about the risk of the government as landlord. One solution: sell federally backed foreclosures to investors who would have to agree to rent them out for a to-be-determined period of time. Investors would rehab the properties, fill them with tenants, and hire a national property management firm to oversee the day-to-day landlord needs. Supporters say while the government isn’t set up to be a landlord, neither is it any better prepared to sell thousands of foreclosed properties — something it’s already doing anyway."
There’s an 800-pound gorilla in the nation’s hardest-hit housing markets: hundreds of thousands of foreclosed properties are selling, and there’s four times as many potential foreclosures behind them.
The Journal writes today that one idea gaining support in Washington is an effort to pull some of those properties off the market and rent them out, either on homes owned by federal agencies or loan giants Fannie Mae and Freddie Mac.
These firms and U.S. banks currently own more than 500,000 foreclosed homes, and there’s another 2 million loans in some stage of foreclosure. The high share of distressed sales in many struggling markets is contributing to continued declines in home prices.
“Can we find a way to try and reduce that overhang or to try to provide incentives for investors to covert them?” said Federal Reserve Chairman Ben Bernanke in testimony to Congress last week.
Critics worry about the risk of the government as landlord. One solution: sell federally backed foreclosures to investors who would have to agree to rent them out for a to-be-determined period of time. Investors would rehab the properties, fill them with tenants, and hire a national property management firm to oversee the day-to-day landlord needs.
Supporters say while the government isn’t set up to be a landlord, neither is it any better prepared to sell thousands of foreclosed properties — something it’s already doing anyway. “Putting these homes in the hands of people who can take care of them and rent them out” would save taxpayer money, says John Burns, who runs a home-building consulting firm in Irvine, Calif.
So far, the Fannie and Freddie have disappointed institutional investors by resisting selling homes in bulk at deep discounts. Instead, foreclosures are either sold through regular retail listings or in public auctions, known as trustee or sheriff sales. Those auctions have attracted primarily mom-and-pop investors but also include hedge fund-backed debt buyers.
Two years ago, investors increasingly scooped up cheap properties at auctions in the hopes of rehabbing and quickly reselling them for a profit. But declining home values — and increased competition from investors — has made that much harder.
Meanwhile, the discounts for foreclosed properties in some markets are so attractive “that it looks like the cash flow investors are getting [on rentals] is awfully good,” says Thomas Lawler, an independent housing economist in Leesburg, Va.
One sign that investor demand has picked up for cheap properties that can be rented: in Phoenix, the number of homes selling below $100,000 was up 41% from one year ago in May, while all other sales were down 11.3%, according to DataQuick, a real-estate data firm.
“It doesn’t take too long as an investor to recognize the opportunity: home prices are less, but rents are more,” says Eric Peterson, a former homebuilder and co-founder of Praxis Capital, which has launched a $10 million fund focused on renting out foreclosures. Once prices stabilize and begin rising in a few years, “we’ll be holding a fair amount of inventory, and we’ll be ready to sell.”
The idea has won backing from a number of influential private sector minds. Rental programs could “solve a couple of policy problems with one solution” by also extending qualified tenants an option to one day purchase the homes, said mortgage-bond pioneer Lewis Ranieri in a recent paper with Kenneth Rosen, a housing economist at the University of California at Berkeley.
URL to original article: http://www.builderonline.com/builder-pulse/government-mulls-going-into-rentals-with-some-of-its-foreclosure-properties.aspx?cid=NWBD110725002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, July 22, 2011
Distressed Properties Comprise Smaller Share of Declining Home Resales
By: Carrie Bay
Foreclosures and short sales made up 30 percent of all existing-home sales in June, according to data released Wednesday by the National Association of Realtors (NAR).
The market share for distressed properties, as anticipated, has been steadily dwindling with the onset of warmer weather. In May, foreclosures and short sales accounted for 31 percent of home resales. As recently as April their share was 37 percent, and in March it was 40 percent.
Overall sales volume slipped in June along with the share of distressed properties. NAR says total existing-home sales declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June, down from 4.81 million in May.
The decline was expected by some analysts after the 11 percent drop in pending home sales recorded in April (pending sales numbers generally manifest two months down the road).
June’s sales pace of 4.77 million for the year is the lowest it’s been since last November. Without a convincing rebound in the months ahead, 2011 is in step to be the fourth time in the last five years where home sales have declined on an annual basis. There were 4.90 million existing homes sold in 2010, according to NAR’s data.
The Realtor group blamed June’s disappointing results, at least in part, on a large number of sales contracts that have fallen through.
“Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” said Lawrence Yun, NAR’s chief economist.
“The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year,” Yun said.
Ron Phipps, NAR’s president, added that lower mortgage loan limits, due to go into effect on October 1, already are having an impact.
“Some lenders are placing lower loan limits on current contracts in anticipation they may not close before the end of September,” Phipps said. “As a result, some contracts may be getting cancelled because certain buyers are unwilling or unable to obtain a more costly jumbo mortgage.”
With fewer discounted, distressed properties trading hands, NAR’s data showed that the national median existing-home price rose to $184,300 in June, up more than 10 percent from May and up 0.8 percent from a year earlier.
Total housing inventory at the end of June rose 3.3 percent to 3.77 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace. That’s up from a 9.1-month supply in May.
URL to original article: http://www.dsnews.com/articles/distressed-properties-account-for-smaller-share-of-declining-home-resales-2011-07-20
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreclosures and short sales made up 30 percent of all existing-home sales in June, according to data released Wednesday by the National Association of Realtors (NAR).
The market share for distressed properties, as anticipated, has been steadily dwindling with the onset of warmer weather. In May, foreclosures and short sales accounted for 31 percent of home resales. As recently as April their share was 37 percent, and in March it was 40 percent.
Overall sales volume slipped in June along with the share of distressed properties. NAR says total existing-home sales declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June, down from 4.81 million in May.
The decline was expected by some analysts after the 11 percent drop in pending home sales recorded in April (pending sales numbers generally manifest two months down the road).
June’s sales pace of 4.77 million for the year is the lowest it’s been since last November. Without a convincing rebound in the months ahead, 2011 is in step to be the fourth time in the last five years where home sales have declined on an annual basis. There were 4.90 million existing homes sold in 2010, according to NAR’s data.
The Realtor group blamed June’s disappointing results, at least in part, on a large number of sales contracts that have fallen through.
“Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” said Lawrence Yun, NAR’s chief economist.
“The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year,” Yun said.
Ron Phipps, NAR’s president, added that lower mortgage loan limits, due to go into effect on October 1, already are having an impact.
“Some lenders are placing lower loan limits on current contracts in anticipation they may not close before the end of September,” Phipps said. “As a result, some contracts may be getting cancelled because certain buyers are unwilling or unable to obtain a more costly jumbo mortgage.”
With fewer discounted, distressed properties trading hands, NAR’s data showed that the national median existing-home price rose to $184,300 in June, up more than 10 percent from May and up 0.8 percent from a year earlier.
Total housing inventory at the end of June rose 3.3 percent to 3.77 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace. That’s up from a 9.1-month supply in May.
URL to original article: http://www.dsnews.com/articles/distressed-properties-account-for-smaller-share-of-declining-home-resales-2011-07-20
For further information on Fresno Real Estate check: http://www.londonproperties.com
Harvard studies issue of Baby Boom housing turnover and remodeling trends
Source: Joint Center for Housing Studies
Harvard's Joint Center for Housing Studies' team tries to understand how demographic patterns may impact remodeling and home improvement business trends. In a new study, authors George Masnick, Abbe Will and Kermit Baker write, "Our research finds that older sellers generally live in their home for many years and they sell relatively older housing stock to much younger buyers, which generates significant levels of home improvement spending after the sale. Yet, a declining mobility rate in recent years also suggests more baby boomers may choose to stay in their homes and age in place. Whether aging in place implies significant upgrading to their homes to accommodate their changing needs remains to be seen. Certainly the housing choices made by baby boomers as they age into retirement years, and as the housing market begins to improve, will dramatically affect the size and composition of home improvement spending in the years and decades ahead." Implications here for new-home sales as well as remodeling.
URL to original article: http://www.builderonline.com/builder-pulse/harvard-studies-issue-of-baby-boom-housing-turnover-and-remodeling-trends.aspx?cid=NWBD110722002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Harvard's Joint Center for Housing Studies' team tries to understand how demographic patterns may impact remodeling and home improvement business trends. In a new study, authors George Masnick, Abbe Will and Kermit Baker write, "Our research finds that older sellers generally live in their home for many years and they sell relatively older housing stock to much younger buyers, which generates significant levels of home improvement spending after the sale. Yet, a declining mobility rate in recent years also suggests more baby boomers may choose to stay in their homes and age in place. Whether aging in place implies significant upgrading to their homes to accommodate their changing needs remains to be seen. Certainly the housing choices made by baby boomers as they age into retirement years, and as the housing market begins to improve, will dramatically affect the size and composition of home improvement spending in the years and decades ahead." Implications here for new-home sales as well as remodeling.
URL to original article: http://www.builderonline.com/builder-pulse/harvard-studies-issue-of-baby-boom-housing-turnover-and-remodeling-trends.aspx?cid=NWBD110722002
For further information on Fresno Real Estate check: http://www.londonproperties.com
New lows in home prices 'almost assured': Radar Logic
by JON PRIOR
Home prices in May dropped 5.9% from the year before but gained 1.2% from the previous month, according to the RPX Composite Price index from analytics firm Radar Logic.
The annual drop is the steepest since September 2009. Radar Logic said the monthly gain barely offsets the declines seen earlier in the year.
"Home prices usually increase in the spring due to seasonal factors, and the bulk of the gains typically occur by May," Radar Logic said. "The lackluster performance of the RPX Composite Price to date means that we are almost assured to see new post-bust lows in the fall, when seasonal strength comes to an end and softening demand pulls housing prices downward."
Because of the new lows, analysts at the firm predicted more homeowners will become underwater on their mortgage than the already 10.9 million and thus more foreclosures are bound to occur.
The largest declines in May came in cities in the West and Midwest. Prices fell 14.7% in Seattle, followed by 11.9% in Sacramento, Calif., and 11.6% in Milwaukee. The smallest dip came in New York, at 0.4%, followed by a 1.1% drop in Charlotte, N.C., and a 4.6% decline in Washington.
URL to original article: http://www.housingwire.com/2011/07/21/new-lows-in-home-prices-almost-assured-radar-logic
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices in May dropped 5.9% from the year before but gained 1.2% from the previous month, according to the RPX Composite Price index from analytics firm Radar Logic.
The annual drop is the steepest since September 2009. Radar Logic said the monthly gain barely offsets the declines seen earlier in the year.
"Home prices usually increase in the spring due to seasonal factors, and the bulk of the gains typically occur by May," Radar Logic said. "The lackluster performance of the RPX Composite Price to date means that we are almost assured to see new post-bust lows in the fall, when seasonal strength comes to an end and softening demand pulls housing prices downward."
Because of the new lows, analysts at the firm predicted more homeowners will become underwater on their mortgage than the already 10.9 million and thus more foreclosures are bound to occur.
The largest declines in May came in cities in the West and Midwest. Prices fell 14.7% in Seattle, followed by 11.9% in Sacramento, Calif., and 11.6% in Milwaukee. The smallest dip came in New York, at 0.4%, followed by a 1.1% drop in Charlotte, N.C., and a 4.6% decline in Washington.
URL to original article: http://www.housingwire.com/2011/07/21/new-lows-in-home-prices-almost-assured-radar-logic
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, July 21, 2011
Tipping point for resales comps should come next month
Source: Calculated Risk
As we noted here yesterday, we're at the beginning of the end of the for-sale single family housing slump. But it will be a protracted beginning of the end, lasting through much of 2012. Next month, however, as a seasonally-fuelled tide of pending home sales translates into existing home sales for July, we'll see a resales comp worth getting excited about. Calculated Risk's Bill McBride notes, "Sales NSA are below the tax credit boosted level of sales in June 2010 and June 2009, but slightly above the level of June sales in 2008. Last year sales collapsed in July (orange column - after the expiration of the tax credit), so expect a report of a large YoY increase in sales announced next month." Meanwhile, Hanley Wood's HousingIntelligence.com's executive research director Jonathan Smoke drills into the emerging patterns of price stabilization.
• The NAR reported that inventory increased in June from May (the normal seasonal pattern), and that inventory is off 3.1% from June 2010. Other data sources suggest that the NAR is overstating inventory (inventory will be part of the coming revisions). Inventory is probably down more year-over-year (YoY) than the NAR reported.
• The NAR provided an update on the timing of the "benchmark revisions". The release will be in the fall, and the revisions will be down (no surprise):
Update on Benchmark Revisions: ... NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts; there will be no change to median prices. Although there will be a downward revision to sales volumes, there will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.
... so we’ve had to develop a new approach with an independent source to improve methodology and to permit more frequent revisions.
Preliminary data based on the new benchmark is expected to be available for review in August. ... Publication of the revisions is not likely before this fall, but we expect to provide a notice one month in advance of the publication date.
