Wednesday, August 31, 2011
CoreLogic: Summer house price gains should begin to fade
House prices ticked up 0.8% in July from the previous month, according to CoreLogic (CLGX: 11.42 +0.62%).
While it's the fourth-straight month of increases, price gains could be turning into more losses in the months ahead.
The more active spring selling season pushed prices up this summer in several indices, including the Standard & Poor's/Case-Shiller home price index. But prices remain 5.2% below one year ago, according to CoreLogic. Even excluding the sale of distressed homes, prices remain 0.6% below last year.
Mark Fleming, chief economist for CoreLogic, expects the spring influence to fade as new data come later this summer.
"At that point the month-over-month growth will most likely turn negative" Fleming said. "The slowdown in economic growth and increased uncertainty caused by the recent stock market volatility will continue to exert downward pressure on prices."
Bank analysts don't expect a bottom in house prices until early 2012, and from there a long, steady recovery should begin.
In July, prices increased 14% in West Virgina, the highest jump in any state, followed by a 3.3% increase in New York, and a 3.2% gain in Wyoming, according to CoreLogic.
Prices fell the most in Nevada, showing a 12.2% drop, followed by an 11.9% dip in Arizona and a 10% fall in Illinois.
URL to original article: http://www.housingwire.com/2011/08/31/corelogic-summer-house-price-gains-should-begin-to-fade
For further information on Fresno Real Estate check: http://www.londonproperties.com
Climbing a wall of worry: Research ties stress, health issues to high foreclosure rates
The threat of losing your home is stressful enough to make you ill, it stands to reason. Now two economists have measured just how unhealthy the foreclosure crisis has been in some of the hardest-hit areas of the U.S.
New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.
Each rise of 100 foreclosures was also associated with 12% more visits related to anxiety in the same age category. And the same rise in foreclosures was associated with 39% more visits for suicide attempts among the same group, though this still represents a small number of patients, the researchers say.
Teasing out cause and effect can be delicate, and correlation doesn't necessarily mean foreclosures directly cause health problems. Financial duress, among other issues, could lead to health problems—and cause foreclosures, too.
The economists didn't find similar patterns with diseases such as cancer or elective surgeries such as hip replacement, leading them to conclude that areas with high foreclosures are seeing mostly an increase of stress-related ailments.
Tuesday brought news of further weakness in the housing market as the closely watched S&P/Case-Shiller home-price index came in 5.9% lower for the second quarter from a year earlier. Continued job losses and economic uncertainty could weigh on home prices and make for another wave of foreclosures, economists say.
It may not just be foreclosure victims arriving at hospitals—but neighbors also grappling with depleting equity in their biggest investment.
"You see foreclosures having a general effect on the neighborhood," Ms. Currie says. "Everybody's stressed out. There is a connection between people's economic well being and their physical well being."
The situation got so bad for Patricia Graci, a 51-year-old Staten Island, N.Y., resident, that she canceled a recent court appearance related to the foreclosure on her house because she couldn't get out of bed. After her husband lost his job as a painter in 2008, the Gracis relied on savings to pay their mortgage for two years.
"Everything was going downhill. My savings were going down to nothing," says Ms. Graci. "When I realized the money wasn't there anymore, I started getting very anxious and depressed."
She says her lender advised her to default on her mortgage to qualify for a loan modification. Ms. Graci, who was an assistant bank manager and already had rheumatoid arthritis, says she began seeing a therapist and landed in the hospital with difficulty breathing in December 2009. A few weeks later came the foreclosure notice from the bank.
"They told me it was more anxiety and stress that made me wind up in the hospital than the arthritis," Ms. Graci says. After repeatedly missing work due to illness, Ms. Graci went on long-term disability.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. Much of the 2005-2009 period examined came before unemployment peaked, too, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. The time period examined, 2005 to 2007, was before unemployment peaked, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
They found that areas in the top fifth of foreclosure activity have more than double the number of visits for preventable conditions that generally don't require hospitalization than the bottom fifth.
At the local hospital in Homestead, Fla., a city of mostly single-family, middle-class homes about 30 miles from Miami, the emergency room has been bustling. Emergency visits to the hospital in 2010 more than doubled from 10 years earlier to about 67,000, and emergency department medical director Otto Vega says they will surpass 70,000 this year. Homestead has the highest rate of mortgage delinquencies in the U.S.—in June, 41% of mortgage holders in the hardest-hit ZIP Code of Homestead were 90 days or more past due on payments, according to real-estate data firm CoreLogic Inc.
While the most common ailments are respiratory problems and pneumonia, Dr. Vega notes an increase in psychosomatic disorders, such as patients with chest pain and shortness of breath, and others who feel suicidal. "A lot of young people, less than 50 years old, have chest pain. You know it's anxiety," he says.
Nationwide, overall emergency-room visits have also been rising, growing 5% from 2007 to 127.3 million in 2009, according to the American Hospital Association. But inpatient stays have largely kept pace with population growth over the last decade, says Beth Feldpush, a vice president for policy and advocacy at the National Association of Public Hospitals.
The number of people covered by employer-sponsored insurance has been falling, she says. "When people don't have insurance, they put off seeking care for too long and end up in the emergency room."
And some of those seeking treatment had medical conditions before foreclosure—but the stress of losing their homes has exacerbated their ailments.
In 2008, Norman Adelman of Freehold, N.J., called his lender to ask for a forbearance of three or four months, saying he was about to undergo knee-replacement surgery. The lender complied and Mr. Adelman, who runs a home-energy business, says he began scaling back his work. He underwent needed tests and doctor visits.
After two months of not paying his mortgage, he successfully applied for a loan modification, taking his monthly payment from $2,700 to $1,900. But then the loan was sold—and a new servicer didn't recognize the terms of the arrangement, he says.
Mr. Adelman is fighting the new lender but says he has been in and out of the hospital for the last two years. He never had his knees replaced and is now on antidepressants and antianxiety medication.
"He's deteriorated. He's had sleepless nights," says his wife, Shulamis. "You always have this fear of being thrown out. He's just gotten worse and worse from not sleeping."
Earlier this month, after working with the nonprofit Staten Island Legal Services, Ms. Graci received a trial loan modification. "I'm happy but I am still scared," she says. "I want a permanent solution. I don't know if I am in the clear."
URL to original article: http://online.wsj.com/article/SB10001424053111904199404576538293771870006.html?mod=WSJ_RealEstate_LeftTopNews
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage applications drop 9.6% as refinancing surge dies down
The number of mortgage applications filed by Americans fell 9.6% this past week after experiencing a dramatic surge in volume on low interest rates and refinancing activity.
The Mortgage Bankers Association's market composite index – a measure of loan volume – fell 9.6% on a seasonally adjusted basis from a week earlier. On an unadjusted basis, the index fell 10% from the previous week.
Refinancing activity, which buoyed loan application levels in recent weeks, died down with the refinance index falling 12.2% from a week ago. The seasonally adjusted purchase index, meanwhile, grew a slight 0.9%.
"Accounting for the increase in average points paid, effective mortgage rates were little changed last week. Refinance application volume declined for a second week from recent highs, despite rates staying near a 10-month low, while purchase volume remained near 15-year lows," said Mike Fratantoni, vice president of research and economics for the MBA.
The refinance share of mortgage activity remained high at 77.8% of total applications, down from 79.8% the previous week. The adjustable-rate mortgage share of activity increased to 7.1% from 6.2% of total applications a week ago.
Mortgage rates continued to fall with the 30-year, fixed-rate mortgage dropping to 4.32% from 4.39%. The average rate for the 15-year, FRM decreased to 3.49% from 3.56%.
URL to original article: http://www.housingwire.com/2011/08/31/mortgage-applications-drop-9-6-as-refinancing-surge-dies-down
Fro further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, August 30, 2011
Present tense, future perfect: multigenerational households abound
When advertising executive John Gallegos wanted to promote a new package of Spanish-language channels for client Comcast Corp. (CMCSA), he put together a spot featuring the fictional Gutierrez clan gathered around television sets in their home.
A smiling grandfather hands out popcorn in the ad. Gutierrez women weep along with a soap opera. A younger family member looks up words in a Spanish-English dictionary. And everyone shouts when a little girl tries to change the channel during a soccer match.
“It’s a snapshot of all the different extensions of what a Hispanic family could be,” Gallegos, chief executive of Grupo Gallegos in Huntington Beach, California, said in an interview.
The U.S. is experiencing a surge in the multigenerational households that were once a common feature of American life, and Hispanic and Asian families are driving the trend, according to U.S. Census Bureau data released this month. The number of such households, defined as those with three or more generations living under one roof, grew to almost 5.1 million in 2010, a 30 percent increase from 3.9 million in 2000, the data show.
They hit 2.9 million in 1950 and didn’t top that again until four decades later, according to the Washington-based Pew Research Center. At the 1980 low, multiple-generation homes represented just 2.9 percent of all U.S. households, down from 7.8 percent in 1900.
Transforming Suburbs
Although the term multigenerational invokes images of grandma churning butter on a pioneer farm or turn-of-the-century immigrants crammed into tenements, today’s extended families are more likely to live in suburbs. Among large cities, the one with the highest percentage of multigenerational households, at 16 percent, is Norwalk, California, a collection of largely single- family homes 15 miles (25 kilometers) south of Los Angeles.
