Source: National Association of Realtors
Pending home sales declined in September, although activity remains above a year ago, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 4.6 percent to 84.5 in September from 88.6 in August but is 6.4 percent higher than September 2010 when it stood at 79.4. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained. “A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” he said.
The PHSI in the Northeast declined 4.7 percent to 60.6 in September but is 4.0 percent above a year ago. In the Midwest the index dropped 6.2 percent to 71.5 in September but remains 12.3 percent higher than September 2010. Pending home sales in the South fell 5.5 percent in September to an index of 91.6 but are 5.0 percent above a year ago. In the West the index declined 2.1 percent to 105.8 in September but is 5.6 percent higher than September 2010.
“America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates,” Yun said. “The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates.”
Yun emphasized the need to reinstate higher loan limits in 42 states. “Just leaving excessive cash to sit in banks and not work into the economy is a drag on the overall recovery,” he said. “We need a comprehensive approach to address housing issues – not additional impediments.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
URL to original article: http://www.realtor.org/press_room/news_releases/2011/10/phs_sept
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, October 31, 2011
Thursday, October 27, 2011
Fed govs lose sleep over what's next for rates
Source: The Atlantic
During the week ending October 6th, the average fixed interest rate on a 30-year mortgage dipped below 4% for the first time, according to Freddie Mac. The Mortgage Bankers Association reported that refinancing applications rose -- by just 1%. These historic rates may not be low enough for the Federal Reserve: reports indicate that some central bankers want to encourage more refinancing and home sales. But have the Fed's efforts reached a saturation point?
The Fed's Next Move?
When the Fed meets next week, the housing market may be on its mind. Its actions announced after its September meeting were squarely aimed at mortgages: it sought to push down long-term interest rates through two policy tweaks. Comparing the week ending October 14th to the week ending September 16th, the Fed's effect on the housing market hasn't been particularly impressive: refinance applications are down 11% and purchase applications are down 6%.
The Washington Post reports that the Fed may humor buying additional mortgage-backed securities to push down rates even farther. At this time, they're reinvesting maturing MBS into new MBS. But a new program would expand their holdings of the mortgage securities. The question is: would it really do much?
Applications were relatively low until mortgage interest rates began to fall below 6% in early 2008. Then the financial crisis hit and they plummeted. But they rebounded strongly in 2009, as rates approached and then dipped below 5%. Then applications dropped again. Since that time, we've seen a few mini-booms, but nothing near those 2009 highs. In the meantime, however, interest rates have continued to fall.
At this point, it looks like interest rates would have to break through a significant new bottom barrier to encourage much more refinancing. If the Fed can't manage to slice off another 0.5% or more, Americans aren't likely to respond with an enormous demand for refinancing. Even, then, the result may be modest. At this point, many are relatively content with their already low mortgage interest rates.
Others, however, aren't managing to qualify for refinancing. An initiative announced by the Obama administration this week hopes to change that by allowing underwater borrowers with loans from Fannie Mae and Freddie to refinance. The program, however, is only expected to reach 800,000 people. For the numbers to rise much above that, we'll need to see banks get into the game. Reports indicate that could happen as a part of their foreclosure settlement with the state attorneys general, however.
Home purchases are another story entirely. Despite the ultra-low interest rates, they remain extremely weak. Just last week, mortgage purchase applications hit a new low-point that you'd have to go all the way back to 1996 to match. That's just a week after mortgage interest rates hit an all-time low. Interest rates alone don't appear to be enough to encourage home buying.
Next week the Fed must ask itself whether a new effort to push mortgage interest rates even lower can accomplish much. Additional action may only push down rates a little, failing to spur much additional refinancing or many purchases. Meanwhile, another dose of monetary stimulus could make the Fed's exit even more difficult. It must decide whether or not that potential harm will outweigh whatever economic benefit additional MBS purchases might provide.
---
*Note: The MBA asks that I don't publish their index values, but the curve alone should give you a good idea of magnitude.
URL to original article: http://www.builderonline.com/builder-pulse/fed-govs-lose-sleep-over-what-s-next-for-rates.aspx?cid=BP:102711:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
During the week ending October 6th, the average fixed interest rate on a 30-year mortgage dipped below 4% for the first time, according to Freddie Mac. The Mortgage Bankers Association reported that refinancing applications rose -- by just 1%. These historic rates may not be low enough for the Federal Reserve: reports indicate that some central bankers want to encourage more refinancing and home sales. But have the Fed's efforts reached a saturation point?
The Fed's Next Move?
When the Fed meets next week, the housing market may be on its mind. Its actions announced after its September meeting were squarely aimed at mortgages: it sought to push down long-term interest rates through two policy tweaks. Comparing the week ending October 14th to the week ending September 16th, the Fed's effect on the housing market hasn't been particularly impressive: refinance applications are down 11% and purchase applications are down 6%.
The Washington Post reports that the Fed may humor buying additional mortgage-backed securities to push down rates even farther. At this time, they're reinvesting maturing MBS into new MBS. But a new program would expand their holdings of the mortgage securities. The question is: would it really do much?
Applications were relatively low until mortgage interest rates began to fall below 6% in early 2008. Then the financial crisis hit and they plummeted. But they rebounded strongly in 2009, as rates approached and then dipped below 5%. Then applications dropped again. Since that time, we've seen a few mini-booms, but nothing near those 2009 highs. In the meantime, however, interest rates have continued to fall.
At this point, it looks like interest rates would have to break through a significant new bottom barrier to encourage much more refinancing. If the Fed can't manage to slice off another 0.5% or more, Americans aren't likely to respond with an enormous demand for refinancing. Even, then, the result may be modest. At this point, many are relatively content with their already low mortgage interest rates.
Others, however, aren't managing to qualify for refinancing. An initiative announced by the Obama administration this week hopes to change that by allowing underwater borrowers with loans from Fannie Mae and Freddie to refinance. The program, however, is only expected to reach 800,000 people. For the numbers to rise much above that, we'll need to see banks get into the game. Reports indicate that could happen as a part of their foreclosure settlement with the state attorneys general, however.
Home purchases are another story entirely. Despite the ultra-low interest rates, they remain extremely weak. Just last week, mortgage purchase applications hit a new low-point that you'd have to go all the way back to 1996 to match. That's just a week after mortgage interest rates hit an all-time low. Interest rates alone don't appear to be enough to encourage home buying.
Next week the Fed must ask itself whether a new effort to push mortgage interest rates even lower can accomplish much. Additional action may only push down rates a little, failing to spur much additional refinancing or many purchases. Meanwhile, another dose of monetary stimulus could make the Fed's exit even more difficult. It must decide whether or not that potential harm will outweigh whatever economic benefit additional MBS purchases might provide.
---
*Note: The MBA asks that I don't publish their index values, but the curve alone should give you a good idea of magnitude.
URL to original article: http://www.builderonline.com/builder-pulse/fed-govs-lose-sleep-over-what-s-next-for-rates.aspx?cid=BP:102711:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home Prices Stabilize But Recovery Remains on Hold
Source: CNBC
Home prices rose in August in half of major cities measured by a private survey, a sign that prices are stabilizing in some hard-hit portions of the country.
The Standard & Poor's/Case-Shiller index showed Tuesday that prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed monthly gains.
The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.
The August data provides a "modest glimmer of hope" that some areas may have bottomed out and could be turning around, said David M. Blitzer, chairman of S&P's index committee. He noted that cities in the Midwest — Chicago, Detroit and Minneapolis — have shown some strength since May.