This revision is expected to show significantly fewer homes sold over the last few years (perhaps 10% to 15% fewer homes in 2010 than originally reported), and also fewer homes for sale.
Hopefully the NAR will provide 1) the revised data for the last decade and 2) a description of the new methodology (as part of this revision, the NAR is expected to change their method for estimating sales and inventory).
Sales NSA are below the tax credit boosted level of sales in June 2010 and June 2009, but slightly above the level of June sales in 2008.
Last year sales collapsed in July (orange column - after the expiration of the tax credit), so expect a report of a large YoY increase in sales announced next month.
The level of sales is still elevated due to investor buying. The NAR noted:
All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent in June 2010; investors account for the bulk of cash purchases.
First-time buyers purchased 31 percent of homes in June, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.
• As Tom Lawler noted yesterday, the Pending Home Sales Index will probably show an increase in June - and reported sales in July will probably be higher than in June. The Pending Home Sales Index will be released on Thursday July 28th.
URL to original article: http://www.builderonline.com/builder-pulse/tipping-point-for-resales-comps-should-come-next-month.aspx?cid=NWBD110721002
For further information on Fresno Real Estate check: http://www.londonproperties.com
As we noted here yesterday, we're at the beginning of the end of the for-sale single family housing slump. But it will be a protracted beginning of the end, lasting through much of 2012. Next month, however, as a seasonally-fuelled tide of pending home sales translates into existing home sales for July, we'll see a resales comp worth getting excited about. Calculated Risk's Bill McBride notes, "Sales NSA are below the tax credit boosted level of sales in June 2010 and June 2009, but slightly above the level of June sales in 2008. Last year sales collapsed in July (orange column - after the expiration of the tax credit), so expect a report of a large YoY increase in sales announced next month." Meanwhile, Hanley Wood's HousingIntelligence.com's executive research director Jonathan Smoke drills into the emerging patterns of price stabilization.
• The NAR reported that inventory increased in June from May (the normal seasonal pattern), and that inventory is off 3.1% from June 2010. Other data sources suggest that the NAR is overstating inventory (inventory will be part of the coming revisions). Inventory is probably down more year-over-year (YoY) than the NAR reported.
• The NAR provided an update on the timing of the "benchmark revisions". The release will be in the fall, and the revisions will be down (no surprise):
Update on Benchmark Revisions: ... NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts; there will be no change to median prices. Although there will be a downward revision to sales volumes, there will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.
... so we’ve had to develop a new approach with an independent source to improve methodology and to permit more frequent revisions.
Preliminary data based on the new benchmark is expected to be available for review in August. ... Publication of the revisions is not likely before this fall, but we expect to provide a notice one month in advance of the publication date.
This revision is expected to show significantly fewer homes sold over the last few years (perhaps 10% to 15% fewer homes in 2010 than originally reported), and also fewer homes for sale.
Hopefully the NAR will provide 1) the revised data for the last decade and 2) a description of the new methodology (as part of this revision, the NAR is expected to change their method for estimating sales and inventory).
Sales NSA are below the tax credit boosted level of sales in June 2010 and June 2009, but slightly above the level of June sales in 2008.
Last year sales collapsed in July (orange column - after the expiration of the tax credit), so expect a report of a large YoY increase in sales announced next month.
The level of sales is still elevated due to investor buying. The NAR noted:
All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent in June 2010; investors account for the bulk of cash purchases.
First-time buyers purchased 31 percent of homes in June, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.
• As Tom Lawler noted yesterday, the Pending Home Sales Index will probably show an increase in June - and reported sales in July will probably be higher than in June. The Pending Home Sales Index will be released on Thursday July 28th.
URL to original article: http://www.builderonline.com/builder-pulse/tipping-point-for-resales-comps-should-come-next-month.aspx?cid=NWBD110721002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Jobless claims rise to 418,000
by JASON PHILYAW
Initial jobless claims rose about 2.4% last week, staying higher than 400,000 for the 15th straight week.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended July 16 increased by 10,000 to 418,000 from an upwardly revised 408,000 the previous week. About 1,750 initial claims last week were attributable to Minnesota state employees filing because of the government shutdown, according to the Labor Department.
Analysts surveyed by Econoday expected 415,000 new jobless claims last week with a range of estimates between 385,000 and 430,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, declined by 2,750 to 421,250 from 424,000 the prior week, which was revised upward slightly.
The seasonally adjusted insured unemployment rate for the week ended July 9 slid back to 2.9% from 3% the prior week, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended July 2 fell to more than 7.3 million from 7.48 million the prior week.
URL to original article: http://www.housingwire.com/2011/07/21/jobless-claims-rise-to-418000
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims rose about 2.4% last week, staying higher than 400,000 for the 15th straight week.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended July 16 increased by 10,000 to 418,000 from an upwardly revised 408,000 the previous week. About 1,750 initial claims last week were attributable to Minnesota state employees filing because of the government shutdown, according to the Labor Department.
Analysts surveyed by Econoday expected 415,000 new jobless claims last week with a range of estimates between 385,000 and 430,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, declined by 2,750 to 421,250 from 424,000 the prior week, which was revised upward slightly.
The seasonally adjusted insured unemployment rate for the week ended July 9 slid back to 2.9% from 3% the prior week, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended July 2 fell to more than 7.3 million from 7.48 million the prior week.
URL to original article: http://www.housingwire.com/2011/07/21/jobless-claims-rise-to-418000
For further information on Fresno Real Estate check: http://www.londonproperties.com
Welcome New Family Members
Wow what a great month!! I just wanted to welcome aboard new agents to our wonderful London office's.
London Properties is pleased to announce the arrival of Alicia Cardenas, Alicia will be working out of Fresno office.
London Properties is pleased to announce the arrival of Lois Petersen, Lois will be working out of Fresno office.
London Properties is please to announce the arrival of Linda Garcia, Linda will be working out of our Madera office.
London Properties is please to announce the arrival of Tina Pafford, formerly with Estate Homes and Land. Tina will be working out of our Fresno office.
London Properties is pleased to announce the arrival of Jagdeep Singh, formerly with Cal Coast & Country Homes. Jagdeep will be working out of our Fresno office.
London Properties is pleased to announce the arrival of Sara Rivera, formerly of Exit Realty. Sara will be working out of our Chowchilla office.
London Properties is please to announce the arrival of Manuel Lopez. Manny will be working out of our Hanford office.
Welcome aboard and welcome to the family. If you or anyone you know would like to get more information please go to www.tiroe.com
London Properties is pleased to announce the arrival of Alicia Cardenas, Alicia will be working out of Fresno office.
London Properties is pleased to announce the arrival of Lois Petersen, Lois will be working out of Fresno office.
London Properties is please to announce the arrival of Linda Garcia, Linda will be working out of our Madera office.
London Properties is please to announce the arrival of Tina Pafford, formerly with Estate Homes and Land. Tina will be working out of our Fresno office.
London Properties is pleased to announce the arrival of Jagdeep Singh, formerly with Cal Coast & Country Homes. Jagdeep will be working out of our Fresno office.
London Properties is pleased to announce the arrival of Sara Rivera, formerly of Exit Realty. Sara will be working out of our Chowchilla office.
London Properties is please to announce the arrival of Manuel Lopez. Manny will be working out of our Hanford office.
Welcome aboard and welcome to the family. If you or anyone you know would like to get more information please go to www.tiroe.com
Wednesday, July 20, 2011
REAL Trends Housing Market Report – June 2011
June housing sales show modest but continued strengthening
Annualized rate of home sales increases from 4.860 million in May 2011 to 5.369 million in June 2011. Average prices of homes sold in June 2011 decreased 1.0 percent from June of 2010.
July 18, 2011 – The REAL Trends Housing Market Report showed that the combination of new and existing home sales in June 2011 on an annualized basis increased from 4.860 million in May 2011 to 5.369 million in June. However the June 2011 rate declined 9.1 percent from the year ago rate of 5.906 million due to the unfavorable comparison with the ending of the tax credit fueled rate of a year ago.
The average price of homes sold declined for the first time in several months with June 2011 average prices declining 1.0 percent from the year ago rate. This decrease follows on increases in each of the last four months.
Housing unit sales for June 2011 were down 26.3 percent in the Northeast followed by a decrease of 9.3 percent in the Midwest when compared to the year ago sales rate. The West had the best performance where housing unit sales were down only 2.7 percent from June 2010.
Average prices of homes sold in June 2011 decreased 1.0 percent across the country. The Northeast had the largest increase with the average price up 4.3 percent followed by a 3.6 percent increase in the South. The largest decrease in average prices of homes sold occurred in the Midwest where prices were off 3.1 percent from a year ago. The West was down 3.0 percent.
"The June 2011 REAL Trends Housing Report shows that housing sales show surprising strength considering the tough economic climate and comparisons to year ago sales that were significantly boosted by the 2010 tax credit program. A significant part of the decline as measured on a year over year basis is due to the Federal tax credit which significantly raised housing sales in the March through June period of 2010,” said Steve Murray, editor of the REAL Trends Housing Market Report. “The fact that the actual average price of home sales has decreased only slightly in June seems to indicate that the market is absorbing the negative news of increased unemployment and continued increases in distressed properties fairly well.”
URL to original article: http://realtrends.com/products/updates/view?uid=50&pid=423&page=9
For further information on Fresno Real Estate check: http://www.londonproperties.com
Annualized rate of home sales increases from 4.860 million in May 2011 to 5.369 million in June 2011. Average prices of homes sold in June 2011 decreased 1.0 percent from June of 2010.
July 18, 2011 – The REAL Trends Housing Market Report showed that the combination of new and existing home sales in June 2011 on an annualized basis increased from 4.860 million in May 2011 to 5.369 million in June. However the June 2011 rate declined 9.1 percent from the year ago rate of 5.906 million due to the unfavorable comparison with the ending of the tax credit fueled rate of a year ago.
The average price of homes sold declined for the first time in several months with June 2011 average prices declining 1.0 percent from the year ago rate. This decrease follows on increases in each of the last four months.
Housing unit sales for June 2011 were down 26.3 percent in the Northeast followed by a decrease of 9.3 percent in the Midwest when compared to the year ago sales rate. The West had the best performance where housing unit sales were down only 2.7 percent from June 2010.
Average prices of homes sold in June 2011 decreased 1.0 percent across the country. The Northeast had the largest increase with the average price up 4.3 percent followed by a 3.6 percent increase in the South. The largest decrease in average prices of homes sold occurred in the Midwest where prices were off 3.1 percent from a year ago. The West was down 3.0 percent.
"The June 2011 REAL Trends Housing Report shows that housing sales show surprising strength considering the tough economic climate and comparisons to year ago sales that were significantly boosted by the 2010 tax credit program. A significant part of the decline as measured on a year over year basis is due to the Federal tax credit which significantly raised housing sales in the March through June period of 2010,” said Steve Murray, editor of the REAL Trends Housing Market Report. “The fact that the actual average price of home sales has decreased only slightly in June seems to indicate that the market is absorbing the negative news of increased unemployment and continued increases in distressed properties fairly well.”
URL to original article: http://realtrends.com/products/updates/view?uid=50&pid=423&page=9
For further information on Fresno Real Estate check: http://www.londonproperties.com
California mid-term outlook is for five-year building bounce: IHS
Source: Orange County (Calif.) Register
According to the Orange County Register's Jon Lansner, "California will lead the pack in a nationwide construction recovery, says a new forecast by economists at IHS Global Insight. According to IHS stats, California will have the most construction dollars spent among the states from 2011-16; will have the largest gain in yearly spending dollars between 2011 and 2016; and have the third highest annual average percentage gain through 2016." Net-net, the IHS forecast is a California vs. Texas stand-off when it comes to construction. For instance, the analysis predicts California construction will grow an average of 15.6% a year to 2016; Texas is predicted to average 5.6% annually. California construction spending will grow 3.7 times faster from 2011 to 2016 in terms of dollars spent — that’s a $55.8 billion gap. California construction will grow to 14.6% of U.S. construction spending by 2016 vs. 10.7% in 2011. Texas’ share will be 9.7% this year — and 8.5% in 2016. Touche!
California will lead the pack in a nationwide construction recovery, says a new forecast by economists at IHS Global Insight.
According to IHS stats, California will have the most construction dollars spent among the states from 2011-16; will have the largest gain in yearly spending dollars between 2011 and 2016; and have the third highest annual average percentage gain through 2016.
Says Jeannine Cataldi of IHS: "California is coming off of such low levels of construction activity, that the growth rates will be very high initially. California's economy is growing again, and will see strong economic growth over the near-term, translating into greater construction activity."
Where's the biggest pop among the states in dollar terms, 2011 vs. 2016 change in annual construction spending?
1.California will see a gain of $76.50 billion.
2.Florida gains $36.90 billion.
3.Texas gains $20.73 billion.
4.Georgia gains $17.98 billion.
5.Arizona gains $17.25 billion.
Which state sees that largest percentage-point gain -- average annual -- from 2011 through 2016?