“Many conservatives are locked into this 1950s paradigm of the nuclear family,” said Joel Kotkin, author of “The Next Hundred Million: America in 2050,” a book about demographics. “Boomers are aging in place. Immigrants move in with their cousins. The suburbs are changing.”
Job losses and the difficulty of purchasing a home make young people more likely to live with their parents, according to D’Vera Cohn, a senior writer with Pew who has studied the trend. Longer life spans and growth in the Hispanic and Asian populations keep older folks in the house.
The nation’s two fastest-growing ethnic groups are 50 percent more likely to live in multigenerational families than are whites, according to Pew research.
“Among immigrants, it’s the way their lives were lived in their home countries,” Cohn said in an interview.
Marketing Challenge
Corporate America is figuring out ways to create products for, and market to, these multi-income, multifaceted families, Gallegos said.
Home builder KB Home (KBH) is seeing increased demand for what it calls double master suites, two large bedrooms with attached bathrooms to accommodate parents living with their adult children, according to Cara Kane, a spokeswoman for the company, which is based in Los Angeles. All 10 of the largest communities in the U.S. ranked by their percentage of multigenerational households were within an hour’s drive of the nation’s second- largest city. All had populations over 100,000.
At the National Council of La Raza’s National Latino Family Expo held in Washington, D.C., last month, businesses tried to reach as broad an audience as possible, according to Georgina Salguero, director of sponsorship for the event. Johnson & Johnson (JNJ)’s booth featured everything from its namesake baby oil to Aveeno anti-aging creams. ConAgra Foods Inc. (CAG) demonstrated modern takes on classic ethnic recipes, Salguero said.
Asian Impact
Asians, as well as Hispanics, are increasingly gathering under one roof. The state with the largest percentage of multigenerational households was Hawaii at 8.8 percent, twice the national average of 4.4 percent. The 50th state owes its large percentage to high real estate prices and the 47 percent of its population that is of Asian or Pacific Island descent, according to Sarah Yuan, a sociologist at the University of Hawaii at Manoa.
Her research on the state’s Filipino residents found multigenerational households are most common among the poor, who live together so they can pool their resources, and the rich, who have the space.
“A lot of times it’s for economic reasons,” Yuan said in an interview. “Other times it’s just cultural preferences.”
Epicenter of Change
Few areas of the country have seen larger economic and cultural changes than Southern California. Norwalk, the Los Angeles suburb with the highest percentage of multigenerational households in the U.S., was mostly dairy farms in the 1930s. It was the hometown of former First Lady Patricia Nixon and the filming location for the 1946 noir classic “The Postman Always Rings Twice,” about a bored, small-town wife who plots her husband’s murder.
The city saw an explosion in residents after World War II as returning soldiers swelled the population to 35,000 in 1950 from 5,770 a decade earlier, according to a municipal history.
By the time Norwalk incorporated in 1957, the city’s developable land was largely built out, according to Kurt Anderson, director of community development. Population increases and additions put on existing structures have strained the municipality, which now counts 105,000 residents.
“Parking is a huge issue,” said Marcel Rodarte, a Norwalk native and city council member. The city requires more onsite parking when permits are requested for room additions, he said.
Subprime Fallout
Norwalk’s median home price leapt to $495,000 in April 2007 from $151,000 in January 2000, according to San Diego-based real estate research firm DataQuick. By July of this year the median price was back down to $255,000, a reflection of the fact that Hispanics were frequent targets of subprime lenders who are no longer in business, according to Felipe Korzenny, a professor of marketing at Florida State University in Tallahassee.
“It’s a working-class community and largely Hispanic,” said Veronica Garcia, who directs social services for the city. “In this economy people have to live together.”
On a recent Monday afternoon, the Norwalk Senior Center was bustling with folks playing bingo and taking weaving classes. Francisca Bernard, a 75-year-old retired waitress, said she has lived in the same three-bedroom Norwalk house since 1968. It now accommodates four generations of her family, including three grandchildren and her father, who is 100 years old.
“The house is big and we like to be together,” she said. Finances also play a role, Bernard said. While her daughter does most of the grocery shopping, major purchases, such as a new car, are hashed out over the dinner table.
Her father, Jose Maria Bernard, was shooting pool in another part of the center. A native of Mexico, he said he has 12 children and rotates among their houses. He said he never considered living in a nursing home because he’s still healthy and, in any case, family values would preclude it.
“My children wouldn’t let me go anyplace else,” he said.
URL to original article: http://www.builderonline.com/builder-pulse/present-tense--future-perfect--multigenerational-households-abound.aspx?cid=BP:083011:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, August 29, 2011
Consumers hit savings to repay debt, purchase durable goods
Americans continue dipping into savings to pay down debt and purchase durable goods, such as electronics, appliances and furniture.
TransUnion said its credit risk index fell again in the second quarter, marking the sixth consecutive quarterly decline. The index, which uses 1998 consumer credit levels as a benchmark, fell 1.9% to 121.22 during the three months ended June 30 from 123.56 a year earlier.
The credit reporting agency said the consistent drops in the index reflect lower consumer delinquency rates and debt levels. The second-quarter decline puts the index at a level last seen in the third quarter of 2008 and 6.5% lower than the peak of 129.67 during the fourth quarter of 2009.
"This responsible use of credit has given some lenders confidence to ease lending standards and invest more in the acquisition of new credit customers," according to Chet Wiermanski, chief scientist at TransUnion.
He said banks increased lending across revolving and installment loans the past few quarters, but consumers aren't using the credit. Wiermanski expects more of the same through 2011 with modest improvement in the TransUnion index to levels last seen just prior to the credit and mortgage crisis.
Earlier Monday, the Commerce Department's Bureau of Economic Analysis said personal spending rose 0.8% to $88.4 billion in July while personal income edged up 0.3%.
This prompted Capital Economics to boost its estimate for third-quarter GDP growth to about 2.5% from a prior projection of 1.5%.
Paul Dales, senior U.S. economist at the Toronto-based firm, said higher spending on durable goods led to a 0.5% increase in real spending, which is the highest gain since December 2009.
He said modest gains in real consumption this month and next will result in annualized spending growth of 2.5% in the third quarter, which in itself would add 1.5 percentage points to GDP growth, according to Dales.
But Americans are "funding their spending partly by running down savings."
"This trend cannot continue indefinitely," Dales said. "Moreover, these data precede the plunge in equity prices seen at the start of August, the recent surge in recession fears and any short-term hit to spending from Hurricane Irene."
Still, he said if upcoming data on manufacturing and employment are weak once again as expected, "talk of another recession would seem strange when the economy may be growing at an annualized rate of 2.5%."
URL to original article: http://www.housingwire.com/2011/08/29/consumers-hit-savings-to-repay-debt-purchase-durable-goods
For further information on Fresno Real Estate check: http://www.londonproperties.com
Pending home sales remain volatile, inch lower in July
The number of pending home sales in July fell 1.3% from June, but remain 14.4% above a year earlier, the National Association of Realtors said Monday.
The huge trade group's pending home sales index measures the number of sales contracts signed each month. The index hit 89.7 in July, down from 90.9 in June yet well above the 78.4 of a year ago.
Analysts polled by Econoday expected the NAR index to decrease 1% for July with estimates ranging from declines of 2% to an increase of 2.5%. Pending home sales climbed 2.4% in June on the heels of an 8.2% jump the prior month.
"The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy," said Lawrence Yun, NAR's chief economist. "We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process."
On a regional basis, home sales in the northeast fell 2% to 67.5 in July, which is still up 9.7% from July 2010.
The Midwest index edged down 0.8%, hitting 79.1 in July, up 18.8% from last year, while pending home sales in the south fell 4.8% to 94.4 on the index, but remained 9.5% higher than last year. Meanwhile, in the West, the pending sales index grew 3.6% to 110.8 in July and is 20.6% above year ago levels.
"Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April," Yun said.
"The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market," according to Yun.
URL to original article: http://www.housingwire.com/2011/08/29/pending-home-sales-edge-down-in-july-up-14-from-last-year
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, August 26, 2011
Zillow estimates 4.3% decline in home prices
Standard & Poor's is likely to report a 4.3% decline in June home prices year-over-year and a 1.2% increase from the previous month when it releases its June Case-Shiller Home Price Indices study next Tuesday, Zillow said Friday.
Zillow, an online real estate marketplace, released its forecast of the S&P Case-Shiller results on Friday, saying the S&P 10-City Composite Home Price Index for June could drop as much as 3.5% year-over-year while still increasing 1.2% from May.
Zillow's second-quarter home price report was released earlier this month, showing a 6.2% drop in 2Q from a year earlier and a slight 0.4% gain from the first quarter.
Declining home prices remain a consistent drag on the nation's overall economy, Federal Reserve Chairman Ben Bernanke said Friday. In a much-anticipated report from Jackson, Wyo., Bernanke noted volatile home prices are disrupting consumer spending.
"For example, the sharp declines in house prices in some areas have left many homeowners underwater on their mortgages, creating financial hardship for households and, through their effects on rates of mortgage delinquency and default, stress for financial institutions as well," Bernanke said in his speech to the nation. "Financial pressures on financial institutions and households have contributed, in turn, to greater caution in the extension of credit and to slower growth in consumer spending."