Still, Robert Shiller, the co-founder of the index and a Yale economics professor, said in an interview on CNBC that overall home prices were "flat" and a recovery in the struggling housing market was not on the horizon.
Over the past 12 months, prices have fallen in all but two cities. Detroit and Washington were the only two cities to show year-over-year gains.
The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The August data are the latest available.
"We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that `housing' is more likely to improve from here," said Dan Greenhaus, chief global strategist for BTIG. "But given the overwhelming level of inventory that remains on the market ... further price declines seem almost assured to help clear the market."
Prices are certain to fall again once banks resume millions of foreclosures that have been delayed because of a yearlong government investigation into mortgage lending practices.
Those homes at risk of foreclosure promise "to keep pressure on prices for some time," said Joshua Shapiro, chief U.S. economist at MFR.
Home prices have stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, home prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.
Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven't been enough to lift sales.
Some can't qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.
Sales of previously occupied home sales are on pace to match last year's dismal figures — the worst in 13 years. Sales of new homes fell to a six-month low in August and this year could be the worst since the government began keeping records a half century ago.
Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — makes up about 30 percent of all home sales last month, up from about 10 percent in past years. The large number of unsold homes and foreclosures are sending prices lower and hurting sales.
URL to original article: http://www.cnbc.com/id/45029170
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices rose in August in half of major cities measured by a private survey, a sign that prices are stabilizing in some hard-hit portions of the country.
The Standard & Poor's/Case-Shiller index showed Tuesday that prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed monthly gains.
The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.
The August data provides a "modest glimmer of hope" that some areas may have bottomed out and could be turning around, said David M. Blitzer, chairman of S&P's index committee. He noted that cities in the Midwest — Chicago, Detroit and Minneapolis — have shown some strength since May.
Still, Robert Shiller, the co-founder of the index and a Yale economics professor, said in an interview on CNBC that overall home prices were "flat" and a recovery in the struggling housing market was not on the horizon.
Over the past 12 months, prices have fallen in all but two cities. Detroit and Washington were the only two cities to show year-over-year gains.
The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The August data are the latest available.
"We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that `housing' is more likely to improve from here," said Dan Greenhaus, chief global strategist for BTIG. "But given the overwhelming level of inventory that remains on the market ... further price declines seem almost assured to help clear the market."
Prices are certain to fall again once banks resume millions of foreclosures that have been delayed because of a yearlong government investigation into mortgage lending practices.
Those homes at risk of foreclosure promise "to keep pressure on prices for some time," said Joshua Shapiro, chief U.S. economist at MFR.
Home prices have stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, home prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.
Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven't been enough to lift sales.
Some can't qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.
Sales of previously occupied home sales are on pace to match last year's dismal figures — the worst in 13 years. Sales of new homes fell to a six-month low in August and this year could be the worst since the government began keeping records a half century ago.
Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — makes up about 30 percent of all home sales last month, up from about 10 percent in past years. The large number of unsold homes and foreclosures are sending prices lower and hurting sales.
URL to original article: http://www.cnbc.com/id/45029170
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, October 25, 2011
Obama stresses refi plan won't 'solve all problems'
by JON PRIOR
President Obama prodded Congress to pass another piece of his jobs bill during a speech in Las Vegas Monday, adding that if the economy is going to speed up its recovery more will be needed than the mortgage refinance plan announced earlier in the morning.
The Federal Housing Finance Agency announced new changes to the Home Affordable Refinance Program that should help millions of underwater Fannie Mae and Freddie Mac mortgage borrowers refinance into a more affordable rate. Only borrowers who are current on their mortgage bills are eligible. But as a percentage of the estimated 11 million underwater borrowers, the results will be modest at best, according to most.
The changes include eliminating upfront fees, negative equity caps, appraisal requirements and even some representation and warranty risk on the new loans.
"These steps I’ve highlighted today will not solve all the problems in the housing market. Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges," Obama said. "We will still need Congress to pass the jobs bill – and even then, the housing market won’t be fully healed until the unemployment rate comes down and the inventory of homes on the market comes down."
Senate Republicans filibustered the overall jobs bill and a portion the White House said would have put 400,000 teachers and first responders back to work. Obama pressed Project Rebuild Monday, which he said would help the private sector employ out-of-work construction workers to rehab vacant foreclosed properties.
"There are hundreds of thousands of vacant homes and more than 1 million construction workers out of work. That doesn't make sense," he said.
Obama said his administration is working to do as much as it can through executive orders as Congress remains gridlocked. Part of that, he said, is restoring many foreclosures as rental properties to ease the inventory on the market – an initiative the White House announced was under development last month.
Top GOP leaders and candidates for a presidential run in 2012 have said reducing burdensome regulations under the Dodd-Frank Act and cutting extraneous government spending would push the economy back to recovery.
Obama said the HARP changes Monday shows the economy can't wait for Congress to act.
"Here in Las Vegas, almost the entire housing market is under severe stress. This is a painful burden for middle-class families," Obama said. "When a home loses its value, a family loses a huge chunk of its wealth. As long as this goes on our recovery could not take off as quickly as it could."
URL to original article: http://www.housingwire.com/2011/10/24/obama-stresses-refi-plan-wont-solve-all-problems
For further information on Fresno Real Estate check: http://www.londonproperties.com
President Obama prodded Congress to pass another piece of his jobs bill during a speech in Las Vegas Monday, adding that if the economy is going to speed up its recovery more will be needed than the mortgage refinance plan announced earlier in the morning.
The Federal Housing Finance Agency announced new changes to the Home Affordable Refinance Program that should help millions of underwater Fannie Mae and Freddie Mac mortgage borrowers refinance into a more affordable rate. Only borrowers who are current on their mortgage bills are eligible. But as a percentage of the estimated 11 million underwater borrowers, the results will be modest at best, according to most.
The changes include eliminating upfront fees, negative equity caps, appraisal requirements and even some representation and warranty risk on the new loans.
"These steps I’ve highlighted today will not solve all the problems in the housing market. Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges," Obama said. "We will still need Congress to pass the jobs bill – and even then, the housing market won’t be fully healed until the unemployment rate comes down and the inventory of homes on the market comes down."
Senate Republicans filibustered the overall jobs bill and a portion the White House said would have put 400,000 teachers and first responders back to work. Obama pressed Project Rebuild Monday, which he said would help the private sector employ out-of-work construction workers to rehab vacant foreclosed properties.
"There are hundreds of thousands of vacant homes and more than 1 million construction workers out of work. That doesn't make sense," he said.
Obama said his administration is working to do as much as it can through executive orders as Congress remains gridlocked. Part of that, he said, is restoring many foreclosures as rental properties to ease the inventory on the market – an initiative the White House announced was under development last month.
Top GOP leaders and candidates for a presidential run in 2012 have said reducing burdensome regulations under the Dodd-Frank Act and cutting extraneous government spending would push the economy back to recovery.
Obama said the HARP changes Monday shows the economy can't wait for Congress to act.
"Here in Las Vegas, almost the entire housing market is under severe stress. This is a painful burden for middle-class families," Obama said. "When a home loses its value, a family loses a huge chunk of its wealth. As long as this goes on our recovery could not take off as quickly as it could."
URL to original article: http://www.housingwire.com/2011/10/24/obama-stresses-refi-plan-wont-solve-all-problems
For further information on Fresno Real Estate check: http://www.londonproperties.com
Welcome New Family Members
I wanted to Welcome aboard new Sale's Agent's to the London Family. Whitney Piekon and Kanwarbir Chahal will be working out of our main Fresno office. Matt Champbell & Ethel Groger will be working out of our Clovis office. Jamie Young formerly of Hot Local Deals will be working out of our Clovis office and Carson Goldberg formerly of Lloyns Real Estate out of Sacramento will be working in our Fresno main office.