1.Arizona will grow at an 18.6% annual pace.
2.Nevada grows 17.9% annually.
3.California grows 15.6% annually.
4.Florida grows 14.8% annually.
5.Georgia grows 14.5% annually.
Where will the most construction occur between this year and 2016, in terms of dollars spent?
1.California construction will spend $723 billion -- 13.6% of U.S. total expenditures in the 6 years.
2.Texas spends $473 billion -- 8.9% of U.S.
3.Florida spends $346 billion -- 6.5% of U.S.
4.New York spends $289 billion -- 5.4% of U.S.
5.North Carolina spends $191 billion -- 3.6% of U.S.
Nationwide, IHS for sees total construction spending averaging 8.6% annual growth to 2016 -- with double-digit expansions in 2012, 2013 and 2014.
Url to original article: http://www.builderonline.com/builder-pulse/california-mid-term-outlook-is-for-five-year-building-bounce--ihs.aspx?cid=NWBD110720002
For further information on Fresno Real Estate check: http://www.londonproperties.com
According to the Orange County Register's Jon Lansner, "California will lead the pack in a nationwide construction recovery, says a new forecast by economists at IHS Global Insight. According to IHS stats, California will have the most construction dollars spent among the states from 2011-16; will have the largest gain in yearly spending dollars between 2011 and 2016; and have the third highest annual average percentage gain through 2016." Net-net, the IHS forecast is a California vs. Texas stand-off when it comes to construction. For instance, the analysis predicts California construction will grow an average of 15.6% a year to 2016; Texas is predicted to average 5.6% annually. California construction spending will grow 3.7 times faster from 2011 to 2016 in terms of dollars spent — that’s a $55.8 billion gap. California construction will grow to 14.6% of U.S. construction spending by 2016 vs. 10.7% in 2011. Texas’ share will be 9.7% this year — and 8.5% in 2016. Touche!
California will lead the pack in a nationwide construction recovery, says a new forecast by economists at IHS Global Insight.
According to IHS stats, California will have the most construction dollars spent among the states from 2011-16; will have the largest gain in yearly spending dollars between 2011 and 2016; and have the third highest annual average percentage gain through 2016.
Says Jeannine Cataldi of IHS: "California is coming off of such low levels of construction activity, that the growth rates will be very high initially. California's economy is growing again, and will see strong economic growth over the near-term, translating into greater construction activity."
Where's the biggest pop among the states in dollar terms, 2011 vs. 2016 change in annual construction spending?
1.California will see a gain of $76.50 billion.
2.Florida gains $36.90 billion.
3.Texas gains $20.73 billion.
4.Georgia gains $17.98 billion.
5.Arizona gains $17.25 billion.
Which state sees that largest percentage-point gain -- average annual -- from 2011 through 2016?
1.Arizona will grow at an 18.6% annual pace.
2.Nevada grows 17.9% annually.
3.California grows 15.6% annually.
4.Florida grows 14.8% annually.
5.Georgia grows 14.5% annually.
Where will the most construction occur between this year and 2016, in terms of dollars spent?
1.California construction will spend $723 billion -- 13.6% of U.S. total expenditures in the 6 years.
2.Texas spends $473 billion -- 8.9% of U.S.
3.Florida spends $346 billion -- 6.5% of U.S.
4.New York spends $289 billion -- 5.4% of U.S.
5.North Carolina spends $191 billion -- 3.6% of U.S.
Nationwide, IHS for sees total construction spending averaging 8.6% annual growth to 2016 -- with double-digit expansions in 2012, 2013 and 2014.
Url to original article: http://www.builderonline.com/builder-pulse/california-mid-term-outlook-is-for-five-year-building-bounce--ihs.aspx?cid=NWBD110720002
For further information on Fresno Real Estate check: http://www.londonproperties.com
California foreclosure activity hits four-year low
by KERRI PANCHUK
Mortgage default notice filings in California fell 19.2% in the second quarter over last year, establishing a four-year low when it comes to new foreclosures in the Golden State.
Real estate data firm DataQuick made that report Tuesday, saying it's impossible to come up with a single reason to explain why foreclosure filings in the state fell from 70,051 last year to 56,633 in the most recent second quarter.
DataQuick said it's likely the drop comes from a confluence of factors, including policy changes, political decisions and changes within the mortgage servicing industry.
“A lot of theories are being floated as to why the numbers are down. Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market. The fact of the matter is that no one really knows, outside of lending and servicing industry insiders," said John Walsh, DataQuick's president. "One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us."
Citing examples, DataQuick said the statewide median home sales price hit $250,000 in quarter two, down from $260,000 a year earlier. Compared to first-quarter 2009 levels when foreclosure activity was at an all-time high, today's median price is much improved compared to the $227,000 median set two years ago. The median home price nationwide is now at $189,000, according to Realtor.com. That is mostly unchanged from last year when the median hit $190,000.
Of the loans still going into default, most of them were originated in the 2005-to-2007 period, DataQuick said.
The median origination quarter for defaulted loans is the third-quarter of 2006. Most of the loans made during that period are either owned or serviced by institutions other than the loan's originator.
The most common names to surface in the Golden State foreclosure process were JPMorgan Chase (JPM: 41.13 +1.83%), Wells Fargo (WFC: 28.95 +1.90%) and Bank of America (BAC: 9.88 +3.24%).
URL to original article: http://www.housingwire.com/2011/07/19/california-foreclosure-activity-hits-four-year-low
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage default notice filings in California fell 19.2% in the second quarter over last year, establishing a four-year low when it comes to new foreclosures in the Golden State.
Real estate data firm DataQuick made that report Tuesday, saying it's impossible to come up with a single reason to explain why foreclosure filings in the state fell from 70,051 last year to 56,633 in the most recent second quarter.
DataQuick said it's likely the drop comes from a confluence of factors, including policy changes, political decisions and changes within the mortgage servicing industry.
“A lot of theories are being floated as to why the numbers are down. Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market. The fact of the matter is that no one really knows, outside of lending and servicing industry insiders," said John Walsh, DataQuick's president. "One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us."
Citing examples, DataQuick said the statewide median home sales price hit $250,000 in quarter two, down from $260,000 a year earlier. Compared to first-quarter 2009 levels when foreclosure activity was at an all-time high, today's median price is much improved compared to the $227,000 median set two years ago. The median home price nationwide is now at $189,000, according to Realtor.com. That is mostly unchanged from last year when the median hit $190,000.
Of the loans still going into default, most of them were originated in the 2005-to-2007 period, DataQuick said.
The median origination quarter for defaulted loans is the third-quarter of 2006. Most of the loans made during that period are either owned or serviced by institutions other than the loan's originator.
The most common names to surface in the Golden State foreclosure process were JPMorgan Chase (JPM: 41.13 +1.83%), Wells Fargo (WFC: 28.95 +1.90%) and Bank of America (BAC: 9.88 +3.24%).
URL to original article: http://www.housingwire.com/2011/07/19/california-foreclosure-activity-hits-four-year-low
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, July 18, 2011
Homebuilder confidence rises with outlook not quite as bleak
by JASON PHILYAW
Homebuilder optimism bounced back this month as some markets show deal-seeking consumers coming to market, according to the latest National Association of Home Builders index.
The NAHB and Wells Fargo (WFC: 26.88 -1.10%) surveys builders to gauge perceptions of the new, single-family home market for the next six months. A score higher than 50 indicates more builders view the market as good than poor. The index rose two points to 15 for July after falling three points to 13 the prior month. The index has stayed within a three-point range for nine of the past 10 months.
NAHB Chairman Bob Nielsen said increasing builder confidence "is a positive sign that the outlook perhaps isn't quite as bleak as was feared in June."
"While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions," Nielsen said.
The part of the survey that gauges expectations of sales over the next six months rose seven points to 22, while the component that tracks prospective buyers remained flat with June at 12.
David Crowe, chief economist for the NAHB, said expectations of stronger sales in the back half of the year coupled with July's gain indicate "a return to trend."
"Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve," Crowe said.
URL to original article: http://www.housingwire.com/2011/07/18/homebuilder-confidence-rises-with-outlook-not-quite-as-bleak
For further information on Fresno Real Estate check: http://www.londonproperties.com
Homebuilder optimism bounced back this month as some markets show deal-seeking consumers coming to market, according to the latest National Association of Home Builders index.
The NAHB and Wells Fargo (WFC: 26.88 -1.10%) surveys builders to gauge perceptions of the new, single-family home market for the next six months. A score higher than 50 indicates more builders view the market as good than poor. The index rose two points to 15 for July after falling three points to 13 the prior month. The index has stayed within a three-point range for nine of the past 10 months.
NAHB Chairman Bob Nielsen said increasing builder confidence "is a positive sign that the outlook perhaps isn't quite as bleak as was feared in June."
"While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions," Nielsen said.
The part of the survey that gauges expectations of sales over the next six months rose seven points to 22, while the component that tracks prospective buyers remained flat with June at 12.
David Crowe, chief economist for the NAHB, said expectations of stronger sales in the back half of the year coupled with July's gain indicate "a return to trend."
"Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve," Crowe said.
URL to original article: http://www.housingwire.com/2011/07/18/homebuilder-confidence-rises-with-outlook-not-quite-as-bleak
For further information on Fresno Real Estate check: http://www.londonproperties.com
One in four private Citi mortgage mods redefaulted
by JON PRIOR
Roughly 25% of the mortgage modifications Citigroup (C: 37.58 -2.08%) completed through its own private programs redefaulted over the past two years, the bank's Chief Financial Officer John Gerspach said Friday.
Over the past nine quarters, the bank converted $5.7 billion in a trial modification into permanent status. More than three-quarters of these went through the government's Home Affordable Modification Program. Redefault rates on these HAMP workouts totaled less than 15%.
Citi reported $3.3 billion in earnings for the second quarter as it continued to reduce its Citi Holdings portfolio, which contains $73 billion in these mortgages, down 19% from one year ago.
Loans in 90-day delinquency dropped 13% to $3.9 billion in the second quarter, less than half of the total from one year ago.
"The sequential decline in first mortgage delinquencies was primarily due to continued asset sales, as we sold nearly $800 million in delinquent mortgages," Gerspach said in a call with analysts.
The Treasury Department launched HAMP in March 2009 and although it resulted in a fraction of the originally estimated 3 million o 4 million modifications, it provided a skeleton around which banks could design their own programs. At the same time, HAMP experiences redefault rates far less than these private initiatives
Citi ended the second quarter with roughly $10 billion of its total loan loss reserve allocated to its North American real estate lending portfolio within Citi Holdings.
"Going forward, we expect fewer new modifications, while some portion of our previous modifications will re-default," Gerspach said. "As a result, delinquency trends may deteriorate; however, this is already factored into our net loan loss reserve balances."
URL to original article: http://www.housingwire.com/2011/07/15/one-in-four-private-citi-modifications-redefaulted-as-of-2q
For further information on Fresno Real Estate check: http://www.londonproperties.com
Roughly 25% of the mortgage modifications Citigroup (C: 37.58 -2.08%) completed through its own private programs redefaulted over the past two years, the bank's Chief Financial Officer John Gerspach said Friday.
Over the past nine quarters, the bank converted $5.7 billion in a trial modification into permanent status. More than three-quarters of these went through the government's Home Affordable Modification Program. Redefault rates on these HAMP workouts totaled less than 15%.
Citi reported $3.3 billion in earnings for the second quarter as it continued to reduce its Citi Holdings portfolio, which contains $73 billion in these mortgages, down 19% from one year ago.
Loans in 90-day delinquency dropped 13% to $3.9 billion in the second quarter, less than half of the total from one year ago.
"The sequential decline in first mortgage delinquencies was primarily due to continued asset sales, as we sold nearly $800 million in delinquent mortgages," Gerspach said in a call with analysts.
The Treasury Department launched HAMP in March 2009 and although it resulted in a fraction of the originally estimated 3 million o 4 million modifications, it provided a skeleton around which banks could design their own programs. At the same time, HAMP experiences redefault rates far less than these private initiatives
Citi ended the second quarter with roughly $10 billion of its total loan loss reserve allocated to its North American real estate lending portfolio within Citi Holdings.
"Going forward, we expect fewer new modifications, while some portion of our previous modifications will re-default," Gerspach said. "As a result, delinquency trends may deteriorate; however, this is already factored into our net loan loss reserve balances."
URL to original article: http://www.housingwire.com/2011/07/15/one-in-four-private-citi-modifications-redefaulted-as-of-2q
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, July 15, 2011
Conflicts in federal programs leave underwater homeowners adrift
by JON PRIOR
Government programs aimed at refinancing mortgages of homeowners with negative equity are plagued with disappointing results, long-shot legislation and growing conflicts among regulatory agencies.
As of May, 2.1 million mortgages sat somewhere in the foreclosure process, according to Lender Processing Services. Of those delinquent home loans, 80% were in negative equity, meaning the borrower owed more on the mortgage than the property is worth. Of the seriously delinquent loans that were current just six months ago, roughly 6% had loan-to-value ratios of 150% or higher.