The S&P Case-Shiller report will be released Tuesday morning.
URL to original article: http://www.housingwire.com/2011/08/26/zillow-estimates-4-3-decline-in-home-prices
For further information on Fresno Real Estate check: http://www.londonproperties.com
Boxer claims White House mortgage refinance effort mirrors hers
Sen. Barbara Boxer (D-Calif.) said the major mortgage refinance program the Obama administration reportedly began developing mirrors her own.
According to The New York Times, the Obama administration is developing a plan to help more underwater borrowers refinance their mortgage, granting them relief under historically low rates.
Boxer and Sen. Johnny Isakson (R-Ga.) resubmitted S. 170 in June to eliminate refinancing barriers and fees for borrowers with mortgages guaranteed by Fannie Mae and Freddie Mac. Their lack of participation in such major refinancing and principal write-down programs, under the direction of their conservator the Federal Housing Finance Agency, has left many underwater borrowers trapped in their current payments.
"I understand that White House officials are now examining steps that mirror the approach of S. 170," Boxer said wrote in a letter to FHFA Acting Director Edward DeMarco Thursday.
She met with DeMarco in June in an effort to persuade him to implement the program administratively and without congressional action.
The FHFA has said such a program would boost already steady losses at the GSEs, forcing more bailout funds from the Treasury.
Currently, more than 8 million Fannie or Freddie loans carry an interest rate of more than 6%. The Boxer bill would target roughly 2 million borrowers for a refinance into today's lower interest rate loans, many with loan-to-value ratios above 125%. She claims the program would not cost the FHFA any taxpayer funds and would reduce defaults by keeping these borrowers from walking away.
"We’ve received the letter and will respond to the senator," an FHFA spokesperson said.
The Treasury Department declined to comment on the reported program.
"As one would expect, we continue to look for ways to ease the burden on struggling homeowners and to help stabilize the market, whether that's through assessing new proposals or older ones worth re-considering as market conditions change," the Obama administration said in a statement. "That said, we have no plans to announce any major new initiatives at this time."
URL to original article: http://www.housingwire.com/2011/08/25/boxer-claims-white-house-mortgage-refinance-effort-mirrors-hers
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, August 25, 2011
Proposal to bulk sell REO could hurt home prices: Radar Logic
At least one housing analyst is pushing back against a government proposal to dispose of the government's real-estate owned properties through bulk sales to investors.
Quinn Eddins, director of research at data firm Radar Logic, concluded in the latest RPX Monthly Housing Market Report that housing remains a drag on the economy and home price stability could be negatively impacted by the Fed's proposed REO-disposition plan to sell Fannie Mae, Freddie Mac and other government-held inventory in bulk. The RPX Composite price index, which tracks home values in 25 metro areas, showed a 4.7% drop year-over-year in June.
Eddins said analysts are concerned about the Fed's proposal to cut down on the number of government-owned distressed properties by allowing investors to buy these REOs in bulk for the purpose of turning them into rentals.
"Unless careful steps are taken to prevent it, we fear that bulk sales of REO properties could have an adverse effect on the appraised values of homes, and therefore home sales," the RPX monthly report warned.
Eddins believes a bulk sale could result in markets with a large number of low-priced homes with "misleadingly low appraisals" on REO properties — skewing home prices across the board.
"The low appraisals could then scuttle home sales that do not involve REO properties," Eddins wrote. "Even if local appraisers do not use the bulk-sale properties as comps, there are many automated valuation models that would likely incorporate the prices of those properties unless there was some way to designate them as bulk-sale properties. This issue should be taken into consideration by anyone trying to implement a bulk-sale program."
The report goes on to say bulk sales will likely result in the GSEs recording losses on the REO properties when comparing the sale amount to the principal on the defaulted loan. "We believe these losses, which will ultimately be passed to taxpayers, could be huge," Radar Logic said.
Instead of going the route of selling the properties to investors, the RPX report recommends the Federal Housing Finance Agency focus on restructuring delinquent or distressed loans to cut down on the flow of properties to government portfolios.
Eddins says the Fed could then rent out properties from its REO portfolios by working with private-sector property managers.
"We believe our two-pronged strategy will reduce the REO portfolios of the enterprises and the FHA and reduce the oversupply problem currently facing the housing market while avoiding a devastating loss to taxpayers," Eddins writes.
The plan will officially be proposed by Radar Logic next month.
Looking forward, the RPX report said "housing is poised for further weakness," but analysts expect a recovery eventually.
URL to original article: http://www.housingwire.com/2011/08/25/proposal-to-bulk-sell-reos-could-hurt-home-prices-radar-logic
For further information on Fresno Real Estate check: http://www.londonproperties.com
In mortgage interest deduction debate, 2nd homes take 1st priority
The economics researchers at the National Association of Home Builders work to clarify the key whys and wherefores in the imminent debate among Uncle Sam's super committee of policy developers as to whether and how much to rein in the mortgage interest deduction. Proposals under consideration suggest that MID for second homes be discontinued. Here's a look at where second homes are, which will redound to everything from electability to local economics. The Eye on Housing blog notes that its topline findings "suggest caution regarding proposals that would affect second home ownership because the reasons for owning a second home are more diverse than critics usually provide. And as the maps above indicate, and given the economic benefits of housing, there are many locations in the country where second homes constitute a significant portion of the total housing stock."
Second home ownership is often discussed in housing policy debates, but in general there is a poor understanding of what is considered a second home and where these homes are located. This is particularly true in tax policy contexts because the most common stereotype of a “second” home – an expensive beach house – is often a rental property that is not eligible for the mortgage interest deduction.
The following analysis sheds some light on the location and count of second homes that are in fact eligible for the second home portion of the mortgage interest deduction. The findings indicate that the geography of second home ownership is much more expansive than simply beachfront locations.
Accurately accounting for the stock of second homes is difficult, in part because what constitutes a second home differs depending on what definition is used. For the purposes of the mortgage interest deduction (MID), a second home is, in general, a non-rental residence that is not the taxpayer’s primary residence. This could be: (1) a home that used to be a primary residence due to a move or a period of simultaneous ownership of two homes due to a move; (2) a home under construction for which the eventual homeowner acts as the builder and obtains a construction loan (Treasury regulations permit up to 24 months of interest deductibility for such construction loans); or (3) a non-rental seasonal or vacation residence.
Given this tax-based definition and using data from the 2009 American Community Survey (the most recent available), a mapping of the share of each county’s housing stock that consists of second homes is generated. However, the analysis excludes the stock of homes under construction (#2 above) because county level data are not available.
Overall, there are 6.9 million housing units that qualify as second homes or more than 5% of all housing units in the nation.
907 counties in the U.S., or about 28% of the total, had at least 10% of the local housing stock consist of second homes, with at least one such county in 49 states (Connecticut and DC are outliers).
339 counties, or more than 10% of the total, had at least 20% of the local housing stock due to second homes.
And there are 26 counties where at least half of the local housing stock was made up of second homes. Of these counties, six were in Michigan, five in Colorado, and two each in Pennsylvania, Utah, Massachusetts, and California. One such county was located in New York, Alaska, Idaho, Missouri, Wisconsin, Texas and New Jersey.
Of course, large overall county stocks of second homes are located in areas with larger totals of population and housing, meaning large metropolitan areas. Keeping this in mind, on a pure count basis, the following states possessed at least one county with at least 25,000 second homes: Florida, California, New Jersey, New York, Texas, Delaware, Michigan, South Carolina, Nevada, Massachusetts, Illinois, and Arizona.
These findings suggest caution regarding proposals that would affect second home ownership because the reasons for owning a second home are more diverse than critics usually provide. And as the maps above indicate, and given the economic benefits of housing, there are many locations in the country where second homes constitute a significant portion of the total housing stock.
URL to original article: http://www.builderonline.com/builder-pulse/in-mortgage-interest-deduction-debate--2nd-homes-take-1st-priority.aspx?cid=BP:082511:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, August 24, 2011
S&P: Mortgage default rate drops below 2% in July
The default rate on first mortgages dropped to 1.93% in July, according to Standard & Poor's.
S&P, in conjunction with the consumer rating firm Experian, monitors the rate of defaults within asset-backed securities. First mortgage defaults declined from 2.02% in June and 3.24% one year ago.
Second mortgage defaults showed a steeper drop to a rate of 1.25% in July, down from 1.4% the month before and 2.77% last year.
Defaults actually dropped across the entire ABS spectrum covered by the two firms, reaching a composite default rate of 2.06% in July. It's down more than a full percentage point from one year ago.
While defaults were down, delinquencies remained elevated. According to Lender Processing Services, the delinquency rate on mortgages increased 2.4% in July. More than 4.4 million loans are considered 30 days late or worse.
Still, the Federal Reserve Bank of Cleveland released a study this week showing overall household debt dropping toward a 20-year low, and Erkan Erturk, a credit analyst at S&P, said the July data shows a similar trend.
"The firming of these rates suggests that consumers continue to bolster their financial positions by paying down debt and not incurring excessive charges despite elevated unemployment and economic weakness, which we consider a positive for auto, credit card, and other types of consumer ABS credit," Erturk said.