Welcome aboard and go get'em!!!
If you or anyone you know is looking for a new career, Real Estate is GREAT!
go to www.tiore.com for more information on how to join our team.
Welcome aboard and go get'em!!!
If you or anyone you know is looking for a new career, Real Estate is GREAT!
go to www.tiore.com for more information on how to join our team.
Monday, October 24, 2011
How do you spell relief?
Source: Wall Street Journal
How many of the estimated 10 million-plus homeowners who owe a bank more than their home is worth would refinance into a lower interest rate if they could, and if the deal were sweetened for them? How many banks would take a haircut on the principal on those refinanced loans providing the government took some some of the hit and eased the blow? How many potential strategic defaulters are still out there, poised to mail in the keys at the slightest provocation, knowing that under current terms, it'll be a decade or more before they're whole again on what they've agreed to pay for their home? In answer to the first question, if there are 1 million borrowers who could and would refinance under a new program being proposed today by federal regulators and the Administration, then the economic impact could be significant. It could cause more people to spend money they're currently paying to service their mortgage debt for consumer goods and services. It could also begin to stabilize home values, the American economy's most viciously moving target. This morning's Wall Street Journal features a report by Nick Timiraos on the new proposed plan to ignite refinancing among a pool of borrowers previously shut out of the chance to lock in lower interest rates. Timiraos writes, "The overhaul will, among other things, let borrowers refinance regardless of how far their homes have fallen in value, eliminating previous limits. That could open up refinancing to legions of borrowers in Nevada, Arizona, Florida, California and elsewhere who are paying high interest rates and are deeply 'underwater,' owing more than their houses are worth. President Barack Obama is expected to tout the program in Las Vegas on Monday. The plan will streamline the refinance process by eliminating appraisals and extensive underwriting requirements for most borrowers, as long as homeowners are current on their mortgage payments, according to administration officials and an official at the Federal Housing Finance Agency. Fannie and Freddie have also agreed to waive some fees that made refinancing less attractive for some." The acronym-developers are busy this morning.
To read more, click on link below.
URL to original article: http://www.builderonline.com/builder-pulse/how-do-you-spell-relief-.aspx?cid=BP:102411:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
How many of the estimated 10 million-plus homeowners who owe a bank more than their home is worth would refinance into a lower interest rate if they could, and if the deal were sweetened for them? How many banks would take a haircut on the principal on those refinanced loans providing the government took some some of the hit and eased the blow? How many potential strategic defaulters are still out there, poised to mail in the keys at the slightest provocation, knowing that under current terms, it'll be a decade or more before they're whole again on what they've agreed to pay for their home? In answer to the first question, if there are 1 million borrowers who could and would refinance under a new program being proposed today by federal regulators and the Administration, then the economic impact could be significant. It could cause more people to spend money they're currently paying to service their mortgage debt for consumer goods and services. It could also begin to stabilize home values, the American economy's most viciously moving target. This morning's Wall Street Journal features a report by Nick Timiraos on the new proposed plan to ignite refinancing among a pool of borrowers previously shut out of the chance to lock in lower interest rates. Timiraos writes, "The overhaul will, among other things, let borrowers refinance regardless of how far their homes have fallen in value, eliminating previous limits. That could open up refinancing to legions of borrowers in Nevada, Arizona, Florida, California and elsewhere who are paying high interest rates and are deeply 'underwater,' owing more than their houses are worth. President Barack Obama is expected to tout the program in Las Vegas on Monday. The plan will streamline the refinance process by eliminating appraisals and extensive underwriting requirements for most borrowers, as long as homeowners are current on their mortgage payments, according to administration officials and an official at the Federal Housing Finance Agency. Fannie and Freddie have also agreed to waive some fees that made refinancing less attractive for some." The acronym-developers are busy this morning.
To read more, click on link below.
URL to original article: http://www.builderonline.com/builder-pulse/how-do-you-spell-relief-.aspx?cid=BP:102411:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Federal Reserve dissenter sees Fed increase inflation tolerance
by LIZ ENOCHS
August and September decisions by Federal Reserve policymakers show they are more inflation-tolerant now than they were a year ago, according to Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis.
The Federal Open Market Committee in September said it would buy $400 billion of Treasury bonds in an effort to lower long-term borrowing costs and reinvest principal payments from agency debt into agency mortgage-backed securities. The move, a departure from the Federal Reserve’s previous practice of reinvesting those proceeds into Treasurys, was aimed at lowering mortgage rates.
In August, the FOMC announced that it would keep the federal funds rate at "exceptionally low levels" at least through mid-2013.
Kocherlakota called those actions "inconsistent with the evolution of the economy in 2011" in a speech Friday to the Harvard Club of Minnesota. He was one of three Fed policy makers who dissented from the decisions; the other two were Richard Fisher, president of the Dallas Federal Reserve Bank, and Charles Plosser, president of the Philadelphia Fed.
"There is a cost to adding monetary accommodation: It increases the risk of inflation running above the Committee's objective of 2 percent for multiple years," said Kocherlakota. "The FOMC's actions in 2011 suggest that the Committee is resolving this key cost-benefit tradeoff differently in 2011 from however it viewed the tradeoff in 2010."
Inflation, and the outlook for inflation, has risen markedly since last November, while unemployment and the outlook for the jobless rate have fallen, the Minneapolis Fed president said. These changes "suggest that the committee should have lowered the level of monetary accommodation over the course of the year," instead of increasing it, he said.
While the committee has communicated this year that it views the unemployment rate as high relative to its dual mandate to promote price stability and maximum employment, reducing interest rates to try and boost employment in the short term can lead to higher inflationary expectations and worsening unemployment in the longer term, Kocherlakota said.
"Some have suggested that the unexpected slowness of the recovery is a justification for the FOMC’s increasing the level of monetary accommodation over the past couple of months," said Kocherlakota. "But I disagree with this argument." Instead, a slowdown in the pace of the recovery should be accompanied by a slower reduction in the level of monetary accommodation, he said.
The committee's decision-making this year "has introduced a lack of clarity about its monetary policy mission," said Kocherlakota.
To address this, the FOMC should "explain how it plans to resolve the trade-off between inflation and unemployment in making its future decisions," he said. The committee should also "provide explicit communication about how its chosen actions are indeed consistent with its pre-announced resolution of the inflation-unemployment trade-off."
URL to original article: http://www.housingwire.com/2011/10/21/federal-reserve-dissenter-sees-fed-increase-inflation-tolerance
For further information on Fresno Real Estate check: http://www.londonproperties.com
August and September decisions by Federal Reserve policymakers show they are more inflation-tolerant now than they were a year ago, according to Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis.
The Federal Open Market Committee in September said it would buy $400 billion of Treasury bonds in an effort to lower long-term borrowing costs and reinvest principal payments from agency debt into agency mortgage-backed securities. The move, a departure from the Federal Reserve’s previous practice of reinvesting those proceeds into Treasurys, was aimed at lowering mortgage rates.
In August, the FOMC announced that it would keep the federal funds rate at "exceptionally low levels" at least through mid-2013.
Kocherlakota called those actions "inconsistent with the evolution of the economy in 2011" in a speech Friday to the Harvard Club of Minnesota. He was one of three Fed policy makers who dissented from the decisions; the other two were Richard Fisher, president of the Dallas Federal Reserve Bank, and Charles Plosser, president of the Philadelphia Fed.