U.S. home prices have fallen 32% from their peak in 2006, according to the Standard & Poor's/Case-Shiller index, but prices may not have bottomed. Robert Shiller, who helped develop the index, recently said prices could drop another 10% to 25%.
In response to the growing number of underwater borrowers, the Obama administration established several programs to urge investors toward writing down the principal on these loans. Each has underwhelmed because the two largest mortgage investors in the country, Fannie Mae and Freddie Mac, do not participate or cannot help homeowners with severe negative equity.
The programs
In September, the Department of Housing and Urban Development launched the $8 billion Federal Housing Administration Short Refinance program. Through it, underwater borrowers can refinance into an FHA-insured loan if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10%.
As of June, only 246 borrowers made it through the program.
One month after FHA Short Refi launched, the Treasury Department started a principal reduction initiative under the Home Affordable Modification Program. Participating servicers evaluate borrowers with a loan-to-value ratio of more than 115% for a reduction.
As of June, servicers included this write-down on 4,911 HAMP modifications.
In February 2010, the Treasury initiated the roughly $7 billion Hardest Hit Fit to provide Troubled Asset Relief Program dollars to state housing finance agencies. Some states including California and Arizona built principal reduction programs, but only Bank of America (BAC: 10.00 -0.70%) and Ally Financial (GJM: 23.68 +1.02%) agreed to participate and only under investor approval.
The Arizona Department of Housing expects BofA to reach up to 8,000 homeowners with the assistance with no estimate yet for California. Ally Financial has given no estimates.
The Home Affordable Refinance Program is by far the most successful. Since it launched in March 2009, more than 784,000 Fannie Mae and Freddie Mac loans pushed through the program and out of negative equity. But 84% of them held LTVs of less than 105%. Only 5,400 borrowers further underwater received help.
The 'Boxer Rebellion'
Sen. Barbara Boxer (D-Calif.) introduced a bill in January that would eliminate upfront fees and underwater restrictions Fannie and Freddie include when evaluating a homeowner for refinancing out of negative equity.
The bill gained recent support from several trade groups and Moody's Analytics Chief Economist Mark Zandi, who said the cost of the bill would be offset by the savings Fannie and Freddie would recoup by helping these borrowers avoid default.
But the bill has Wall Street jumpy. Analysts at Bank of America Merrill Lynch called the bill the "Boxer Rebellion" in a research note released Friday.
"Due to the existence of HARP and HAMP, programs which have performed well below initial expectations, the practical need for this new, seemingly sensible legislation is hard to rationalize. Why would this program have any more implementation success than its predecessor programs?" BofAML analysts said. "Sen. Boxer's push for legislation to refinance underwater homeowners stands in opposition to perhaps the most pressing need of the U.S. economy and fiscal situation: reliance on, not help for, responsible citizens."
Jaret Seiberg, an analyst at the Washington think tank MF Global said Friday the Boxer bill does not have the legs to wind through Congress. Even if it did, the prepayment risk could overwhelm the system.
With Boxer targeting roughly 2 million Americans with her bill, Seiberg said the paperwork needed could have the same damaging effects as the robo-signing disaster.
"Even if one could get massive refinancings, there is the question of whether the infrastructure could support such a move. We saw with the robo-signing controversy that the system could not handle the crush of record foreclosures. In our view, there would be similar problems if there was a crush of refinancing," Seiberg said. "This would be a massive amount of paper to process at once and each loan would need to be recorded in a county clerk’s office."
Conflicting agencies
It appears two government agencies are sending conflicting signals to Fannie Mae and Freddie Mac on whether principal reduction even fits into their conservatorship roles.
When the FHA Short Refinance program launched in September, HUD said between 500,000 and 1.5 million borrowers who owe more on their mortgage than their home is worth would be able to refinance into a right-side-up FHA loan.
But HUD counted on two-thirds of that estimate on loans owned by Fannie and Freddie. As a result of these two firms missing from the program, only the 246 loans, mentioned above, made it through.
HUD said it is working to get Fannie and Freddie involved and is "getting the ball rolling" on the other one-third of the program's targeted loans.
But the lack of participation from Fannie and Freddie is a directive issued by their regulator, the Federal Housing Finance Agency.
"FHFA understands that some mortgage investors have sought such solutions in order to recover today what principal they can on outstanding mortgages. However, I have determined that these programs as they work today, while they may be in the best interest of certain other mortgage investors, do not meet FHFA's conservatorship goals," said FHFA Acting Director Edward DeMarco in a letter to Rep. Brad Miller (D-N.C.) this year.
Out of options
Treasury Secretary Timothy Geithner admitted on last week's Meet the Press that the Obama administration is running out of options to "engineer artificially a stronger recovery" in the housing market and overall economy.
Obama did say at the town hall hosted by Twitter last week that he would put more pressure on banks to pursue principal reduction as an option. But Seiberg said voluntary programs proved to be unreliable and going further would be an illegal breach of securitization documents.
"To make a real difference, the government would need to refinance all underwater borrowers at once to a lower rate loan," Seiberg said. "Such a move would leave the government on the hook for billions of dollars in damages."
BofAML analysts said Washington should instead be focusing on establishing a public-private partnership to invest in distressed real estate, citing the success Treasury had under such a program through TARP. But the analysts remained doubtful — given the current political gridlock on Capitol Hill — that anything could be done.
"Given the less than heroic nature of the budget debate so far, we are not hopeful that this will change anytime soon," the analysts said.
URL to original article: http://www.housingwire.com/2011/07/15/washington-stalled-efforconflicts-in-federal-programs-leave-underwater-homeowners-helplessts-to-rescue-underwater-homeowners
For further information on Fresno Real Estate check: http://www.londonproperties.com
Government programs aimed at refinancing mortgages of homeowners with negative equity are plagued with disappointing results, long-shot legislation and growing conflicts among regulatory agencies.
As of May, 2.1 million mortgages sat somewhere in the foreclosure process, according to Lender Processing Services. Of those delinquent home loans, 80% were in negative equity, meaning the borrower owed more on the mortgage than the property is worth. Of the seriously delinquent loans that were current just six months ago, roughly 6% had loan-to-value ratios of 150% or higher.
U.S. home prices have fallen 32% from their peak in 2006, according to the Standard & Poor's/Case-Shiller index, but prices may not have bottomed. Robert Shiller, who helped develop the index, recently said prices could drop another 10% to 25%.
In response to the growing number of underwater borrowers, the Obama administration established several programs to urge investors toward writing down the principal on these loans. Each has underwhelmed because the two largest mortgage investors in the country, Fannie Mae and Freddie Mac, do not participate or cannot help homeowners with severe negative equity.
The programs
In September, the Department of Housing and Urban Development launched the $8 billion Federal Housing Administration Short Refinance program. Through it, underwater borrowers can refinance into an FHA-insured loan if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10%.
As of June, only 246 borrowers made it through the program.
One month after FHA Short Refi launched, the Treasury Department started a principal reduction initiative under the Home Affordable Modification Program. Participating servicers evaluate borrowers with a loan-to-value ratio of more than 115% for a reduction.
As of June, servicers included this write-down on 4,911 HAMP modifications.
In February 2010, the Treasury initiated the roughly $7 billion Hardest Hit Fit to provide Troubled Asset Relief Program dollars to state housing finance agencies. Some states including California and Arizona built principal reduction programs, but only Bank of America (BAC: 10.00 -0.70%) and Ally Financial (GJM: 23.68 +1.02%) agreed to participate and only under investor approval.
The Arizona Department of Housing expects BofA to reach up to 8,000 homeowners with the assistance with no estimate yet for California. Ally Financial has given no estimates.
The Home Affordable Refinance Program is by far the most successful. Since it launched in March 2009, more than 784,000 Fannie Mae and Freddie Mac loans pushed through the program and out of negative equity. But 84% of them held LTVs of less than 105%. Only 5,400 borrowers further underwater received help.
The 'Boxer Rebellion'
Sen. Barbara Boxer (D-Calif.) introduced a bill in January that would eliminate upfront fees and underwater restrictions Fannie and Freddie include when evaluating a homeowner for refinancing out of negative equity.
The bill gained recent support from several trade groups and Moody's Analytics Chief Economist Mark Zandi, who said the cost of the bill would be offset by the savings Fannie and Freddie would recoup by helping these borrowers avoid default.
But the bill has Wall Street jumpy. Analysts at Bank of America Merrill Lynch called the bill the "Boxer Rebellion" in a research note released Friday.
"Due to the existence of HARP and HAMP, programs which have performed well below initial expectations, the practical need for this new, seemingly sensible legislation is hard to rationalize. Why would this program have any more implementation success than its predecessor programs?" BofAML analysts said. "Sen. Boxer's push for legislation to refinance underwater homeowners stands in opposition to perhaps the most pressing need of the U.S. economy and fiscal situation: reliance on, not help for, responsible citizens."
Jaret Seiberg, an analyst at the Washington think tank MF Global said Friday the Boxer bill does not have the legs to wind through Congress. Even if it did, the prepayment risk could overwhelm the system.
With Boxer targeting roughly 2 million Americans with her bill, Seiberg said the paperwork needed could have the same damaging effects as the robo-signing disaster.
"Even if one could get massive refinancings, there is the question of whether the infrastructure could support such a move. We saw with the robo-signing controversy that the system could not handle the crush of record foreclosures. In our view, there would be similar problems if there was a crush of refinancing," Seiberg said. "This would be a massive amount of paper to process at once and each loan would need to be recorded in a county clerk’s office."
Conflicting agencies
It appears two government agencies are sending conflicting signals to Fannie Mae and Freddie Mac on whether principal reduction even fits into their conservatorship roles.
When the FHA Short Refinance program launched in September, HUD said between 500,000 and 1.5 million borrowers who owe more on their mortgage than their home is worth would be able to refinance into a right-side-up FHA loan.
But HUD counted on two-thirds of that estimate on loans owned by Fannie and Freddie. As a result of these two firms missing from the program, only the 246 loans, mentioned above, made it through.
HUD said it is working to get Fannie and Freddie involved and is "getting the ball rolling" on the other one-third of the program's targeted loans.
But the lack of participation from Fannie and Freddie is a directive issued by their regulator, the Federal Housing Finance Agency.
"FHFA understands that some mortgage investors have sought such solutions in order to recover today what principal they can on outstanding mortgages. However, I have determined that these programs as they work today, while they may be in the best interest of certain other mortgage investors, do not meet FHFA's conservatorship goals," said FHFA Acting Director Edward DeMarco in a letter to Rep. Brad Miller (D-N.C.) this year.
Out of options
Treasury Secretary Timothy Geithner admitted on last week's Meet the Press that the Obama administration is running out of options to "engineer artificially a stronger recovery" in the housing market and overall economy.
Obama did say at the town hall hosted by Twitter last week that he would put more pressure on banks to pursue principal reduction as an option. But Seiberg said voluntary programs proved to be unreliable and going further would be an illegal breach of securitization documents.
"To make a real difference, the government would need to refinance all underwater borrowers at once to a lower rate loan," Seiberg said. "Such a move would leave the government on the hook for billions of dollars in damages."
BofAML analysts said Washington should instead be focusing on establishing a public-private partnership to invest in distressed real estate, citing the success Treasury had under such a program through TARP. But the analysts remained doubtful — given the current political gridlock on Capitol Hill — that anything could be done.
"Given the less than heroic nature of the budget debate so far, we are not hopeful that this will change anytime soon," the analysts said.
URL to original article: http://www.housingwire.com/2011/07/15/washington-stalled-efforconflicts-in-federal-programs-leave-underwater-homeowners-helplessts-to-rescue-underwater-homeowners
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage rates drop on weak jobs report
by JON PRIOR
Mortgage rates slipped across all product types following weaker job gains and an increase in the unemployment rate, according to the Freddie Mac market survey.
The 30-year fixed-rate mortgage averaged 4.51% with an average 0.7 point for the week ending July 14, down 9 basis points from the week before. One year ago, the rate was 4.57%.
The 15-year FRM averaged 3.65% with an average 0.6 point, down 10 bps from the previous week. One year ago, the rate reached above 4%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.29% with an average 0.6 point, down slightly from 3.3% last week. One year ago it was at 3.85%. The 1-year Treasury-indexed ARM averaged 2.95% with an average 0.5 point, a decrease of 6 bps from last week.
Last week, the Labor Department showed only 18,000 jobs were created in June, and the unemployment rate climbed to 9.2%.
"Long-term bond yields and mortgage rates fell this week following a weak employment report," said Freddie Mac Chief Economist Frank Nothaft. "In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term."
URL to the original article: http://www.housingwire.com/2011/07/14/mortgage-rates-drop-on-weak-jobs-report
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage rates slipped across all product types following weaker job gains and an increase in the unemployment rate, according to the Freddie Mac market survey.
The 30-year fixed-rate mortgage averaged 4.51% with an average 0.7 point for the week ending July 14, down 9 basis points from the week before. One year ago, the rate was 4.57%.