URL to original article: http://www.housingwire.com/2011/08/18/sp-mortgage-default-rate-drops-below-2-in-july
For further information on Fresno Real Estate check: http://www.londonproperties.com
Pending home sales dip in California
California pending home sales dipped in July from the previous month, as did the share of sales of distressed properties, the California Association of Realtors said.
Pending home sales in California fell 1.7% in July, according to CAR's Pending Home Sales Index. The index was 117 in July, down from June's index of 119, based on contracts signed in July. The index was up 4.9% from July 2010.
"Pending sales have been ahead of last year's level for the past three consecutive months and should be on track to finish the year even with last year's pace," said CAR President Beth Peerce.
The total share of all distressed property types sold statewide fell to 44.5% in July, down from June's 46.9%. The share of distressed sales also was down from a year prior, when distressed sales made up 47.7% of all home sales.
Of distressed properties sales, 17.5% were short sales, down from 19.3% in June and 20.9% in July 2010.
Pending REO sales accounted for 26.7% of the market in July, down from June's 27.3% figure, but up slightly from the 26.3% reported in July 2010.
URL to original article: http://www.housingwire.com/2011/08/23/pending-home-sales-dip-in-california
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, August 23, 2011
Despite what it seems, news is not all bad on the economic front
Forbes' Jon Bruner is a legitimate triple-threat in the world of digital journalism these days: he knows economics, can write graphics programming, and has a reporter's eye for counter-intuitive news analysis. Here Bruner's contrarian instincts play out in a look at traction United States manufacturing is showing, even amid the stresses and strains of a global debt crisis, slowing world economies, and domestic strains. In three simple charts, Bruner maps out one of America's current challenges: "output increases and American manufacturing remains competitive with low-cost manufacturing in the developing world. But the enormous job growth that we’ll need in order to avert a second recession won’t come from factories." What about housing?
U.S. Manufacturing Surges Ahead--But Don't Look for a Factory Job
The manufacturing sector has been one of the brighter parts of the U.S. economy since the end of the Great Recession. In 2010, American manufacturers added value of $1.7 trillion to the U.S. economy, up 6.6% over the previous year after accounting for inflation. By the same measure, the rest of the economy grew by 2.2%.
You might not know it from public commentary, but the United States manufactures more than any other country (including China), and U.S. factories are within reach of their all-time greatest output–a record they set in 2000 and came close to reaching again in 2007.
With that growth have come some jobs–about 120,000 new factory jobs in 2011 by the estimate of the Bureau of Labor Statistics, the first year-over-year increase in manufacturing employment since 1998. But that increase, while welcome for those workers who now have a job, barely changes the larger trend: 11.8 million Americans work in manufacturing today, down 40% from peak manufacturing employment in June 1979. In percentage terms, manufacturing employment peaked even earlier: in 1953, 32% of American workers labored in manufacturing, a figure that has fallen to 9% today (38% of workers were in factories in 1943, but World War II made for special circumstances as far as this statistic goes).
Over the last three decades, American factories have become vastly more productive in terms of output per hour of labor. U.S. manufacturers now produce three and a half times more output per worker hour than they did in the peak employment year of 1979, in part because offshoring has sent many low-value jobs overseas, but also because automation has replaced lots of factory jobs. These gains in productivity have been most pronounced during recessions, when manufacturers tend to lay off workers and then replace them with machines as the economy grows again and demand increases.
That’s good for the economy–output increases and American manufacturing remains competitive with low-cost manufacturing in the developing world. But the enormous job growth that we’ll need in order to avert a second recession won’t come from factories
URL to original article: http://www.builderonline.com/builder-pulse/despite-what-it-seems--news-is-not-all-bad-on-the-economic-front.aspx?cid=BP:082311:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Time keeps on slippin', slippin', slippin' ... into the '90s
Prepare to take a trip back in time as you use the interactive map below to view the last time median home prices matched current median prices. You’ll find some markets and regions are mirroring 2006 - when MySpace was the top website in the social networking realm. In other markets, you may have a flashback to 1997, standing in line to see the movie Titanic.
Of the markets where median prices have returned to 2006 and prior years, the Texas region has fared the strongest with Dallas, Houston, Austin and San Antonio grouped in 2006. These markets have benefited from a strong employment base, lower distress levels and a general absence of the abnormal appreciation rates experienced in many other parts of the county.
While Texas and other select markets rank on the more positive end, there are a handful of markets such as Atlanta, Las Vegas, Phoenix and Oakland where prices have turned back the clock more than a decade. Elevated levels of distress, heavy employment losses and large booms of sprawling development are common themes.
The highlighted markets represent opposite ends of the spectrum and a majority of notable markets fall in the middle and mirror the years of 2002 to 2004.
No matter where you build or invest, there are opportunities to understand your market's unique characteristics, find submarkets that show very little distress, and identify consumer demand for housing with design characteristics that are in short supply. You just have to do your homework.
Economic Growth............................................................................C-
The U.S. economic recovery remains sluggish. Real GDP grew at a 1.3% pace in 2Q11, following downwardly revised growth of 0.4% in 1Q11; far below the 1.9% rate of expansion previously estimated for last quarter. We now have positive Y/Y employment growth for eleven consecutive months, with payrolls expanding by 117K in July, up from 46K in June, and the unemployment rate dropping from 9.2% to 9.1%. Initial jobless claims fell to 400K in July. Government payrolls decreased by 37K in July, the ninth straight sequential drop. The average length of unemployment increased to 40.4 weeks (new record high), and the labor force percentage of those unemployed over 27 weeks dipped slightly from 4.1% to 4.0%. On a positive note, retail sales continue to improve, with Y/Y growth at 8.5%.
Leading Indicators...........................................................................C-
Leading indicators for the economy are mixed this month, with our overall grade for this subsection of indicators dropping from a C in June to C- in July. Many of the leading indicators we analyze have been trending down over the past several months, returning to levels not seen since mid-2009, a time when the U.S. economy was still in the midst of the Great Recession. For example, the ISM Purchasing Managers Index has fallen two consecutive months, dropping to 50.9 (just above the expansion threshold value), a level not seen since July 2009. In addition, the Vistage CEO Confidence Index fell in 2Q11, crossing into negative Y/Y territory for the first time since 2Q09. Corporate profit growth was revised down from last quarter, rising at an 8.8% Y/Y clip in 1Q11, the weakest annual growth rate since Q309. Other leading indicators such as the ECRI Leading Index were relatively flat versus last month.
Stocks were down across the board in July for the four major indices we track, with sequential losses ranging from -2.1% for the NASDAQ to -3.7% for the Wilshire 5000. That said, the indices have all improved from one year ago, climbing between +16% (Dow Jones) and +22% (NASDAQ). The S&P Homebuilding Index fell sharply again in July, dropping 5% sequentially, now up a marginal 1.2% Y/Y. Corporate bond spreads narrowed slightly this month to 196bps, while 10-year (2.97%) and 2-year (0.41%) Treasury rates were flat to marginally down for the month. Oil prices rose 0.9% sequentially in July to $97.
Affordability......................................................................................C
Due to a rise in the median home price over the last few months, our overall affordability indicator worsened from a C+ to C this month. As the cost of owning a home has come down in recent years, conversely the cost of renting has increased; resulting in a narrow rent gap for the 81 markets we aggregate. Our housing-cost-to-income ratio remains low, now at 25.5%, and our JBREC Affordability Index stands at 1.7, with zero being the best possible rating for affordability. Affordability continues to be bolstered by historically low mortgage rates. The 30-year fixed mortgage rate is currently at 4.55% and adjustable mortgage rates are at 2.95%. The median home price to income ratio is 3.3, which is slightly above the long-term historical norm and near a level conducive to market health. After increasing every quarter from 1Q09 through 2Q10, owner equity declined for the third consecutive quarter in 1Q11; a reflection of the continued downward pressure on home prices.
Consumer Behavior..........................................................................D+
Consumer behavior was mixed this month, with several metrics rising and others falling, resulting in an unchanged overall grade of D+. Consumer debt continues to decline, as evidenced by the Financial Obligation Ratio (FOR), which is a relation of debt payments to disposable personal income. At 16.4% of income, this ratio is at its lowest level since 1994. The percentage of consumer credit accounts entering default also improved this month, as evidenced by the S&P/Experian U.S. Consumer Credit Default Indices. Credit default indices for all major accounts (first mortgages, second mortgages, automobile loans, bank cards) have all improved over the last year. Both Consumer Comfort and Consumer Sentiment decreased in July, while Consumer Confidence ticked up. Due to rising inflation and a still elevated unemployment rate, the misery index (unemployment + inflation) worsened this month, increasing to 12.8%; significantly higher than its historical average of 9.46% that dates back to 1948.
Existing Home Market.......................................................................D+
The existing home market continues to remain weak, with most indicators worsening this month. Homeownership fell to 65.9% in 2Q11, down from 66.4% in 1Q11, which is the lowest level since 1Q98. The seasonally adjusted annual resale activity dropped to 4.77 million homes in June, with median resale prices up a modest 0.6% Y/Y. " The S&P/Case-Shiller 10 and 20 market composite indices fell again this month, and have now declined -3.6% and -4.5%, respectively over the last 12-months. Both existing home inventory and months of supply rose in June, while the Purchase Mortgage Application Index rose marginally through July.