"There is a cost to adding monetary accommodation: It increases the risk of inflation running above the Committee's objective of 2 percent for multiple years," said Kocherlakota. "The FOMC's actions in 2011 suggest that the Committee is resolving this key cost-benefit tradeoff differently in 2011 from however it viewed the tradeoff in 2010."
Inflation, and the outlook for inflation, has risen markedly since last November, while unemployment and the outlook for the jobless rate have fallen, the Minneapolis Fed president said. These changes "suggest that the committee should have lowered the level of monetary accommodation over the course of the year," instead of increasing it, he said.
While the committee has communicated this year that it views the unemployment rate as high relative to its dual mandate to promote price stability and maximum employment, reducing interest rates to try and boost employment in the short term can lead to higher inflationary expectations and worsening unemployment in the longer term, Kocherlakota said.
"Some have suggested that the unexpected slowness of the recovery is a justification for the FOMC’s increasing the level of monetary accommodation over the past couple of months," said Kocherlakota. "But I disagree with this argument." Instead, a slowdown in the pace of the recovery should be accompanied by a slower reduction in the level of monetary accommodation, he said.
The committee's decision-making this year "has introduced a lack of clarity about its monetary policy mission," said Kocherlakota.
To address this, the FOMC should "explain how it plans to resolve the trade-off between inflation and unemployment in making its future decisions," he said. The committee should also "provide explicit communication about how its chosen actions are indeed consistent with its pre-announced resolution of the inflation-unemployment trade-off."
URL to original article: http://www.housingwire.com/2011/10/21/federal-reserve-dissenter-sees-fed-increase-inflation-tolerance
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, October 21, 2011
Supply vs. Demand: Why Is Housing Hurting?.
By Nick Timiraos
Is low demand or poor supply the biggest cause for concern in the current housing market?
Of course, one of the biggest problems facing the U.S. housing market right now is that there aren’t enough buyers for homes. Mortgage rates are hovering near their lowest levels in most Americans’ adult lifetimes, but demand is anemic.
But we have written about a surprising trend: housing inventories have shrunk over the past year, leaving some pockets of the country with a shortage of attractive inventory—or with homes that are reasonably priced. Real-estate industry executives say that a lack of quality homes for sale is hurting sales because even though demand remains depressed, those buyers who are ready to purchase a home just don’t like what they see.
In a research note on Monday, Paul Dales, senior U.S. economist at Capital Economics, challenged that view. Looking back over the past 30 years, he estimates that there’s an excess supply of 1 million homes. “At the aggregate level, there is certainly no shortage of supply. Instead, home sales are low because demand is being constrained by the weak economy and the inability of many households to qualify for a new mortgage,” writes Mr. Dales.
Meanwhile, there’s an even greater “shadow” supply of potential foreclosures and other distressed homes, a figure in the millions, which will keep inventories bloated for years. Real-estate agents also see firsthand this shadow inventory: many of them may represent “sidelined sellers” that have pulled their homes from the market and are likely to list their homes once it’s clear home prices have stopped falling.
So economists rightly note that housing markets are historically over-supplied, and yet real-estate agents also are reporting that in many pockets of the country, there aren’t enough homes for sale. What’s going on here?
The easiest explanation is that there may be too many homes for sale in the wrong places. During the housing boom, many homes were built in far-flung locales that aren’t as attractive today.
Second, many homes listed for sale may be over-priced, exacerbating the challenge of declining inventory. Some sellers may be listing their homes at wildly unrealistic prices because they don’t want to have to sell their home in a short sale, where the bank agrees to a sale for less than the mortgage debt owed.
Third, short sales make up a large chunk of sales in many hard-hit markets, and some home buyers have steered clear of short sales because those deals can take months to complete. They’re also liable to fall through at the last second.
These factors help explain some of the dissonance: a poor selection of homes, with some that are overpriced and others that have an unattractive sales process. The bottom line is that the housing market remains far from healthy, and until demand revs up, it’s hard to see how this dynamic improves.
URL to original article: http://blogs.wsj.com/developments/2011/10/18/supply-vs-demand-why-is-housing-hurting/
For further information on Fresno Real Estate check: http://www.londonproperties.com
Is low demand or poor supply the biggest cause for concern in the current housing market?
Of course, one of the biggest problems facing the U.S. housing market right now is that there aren’t enough buyers for homes. Mortgage rates are hovering near their lowest levels in most Americans’ adult lifetimes, but demand is anemic.
But we have written about a surprising trend: housing inventories have shrunk over the past year, leaving some pockets of the country with a shortage of attractive inventory—or with homes that are reasonably priced. Real-estate industry executives say that a lack of quality homes for sale is hurting sales because even though demand remains depressed, those buyers who are ready to purchase a home just don’t like what they see.
In a research note on Monday, Paul Dales, senior U.S. economist at Capital Economics, challenged that view. Looking back over the past 30 years, he estimates that there’s an excess supply of 1 million homes. “At the aggregate level, there is certainly no shortage of supply. Instead, home sales are low because demand is being constrained by the weak economy and the inability of many households to qualify for a new mortgage,” writes Mr. Dales.
Meanwhile, there’s an even greater “shadow” supply of potential foreclosures and other distressed homes, a figure in the millions, which will keep inventories bloated for years. Real-estate agents also see firsthand this shadow inventory: many of them may represent “sidelined sellers” that have pulled their homes from the market and are likely to list their homes once it’s clear home prices have stopped falling.
So economists rightly note that housing markets are historically over-supplied, and yet real-estate agents also are reporting that in many pockets of the country, there aren’t enough homes for sale. What’s going on here?
The easiest explanation is that there may be too many homes for sale in the wrong places. During the housing boom, many homes were built in far-flung locales that aren’t as attractive today.
Second, many homes listed for sale may be over-priced, exacerbating the challenge of declining inventory. Some sellers may be listing their homes at wildly unrealistic prices because they don’t want to have to sell their home in a short sale, where the bank agrees to a sale for less than the mortgage debt owed.
Third, short sales make up a large chunk of sales in many hard-hit markets, and some home buyers have steered clear of short sales because those deals can take months to complete. They’re also liable to fall through at the last second.
These factors help explain some of the dissonance: a poor selection of homes, with some that are overpriced and others that have an unattractive sales process. The bottom line is that the housing market remains far from healthy, and until demand revs up, it’s hard to see how this dynamic improves.
URL to original article: http://blogs.wsj.com/developments/2011/10/18/supply-vs-demand-why-is-housing-hurting/
For further information on Fresno Real Estate check: http://www.londonproperties.com
Planning to retire? Maybe put a hold on it
Source: Bloomberg
Talk about a race to the bottom: Which institution do you think is losing the trust of Americans to provide future retirement benefits most quickly – government, or private employers?
The winner is . . . private employers, but not by much. A new national poll on retirement sentiment by Sun Life Financial Inc. finds worker confidence in the future value of employer-provided benefits plunged 32 percent in the past year. Meanwhile, confidence in the government’s ability to provide Social Security and Medicare benefits fell 22 percent.
Sun Life’s fourth annual Unretirement Index points to a sharp deterioration in Americans’ overall confidence about their ability to retire. The survey’s overall retirement confidence index fell nearly 20 percent to an all-time low compared with a year ago. Like several other surveys this year, the poll underscores the national mood of deep worry about financial security, especially in old age.