The 15-year FRM averaged 3.65% with an average 0.6 point, down 10 bps from the previous week. One year ago, the rate reached above 4%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.29% with an average 0.6 point, down slightly from 3.3% last week. One year ago it was at 3.85%. The 1-year Treasury-indexed ARM averaged 2.95% with an average 0.5 point, a decrease of 6 bps from last week.
Last week, the Labor Department showed only 18,000 jobs were created in June, and the unemployment rate climbed to 9.2%.
"Long-term bond yields and mortgage rates fell this week following a weak employment report," said Freddie Mac Chief Economist Frank Nothaft. "In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term."
URL to the original article: http://www.housingwire.com/2011/07/14/mortgage-rates-drop-on-weak-jobs-report
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, July 14, 2011
Salmon says: mortgage interest deduction favors wealthy, unfair to renters
Source: Reuters
Reuters contributor and financial analyst Felix Salmon has, as one of his "most loyal readers" comments, spent "valuable time to illistrate that one of the largest tax break goes to… ahem… tax payers (sic)." The Salmon piece itself outlines a standard issue lambaste of the mortgage interest deduction. It's the comments--the criticism of the criticism--that show where the rubber meets the road on the issue. A reader notes, "the deduction is the Qwerty keyboard of the tax code."
Check out page 44 of the Joint Committee on Taxation report on the way that household debt is treated for tax purposes. I’ve put the table into chart form, to make it easier to see what’s going on. Apologies for the rather weird y-axis on the chart: it’s serving a double purpose, counting total returns for the left-hand column and dollars for the right hand column. I would have done a dual axis, but I was having difficulty making that work in Excel.
In any event, the big picture here is clear. Households earning more than $200,000 a year account for less than 10% of the returns, but get 30% of all the benefits. And households earning more than $100,000 a year get 69% of all the benefit. The mortgage-interest deduction might be a middle-class tax break, but realistically it’s an upper-middle-class tax break.
The JCT is also very clear on the two separate ways in which it’s fundamentally unfair, benefiting owners at the expense of renters:
The deduction for home mortgage interest reduces the after-tax cost of financing and maintaining a home. Because the Federal income tax allows taxpayers to deduct mortgage interest from their taxable income, but does not allow them to deduct rental payments, there is a financial incentive to buy rather than rent a home. Taxpayers are also allowed to exclude gains from the sale of their principal residences of up to $500,000 from gross income. There is no such exclusion for other types of investments, further reinforcing the financial incentive to buy rather than rent a home.
Homeowners also receive preferential treatment under U.S. tax law because the imputed rental income on owner-occupied housing (that is, the cost of rent which the taxpayer avoids by owning and occupying a home) is not taxed. Consider two taxpayers: one rents a home at a $1,000 monthly rate, and the other owns a home which carries a $1,000 monthly mortgage. All else equal, a renter pays taxes on a measure of income that includes the $1,000 used to pay rent and the homeowner pays taxes on a measure of income that does not include that same $1,000. If imputed rental income were included in income, it would be appropriate to allow a deduction for mortgage interest, property taxes, and depreciation as costs of earning that income. Because tax law allows taxpayers to deduct mortgage interest and property taxes to determine their taxable income but does not tax imputed rental income or allow them to deduct rental payment, it creates the incentive to buy rather than rent a home and to finance the acquisition with debt.
The mortgage-interest deduction should be abolished, of course — it’s a dreadful piece of public policy. Homeownership, especially during times of high unemployment, does more harm than good, and there’s not even any real evidence that the deduction actually increases homeownership, rather than just artificially making houses more expensive to buy.
But if we’re not going to abolish the mortgage-interest deduction, I like the idea that homeowners should be taxed on their imputed rental income. Think about it this way: I can give you a house, or I can give you the money to buy that house, or I can give you an income stream to pay the rent on that house. The tax consequences of the three are very different, and the last one is the worst: you have to pay income tax on the income stream, leaving you with less money for rent. But if you own a house, and get lots of valuable benefit from it every month, you don’t need to pay any tax on that benefit at all.
More realistically, however, we should just look at the $80 billion a year we’re spending on the mortgage-interest deduction and ask ourselves (a) whether we can afford it, and (b) whether it’s really the best possible way in which we could be spending $80 billion a year. The answer to both questions is clearly no. Especially since that money is going overwhelmingly to the richest households in America.
URL to original article: http://www.builderonline.com/builder-pulse/salmon-says--mortgage-interest-deduction-favors-wealthy--unfair-to-renters.aspx?cid=NWBD110714002
For further information on Fresno Real Estate check: http://www.londonproperties.com
Reuters contributor and financial analyst Felix Salmon has, as one of his "most loyal readers" comments, spent "valuable time to illistrate that one of the largest tax break goes to… ahem… tax payers (sic)." The Salmon piece itself outlines a standard issue lambaste of the mortgage interest deduction. It's the comments--the criticism of the criticism--that show where the rubber meets the road on the issue. A reader notes, "the deduction is the Qwerty keyboard of the tax code."
Check out page 44 of the Joint Committee on Taxation report on the way that household debt is treated for tax purposes. I’ve put the table into chart form, to make it easier to see what’s going on. Apologies for the rather weird y-axis on the chart: it’s serving a double purpose, counting total returns for the left-hand column and dollars for the right hand column. I would have done a dual axis, but I was having difficulty making that work in Excel.
In any event, the big picture here is clear. Households earning more than $200,000 a year account for less than 10% of the returns, but get 30% of all the benefits. And households earning more than $100,000 a year get 69% of all the benefit. The mortgage-interest deduction might be a middle-class tax break, but realistically it’s an upper-middle-class tax break.
The JCT is also very clear on the two separate ways in which it’s fundamentally unfair, benefiting owners at the expense of renters:
The deduction for home mortgage interest reduces the after-tax cost of financing and maintaining a home. Because the Federal income tax allows taxpayers to deduct mortgage interest from their taxable income, but does not allow them to deduct rental payments, there is a financial incentive to buy rather than rent a home. Taxpayers are also allowed to exclude gains from the sale of their principal residences of up to $500,000 from gross income. There is no such exclusion for other types of investments, further reinforcing the financial incentive to buy rather than rent a home.
Homeowners also receive preferential treatment under U.S. tax law because the imputed rental income on owner-occupied housing (that is, the cost of rent which the taxpayer avoids by owning and occupying a home) is not taxed. Consider two taxpayers: one rents a home at a $1,000 monthly rate, and the other owns a home which carries a $1,000 monthly mortgage. All else equal, a renter pays taxes on a measure of income that includes the $1,000 used to pay rent and the homeowner pays taxes on a measure of income that does not include that same $1,000. If imputed rental income were included in income, it would be appropriate to allow a deduction for mortgage interest, property taxes, and depreciation as costs of earning that income. Because tax law allows taxpayers to deduct mortgage interest and property taxes to determine their taxable income but does not tax imputed rental income or allow them to deduct rental payment, it creates the incentive to buy rather than rent a home and to finance the acquisition with debt.
The mortgage-interest deduction should be abolished, of course — it’s a dreadful piece of public policy. Homeownership, especially during times of high unemployment, does more harm than good, and there’s not even any real evidence that the deduction actually increases homeownership, rather than just artificially making houses more expensive to buy.
But if we’re not going to abolish the mortgage-interest deduction, I like the idea that homeowners should be taxed on their imputed rental income. Think about it this way: I can give you a house, or I can give you the money to buy that house, or I can give you an income stream to pay the rent on that house. The tax consequences of the three are very different, and the last one is the worst: you have to pay income tax on the income stream, leaving you with less money for rent. But if you own a house, and get lots of valuable benefit from it every month, you don’t need to pay any tax on that benefit at all.
More realistically, however, we should just look at the $80 billion a year we’re spending on the mortgage-interest deduction and ask ourselves (a) whether we can afford it, and (b) whether it’s really the best possible way in which we could be spending $80 billion a year. The answer to both questions is clearly no. Especially since that money is going overwhelmingly to the richest households in America.
URL to original article: http://www.builderonline.com/builder-pulse/salmon-says--mortgage-interest-deduction-favors-wealthy--unfair-to-renters.aspx?cid=NWBD110714002
For further information on Fresno Real Estate check: http://www.londonproperties.com
One million foreclosures delayed to 2012 or later
by JON PRIOR
Processing problems at the major mortgage servicers pushed up to 1 million foreclosure actions that should have taken place in 2011 into 2012 and beyond, according to RealtyTrac.
Lenders issued a foreclosure filing on more than 1.1 million properties in the first half 2011, down 29% from the same period one year ago. More than 608,000 properties received a filing in the second quarter, down 32% from the same period last year. And foreclosures in June were down 29% from one year ago, the ninth straight month of yearly declines.
"It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market," said RealtyTrac CEO James Saccacio. "Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case."
Major servicers froze the foreclosure process late last year and are still in the middle of correcting mishandled documents. The servicers became the focal point of investigations from the 50 state attorneys general and have been forced into compliance with consent orders from regulators.
Month-to-month, the process seems to be showing signs of life. In May, foreclosure activity spiked across certain states. And in June, foreclosure filings across the country increased 4% from the month before.
But viewed on a quarterly or larger scale, the process continues to drag. The properties that completed the foreclosure process in the second quarter spent 318 days in the system on average, up from a revised 298 days in the first quarter and 277 days in the second quarter of 2010.
REO properties that sold in the second quarter spent 178 days on the market from the time they were foreclosed, an uptick from 176 days in the first quarter and 164 days one year ago. In New York, REO properties took an average of 309 days to sell.
"Processing and procedural delays are pushing foreclosures further and further out," Saccaccio said. "This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."
URL to original article: http://www.housingwire.com/2011/07/13/one-million-foreclosures-delayed-to-2012-or-later-realtytrac
For further information on Fresno Real Estate check: http://www.londonproperties.com
Processing problems at the major mortgage servicers pushed up to 1 million foreclosure actions that should have taken place in 2011 into 2012 and beyond, according to RealtyTrac.
Lenders issued a foreclosure filing on more than 1.1 million properties in the first half 2011, down 29% from the same period one year ago. More than 608,000 properties received a filing in the second quarter, down 32% from the same period last year. And foreclosures in June were down 29% from one year ago, the ninth straight month of yearly declines.
"It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market," said RealtyTrac CEO James Saccacio. "Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case."
Major servicers froze the foreclosure process late last year and are still in the middle of correcting mishandled documents. The servicers became the focal point of investigations from the 50 state attorneys general and have been forced into compliance with consent orders from regulators.
Month-to-month, the process seems to be showing signs of life. In May, foreclosure activity spiked across certain states. And in June, foreclosure filings across the country increased 4% from the month before.
But viewed on a quarterly or larger scale, the process continues to drag. The properties that completed the foreclosure process in the second quarter spent 318 days in the system on average, up from a revised 298 days in the first quarter and 277 days in the second quarter of 2010.
REO properties that sold in the second quarter spent 178 days on the market from the time they were foreclosed, an uptick from 176 days in the first quarter and 164 days one year ago. In New York, REO properties took an average of 309 days to sell.
"Processing and procedural delays are pushing foreclosures further and further out," Saccaccio said. "This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."
URL to original article: http://www.housingwire.com/2011/07/13/one-million-foreclosures-delayed-to-2012-or-later-realtytrac
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, July 13, 2011
Bernanke down on housing, admits more securities purchases possible
by KERRI PANCHUK
Federal Reserve Chairman Ben Bernanke is not ruling out additional securities purchases by the central bank as the economic recovery continues to sputter.
"Residential construction activity remains at an extremely low level," Bernanke told the House Committee on Financial Services Wednesday. "The demand for homes has been depressed by many of the same factors that have held down consumer spending more generally, including the slowness of the recovery in jobs and income as well as poor consumer sentiment."
Bernanke says access to credit and unstable home prices are stifling a recovery in the real estate economy.
The chairman reiterated the Fed's forecast the economy will pick up speed in coming quarters, but stopped short of sounding confident.
The "possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support," Bernanke told lawmakers.
While lowering the federal funds rate is often one way to spur economic activity, lowering the funds rate again is impossible as it's remained near zero since December 2008.
"Another approach would be to initiate more securities purchases or to increase the average maturity of our holdings," Bernanke told lawmakers. The Federal Reserve "could also reduce the 25 basis point rate of interest it pays to banks on their reserves, thereby putting downward pressure on short-term rates more generally."
The Fed's accommodative policies have drawn criticism from economists and even a few Federal Reserve Bank leaders. The Fed's well-known QE2, $600 billion Treasury-bond buying program ended June 30, with many economists suggesting some type of stimulus would be retained to help the sagging American economy.
Christopher Whalen with Institutional Risk Analytics responded to Bernanke's Wednesday comments saying, "The FOMC cannot leave rates at current levels or the financial system will collapse. The cost-benefit tipping point on ZIRP has long since been passed."
Bernanke, himself, conceded in front of lawmakers Wednesday that further easing may be necessary to breath life into the markets, while also admitting the approach could create unforeseen consequences.