New Home Market..............................................................................C-
The new home market improved this month, due in large part to continued declines in new home supply. The median single-family new home price rose to $235,200 this month, and is up 7.2% Y/Y, but that is a shift in what is selling and not a true price increase. Our overall grade for the new home market is a C-, up from a D+ last month. The Housing Market Index stayed flat at 15, still far below its historical average of 49. Rolling 12-month sales rose slightly to 299K transactions, while new home sales decreased to 312K units on an annualized basis. Months of unsold new homes dropped this month, currently at 6.3 months versus 6.4 months in June. New home inventory (NSA), declined to 165K in June, hitting a new all-time low.
Repairs and Remodeling....................................................................D+
Indicators for residential repairs and remodeling were mixed this month. Homeowner improvement activity increased in 2Q11, climbing at a 1.3% Y/Y clip. Residential investment as a percentage of GDP increased slightly to 2.2% this quarter, rising $4.4 billion on an absolute level. The Remodeling Market Index (current) fell in 2Q11, dropping from 46.1 to 44.8, below its historical average of 46.4. The Remodeling Market Index (future expectations) fell from 46.8 in 1Q11 to 43 in 2Q11. The Remodeling market Index (future expectations) is now below its historical average.
Housing Supply...................................................................................F
While some housing supply indicators improved from last month, only multifamily starts (D-) and excess vacancy (D) is not an F. Single-family permits decreased to 404K units (SA), and single-family starts decreased to 425K units (SA). Multifamily permits continue to rise, now up 34% Y/Y, while multifamily starts are up 100% Y/Y. New housing units completed is at 636K (SA)this month, while manufactured housing placements fell to 0K (SA). The homeowner vacancy rate decreased this quarter to 2.5%.
U.S. HOUSING MARKET STATISTICS
Data Current Through August 17, 2011
Grade*
Overall Grade D+
Statistic Grade
Economic Growth C-
These are the best indicators of how the economy is currently performing.
Real GDP (annual rate) 1.3% C
Employment Growth (1-year Change)
- Non-ag Payroll, NSA 952,000 C
Employment Growth Rate
- Non-ag Payroll, NSA 1.0% C
Unemployment Rate 9.1% D-
Average Length of Unemployment (Weeks) 40.4
Median Length of Unemployment (Weeks) 21.2
% of Labor Force Unemployed (27 weeks and over) 4.0%
U.S. Initial Jobless Claims 400,000
Mass Layoff Events, SA (YOY % Change) -11.4% B-
Productivity -0.3% C-
Retail Sales 8.5% B+
Capacity Utilization 76.7% D+
Inflation
Core CPI 1.6% A-
Full CPI 3.6% C
Personal Income Growth, nominal 5.0% C-
Federal Deficit (last 12 mos., $mil curr.) -$1,290,016 F
U.S. Immigration as a % of Total Population 0.3%
Total Population Growth 1.1%
Total Households 112,473,000
- Growth Rate 0.7% D
Owned Households 74,131,000
- Growth Rate -0.8% F
Rented Households 38,342,000
- Growth Rate 3.8% B+
Statistic Grade
Leading Indicators C-
These have all proven to be predictable early indicators of the direction of economic growth.
Leading Econ. Index (Ann. Growth Rate Last 6 Mos.) 5.4% C+
ECRI Leading Index 2.1% C
Manpower Net Employment Outlook 8% D+
U.S. Vistage CEO Confidence Index 93%
CEO Economic Outlook Survey 110%
U.S. Average Hours Worked per Week 33.7
Temporary Employed Workers (YOY % Change) 7.6% C+
Corporate Profit Growth (pre-tax) 8.8% C
Corporate Bond Spread (Corp Bond vs. 10-Yr Tres.) 196.0%
Capital Goods New Orders 6.6% C+
Money Supply - M2 2.4% C
Interest Rate Spread
10-year Treasury 2.97%
2-year Treasury 0.41%
Interest Rate Spread 2.56% B+
3-month LIBOR 0.25%
3-month Treasury 0.07%
TED Spread 0.18% B
Stock Market (Return over last 12 months)
Dow Jones 16% C
S&P 500 17% C+
NASDAQ 22% C
Wilshire 5000 19% C+
S&P Super Homebuilding 1% C
Tougher Standards on Business Loans - Large Firms -16% A-
- Small Firms -14% B+
Crude Oil Price (Current $) $97.19 D
ISM Manufacturing Index 50.9 C
ISM Non-Manufacturing Business Activity Index 56.1 C
Statistic Grade
Affordability C
These statistics are probably the most important indicators of short-term housing market performance.
Conforming Mortgage Rates (contract rate; an additional 0.6 - 1.0 points are also paid up front by the borrower)
JBREC Affordability Index 1.7 B+
US Median Home Payment / Income Ratio 25.5%
US Median Home Price / Income Ratio 3.3 C
Mortgage Rates, Fixed 4.55% A+
Mortgage Rates, Adjustable 2.95% A+
Fixed/Adjustable Spread 1.60% C
Fixed/10-year Spread 1.58% C
Fed Funds Rate 0.15%
Percentage of Adjust. Loans 6.6% B+
Equity/Owned Home (Current $) $82,209 F
Avg. Debt % in Home (LTV) - Homes with Mortgages 85.2% F
Median Household Income $55,986
- Growth Rate, nominal 1.2% D
Statistic Grade
Consumer Behavior D+
Consumer attitudes correlate well with short-term housing sales performance. Consumer income growth, debt levels and job prospects affect the long-term outlook for housing sales.
Consumer Confidence Index 60.8 D
Consumer Sentiment Index 63.7 D-
Consumer Comfort Index -44.7 F
Revolving Cons. Credit per Household $7,095
- Growth Rate -4.4% B
Personal Savings Rate 5.4% C-
U.S. Net Worth Growth Rate 5.0% C
Financial Obligation Ratio 16.4% B
Misery Index (Unemployment + Inflation) 12.80 D+
Statistic Grade
Existing Home Market D+
Sales volumes correlate well with the Housing Cycle calculations, and boost the trade up New Home sales market.
S&P/Case-Shiller® U.S. Price Index (YOY % Change) -5.1% D+
NAR Single-Family Median Home Price $184,600
NAR Single-Family Annual Price Appreciation 0.6% C-
Freddie Mac Annual Price Appreciation -8.5% F
Annual Sales Volume, SA 4,770,000 B-
Existing Home Inventory for Sale, SA 3,765,000 D
Months Supply of Unsold Homes, SA 9.5 D+
Purchase Mort. App. Index, SA 209.9 D+
Pending Home Sales Index, SA 90.9 D
Homeownership Rate 65.9% C
Statistic Grade
New Home Market C-
High appreciation and low inventory would mean an excellent short-term outlook for the new home industry.
Housing Market Index 15 F
Multifamily Condo Market Index 23 D+
Median Price, NSA $235,200
Annual Appreciation Rate 7.2% C
Constant Quality Price Index (YOY % Change) -0.6% D
Sales Volume, SA 312,000 F
New Home Inventory for Sale, NSA 165,000 A+
Months Supply of Unsold Homes, SA 6.3 C
Months of Homes Completed, SA 2.3 C
Months of Homes Under Const., SA 3.0 B-
Months of Homes Not Started, SA 1.0 C
Statistic Grade
Repairs and Remodeling D+
High remodeling levels are good for the economy and are closely tied to consumer confidence.
Homeowner Improvement Activity (YOY % Change) 1.3% C
Remodeling Market Index - Current 44.8 C
Remodeling Market Index - Future Expectations 43.0 C
Private Residential Construction (YOY % Change) -2.1% C
Residential Investment as % of GDP (nominal) 2.2% F
Statistic Grade
Housing Supply F
High construction levels are good for the economy. However, if new supply exceeds demand, prices could fall.
New Housing Units Completed, SA 636,000 F
Single-Family Starts, SA 425,000 F
Multifamily Starts, SA 179,000 D-
Total Starts, SA 604,000 F
Single-Family Permits, SA 404,000 F
Multifamily Permits, SA 193,000 F
Total Permits, SA 597,000 F
Manuf. Housing Placements, SA 0,000 F
Total Supply, SA 597,000 F
Total Housing Stock 131,173,000
Excess Vacancy 108715753.1% D
SA stands for Seasonally Adjusted Annual Rate. NSA stands for Not Seasonally Adjusted.
* The best 15% ever are "A" scores, the average is a "C", and the worst 15% ever are "F" scores, with distributions throughout.
URL to original article: http://www.builderonline.com/builder-pulse/time-keeps-on-slippin---slippin---slippin------into-the--90s.aspx?cid=BP:082311:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, August 22, 2011
Betting the Ranch that this ain't no tear-down
ATLANTA—Richard Cloues has spent much of his career saving antebellum plantations, Victorian mansions and other rare buildings. Now the historic preservationist is leading a campaign to protect a building style many don't see as worth saving: the modest ranch house.
Once a symbol of economic expansion, the long, low, single-story home was the dwelling of choice in America's burgeoning suburbs from the 1940s to the 1970s. Practical and cheap, ranches housed millions of returning soldiers and their families after World War II.
"It's just kind of a plain house—well, that was the point," says Mr. Cloues.
Today, many see the ranch house as outdated as the eight-track tape. "The real-estate term is functional obsolescence," says Cindi Sokol, an Atlanta real-estate agent who loves the ranch house she lives in, but finds it difficult to get potential buyers to look at them. "People just don't want them."