Along with worries about workplace and government benefits, only 23 percent of working Americans said they are very confident that they will be able to meet basic living expenses in retirement — plunging from double that number (42 percent) last year. And one in five workers said they will never retire.
The falling confidence in employers to provide benefits such as defined benefit pensions or health insurance “reflects a sense people have that an employee benefit is discretionary,” said Wes Thompson, president of Sun Life Financial.
“But the broader underlying trend is a shifting of responsibility to the individual – whether it’s from government or employers. That starts with the shift in recent years from defined-benefit to defined contribution plans, and much greater dependence over the last 10 or 15 years on employees to contribute more for their health care. Now it’s spreading to other areas of employer-paid benefits, such as life insurance and disability benefits.”
Thompson thinks falling confidence in Social Security and Medicare stems from the “public policy debate in Washington.” Indeed, we’ve seen repeated calls this year for a higher Social Security retirement age, reduced cost-of-living adjustments and a higher eligibility age for Medicare.
But don’t confuse pessimism with lack of desire for the benefits. A survey for the National Committee to Protect Social Security and Medicare shows that Americans overwhelmingly reject the suggestion that Social Security contributes to the national deficit, or that benefits should be cut to reduce the debt. And that sentiment crosses all lines of political party, gender, race and age.
Considering the sorry state of every other aspect of retirement, is that really a surprise?
URL to original article: http://www.builderonline.com/builder-pulse/planning-to-retire--maybe-put-a-hold-on-it.aspx?cid=BP:102111:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Talk about a race to the bottom: Which institution do you think is losing the trust of Americans to provide future retirement benefits most quickly – government, or private employers?
The winner is . . . private employers, but not by much. A new national poll on retirement sentiment by Sun Life Financial Inc. finds worker confidence in the future value of employer-provided benefits plunged 32 percent in the past year. Meanwhile, confidence in the government’s ability to provide Social Security and Medicare benefits fell 22 percent.
Sun Life’s fourth annual Unretirement Index points to a sharp deterioration in Americans’ overall confidence about their ability to retire. The survey’s overall retirement confidence index fell nearly 20 percent to an all-time low compared with a year ago. Like several other surveys this year, the poll underscores the national mood of deep worry about financial security, especially in old age.
Along with worries about workplace and government benefits, only 23 percent of working Americans said they are very confident that they will be able to meet basic living expenses in retirement — plunging from double that number (42 percent) last year. And one in five workers said they will never retire.
The falling confidence in employers to provide benefits such as defined benefit pensions or health insurance “reflects a sense people have that an employee benefit is discretionary,” said Wes Thompson, president of Sun Life Financial.
“But the broader underlying trend is a shifting of responsibility to the individual – whether it’s from government or employers. That starts with the shift in recent years from defined-benefit to defined contribution plans, and much greater dependence over the last 10 or 15 years on employees to contribute more for their health care. Now it’s spreading to other areas of employer-paid benefits, such as life insurance and disability benefits.”
Thompson thinks falling confidence in Social Security and Medicare stems from the “public policy debate in Washington.” Indeed, we’ve seen repeated calls this year for a higher Social Security retirement age, reduced cost-of-living adjustments and a higher eligibility age for Medicare.
But don’t confuse pessimism with lack of desire for the benefits. A survey for the National Committee to Protect Social Security and Medicare shows that Americans overwhelmingly reject the suggestion that Social Security contributes to the national deficit, or that benefits should be cut to reduce the debt. And that sentiment crosses all lines of political party, gender, race and age.
Considering the sorry state of every other aspect of retirement, is that really a surprise?
URL to original article: http://www.builderonline.com/builder-pulse/planning-to-retire--maybe-put-a-hold-on-it.aspx?cid=BP:102111:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Barclays: Housing may not be as bad as some believe
by KERRI PANCHUK
It is unlikely home prices will drop as much as 17%, but analysts with Barclays Capital evaluated that possibility during a recent analysis of future home prices.
However, the firm noted such a decline is unlikely because the shadow inventory of 4 million to 7 million homes is still not as severe as some expect. The analysts generally use a 7% drop in prices nationwide as the base for their test scenario. BarCap said the market absorbs about 1.5 million homes through distressed liquidations annually.
"Given that most borrowers evicted in a foreclosure process have to go and live somewhere, it makes more sense to look at total excess supply of homes including owner and rental units," the analysts wrote in a recent report. "Our estimate is that versus the historical norms, there are only a couple of million homes in excess housing inventory that need to be absorbed. Do not get us wrong — we are not presenting a bullish case for housing — all we are saying is that things are bad but not as bad as some might try to make us believe."
Barclays bolstered its belief that home prices will not experience an extreme decline by saying "contrary to what many believe, the administration can and likely will do things to control a significant downward spiral in housing in the near term."
If that does occur, Barclays said the move will lead to slower home price growth, while preventing another dip over the next two years.
URL to original article: http://www.housingwire.com/2011/10/20/barclays-housing-may-not-be-as-bad-as-some-believe
For further information on Fresno Real Estate check: http://www.londonproperties.com
It is unlikely home prices will drop as much as 17%, but analysts with Barclays Capital evaluated that possibility during a recent analysis of future home prices.
However, the firm noted such a decline is unlikely because the shadow inventory of 4 million to 7 million homes is still not as severe as some expect. The analysts generally use a 7% drop in prices nationwide as the base for their test scenario. BarCap said the market absorbs about 1.5 million homes through distressed liquidations annually.
"Given that most borrowers evicted in a foreclosure process have to go and live somewhere, it makes more sense to look at total excess supply of homes including owner and rental units," the analysts wrote in a recent report. "Our estimate is that versus the historical norms, there are only a couple of million homes in excess housing inventory that need to be absorbed. Do not get us wrong — we are not presenting a bullish case for housing — all we are saying is that things are bad but not as bad as some might try to make us believe."
Barclays bolstered its belief that home prices will not experience an extreme decline by saying "contrary to what many believe, the administration can and likely will do things to control a significant downward spiral in housing in the near term."
If that does occur, Barclays said the move will lead to slower home price growth, while preventing another dip over the next two years.
URL to original article: http://www.housingwire.com/2011/10/20/barclays-housing-may-not-be-as-bad-as-some-believe
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, October 20, 2011
What it takes--financially--to be a middle-class American
Source: New Strategist Publications
A lot more than poverty-level income, which the Census Bureau defines as an annual income of $11,344 for one person and $22,113 for a family of four with two children.
For one worker who lives alone, a middle-class lifestyle requires an annual income of at least $30,012 (or earnings of $14.21 per hour), according to the Basic Economic Security Tables (BEST) Index--and that's only if your job provides employment-based health insurance and a retirement plan. If you are a family of four with two workers and two children, you need to earn at least $67,920 ($16.08/hour per worker), assuming employment-based benefits. These estimates are bare bones and do not include eating out, vacations, or other discretionary spending. They do include modest savings toward a rainy day fund and retirement, but no savings for homeownership or college. Among full-time workers in 2010, one-fourth of men and one-third of women earned less than $30,000 per year.
The BEST estimates of what it takes to be middle class were produced in a joint effort by Wider Opportunities for Women and the Center for Social Development at Washington University in St. Louis. They were created to help policymakers and workers evaluate economic security in the United States. The BEST estimates show how much is needed for economic security for 400 family types, from single to double earners with up to six children. The estimates are calculated for workers with or without employer-provided health insurance and retirement benefits.