"Our experience with these policies remains relatively limited, and employing them would entail potential risks and costs," he said. "However, prudent planning requires that we evaluate the efficacy of these and other potential alternatives for deploying additional stimulus if conditions warrant."
He added if the economy evolves in a positive direction, the Fed could draw back by shrinking its balance sheet and increasing the federal funds rate.
At the moment, the Fed is projecting a 2.7% and 2.9% increase in gross domestic product for 2011 and 3.3 to 3.7% growth in 2012.
URL to original article: http://www.housingwire.com/2011/07/13/bernanke-down-on-housing-admits-more-securities-purchases-possible
For further information on Fresno Real Estate check: http://www.londonproperties.com
Federal Reserve Chairman Ben Bernanke is not ruling out additional securities purchases by the central bank as the economic recovery continues to sputter.
"Residential construction activity remains at an extremely low level," Bernanke told the House Committee on Financial Services Wednesday. "The demand for homes has been depressed by many of the same factors that have held down consumer spending more generally, including the slowness of the recovery in jobs and income as well as poor consumer sentiment."
Bernanke says access to credit and unstable home prices are stifling a recovery in the real estate economy.
The chairman reiterated the Fed's forecast the economy will pick up speed in coming quarters, but stopped short of sounding confident.
The "possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support," Bernanke told lawmakers.
While lowering the federal funds rate is often one way to spur economic activity, lowering the funds rate again is impossible as it's remained near zero since December 2008.
"Another approach would be to initiate more securities purchases or to increase the average maturity of our holdings," Bernanke told lawmakers. The Federal Reserve "could also reduce the 25 basis point rate of interest it pays to banks on their reserves, thereby putting downward pressure on short-term rates more generally."
The Fed's accommodative policies have drawn criticism from economists and even a few Federal Reserve Bank leaders. The Fed's well-known QE2, $600 billion Treasury-bond buying program ended June 30, with many economists suggesting some type of stimulus would be retained to help the sagging American economy.
Christopher Whalen with Institutional Risk Analytics responded to Bernanke's Wednesday comments saying, "The FOMC cannot leave rates at current levels or the financial system will collapse. The cost-benefit tipping point on ZIRP has long since been passed."
Bernanke, himself, conceded in front of lawmakers Wednesday that further easing may be necessary to breath life into the markets, while also admitting the approach could create unforeseen consequences.
"Our experience with these policies remains relatively limited, and employing them would entail potential risks and costs," he said. "However, prudent planning requires that we evaluate the efficacy of these and other potential alternatives for deploying additional stimulus if conditions warrant."
He added if the economy evolves in a positive direction, the Fed could draw back by shrinking its balance sheet and increasing the federal funds rate.
At the moment, the Fed is projecting a 2.7% and 2.9% increase in gross domestic product for 2011 and 3.3 to 3.7% growth in 2012.
URL to original article: http://www.housingwire.com/2011/07/13/bernanke-down-on-housing-admits-more-securities-purchases-possible
For further information on Fresno Real Estate check: http://www.londonproperties.com
Bernanke: Private sector ready for conforming loan limit drop
by JON PRIOR
Federal Reserve Chairman Ben Bernanke said in a House committee hearing Wednesday the private market is set to fill the void when the conforming loan limits on government-backed mortgages expire in October – at a higher cost to homebuyers.
Congress raised the conforming loans limits in 2008 to allow Fannie Mae, Freddie Mac and the Federal Housing Administration to insure, guarantee and buy more mortgages at a time when private funding froze during the financial crisis.
Without an extension, the maximum mortgage amount will drop to $625,500 from $729,750 in high-cost areas on Oct.1.
"As far as Fannie Mae and Freddie Mac are concerned, there is a tradeoff there between supporting the higher priced homes and weaning the housing finance system off of unusual limits it was put under during the crisis," Bernanke said. "I understand the private sector is taking at least a significant number of the jumbo mortgage market but at a higher cost."
Researchers from George Washington University said the FHA already exceeds the market share needed to serve its targeted demographic of low- to middle-income homebuyers.
According to Capital Economics, only 5% of the loans bought or guaranteed by Fannie and Freddie fell above where the conforming loan limit will drop to in October.
However, a separate report from the National Association of Home Builders suggests more than 17 million homes across the country will become ineligible for cheaper federal funding – at a time when the housing market continues to struggle.
"These are not necessarily mansions, but there are many of them around the country that would be affected," Rep. Gary Ackerman (D-N.Y.) said at the hearing. "The housing market and the low level of new homebuyers is a huge problem."
Ackerman then asked Bernanke how Congress should reconcile the possibility that many homeowners will not buy homes in this higher bracket when they would otherwise be qualified to do so.
"I don't have an answer other than to say that we have to get our housing finance system back into working order," Bernanke said.
URL to original article: http://www.housingwire.com/2011/07/13/bernanke-private-sector-ready-for-conforming-loan-limit-drop
For further information on Fresno Real Estate check: http://www.londonproperties.com
Federal Reserve Chairman Ben Bernanke said in a House committee hearing Wednesday the private market is set to fill the void when the conforming loan limits on government-backed mortgages expire in October – at a higher cost to homebuyers.
Congress raised the conforming loans limits in 2008 to allow Fannie Mae, Freddie Mac and the Federal Housing Administration to insure, guarantee and buy more mortgages at a time when private funding froze during the financial crisis.
Without an extension, the maximum mortgage amount will drop to $625,500 from $729,750 in high-cost areas on Oct.1.
"As far as Fannie Mae and Freddie Mac are concerned, there is a tradeoff there between supporting the higher priced homes and weaning the housing finance system off of unusual limits it was put under during the crisis," Bernanke said. "I understand the private sector is taking at least a significant number of the jumbo mortgage market but at a higher cost."
Researchers from George Washington University said the FHA already exceeds the market share needed to serve its targeted demographic of low- to middle-income homebuyers.
According to Capital Economics, only 5% of the loans bought or guaranteed by Fannie and Freddie fell above where the conforming loan limit will drop to in October.
However, a separate report from the National Association of Home Builders suggests more than 17 million homes across the country will become ineligible for cheaper federal funding – at a time when the housing market continues to struggle.
"These are not necessarily mansions, but there are many of them around the country that would be affected," Rep. Gary Ackerman (D-N.Y.) said at the hearing. "The housing market and the low level of new homebuyers is a huge problem."
Ackerman then asked Bernanke how Congress should reconcile the possibility that many homeowners will not buy homes in this higher bracket when they would otherwise be qualified to do so.
"I don't have an answer other than to say that we have to get our housing finance system back into working order," Bernanke said.
URL to original article: http://www.housingwire.com/2011/07/13/bernanke-private-sector-ready-for-conforming-loan-limit-drop
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices, inventory levels trend up: Altos Research
by KERRI PANCHUK
Home prices and inventory levels are trending upward in many U.S. cities tracked by Altos Research, according to the firm's latest Housing Market Update.
The median national home price for all 26 markets covered by Altos hit $450,358 in June, up from $444,273 in May.
Meanwhile, in the past three months, listing prices rose 2.31% and inventory levels grew 3.52%.
The only city to report a drop in home prices in June was Las Vegas and even that was a mere 0.86% decline when compared to the month before.
When analyzing home price data for the past three months, both New York and Las Vegas experienced falling prices, reporting drops of 2.2% and 1.61%, respectively, Altos said.
Inventory rose in 12 of the major markets tracked by Altos last month, while falling in the remaining 14 composite cities. The biggest inventory jump occurred in Boston, with the city's inventory level rising to 5.8%. Phoenix, on the other hand, experienced the largest inventory level drop, falling 7.93%.
Even though the 90-day home price trends rose somewhat, Altos said a weekly sample taken from the month of June still shows a "slight flattening" in home prices.
Comparatively, the latest S&P/Case Shiller report said the average price of a single-family home rose for the first time in eight months during the month of April. Altos suspects the S&P/Case-Shiller will be reporting a few positive trends through September.
At the same time when looking forward, Altos foresees a slowing or plateau of home prices in the fourth quarter.
URL to original article: http://www.housingwire.com/2011/07/12/home-prices-inventory-levels-trend-up-altos-research
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices and inventory levels are trending upward in many U.S. cities tracked by Altos Research, according to the firm's latest Housing Market Update.
The median national home price for all 26 markets covered by Altos hit $450,358 in June, up from $444,273 in May.
Meanwhile, in the past three months, listing prices rose 2.31% and inventory levels grew 3.52%.
The only city to report a drop in home prices in June was Las Vegas and even that was a mere 0.86% decline when compared to the month before.
When analyzing home price data for the past three months, both New York and Las Vegas experienced falling prices, reporting drops of 2.2% and 1.61%, respectively, Altos said.
Inventory rose in 12 of the major markets tracked by Altos last month, while falling in the remaining 14 composite cities. The biggest inventory jump occurred in Boston, with the city's inventory level rising to 5.8%. Phoenix, on the other hand, experienced the largest inventory level drop, falling 7.93%.
Even though the 90-day home price trends rose somewhat, Altos said a weekly sample taken from the month of June still shows a "slight flattening" in home prices.
Comparatively, the latest S&P/Case Shiller report said the average price of a single-family home rose for the first time in eight months during the month of April. Altos suspects the S&P/Case-Shiller will be reporting a few positive trends through September.
At the same time when looking forward, Altos foresees a slowing or plateau of home prices in the fourth quarter.
URL to original article: http://www.housingwire.com/2011/07/12/home-prices-inventory-levels-trend-up-altos-research
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, July 12, 2011
Why a foreclosure moratorium is no longer an option
by RICK SHARGA
A foreclosure moratorium is one of those suggestions that sounds like a good idea. And, for borrowers currently in foreclosure or seriously in default on their loans, a moratorium would provide a temporary reprieve.
Unfortunately, for the overwhelming majority of those borrowers, a moratorium would do nothing to change the ultimate outcome of the foreclosure process, it would simply be delaying the inevitable.
On the other hand, a foreclosure moratorium would have disastrous implications for the housing market, and quite possibly for the overall economy. Foreclosure actions are already at artificially low levels due to massive delays caused by paperwork problems and ongoing settlement negotiations between the major lenders and government officials.
These delays will push out the housing market recovery by at least another 12 months, as foreclosures that should have taken place gradually make their way into the pipeline, continuing to put downward pricing pressure on the market.
A moratorium would exacerbate this situation, and essentially push out the recovery even further, putting even more pressure on an already-weak U.S. economy.
A moratorium would also very likely put a stop to all – or at least most – residential lending for two reasons.
First, a foreclosure moratorium would accelerate risk for lenders, who offer low interest rates on mortgages because of the collateral put up against the loan, but would now be unable to recoup their losses.
Second, the moratorium, by pushing out the housing market recovery, would probably drive home prices lower, meaning that banks would be writing loans against depreciating assets. In an environment where the assets are worth less and less and the banks can't hedge against potential losses by being able to foreclose, who is going to write a home loan?
Finally, don't discount the disruption that could potentially be caused by thousands of borrowers deciding to "take advantage" of a foreclosure moratorium by opting to simply stop making their loan payments. With about 25% of all mortgages being underwater, this is more than just an idle threat; it's a very real possibility.
Rick Sharga is the senior vice president for RealtyTrac, a foreclosure data provider and online marketplace.
URL to original article: http://www.housingwire.com/2011/07/11/why-a-foreclosure-moratorium-is-no-longer-an-option
For further information on Fresno Real Estate check: http://www.londonproperties.com
A foreclosure moratorium is one of those suggestions that sounds like a good idea. And, for borrowers currently in foreclosure or seriously in default on their loans, a moratorium would provide a temporary reprieve.
Unfortunately, for the overwhelming majority of those borrowers, a moratorium would do nothing to change the ultimate outcome of the foreclosure process, it would simply be delaying the inevitable.
On the other hand, a foreclosure moratorium would have disastrous implications for the housing market, and quite possibly for the overall economy. Foreclosure actions are already at artificially low levels due to massive delays caused by paperwork problems and ongoing settlement negotiations between the major lenders and government officials.
These delays will push out the housing market recovery by at least another 12 months, as foreclosures that should have taken place gradually make their way into the pipeline, continuing to put downward pricing pressure on the market.
A moratorium would exacerbate this situation, and essentially push out the recovery even further, putting even more pressure on an already-weak U.S. economy.
A moratorium would also very likely put a stop to all – or at least most – residential lending for two reasons.
First, a foreclosure moratorium would accelerate risk for lenders, who offer low interest rates on mortgages because of the collateral put up against the loan, but would now be unable to recoup their losses.
Second, the moratorium, by pushing out the housing market recovery, would probably drive home prices lower, meaning that banks would be writing loans against depreciating assets. In an environment where the assets are worth less and less and the banks can't hedge against potential losses by being able to foreclose, who is going to write a home loan?
Finally, don't discount the disruption that could potentially be caused by thousands of borrowers deciding to "take advantage" of a foreclosure moratorium by opting to simply stop making their loan payments. With about 25% of all mortgages being underwater, this is more than just an idle threat; it's a very real possibility.
Rick Sharga is the senior vice president for RealtyTrac, a foreclosure data provider and online marketplace.