But with a growing number of the homes turning 50 years old—the age at which the National Park Service says most buildings may be considered for the National Register of Historic Places—Mr. Cloues is leading one of the first state efforts to protect them.
His office, Georgia's Historic Preservation Division, has produced a coffee-table-book-style manual to help state agencies and homeowners assess the historic value of ranch homes. He and his colleagues helped a 1950 ranch house in Macon, Ga., as well as ranch-house subdivisions in Savannah and Atlanta, win listings on the National Register.
Mr. Cloues grew up in a two-story Georgian Revival-style home in New Hampshire. But he keeps a third-grade report he wrote exalting the ranch, which he admired as the epitome of modern living. "It was my ideal of a house," he says.
Joe League was surprised when state officials asked him a few years ago to submit an application for his Macon, Ga. home to the National Register. The former World War II pilot and budding insurance agent was thinking only about a place he could afford and that would work for a young family when he had the 1,800-square-foot edifice built in 1950 for about $15,000. The house featured floor-to-ceiling windows, 13 doors to the outside and low roofs.
"It was a functional house that satisfied our needs and was relatively inexpensive," says Mr. League, now 90 years old.
The house, enlarged to about 2,200 square feet in the 1960s, was accepted on the register in 2009. Mr. League and his wife Mary Jane proudly posted their plaque at the front door.
State officials thought the home was a perfect ranch house to submit for the National Register because it was designed individually by an architect (Mr. League's Harvard-educated sister) and kept in pristine condition by original owners.
Still, historic status has its downside. "You can't repave the driveway without their say-so," Mr. League says of the National Register staff. He says he doesn't have any changes in mind.
Applications from ranch house owners seeking historic status for their homes have risen sharply in recent years, according to the National Register. "It's just now starting to become appreciated again," says Daniel Paul, an architectural historian in southern California who has worked on applications for ranch house developments and homes.
The guidelines produced by Mr. Cloues and colleagues, which detail ranch house styles, have been downloaded by governments, businesses and homeowners across the country. Styles listed range from "Contemporary" to "Rustic" to "Plain (No Style)." They have generated such interest that a National Academy of Sciences panel was formed—with Mr. Cloues as a member—to announce nationwide guidelines next year.
State and local governments are taking up the cause to protect ranch houses from modification or the wrecking ball as more people appreciate the simplicity of the homes, says Dianna Litvak, a senior historian with the Colorado Department of Transportation. Her office just completed a study of ranch homes in metro Denver to identify ones that might be considered historic. Los Angeles officials have a similar survey under way.
Derived from Mexican ranches, ranch houses were first built in the 1930s in southern California. They took off in the 1950s and 1960s as developers found them affordable to mass produce. With their sleek, low, modern design, large windows and open rooms, they also "signified the future," says Barbara Lamprecht, an architectural historian in southern California.
By the mid-1970s, though, they became passé, as Americans started craving more space, a second floor and flashier exteriors. Now, the housing crisis has made ranches even less appealing, since larger, more modern houses can be had for competitive prices.
Living in history didn't intrigue Matthew Shugart when he recently visited a refurbished ranch house in Atlanta—and immediately walked out. The 34-year-old salesman and his wife felt the house was too small inside with low ceilings. "We don't want to live on top of each other," he says.
Kirk Boggs, an Atlanta-area developer, started his business building ranch houses in the early 1970s but then switched to larger, two-story homes, which put more square footage on less land, maximizing profit per unit built. Most home buyers today dismiss ranches as "something their grandparents lived in," he says.
"A lot of people are still like, 'Are you telling me this little crappy two-bedroom in Las Vegas is historic?'" says Michelle Gringeri-Brown, a co-founder of "Atomic Ranch," a quarterly magazine dedicated to the ranch house.
Still, some are finding charms in the houses. "Atomic Ranch," started in 2004, now sells about 100,000 copies every issue.
Bill Adams, a 62-year-old Atlanta real-estate agent, cites one reason ranch houses have appeal for the aging baby boomers to whom he shows homes: no stairs. "Their knees and hips are starting to bother them a bit," he says.
Mr. Adams agonized 15 years ago about moving from a large, ornate but drafty Victorian house to "an ugly ranch house" in a safer suburban neighborhood. But he says he's grown to appreciate how easy the house is to maintain and the lower energy bills.
"Its ugliness has grown on me," he says. "It took me about six years."
URL to original article: http://www.builderonline.com/builder-pulse/betting-the-ranch-that-this-ain-t-no-tear-down.aspx?cid=BP:082211:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices in lackluster markets return to 1997 levels
Real estate prices in a few U.S. markets are back to levels not seen in a decade, according to data released by John Burns Real Estate Consulting on Friday.
In a report titled, "Back to the Future: Median Home Prices Mirror Years Past," the study's author Gregory Tsujimoto says prices in Atlanta, Las Vegas, Phoenix and Oakland have fallen back to 1997 levels, while healthier markets throughout Texas are hovering at 2006 levels, suggesting the state's brighter employment prospects are preventing steep drops.
The markets performing the best include Dallas, Houston, Austin and San Antonio.
All other markets fall somewhere in between the two extremes, with prices hanging somewhere between 2002 and 2004 levels.
In the past few months, several markets did experience an increase in the median home price, creating a situation where affordability is beginning to decline slightly in some areas.
Even still, home prices are at extreme lows, while the cost of renting has increased, according to Tsujimoto's housing market update.
Consumer behavior in the past month remained unchanged, with John Burns Real Estate grading consumer sentiment at the D-plus level. Overall consumer sentiment decreased in July even as consumer debt levels improved, the research firm said.
URL to original article: http://www.housingwire.com/2011/08/19/home-prices-in-lackluster-markets-return-to-1997-levels
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, August 19, 2011
Supreme home makeover?
Mike and Chantell Sackett vs. the EPA
The couple wanted to build a picturesque Idaho home. Instead they were accused of building on a wetland. Now the Supreme Court will hear their case.
When Mike and Chantell Sackett paid $23,000 for a lot near the banks of Priest Lake in northern Idaho in 2005, they thought they were buying the site for a picturesque new home. They got a lot more: a long feud with the Environmental Protection Agency and now a Supreme Court case that could bolster the rights of landowners facing costly demands from the federal government.
Four years ago the Sacketts were filling in their lot with dirt and rock, preparing to build a simple three-bedroom home in a neighborhood where other houses have stood for years. Then three federal officials showed up and demanded they stop construction. The agency claimed the .63-acre lot was a wetland, protected under the Clean Water Act.
The Sacketts say they were stunned. The owners of an excavation company, they had secured all the necessary local permits. And Chantell Sackett says that before work began, she drove two hours to Coeur d’Alene, Idaho, to consult with an Army Corps of Engineers official. She says the official told her orally, though not in writing, that she didn’t need a federal permit. “We did all the right things,” she says.
The EPA issued an order requiring the Sacketts to put the land back the way it was, removing the piles of fill material and replanting the vegetation they had cleared away. The property was to be fenced off and the Sacketts would be required to submit annual reports about its condition to the EPA. The agency threatened to fine them up to $32,500 a day until they complied.
The Sacketts instead tried to get a hearing in federal court, seeking a declaration that their property wasn’t a protected wetland. The plot is not connected either to the lake or a nearby creek, though Mike Sackett, 45, says part of the land got “wet” at times in the spring. “We sued because we wanted our day in court to say, ‘This is not a wetland,’ ” he says. Two lower courts turned the couple away, saying they could not make that argument until the EPA asked a federal judge to enforce the order. That left the Sacketts in limbo. Restoring the property as the EPA demanded made no sense to them. It would cost hundreds of thousands of dollars, they say, and if they ultimately won the case they’d have to clear the land a second time. But defying the order potentially meant racking up $32,500 in fines each day—and perhaps criminal liability if they continued with construction—while they waited for the EPA to decide whether to pursue the case. “It’s an unenviable choice,” says Damien M. Schiff of the Pacific Legal Foundation, a Sacramento-based property rights group that is representing the couple for free. “It’s really almost no choice at all.”
The Sacketts appealed to the Supreme Court, asking for the right to go straight to a federal judge. The high court agreed to hear the case in its fall term. It is being watched closely by environmentalists and property rights activists because of its potential scope. A ruling in the Sacketts’ favor would blunt one of the agency’s favorite enforcement tools. Each year it issues up to 3,000 “administrative compliance orders” to businesses and individuals, demanding an end to alleged environmental violations and applying enough pressure that those who are accused typically give in before the agency has to justify the action before a judge.
“The compliance order tool is one of a few mechanisms that EPA has to resolve, and resolve quickly, pollution problems,” says Jon P. Devine, a senior attorney with the National Resources Defense Council. The EPA argues the rules are reasonable. While fines may accrue, they won’t actually be assessed until the Sacketts have a chance to make their case to a judge, it says. Agency officials declined to be interviewed.
In taking on the case, the high court told the two sides to discuss in their filings whether the EPA’s procedures are so unfair that they violate the Sacketts’ constitutional right to due process. A ruling in favor of the landowners on those grounds would reverberate beyond the EPA, potentially forcing both state and federal agencies to seek court permission before trying to enforce rules.