Perhaps the most interesting aspect of the BEST estimates is the requirement that savings are necessary for economic stability. Emergency and retirement saving, notes the report, "promotes lifelong and intergenerational economic security." A single worker needs to save $75 per month for emergencies. A family of four with two workers and two children needs to save $170 per month to help them weather hard times. To download the study, visit The Basic Economic Security Tables Initiative on the Wider Opportunities for Women web site.
URL to original article: http://www.builderonline.com/builder-pulse/what-it-takes--financially--to-be-a-middle-class-american.aspx?cid=BP:102011:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
A lot more than poverty-level income, which the Census Bureau defines as an annual income of $11,344 for one person and $22,113 for a family of four with two children.
For one worker who lives alone, a middle-class lifestyle requires an annual income of at least $30,012 (or earnings of $14.21 per hour), according to the Basic Economic Security Tables (BEST) Index--and that's only if your job provides employment-based health insurance and a retirement plan. If you are a family of four with two workers and two children, you need to earn at least $67,920 ($16.08/hour per worker), assuming employment-based benefits. These estimates are bare bones and do not include eating out, vacations, or other discretionary spending. They do include modest savings toward a rainy day fund and retirement, but no savings for homeownership or college. Among full-time workers in 2010, one-fourth of men and one-third of women earned less than $30,000 per year.
The BEST estimates of what it takes to be middle class were produced in a joint effort by Wider Opportunities for Women and the Center for Social Development at Washington University in St. Louis. They were created to help policymakers and workers evaluate economic security in the United States. The BEST estimates show how much is needed for economic security for 400 family types, from single to double earners with up to six children. The estimates are calculated for workers with or without employer-provided health insurance and retirement benefits.
Perhaps the most interesting aspect of the BEST estimates is the requirement that savings are necessary for economic stability. Emergency and retirement saving, notes the report, "promotes lifelong and intergenerational economic security." A single worker needs to save $75 per month for emergencies. A family of four with two workers and two children needs to save $170 per month to help them weather hard times. To download the study, visit The Basic Economic Security Tables Initiative on the Wider Opportunities for Women web site.
URL to original article: http://www.builderonline.com/builder-pulse/what-it-takes--financially--to-be-a-middle-class-american.aspx?cid=BP:102011:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Who Needs Banks?
By:Jonathan Smoke
We do. Tough credit conditions remain the largest roadblock to recovery.
Behind the historic lows this year in new-home sales is evidence indicating a shift in how home buyers are financing their purchases. It’s clear that traditional financing is particularly challenging for the new-home market. According to Hanley Wood Market Intelligence data on new-home sales, representing over 90 percent of all new construction, cash-only purchases are up 77 percent for the 12 months ending June 30, 2011, over the all cash purchases that occurred in 2007.
As cash has risen in importance, the number of new-home sales financed by the too-big-to-fail national banks has fallen at a greater rate than the overall market. For the 12 months ending June 30, 2011, traditional banks financed only slightly more than half of new-home sales. What accounted for the rest? Cash purchases and the captive mortgage companies of the top 20 builders.
The truth is, we do need banks. Without traditional financing, new-home construction cannot begin to recover. The data indicate that difficult credit conditions are the biggest stumbling block to any hope of recovery.
With the exception of Wells Fargo, national megabanks have dropped their support of new-home buyers. Meanwhile, big builders with captive mortgage companies have proliferated. Having a captive mortgage company may provide a competitive advantage over builders without one, especially in the entry-level segment where credit has tightened the most and will likely get even tougher in the months ahead.
URL to original article: http://www.builderonline.com/economic-conditions/who-needs-banks.aspx?cid=BP:102011:FULL
For further information on Fresno Real Estate check: http://www.londonproperties.com
We do. Tough credit conditions remain the largest roadblock to recovery.
Behind the historic lows this year in new-home sales is evidence indicating a shift in how home buyers are financing their purchases. It’s clear that traditional financing is particularly challenging for the new-home market. According to Hanley Wood Market Intelligence data on new-home sales, representing over 90 percent of all new construction, cash-only purchases are up 77 percent for the 12 months ending June 30, 2011, over the all cash purchases that occurred in 2007.
As cash has risen in importance, the number of new-home sales financed by the too-big-to-fail national banks has fallen at a greater rate than the overall market. For the 12 months ending June 30, 2011, traditional banks financed only slightly more than half of new-home sales. What accounted for the rest? Cash purchases and the captive mortgage companies of the top 20 builders.
The truth is, we do need banks. Without traditional financing, new-home construction cannot begin to recover. The data indicate that difficult credit conditions are the biggest stumbling block to any hope of recovery.
With the exception of Wells Fargo, national megabanks have dropped their support of new-home buyers. Meanwhile, big builders with captive mortgage companies have proliferated. Having a captive mortgage company may provide a competitive advantage over builders without one, especially in the entry-level segment where credit has tightened the most and will likely get even tougher in the months ahead.
URL to original article: http://www.builderonline.com/economic-conditions/who-needs-banks.aspx?cid=BP:102011:FULL
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage rates hold steady on uncertain economic data
by KERRI PANCHUK
Fixed-mortgage rates held steady on mixed economic reports this past week, Freddie Mac said Thursday.
Still, fixed rates hovered near their 60-year lows.
Freddie's Primary Mortgage Market Survey showed the 30-year, fixed-rate mortgage averaging 4.11%, down from 4.12% a week earlier and 4.21% a year ago.
In addition, the 15-year, FRM hit 3.38%, up slightly from 3.37% a week ago and down from 3.54% last year.
Frank Nothaft, vice president and chief economist of Freddie Mac, said mixed economic data left mortgage rates mostly unchanged. "Retail sales were up 1.1% from September, almost four times the pace set in August," he said.
However, he noted the consumer sentiment fell in the Thomson Reuters/University of Michigan Index, leading to mixed economic reports in the market.
Adjustable rates moved more than fixed rates during the period.
The five-year, Treasury-indexed hybrid adjustable-rate mortgage hit 3.01%, down from 3.06% a week earlier and 3.45% from last year.
In addition, the one-year, Treasury-indexed ARM averaged 2.94%, up from 2.90% last week and down from 3.30% last year.
URL to original article: http://www.housingwire.com/2011/10/20/mortgage-rates-hold-steady-on-uncertain-economic-data
For further information on Fresno Real Estate check: http://www.londonproperties.com
Fixed-mortgage rates held steady on mixed economic reports this past week, Freddie Mac said Thursday.
Still, fixed rates hovered near their 60-year lows.
Freddie's Primary Mortgage Market Survey showed the 30-year, fixed-rate mortgage averaging 4.11%, down from 4.12% a week earlier and 4.21% a year ago.
In addition, the 15-year, FRM hit 3.38%, up slightly from 3.37% a week ago and down from 3.54% last year.
Frank Nothaft, vice president and chief economist of Freddie Mac, said mixed economic data left mortgage rates mostly unchanged. "Retail sales were up 1.1% from September, almost four times the pace set in August," he said.
However, he noted the consumer sentiment fell in the Thomson Reuters/University of Michigan Index, leading to mixed economic reports in the market.
Adjustable rates moved more than fixed rates during the period.
The five-year, Treasury-indexed hybrid adjustable-rate mortgage hit 3.01%, down from 3.06% a week earlier and 3.45% from last year.
In addition, the one-year, Treasury-indexed ARM averaged 2.94%, up from 2.90% last week and down from 3.30% last year.
URL to original article: http://www.housingwire.com/2011/10/20/mortgage-rates-hold-steady-on-uncertain-economic-data
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, October 19, 2011
Young home buyers--post-housing crash--are once-bitten, twice shy
Source: Wall Street Journal
The younger you are, the more freaked out you are likely to be by the housing market crash.