URL to original article: http://www.housingwire.com/2011/07/11/why-a-foreclosure-moratorium-is-no-longer-an-option
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, July 11, 2011
Foreclosure sales dip for second straight month
by JON PRIOR
Mortgage servicers completed 68,000 foreclosure sales on the courthouse steps in May, down 7% from the previous month and the second straight month of declines, according to the Hope Now alliance of insurers, counselors and lenders.
Foreclosure sales dropped 14% in April. However, servicers started 176,000 foreclosures in May, up 8% from the previous month. Roughly 2.67 million mortgages remained in 60-day delinquency, up 1% from the previous month.
Modifications remained flat at roughly 85,000 through private initiatives and the Home Affordable Modification Program.
Private modifications dipped to 53,000 in May, a 7% decrease. In April, the drop on private workouts was 26%, allowing HAMP to take a larger share of completed modifications. Servicers completed 32,398 permanent HAMP modifications in May, up 12%.
"Despite increases in foreclosure starts and a decrease in proprietary modifications this month, there were still a few bright spots in fewer foreclosure sales, an increase in HAMP loan modifications and the third straight month of relatively flat 60+ day delinquencies," said Faith Schwartz, the executive director of Hope Now.
Schwartz added servicers have even more tools now to assist troubled homeowners. The Department of Housing and Urban Development will target roughly 30,000 borrowers with unemployment assistance through the Emergency Homeowner Loan Program. The Federal Housing Administration recently increased the forbearance period on its modification program, and banks are still signing up to 19 state programs under the Treasury Department's Hardest Hit Fund.
Since the housing meltdown in 2007, servicers completed 4.6 million modifications, according to Hope Now.
"While we have seen loan modifications flatten out in recent months, the overall numbers continue to illustrate the size and scope of what mortgage servicers, and their non-profit and government partners, have achieved on behalf of at-risk homeowners," Schwartz said. "This combination of new tools and extraordinary outreach efforts has resulted in the most comprehensive set of solutions available to at-risk homeowners to date."
URL to original article: http://www.housingwire.com/2011/07/11/foreclosure-sales-dip-for-second-straight-month
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage servicers completed 68,000 foreclosure sales on the courthouse steps in May, down 7% from the previous month and the second straight month of declines, according to the Hope Now alliance of insurers, counselors and lenders.
Foreclosure sales dropped 14% in April. However, servicers started 176,000 foreclosures in May, up 8% from the previous month. Roughly 2.67 million mortgages remained in 60-day delinquency, up 1% from the previous month.
Modifications remained flat at roughly 85,000 through private initiatives and the Home Affordable Modification Program.
Private modifications dipped to 53,000 in May, a 7% decrease. In April, the drop on private workouts was 26%, allowing HAMP to take a larger share of completed modifications. Servicers completed 32,398 permanent HAMP modifications in May, up 12%.
"Despite increases in foreclosure starts and a decrease in proprietary modifications this month, there were still a few bright spots in fewer foreclosure sales, an increase in HAMP loan modifications and the third straight month of relatively flat 60+ day delinquencies," said Faith Schwartz, the executive director of Hope Now.
Schwartz added servicers have even more tools now to assist troubled homeowners. The Department of Housing and Urban Development will target roughly 30,000 borrowers with unemployment assistance through the Emergency Homeowner Loan Program. The Federal Housing Administration recently increased the forbearance period on its modification program, and banks are still signing up to 19 state programs under the Treasury Department's Hardest Hit Fund.
Since the housing meltdown in 2007, servicers completed 4.6 million modifications, according to Hope Now.
"While we have seen loan modifications flatten out in recent months, the overall numbers continue to illustrate the size and scope of what mortgage servicers, and their non-profit and government partners, have achieved on behalf of at-risk homeowners," Schwartz said. "This combination of new tools and extraordinary outreach efforts has resulted in the most comprehensive set of solutions available to at-risk homeowners to date."
URL to original article: http://www.housingwire.com/2011/07/11/foreclosure-sales-dip-for-second-straight-month
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, July 8, 2011
Home prices to slip more but dip to be less severe
by JON PRIOR
Home prices fell 3.2% in the first six months of 2011 and should drop another 2.4% in the second half of the year, according to data provider Clear Capital, but five key markets could record gains by year-end.
Clear Capital showed early signs of a double-dip in March before reaching a new low on its index one month later.
Prices in the Midwest fell especially hard. In Detroit, prices fell 20% in the first six months of 2011 alone, equal to roughly $12,000 on a home worth $62,500. Analysts at the firm forecast home price gains in only five U.S. markets by the end of 2011: Washington, D.C., New York, Orlando, Dallas and San Francisco.
"While most individual markets are also projected to post losses for the year, it is clear prices have begun to level off and are not exhibiting as much volatility as we’ve seen since the downturn began," said Alex Villacorta, director of research and analytics at Clear Capital.
There was some good news. REO, or previously foreclosed properties, accounted for 31.5% of the U.S. housing market at the end of June, down from 33.1% three months before. While still well above historical levels, Clear Capital said the number is "clearly trending downward" as the market absorbs more REO properties.
Home prices in the second quarter actually increased 0.9% after nine months of continued decline.
"At the mid-point of the year, it’s promising to see the overall market shake off the string of declines observed since late last year, especially in light of significant challenges for the industry," Villacorta said. "However, we have yet to see the burst in consumer demand to avoid posting a net loss in national prices for the year."
URL to original article: http://www.housingwire.com/2011/07/07/home-prices-to-slip-more-but-dip-to-be-less-severe
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices fell 3.2% in the first six months of 2011 and should drop another 2.4% in the second half of the year, according to data provider Clear Capital, but five key markets could record gains by year-end.
Clear Capital showed early signs of a double-dip in March before reaching a new low on its index one month later.
Prices in the Midwest fell especially hard. In Detroit, prices fell 20% in the first six months of 2011 alone, equal to roughly $12,000 on a home worth $62,500. Analysts at the firm forecast home price gains in only five U.S. markets by the end of 2011: Washington, D.C., New York, Orlando, Dallas and San Francisco.
"While most individual markets are also projected to post losses for the year, it is clear prices have begun to level off and are not exhibiting as much volatility as we’ve seen since the downturn began," said Alex Villacorta, director of research and analytics at Clear Capital.
There was some good news. REO, or previously foreclosed properties, accounted for 31.5% of the U.S. housing market at the end of June, down from 33.1% three months before. While still well above historical levels, Clear Capital said the number is "clearly trending downward" as the market absorbs more REO properties.
Home prices in the second quarter actually increased 0.9% after nine months of continued decline.
"At the mid-point of the year, it’s promising to see the overall market shake off the string of declines observed since late last year, especially in light of significant challenges for the industry," Villacorta said. "However, we have yet to see the burst in consumer demand to avoid posting a net loss in national prices for the year."
URL to original article: http://www.housingwire.com/2011/07/07/home-prices-to-slip-more-but-dip-to-be-less-severe
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, July 7, 2011
Jobless claims fall last week, private sector adds 157,000 jobs in June
by JASON PHILYAW
Initial jobless claims fell again last week, and the private sector added 157,000 jobs in June, indicating potential strengthening in the jobs market.
The Labor Department said the seasonally adjusted figure of initial claims for the week ended July 2 decreased by 14,000 to 418,000 from an upwardly revised 432,000 the previous week.
Analysts surveyed by Econoday expected 420,000 new jobless claims last week with a range of estimates between 405,000 and 435,000. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Also Thursday, Automatic Data Processing Inc. said private-sector employment rose by 157,000 in June, well ahead of analysts' estimates. Briefing.com expected 50,000 new private-sector jobs in June. Paul Ashworth, chief U.S. economist at Capital Economics, said June's gain was double consensus projections of 70,000.
"The bigger than expected 157,000 increase in June's ADP payroll survey measure of private employment suggests that the U.S. economy started to recover some of the momentum lost over the preceding couple of months," Ashworth said.
The payroll giant conducts the monthly survey, which excludes federal jobs, in conjunction with Macroeconomic Advisers. The companies revised the May increase in nonfarm private-sector jobs downward slightly to 36,000 from 38,000.
"This month's jobs figures are a significant improvement over May's, particularly in light of last quarter's disappointing 1.9% GDP growth," ADP Chief Executive Gary Butler said. "Given such strong employment results despite poor GDP, I am optimistic we will see improving job growth in the second half of the year."
The Labor Department said the four-week moving average of jobless claims, which is considered a less volatile indicator than weekly claims, fell to 424,750 last week from a slightly revised 427,750 the prior week.
The total number of people receiving some sort of federal unemployment benefits for the week ended June 18 fell to 7.46 million from 7.51 million the prior week. The Labor Department reports nonfarm payroll data for June on Friday.
On Wednesday, research firm Challenger, Gray & Christmas said the number of planned layoffs grew 11.6% in June even as job cuts fell to an 11-year low in the first half of 2011.
URL to original article: http://www.housingwire.com/2011/07/07/jobless-claims-fall-last-week-private-sector-adds-157000-jobs-in-june
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims fell again last week, and the private sector added 157,000 jobs in June, indicating potential strengthening in the jobs market.
The Labor Department said the seasonally adjusted figure of initial claims for the week ended July 2 decreased by 14,000 to 418,000 from an upwardly revised 432,000 the previous week.
Analysts surveyed by Econoday expected 420,000 new jobless claims last week with a range of estimates between 405,000 and 435,000. Most economists believe weekly claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
Also Thursday, Automatic Data Processing Inc. said private-sector employment rose by 157,000 in June, well ahead of analysts' estimates. Briefing.com expected 50,000 new private-sector jobs in June. Paul Ashworth, chief U.S. economist at Capital Economics, said June's gain was double consensus projections of 70,000.
"The bigger than expected 157,000 increase in June's ADP payroll survey measure of private employment suggests that the U.S. economy started to recover some of the momentum lost over the preceding couple of months," Ashworth said.
The payroll giant conducts the monthly survey, which excludes federal jobs, in conjunction with Macroeconomic Advisers. The companies revised the May increase in nonfarm private-sector jobs downward slightly to 36,000 from 38,000.
"This month's jobs figures are a significant improvement over May's, particularly in light of last quarter's disappointing 1.9% GDP growth," ADP Chief Executive Gary Butler said. "Given such strong employment results despite poor GDP, I am optimistic we will see improving job growth in the second half of the year."
The Labor Department said the four-week moving average of jobless claims, which is considered a less volatile indicator than weekly claims, fell to 424,750 last week from a slightly revised 427,750 the prior week.
The total number of people receiving some sort of federal unemployment benefits for the week ended June 18 fell to 7.46 million from 7.51 million the prior week. The Labor Department reports nonfarm payroll data for June on Friday.
On Wednesday, research firm Challenger, Gray & Christmas said the number of planned layoffs grew 11.6% in June even as job cuts fell to an 11-year low in the first half of 2011.
URL to original article: http://www.housingwire.com/2011/07/07/jobless-claims-fall-last-week-private-sector-adds-157000-jobs-in-june
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, July 6, 2011
Treasury to reward servicers for quicker mortgage modifications
by JON PRIOR
The Treasury Department will pay mortgage servicers more for modifying loans in an earlier stage of delinquency and less the longer the process takes, according to guidance released Wednesday.
The Treasury said these same guidelines, effective Oct. 1, will be adopted by Fannie Mae and Freddie Mac when the Federal Housing Finance Agency releases the new mortgage servicing fee structures that same month.
Through HAMP, a servicer receives $1,000 when a homeowner is placed into a verified income trial modification that would last three months before turning permanent. Since the program launched in March 2009, servicers started 1.6 million trials and started roughly 731,000 permanent modifications through May.
Effective Oct. 1, mortgage servicers will receive $1,600 if the trial starts before a loan becomes more than 120 days delinquent. The servicer will get $1,200 for loans between 121 days and 210 days delinquent.
But for mortgages put into a trial stage after 210-days delinquent, the servicer will actually see less money. Instead of the $1,000 the bank received before, the Treasury will pay $400.
The Treasury banned servicers from requiring a borrower to make past-due payments before entering a trial in order to collect the higher fee.
Treasury officials and servicers found seriously delinquent borrowers were falling out of the program because the months of interest accruing over an extended period of time needed to be capitalized into eligibility tests. As a result many borrowers were found ineligible for the program.
Also, the further into delinquency a borrower was before the trial stage, the greater the possibility of redefault. According to the Treasury, mortgages modified through HAMP beyond eight months delinquent redefaulted at a rate of 28%.
That's compared to a 16% redefault rate for loans modified before five months delinquency.
HAMP will not reach the 3 million to 4 million borrowers the Treasury initially estimated. Officials say the program set the standard for private initiatives, and the Treasury has made a variety of changes such as documentation requirements and a single-point of contact to boost numbers and performance.
"We want to encourage servicers to reach borrowers early and modify loans before they are seriously delinquent," a Treasury official said. "If we can reduce the delinquency time we should incrementally increase the amount of modifications through the program and reduce the likelihood of redefault. We want to get a trial modification started within four months of it going delinquent."