Some environmental advocates believe the agency made a mistake in letting a case with such appealing plaintiffs reach the Supreme Court. The Sacketts haven’t dared to touch their land since the dispute began. Their dream house is on hold; they live in a rental nearby. It’s a problem for the EPA that the Sacketts “feel like the mom and pop who are getting the heavy hand of government brought down on them,” says Catholic University law professor Amanda Cohen Leiter, who sides with the agency. “I can imagine the court being sympathetic to these particular plaintiffs and issuing … an overbroad ruling as a result.”
The bottom line: The Supreme Court could turn a minor land dispute between an Idaho couple and the EPA into a far-reaching case on government power.
URL to original article: http://www.builderonline.com/builder-pulse/supreme-home-makeover-.aspx?cid=BP:081911:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, August 18, 2011
California home sales decline 11% in July
California home sales fell 11% in July with 34,695 homes sold last month compared to 38,975 in June, real estate data firm DataQuick said Wednesday.
On a year-over-year basis, home sales dropped 1.4% from 35,202 in July of 2010. DataQuick considers the June-to-July drop inline with normal seasonal expectations.
While the median home price remained relatively unchanged, dropping to $252,000 in July from $253,000 in June, it's still down 6% from $268,000 a year ago.
The median sales price on a year-over-year basis has fallen in each of the past 10 months. The median price peaked at $484,000 in early 2007 before plummeting to $221,000 in April 2009.
Despite the sales price going up from the trough of the recession, existing homes sales still include a large number of distressed assets, with foreclosures representing 34.6% of the homes sold in California in July. That is down from 35.1% in June and 35.2% a year ago.
Meanwhile, short sales made up 17.3% of all resales in July.
URL to original article: http://www.housingwire.com/2011/08/17/california-home-sales-decline-11-in-july
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, August 17, 2011
Household debt burden heads toward 20-year low
Consumers cut the amount of disposable income going toward debt repayments, such as mortgages, to below the average measured in the 1990s, according to the Federal Reserve Bank of Cleveland.
Researchers said much of the drop likely stems from historically low interest rates, which press such payments downward. The Cleveland Fed measured consistent declines in debt levels since the third quarter of 2008.
"The ratio is now well below the average levels seen from 1990 to 2000, and it is rapidly approaching its lowest levels since 1993 to 1994," researchers said.
Consumer spending represents 70% of GDP and consumption growth is recovering since the crisis in 2008. Income growth, however is currently moving toward levels measured during times of economic stress, and while consumption growth continues upward, it barely reached its 20-year average in 2010.
Researchers said the contraction in income, consumer spending and borrowing, is also explained by higher-than-average defaults on mortgages and other loans.
Even as banks continue to charge off mortgages at high-levels, they are loosening standards on other debt, especially credit cards, researchers said.
According to a study from consumer credit firm Experian, delinquencies in credit cards are improving at a far greater clip than mortgages.
The Cleveland Fed said the as consumers continue to deleverage at such a steep clip, new lending may begin to ramp up.
"While the (debt-to-income) ratio may potentially undershoot its long-term average, its sharp decline since 2008 indicates that the debt-service burden has fallen substantially, which may make borrowers more inclined to borrow again and financial institutions more willing to lend," researchers said.
URL to original article: http://www.housingwire.com/2011/08/16/household-debt-burden-heads-toward-20-year-low
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage delinquency rate grew 2.4% in July
The U.S. mortgage delinquency rate rose between June and July, while the nation's foreclosure pre-sale inventory rate edged down slightly.
The delinquency rate for U.S. mortgages more than 30 days past due but not in foreclosure hit 8.34% in July, up 2.4% from the previous month, Lender Processing Services (LPS: 17.858 -3.68%) said in its monthly First Look Mortgage Report.
On a year-over-year basis, the same delinquency rate fell to 10.4%, LPS said after studying 40 million loans in its database.
The Jackonsville, Fla.-based mortgage technology and data analytics provider said 4.4 million properties were classified as more than 30 days past due last month, while 1.89 million were listed as more than 90 days past due.
When looking at loans that are either 30 days or more delinquent or in foreclosure, the database has approximately 6.5 million mortgages that fit that criteria.
States with the most delinquent loans included Florida, Mississippi, Nevada, New Jersey and Illinois, while Montana, Wyoming, Alaska, South Dakota and North Dakota had the fewest non-current loans.
The total U.S. foreclosure pre-sale inventory rate hit 4.11% in July, a 9.7% surge from last year, but a slight o.4% decline from June.
URL to original article: http://www.housingwire.com/2011/08/16/u-s-mortgage-delinquency-rate-grew-2-4-in-july
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home Depot profits rise on repair trends
Home Depot (HD: 33.0601 -0.18%) reported net income in the second quarter jumped 14.3% on sales growth of 4.2% in a signal that more homeowners are remodeling their homes rather than buy new ones.The hardware store chain is also seeing an increased demand for rental property repair supplies.
The gain was driven by a rebound in seasonal business, increased spending on storm-related repairs, and a strengthening in the company's core business. Diluted earnings per share for the Atlanta-based company rose 19.4% to 86 cents a share from 72 cents a year earlier.
Core merchandising segments such as hardware, tools, building materials, and electrical supplies helped buoy Home Depot’s financials in the three months ended July 31, said CEO Frank Blake in a conference call Tuesday.
"We were also encouraged that soft housing markets like California, Florida, Arizona, and Nevada were positive in the quarter," he said.
Those core purchases are indicative of a focus on repairs and renovation, a point Blake touched on in a comment to analysts. "We have seen a decline in the percent of the population that owns homes, but people who rent also do upgrades," he said. "There's actually a lot of wear and tear on rental units and we can fill some of that need."
While Home Depot profit outpaced growth in U.S. gross domestic product of just 1.3% in the second quarter, the company’s business is generally correlated with the economy’s performance, said Blake. Although real residential fixed investment grew 3.8% in the second quarter, he painted a bleak picture of the outlook for housing through the rest of the year, noting that starts, turnover and pricing all remain depressed.
“We do not expect any meaningful improvement in the housing market for the back half of 2011 and events here and across the globe would suggest that there are more risks to the downside than the upside on GDP growth,” said Blake.
Even so, the company expects its fiscal 2011 sales to increase 2.5% from 2010, and diluted earnings per share to rise 16% for the year to $2.34.
URL to original article: http://www.housingwire.com/2011/08/16/home-depot-profits-rise-on-repair-trends
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, August 16, 2011
On mortgage rates, Obama wants proposal for how government can keep big role
President Obama has directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation’s mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter.
The decision follows the advice of his senior economic and housing advisers, who favor maintaining the government’s role as an insurer of mortgages for most borrowers. The approach could even preserve Fannie Mae and Freddie Mac, the mortgage finance giants owned by the government, although under different names and with significant new constraints, said people knowledgeable about the discussions.
A decision to preserve a major government role would mark a big milestone in the effort to craft a new housing policy from the wreckage of the mortgage meltdown and could mean a larger part for Fannie and Freddie than administration officials had signaled.
In a statement, the White House said it is premature to say that senior officials have agreed on any of the three main options outlined earlier this year in an administration white paper on reforming the housing finance system.
“It is simply false that there has been a decision to move forward with any particular option,” said Matt Vogel, a White House spokesman. “All three options remain under active consideration and we are deepening our analysis around how each would potentially be implemented. No recommendation has been made to the president by his economic advisers.”
The proposal is likely to draw criticism from many Republicans, who blame the financial crisis on policies they say overly encouraged the housing market. And many economists, including some who have worked in the White House under Obama, consider the federal role harmful to the free market.
But if this approach became law, it probably would keep in place the kind of popular home loans that have been around for decades — 30-year fixed-rate mortgages with relatively low interest rates.
Officials have not determined whether to advance a final proposal before the 2012 presidential election. Officials from the White House, the Treasury Department and the Department of Housing and Urban Development are working out the details.
The government could maintain a substantial role in various ways. These include restructuring Fannie and Freddie as public utilities overseen by a government regulator. The government would no longer guarantee their financial health, as in the past, but would continue to backstop the mortgage-backed securities they issue using loans made by private banks.
Or the two companies could be shut down and replaced with several successors that, likewise, would have their mortgage-backed securities guaranteed by the government in exchange for a fee. A federal guarantee, by reducing the risk to investors, can make it cheaper for firms to raise money for making home loans, in turn reducing mortgage rates.
For years, Fannie and Freddie — shareholder-owned companies chartered by Congress to support the housing market — owned or insured trillions of dollars in home loans. When the housing market crashed, the government seized the firms, and it has spent more than $150 billion propping them up.
Since then, Fannie and Freddie have played a key role in ensuring the availability of mortgages amid the market upheaval. But the Obama administration has said it wants to scale back the federal role.
In weighing whether to preserve Fannie and Freddie, administration officials have several concerns, said people familiar with the discussions. They spoke on the condition of anonymity because the talks are still preliminary.
The firms spent decades developing a market in which investors worldwide can buy and sell securities backed by U.S. home loans, and administration officials don’t want to jeopardize it.
In addition, officials don’t want to punish the thousands of Fannie and Freddie employees who have specialized knowledge about the mortgage market and had nothing to do with the poor business decisions top executives made in the run-up to the financial crisis.
But some critics warn that nearly any government role could leave taxpayers on the hook.