A new paper by Federal Reserve Bank of Boston economists used consumer sentiment data collected in the Michigan Survey of Consumers over the summer to try to find out how the housing market’s terrible state of affairs was affecting the willingness to buy a new home. Age mattered, which suggests a new generation may be coming along that will cast a wary eye at home ownership for a long time to come. The finding also suggests a new headwind to future growth levels, given that it’s hard for the economy to achieve a better rate of growth when the housing sector remains moribund.
The Michigan data suggests younger survey respondents “are relatively less confident about home ownership after larger declines, while older respondents are relatively more confident,” the paper said.
Importantly, attitudes were affected by personal experience. For both age groups attitude changes were “observed only for those with personal experience of loss (via themselves or someone close) during the crash.”
The paper said that older survey respondents with stable attitudes on home ownership’s value, even in the face of price declines, were over the age of 58. The paper’s authors, Anat Bracha and Julian Jamison, both of the Boston Fed, speculated “in terms of the striking age differential, one possibility is that relatively younger respondents were indeed more malleable, and hence they internalized the sharp drop as a regime change.”
Meanwhile, “older respondents — whose models of the world are harder to alter — see the drop in house prices as a temporary dip in a stable long-term upward trend, making it a particularly good time to purchase.”
URL to original article: http://www.builderonline.com/builder-pulse/young-home-buyers--post-housing-crash--are-once-bitten--twice-shy.aspx?cid=BP:101911:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The younger you are, the more freaked out you are likely to be by the housing market crash.
A new paper by Federal Reserve Bank of Boston economists used consumer sentiment data collected in the Michigan Survey of Consumers over the summer to try to find out how the housing market’s terrible state of affairs was affecting the willingness to buy a new home. Age mattered, which suggests a new generation may be coming along that will cast a wary eye at home ownership for a long time to come. The finding also suggests a new headwind to future growth levels, given that it’s hard for the economy to achieve a better rate of growth when the housing sector remains moribund.
The Michigan data suggests younger survey respondents “are relatively less confident about home ownership after larger declines, while older respondents are relatively more confident,” the paper said.
Importantly, attitudes were affected by personal experience. For both age groups attitude changes were “observed only for those with personal experience of loss (via themselves or someone close) during the crash.”
The paper said that older survey respondents with stable attitudes on home ownership’s value, even in the face of price declines, were over the age of 58. The paper’s authors, Anat Bracha and Julian Jamison, both of the Boston Fed, speculated “in terms of the striking age differential, one possibility is that relatively younger respondents were indeed more malleable, and hence they internalized the sharp drop as a regime change.”
Meanwhile, “older respondents — whose models of the world are harder to alter — see the drop in house prices as a temporary dip in a stable long-term upward trend, making it a particularly good time to purchase.”
URL to original article: http://www.builderonline.com/builder-pulse/young-home-buyers--post-housing-crash--are-once-bitten--twice-shy.aspx?cid=BP:101911:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
It's Time to Buy That House
Source: Wall Street Journal
U.S. house prices have plunged by nearly a third since 2006, and homeownership rates are falling at the fastest pace since the Great Depression.
The good news? Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income (but not for a quick flip). First, the nation's ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.
Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter "throws money down the drain." Whether buying is a better deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.
But the math is turning in buyers' favor. Stock-oriented folks can think of a house's price/rent ratio as akin to a stock's price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.
Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody's Analytics. The average from 1989 to 2003 was about 10, so valuations aren't quite back to normal.
But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or "points.") The latest rate is still less than half the average since 1971.
As a result, house payments are more affordable than they have been in decades. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index's historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. So today's buyers can afford handsome houses—but prudent ones might opt for moderate houses with skimpy payments.
For example, the median home in the greater Phoenix market, including houses, condos and co-ops, costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer's monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com.
Of course, all of this assumes mortgages are available—no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. "If you have good credit, a job and a down payment, you can get a mortgage," Mr. Humphries says. "There's more paperwork and scrutiny than five years ago, but things are pretty much like they were in the '80s and '90s."
Not all housing markets are bargains. Mr. Humphries says Zillow has developed a new price/rent ratio that uses estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price/rent ratios of 5.6 and 7.7, respectively. New York and San Francisco are more expensive, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.
For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price/rent ratio, resulting in a rent "yield." The median market's rent yield is 9.3% and Detroit's is 17.9%.
Investors would then subtract for taxes, insurance, upkeep and other expenses—costs that vary widely. But suppose total costs were 4% of the purchase price. That would still leave a 5.3% rent yield in the typical market. With the 10-year Treasury yield at 2.2% and the Standard & Poor's 500-stock index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive.
A few caveats are in order. First, not all transactions are average ones. Even in low-priced markets, buyers should shop carefully. Second, prices could fall further. Celia Chen, a senior director at Moody's Analytics, expects prices to drop 3% before bottoming early next year and rising slowly thereafter. "If the economy slips back into recession, however, we could easily see a 10% drop," Ms. Chen says.
And property "flipping" can be dangerous even when prices are rising. That is because, absent a real-estate boom, house price gains simply aren't that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.
Houses aren't the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.
URL to original article: http://www.builderonline.com/builder-pulse/the-wsj-says--it-s-time-to-buy-.aspx?cid=BP:101911:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
U.S. house prices have plunged by nearly a third since 2006, and homeownership rates are falling at the fastest pace since the Great Depression.
The good news? Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income (but not for a quick flip). First, the nation's ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.
Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter "throws money down the drain." Whether buying is a better deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.
But the math is turning in buyers' favor. Stock-oriented folks can think of a house's price/rent ratio as akin to a stock's price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.
Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody's Analytics. The average from 1989 to 2003 was about 10, so valuations aren't quite back to normal.
But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or "points.") The latest rate is still less than half the average since 1971.
As a result, house payments are more affordable than they have been in decades. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index's historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. So today's buyers can afford handsome houses—but prudent ones might opt for moderate houses with skimpy payments.
For example, the median home in the greater Phoenix market, including houses, condos and co-ops, costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer's monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com.
Of course, all of this assumes mortgages are available—no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. "If you have good credit, a job and a down payment, you can get a mortgage," Mr. Humphries says. "There's more paperwork and scrutiny than five years ago, but things are pretty much like they were in the '80s and '90s."
Not all housing markets are bargains. Mr. Humphries says Zillow has developed a new price/rent ratio that uses estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price/rent ratios of 5.6 and 7.7, respectively. New York and San Francisco are more expensive, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.
For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price/rent ratio, resulting in a rent "yield." The median market's rent yield is 9.3% and Detroit's is 17.9%.
Investors would then subtract for taxes, insurance, upkeep and other expenses—costs that vary widely. But suppose total costs were 4% of the purchase price. That would still leave a 5.3% rent yield in the typical market. With the 10-year Treasury yield at 2.2% and the Standard & Poor's 500-stock index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive.
A few caveats are in order. First, not all transactions are average ones. Even in low-priced markets, buyers should shop carefully. Second, prices could fall further. Celia Chen, a senior director at Moody's Analytics, expects prices to drop 3% before bottoming early next year and rising slowly thereafter. "If the economy slips back into recession, however, we could easily see a 10% drop," Ms. Chen says.
And property "flipping" can be dangerous even when prices are rising. That is because, absent a real-estate boom, house price gains simply aren't that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.
Houses aren't the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.