URL to original article: http://www.housingwire.com/2011/07/06/treasury-to-reward-servicers-for-quicker-mortgage-modifications
For further information on Fresno Real Estate check: http://www.londonproperties.com
The Treasury Department will pay mortgage servicers more for modifying loans in an earlier stage of delinquency and less the longer the process takes, according to guidance released Wednesday.
The Treasury said these same guidelines, effective Oct. 1, will be adopted by Fannie Mae and Freddie Mac when the Federal Housing Finance Agency releases the new mortgage servicing fee structures that same month.
Through HAMP, a servicer receives $1,000 when a homeowner is placed into a verified income trial modification that would last three months before turning permanent. Since the program launched in March 2009, servicers started 1.6 million trials and started roughly 731,000 permanent modifications through May.
Effective Oct. 1, mortgage servicers will receive $1,600 if the trial starts before a loan becomes more than 120 days delinquent. The servicer will get $1,200 for loans between 121 days and 210 days delinquent.
But for mortgages put into a trial stage after 210-days delinquent, the servicer will actually see less money. Instead of the $1,000 the bank received before, the Treasury will pay $400.
The Treasury banned servicers from requiring a borrower to make past-due payments before entering a trial in order to collect the higher fee.
Treasury officials and servicers found seriously delinquent borrowers were falling out of the program because the months of interest accruing over an extended period of time needed to be capitalized into eligibility tests. As a result many borrowers were found ineligible for the program.
Also, the further into delinquency a borrower was before the trial stage, the greater the possibility of redefault. According to the Treasury, mortgages modified through HAMP beyond eight months delinquent redefaulted at a rate of 28%.
That's compared to a 16% redefault rate for loans modified before five months delinquency.
HAMP will not reach the 3 million to 4 million borrowers the Treasury initially estimated. Officials say the program set the standard for private initiatives, and the Treasury has made a variety of changes such as documentation requirements and a single-point of contact to boost numbers and performance.
"We want to encourage servicers to reach borrowers early and modify loans before they are seriously delinquent," a Treasury official said. "If we can reduce the delinquency time we should incrementally increase the amount of modifications through the program and reduce the likelihood of redefault. We want to get a trial modification started within four months of it going delinquent."
URL to original article: http://www.housingwire.com/2011/07/06/treasury-to-reward-servicers-for-quicker-mortgage-modifications
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications drop 5.2% on higher interest rates
by KERRI PANCHUK
Mortgage applications fell 5.2% this past week as mortgage rates rose in response to the Federal Reserve ending its quantitative easing program.
For the week ending July 1, the market composite index – a measure of loan application volume – fell 5.2% on a seasonally adjusted basis, the Mortgage Bankers Association said. On an unadjusted basis, the index fell 5.1%.
Meanwhile, the refinance index fell for the third-consecutive week, dropping 9.2% over the previous week and the seasonally-adjusted purchase index grew 4.8%.
"Stronger economic data towards the end of the week coupled with the end of the Fed's second round of quantitative easing helped bring mortgage rates to their highest level in over a month," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday."
The four-week moving averages for the market index and refinance index fell 0.5% and 1.1%, respectively, while the four-week moving average for the purchase index is up 0.8% on a seasonally adjusted basis.
The refinance share of mortgage activity fell to 66.4% of total applications, compared to 69.5% from the previous week.
The 30-year, fixed-rate mortgage increased to 4.69%, up from 4.46%, while the 15-year, FRM grew to 3.79%, up from 3.64%.
URL to original article: http://www.housingwire.com/2011/07/06/mortgage-applications-drop-5-2-on-higher-interest-rates
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications fell 5.2% this past week as mortgage rates rose in response to the Federal Reserve ending its quantitative easing program.
For the week ending July 1, the market composite index – a measure of loan application volume – fell 5.2% on a seasonally adjusted basis, the Mortgage Bankers Association said. On an unadjusted basis, the index fell 5.1%.
Meanwhile, the refinance index fell for the third-consecutive week, dropping 9.2% over the previous week and the seasonally-adjusted purchase index grew 4.8%.
"Stronger economic data towards the end of the week coupled with the end of the Fed's second round of quantitative easing helped bring mortgage rates to their highest level in over a month," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday."
The four-week moving averages for the market index and refinance index fell 0.5% and 1.1%, respectively, while the four-week moving average for the purchase index is up 0.8% on a seasonally adjusted basis.
The refinance share of mortgage activity fell to 66.4% of total applications, compared to 69.5% from the previous week.
The 30-year, fixed-rate mortgage increased to 4.69%, up from 4.46%, while the 15-year, FRM grew to 3.79%, up from 3.64%.
URL to original article: http://www.housingwire.com/2011/07/06/mortgage-applications-drop-5-2-on-higher-interest-rates
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, July 5, 2011
Administration scorecard shows delinquent mortgages down 22% in May
by KERRI PANCHUK
The number of mortgages classified as seriously delinquent – at least 90 days past due – fell by 22% in May, the Obama administration said in its monthly housing scorecard.
Even still, the latest scorecard from the Department of Housing and Urban Development and Treasury is cautious, saying housing data offers mixed signals about the real estate economy.
In May, home prices turned slightly upward, while excessive levels of foreclosures and distressed properties continued to weigh down housing, suffocating a sustainable upswing in sales.
Radar Logic, a real estate analytics data firm, issued a warning about positive sales reports, saying despite the 8.2% upswing in home sales in May, a housing recovery is a long ways off with sales still down 20.4% from last year.
Mortgages more than 30-days late also fell in May, with that delinquency rate dropping to 4.3%, compared to 5.9% last year, according to the housing scorecard from the Treasury Department.
The administration's Home Affordable Modification Program remains an integral part of the government's effort to calm the foreclosure tide. In May, more than 32,000 homeowners received a permanent loan modification, bringing the total to 730,000 homeowners the past two years.
URL to original article: http://www.housingwire.com/2011/07/01/administration-scorecard-shows-delinquent-mortgages-down-22-in-may
For further information on Fresno Real Estate check: http://www.londonproperties.com
The number of mortgages classified as seriously delinquent – at least 90 days past due – fell by 22% in May, the Obama administration said in its monthly housing scorecard.
Even still, the latest scorecard from the Department of Housing and Urban Development and Treasury is cautious, saying housing data offers mixed signals about the real estate economy.
In May, home prices turned slightly upward, while excessive levels of foreclosures and distressed properties continued to weigh down housing, suffocating a sustainable upswing in sales.
Radar Logic, a real estate analytics data firm, issued a warning about positive sales reports, saying despite the 8.2% upswing in home sales in May, a housing recovery is a long ways off with sales still down 20.4% from last year.
Mortgages more than 30-days late also fell in May, with that delinquency rate dropping to 4.3%, compared to 5.9% last year, according to the housing scorecard from the Treasury Department.
The administration's Home Affordable Modification Program remains an integral part of the government's effort to calm the foreclosure tide. In May, more than 32,000 homeowners received a permanent loan modification, bringing the total to 730,000 homeowners the past two years.
URL to original article: http://www.housingwire.com/2011/07/01/administration-scorecard-shows-delinquent-mortgages-down-22-in-may
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, July 1, 2011
U.S. home values rise; Fresno home prices drop
Written by Michael Kincheloe, The Business Journal
Overall home prices in the U.S. have risen ever-so-slightly during the last month while home prices in Fresno have continued to drop considerably.
CoreLogic, a corporation that provides financial, property and consumer information, released its May Home Price Index this week, showing that home prices in the U.S. increased on a month-over-month basis by 0.8 percent in May 2011 compared to April 2011, the second consecutive month-over-month increase.
The month-over-month increase included distressed sales, which take into account homes that have been subject to foreclosure. On a year-over-year basis, home prices nationwide declined by 7.4 percent between May 2010 and May 2011. When distressed sales were excluded, the decline was 0.4 percent over the same period.
“Two consecutive months of month-over-month growth and continued relative strength in the non-distressed market segment are positive seasonal signs in the housing market,” said Mark Fleming, chief economist at CoreLogic. “Nonetheless, the fragile economic recovery is still critical to the long-term recovery in the housing market.”
Home prices in Fresno, including distressed sales, declined by 12.81 percent between May 2010 and May 2011. When distressed sales were excluded, year-over-year prices declined by 7.62 percent.
Home prices in New York, including distressed sales, had the highest appreciation, at +4.4 percent, with home prices in Idaho having the greatest depreciation at -16.4 percent. When distressed sales were excluded, home prices in West Virginia had the highest appreciation, at +10.1 percent, and home prices in Nevada had the greatest depreciation, at -9.8 percent.
California’s home prices, including distressed sales, were at -6.2 percent, but when distressed sales were excluded, the state’s home prices rose to +1.1 percent.
URL to original article: http://www.thebusinessjournal.com/real-estate/10331-us-home-values-rise-fresno-home-prices-drop
For further information on Fresno Real Estate check: http://www.londonproperties.com
Overall home prices in the U.S. have risen ever-so-slightly during the last month while home prices in Fresno have continued to drop considerably.
CoreLogic, a corporation that provides financial, property and consumer information, released its May Home Price Index this week, showing that home prices in the U.S. increased on a month-over-month basis by 0.8 percent in May 2011 compared to April 2011, the second consecutive month-over-month increase.
The month-over-month increase included distressed sales, which take into account homes that have been subject to foreclosure. On a year-over-year basis, home prices nationwide declined by 7.4 percent between May 2010 and May 2011. When distressed sales were excluded, the decline was 0.4 percent over the same period.
“Two consecutive months of month-over-month growth and continued relative strength in the non-distressed market segment are positive seasonal signs in the housing market,” said Mark Fleming, chief economist at CoreLogic. “Nonetheless, the fragile economic recovery is still critical to the long-term recovery in the housing market.”
Home prices in Fresno, including distressed sales, declined by 12.81 percent between May 2010 and May 2011. When distressed sales were excluded, year-over-year prices declined by 7.62 percent.
Home prices in New York, including distressed sales, had the highest appreciation, at +4.4 percent, with home prices in Idaho having the greatest depreciation at -16.4 percent. When distressed sales were excluded, home prices in West Virginia had the highest appreciation, at +10.1 percent, and home prices in Nevada had the greatest depreciation, at -9.8 percent.
California’s home prices, including distressed sales, were at -6.2 percent, but when distressed sales were excluded, the state’s home prices rose to +1.1 percent.
URL to original article: http://www.thebusinessjournal.com/real-estate/10331-us-home-values-rise-fresno-home-prices-drop
For further information on Fresno Real Estate check: http://www.londonproperties.com
Administration scorecard shows delinquent mortgages down 22% in May
by KERRI PANCHUK
The number of mortgages classified as seriously delinquent – at least 90 days past due – fell by 22% in May, the Obama administration said in its monthly housing scorecard.
Even still, the latest scorecard from the Department of Housing and Urban Development and Treasury is cautious, saying housing data offers mixed signals about the real estate economy.
In May, home prices turned slightly upward, while excessive levels of foreclosures and distressed properties continued to weigh down housing, suffocating a sustainable upswing in sales.
Radar Logic, a real estate analytics data firm, issued a warning about positive sales reports, saying despite the 8.2% upswing in home sales in May, a housing recovery is a long ways off with sales still down 20.4% from last year.
Mortgages more than 30-days late also fell in May, with that delinquency rate dropping to 4.3%, compared to 5.9% last year, according to the housing scorecard from the Treasury Department.
The administration's Home Affordable Modification Program remains an integral part of the government's effort to calm the foreclosure tide. In May, more than 32,000 homeowners received a permanent loan modification, bringing the total to 730,000 homeowners the past two years.
URL to original article: http://www.housingwire.com/2011/07/01/administration-scorecard-shows-delinquent-mortgages-down-22-in-may
For further information on Fresno Real Estate check: http://www.londonproperties.com
The number of mortgages classified as seriously delinquent – at least 90 days past due – fell by 22% in May, the Obama administration said in its monthly housing scorecard.
Even still, the latest scorecard from the Department of Housing and Urban Development and Treasury is cautious, saying housing data offers mixed signals about the real estate economy.
In May, home prices turned slightly upward, while excessive levels of foreclosures and distressed properties continued to weigh down housing, suffocating a sustainable upswing in sales.
Radar Logic, a real estate analytics data firm, issued a warning about positive sales reports, saying despite the 8.2% upswing in home sales in May, a housing recovery is a long ways off with sales still down 20.4% from last year.
Mortgages more than 30-days late also fell in May, with that delinquency rate dropping to 4.3%, compared to 5.9% last year, according to the housing scorecard from the Treasury Department.
The administration's Home Affordable Modification Program remains an integral part of the government's effort to calm the foreclosure tide. In May, more than 32,000 homeowners received a permanent loan modification, bringing the total to 730,000 homeowners the past two years.
URL to original article: http://www.housingwire.com/2011/07/01/administration-scorecard-shows-delinquent-mortgages-down-22-in-may
For further information on Fresno Real Estate check: http://www.londonproperties.com
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