“The long-term consequence is that the taxpayers ultimately have to bail out the government’s losses,” said Peter Wallison, a fellow at the American Enterprise Institute. He added, “There is only one legitimate role for government in guaranteeing mortgages: That is mortgages for low-income people, to enable them to buy homes.”
Under the approach Obama endorsed, the government would seek to limit the exposure of taxpayers. Fannie, Freddie or other successor firms would charge a fee to mortgage lenders and banks and use the money to create an insurance pool to cover losses on mortgage securities caused by defaults on the underlying loans. The government would be the last line of defense in case of another housing market meltdown, using taxpayer money to cover losses only if the insurance pool ran dry.
Some special advantages awarded to Fannie and Freddie would be eliminated, according to people familiar with the matter. For example, the two companies were allowed for decades to do business while holding a fraction of the reserves — essentially, rainy-day money — that banks and other financial firms were required to hold. This advantage allowed Fannie and Freddie to grow very large. The companies, or the firms that replace them, would have to start holding much more in reserve.
The administration’s strategy also would require Fannie and Freddie, if they remain in some form, to shed many of the mortgages they own. Their loan portfolios, which have ballooned recently, would shrink greatly over coming years and perhaps be eliminated. Private firms would have to fill the void.
“We remain committed to winding down Fannie and Freddie, though such significant measures would need to be done gradually and with care,” said Vogel, the White House spokesman. “We believe that it is essential to bring private capital back to the center of a reformed housing system.”
Although banks would be able to make any home loans they wanted, only those that met federal standards would be eligible to be included in securities assembled by Fannie, Freddie or successor companies. And only those securities would have a government guarantee.
Any effort to remake the nation’s housing finance system would be phased in over five to 10 years.
Since early in his tenure, Obama has promised to offer a proposal to overhaul the nation’s housing finance system.
In February, the administration released a long-awaited white paper discussing an overhaul of the housing finance system. The paper called for the end of Fannie and Freddie but did not say what should replace them.
Three options were presented. The first two called for greatly reducing the federal role in the mortgage market, perhaps eliminating it. A third option called for largely maintaining the government’s footprint but introducing several changes to reduce the chances that another taxpayer bailout would be needed.
(All of the options preserved the Federal Housing Administration, a government agency that helps low- and middle-income and minority home buyers.)
The administration’s decision in February to release a series of options — and not make a formal recommendation — reflected a political calculation and a disagreement among Obama’s advisers.
Two top Obama advisers, HUD Secretary Shaun Donovan and Treasury Secretary Timothy F. Geithner, think the government should maintain an outsize role in the housing market, administration officials said.
Donovan thinks federal support for housing fulfills a public service, while Geithner has been focused on the need for the government to have a way to keep the mortgage market operating during a financial crisis.
Other advisers, however, opposed a continued government role over the long run. Austan Goolsbee, who this month left his job as chairman of Obama’s Council of Economic Advisers, argued that the federal role in housing distorts the free market. By subsidizing mortgage investments, he argued, the government drives capital away from other types of investments — for example, those in companies developing environmentally friendly technology. He also warned that the government is putting enormous sums of taxpayer money on the line while conveying little actual benefit to home buyers.
In a meeting with the president, Goolsbee said that the government had finally brought Fannie and Freddie’s excesses to heel by taking over the companies and that it would be a mistake to let them loose in the market again, said a person familiar with the meeting. Goolsbee likened the companies to a villain held in a special prison who shouldn’t be freed just because he promises to help the poor, the source recounted.
Lawrence H. Summers, who was director of the National Economic Council until early this year, argued that, over the long term, it didn’t make sense to have a government-backed agency providing guarantees to the mortgage market but that Fannie and Freddie still play a crucial role.
“My position was that we needed to maximize activity in the short run to support the housing market,” Summers said in an interview. “Discussions of scaling down Fannie and Freddie were vastly premature under the circumstances of a collapsing housing market.”
After a decade or so, he added, the government role might be phased out. He cautioned that models similar to Fannie and Freddie “were problematic because they were likely to lead to the same type of abuses” that Fannie and Freddie engendered.
Gene Sperling, who became director of the National Economic Council this year, shepherded the release of the white paper. He agreed that a continued government guarantee made sense.
In the end, Obama signaled agreement. The White House, however, says the president has not made a final decision.
URL to original article: http://www.housingwire.com/2011/08/16/on-mortgage-rates-obama-wants-proposal-for-how-government-can-keep-big-role
For further information on Fresno Real Estate check: http://www.londonproperties.com
Fixed-rate mortgages dominate refinancing space in 2Q
Borrowers refinancing mortgages in the second quarter of 2011 overwhelmingly chose fixed-rate mortgages, with 95% taking that route, Freddie Mac said Monday.
Homeowners went with the fixed-rate mortgage whether they had a fixed-rate loan before or an adjustable-rate contract, Freddie Mac concluded in its Quarterly Product Transition Report.
In addition to selecting fixed-rate contracts, more refinancing borrowers shortened their loan terms, with 37% choosing a 15- or 20-year loan, the highest rate to select these alternatives in 8 years.
55% of refi borrowers who previously had a hybrid ARM selected a fixed-rate loan during the second quarter.
Overall, the share deciding to refinance from hybrid ARM-to-hybrid ARM reached its highest level in seven years.
"Fixed mortgage rates averaged 4.65% for 30-year loans and 3.84% for 15-year product during the second quarter in Freddie Mac's Primary Mortgage Market Survey, well below long-term averages," said Frank Nothaft, Freddie Mac's vice president and chief economist.
He added, "The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.3 percent during the second quarter of 2011. It's no wonder we continue to see strong refinance activity into fixed-rate loans."
URL to original article: http://www.housingwire.com/2011/08/15/fixed-rate-mortgages-dominate-refinancing-space-in-2q
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, August 15, 2011
Delinquent mortgage borrowers 25% above pre-crash levels
There are 25% more borrowers paying their mortgage 60 days late than before the financial crisis in 2007, according to the consumer credit company Experian.
Researchers took a look at borrower behavior on credit cards and mortgages at a city-by-city level from the second quarter of 2006 to the second quarter of 2011. They found more borrowers are making an effort to bring cards current that hasn't been seen for home loans (see the chart below).
Compared to the delinquent mortgages, Experian found late credit-card payments actually declined 20% since 2007.
"In looking at the numbers, we’re seeing that even in the cities at the bottom of the list, consumers are meeting their bankcard payment obligations better than before the recession,” said Michele Raneri, vice president of analytics at Experian.
Researchers added only four cities are showing improved mortgage payments: Cleveland, Minneapolis, Denver and Detroit.
"While the trend is positive on the bankcard side, the mortgage side is continuing to suffer in most of the markets," according to the report.
URL to original article: http://www.housingwire.com/2011/08/12/delinquent-mortgage-borrowers-25-above-pre-crash-levels
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, August 12, 2011
Refinancing surges as mortgage rates dip below 4.5%
A surge in mortgage refinancing applications last week is likely to create a bump in lending activity, but only for as long as mortgage rates hold below the 4.5% level, analysts say.
"For lenders, when mortgage rates take a drop like they have, especially when it involves record lows, the phones ring off the hook," said Greg McBride, a senior financial analyst with Bankrate.com.
An investor flight to quality in the wake of the downgrade by Standard & Poor’s of the country's credit rating is pushing yields on Treasury bonds, and consequently, mortgage rates, down near record lows. The average interest rate on a 30-year, fixed-rate mortgage fell this week to 4.32%, down from 4.39%, according to Freddie Mac. The lowest rate recorded by the company's primary mortgage market survey was 4.23% in October.
Consumers are looking to take advantage of the decline by refinancing. Applications for refinancing jumped more than 30% this week to their highest levels of the year, and over the past month, refinance application volume has risen by 63%, according to the Mortgage Bankers Association.
"What’s prompted this surge in applications is that mortgage rates got below a key threshhold," McBride said. "Mortgage rates have been below 5% every week since April, but we saw the surge in applications in August because rates dipped below the 4.5% mark."
Will the rise in applications translate into a higher lending volume?
David Crowe, chief economist for the National Association of Home Builders, said the members of his organization are struggling with sales because many buyers can’t get approved for loans.
"Credit conditions have not eased up as much as the administration would like and sometimes even as much as the few surveys would suggest," he said.
The Federal Reserve’s most recent survey of senior loan officers shows that lending standards for prime mortgages have remained steady while about 10% of banks tightened standards for nontraditional mortgage loans.
"We hear from our builder members that even when they do get an interested buyer, they often fail to complete the contract because they can't get financing, the appraisal doesn’t meet the agreed-upon price, or if the buyer is a current homeowner, they can’t sell their prior home," Crowe said.
McBride’s outlook is more positive. "Lending will go up," he said. "Three out of four mortgage applications are getting approved, so this idea that nobody can get a loan is off base."
Still, McBride cautions that lending activity will likely take a hit when conforming loan limits reset lower in October.
"Anybody in the market who’s subject to seeing the limit drop and putting them into the jumbo mortgage arena should act now in order to get their refinancing closed by Sept. 30," he said,
URL to original article: http://www.housingwire.com/2011/08/11/refinancing-surges-as-mortgage-rates-dip-below-4-5
For further information on Fresno Real Estate check: http://www.londonproperties.com