URL to original article: http://www.builderonline.com/builder-pulse/the-wsj-says--it-s-time-to-buy-.aspx?cid=BP:101911:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, October 18, 2011
The kids are not moving out, so homebuilders are moving in
by KERRI PANCHUK
As Bob Dylan first sang nearly 48 years ago: "The times, they are a-changin." And it certainly holds true in the homebuilding profession, where builders are revamping product offerings to serve families with multiple generations living under one roof.
A few years ago, 20-somethings, armed with a decent FICO score and a steady job, could easily qualify for a mortgage. Now we find ourselves in a world where homeownership is marred by tighter underwriting guidelines and a lack of secure employment among potential homebuyers.
As the economy lingers in the doldrums, families are shacking up and housing multiple generations under one roof. Consequently, homebuilders are no longer waiting for the kids to move out. Instead, they're moving in with new ideas on how to accommodate this growing segment of the population.
Lennar Corp. (LEN: 15.92 +9.27%) is one an example of a homebuilder practicing innovation at a time of great change, according to John Burns, chief executive of John Burns Real Estate Consulting.
Lennar is now selling what it calls a home-within-a-home. The company is offering houses that feature a full home connected to a smaller apartment. The home-within-a-home concept is designed to give families more versatility in living arrangements.
For example, if grandma or grandpa move back in, the NextGen home offers them a private suite with a bedroom, living area, kitchen, bathroom and a separate patio. The living areas are separated by double doors, for example, if more privacy is desired.
Prior to the baby boomers, adulthood was not defined by owning your own property. In fact, older generations stayed within the confines of the family unit they could afford mortgages of their own. At the time, this arrangement was considered a sign of prudence and fiscal conservatism since it gave older generations a place to stay and younger generations a place to live, while saving money to secure a solid future.
In the post-modern age, families moved away from this design, forcing the idea of high rents and big mortgage payments on young, unsuspecting buyers. Today's economy is turning the market retro, giving builders a chance to differentiate themselves through the products that they offer.
Lennar's product shows the family-model is back in-vogue. It will be interesting to see what other building innovations are spawned by the changing marketplace.
URL to original article: http://www.housingwire.com/2011/10/18/the-kids-are-not-moving-out-so-homebuilders-are-moving-in
For further information on Fresno Real Estate check: http://www.londonproperties.com
As Bob Dylan first sang nearly 48 years ago: "The times, they are a-changin." And it certainly holds true in the homebuilding profession, where builders are revamping product offerings to serve families with multiple generations living under one roof.
A few years ago, 20-somethings, armed with a decent FICO score and a steady job, could easily qualify for a mortgage. Now we find ourselves in a world where homeownership is marred by tighter underwriting guidelines and a lack of secure employment among potential homebuyers.
As the economy lingers in the doldrums, families are shacking up and housing multiple generations under one roof. Consequently, homebuilders are no longer waiting for the kids to move out. Instead, they're moving in with new ideas on how to accommodate this growing segment of the population.
Lennar Corp. (LEN: 15.92 +9.27%) is one an example of a homebuilder practicing innovation at a time of great change, according to John Burns, chief executive of John Burns Real Estate Consulting.
Lennar is now selling what it calls a home-within-a-home. The company is offering houses that feature a full home connected to a smaller apartment. The home-within-a-home concept is designed to give families more versatility in living arrangements.
For example, if grandma or grandpa move back in, the NextGen home offers them a private suite with a bedroom, living area, kitchen, bathroom and a separate patio. The living areas are separated by double doors, for example, if more privacy is desired.
Prior to the baby boomers, adulthood was not defined by owning your own property. In fact, older generations stayed within the confines of the family unit they could afford mortgages of their own. At the time, this arrangement was considered a sign of prudence and fiscal conservatism since it gave older generations a place to stay and younger generations a place to live, while saving money to secure a solid future.
In the post-modern age, families moved away from this design, forcing the idea of high rents and big mortgage payments on young, unsuspecting buyers. Today's economy is turning the market retro, giving builders a chance to differentiate themselves through the products that they offer.
Lennar's product shows the family-model is back in-vogue. It will be interesting to see what other building innovations are spawned by the changing marketplace.
URL to original article: http://www.housingwire.com/2011/10/18/the-kids-are-not-moving-out-so-homebuilders-are-moving-in
For further information on Fresno Real Estate check: http://www.londonproperties.com
REO sales may not peak until 2013
by JON PRIOR
The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday.
Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government — including the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — will begin taking a majority of the activity.
In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.
"We do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller," BofAML analysts said. "But home prices are starting from a negative point, so the implication is that home prices will continue to decline as the foreclosures transition through the pipeline."
Most of the projected increase will come as the government begins to unload its backlog. The government-sponsored enterprises and HUD, analysts estimate, will liquidate roughly 595,000 properties in 2013 alone.
Total REO liquidations wouldn't drop below 1 million until 2015, according to BofAML.
The Obama administration began work last month developing new strategies for selling this mass of properties, which may involve renting more of them. The Federal Housing Finance Agency is also working on a way to refinance more underwater borrowers to entice them from walking away.
"I would essentially rent the house back to those who are living in them now," said Susan Woodward, an economist with Sand Hill Econometrics. "I don't think it makes a lot of sense to push 4 million people out of their homes when they're victims of a slower economy they had nothing to do with."
Other analysts were skeptical of anyone who could predict accurately what the GSEs or Washington would do, especially after the elections in 2012.
"Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?" said Scott Sambucci, chief analyst at Altos Research.
He said even if unemployment improved by a full percentage point or two — which he said would be a stretch — the market would still struggle to meet such a supply influx.
"It would crash the market, so no, it'll never happen," Sambucci said.
Daren Blomquist at RealtyTrac, which monitors foreclosure filings across the country, said the sale of REO is on track to reach 825,000 by the end of 2011.
"We do expect the REOs to pick back up in 2012 as lenders push through some of the foreclosures delayed by processing and paperwork issues," Blomquist said, adding the inventory needed to be sold could reach well into the millions.
If half of the 800,000 mortgages currently somewhere in the foreclosure process and another half of the 1.5 million loans in serious delinquency end up REO, it could mean an additional, 1.15 million properties that would need to be liquidated — not including new foreclosures that enter the process, according to RealtyTrac.
"That's very possible given continued high unemployment rates and high underwater rates," Blomquist said. RealtyTrac estimates roughly 27% of all outstanding mortgages are worth more than the underlying property.
Woodward said refinancing borrowers, in negative equity or not, down to current market rates could result in a total savings for U.S. households at $250 billion annually. When asked if private investors would return to fund the future mortgage market after such a radical change, she said they would.
"I think the whole world would see this as a one-time fix. We did similar extreme things during the Great Depression," Woodward said.
Investors themselves, though, showed little confidence they would take on such a risk again. In fact, most are trying to keep the government involved in the housing market for the future, to keep risks as low as possible. Otherwise, foreign investors would flee.
While the estimates on how many REO will be sold in the future are extremely difficult to nail down, the size of the best projections share a common and threatening scale. Analysts said major refinancing schemes or new strategies for liquidating REO on a local level would need to be completed soon to rescue house prices from the still increasing pressure of mounting foreclosures.
"The need for policy support would therefore be considered urgent," the BofAML analysts said.
URL to original article: http://www.housingwire.com/2011/10/17/reo-sales-may-not-peak-until-2013
For further information on Fresno Real Estate check: http://www.londonproperties.com
The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday.
Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government — including the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — will begin taking a majority of the activity.
In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.
"We do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller," BofAML analysts said. "But home prices are starting from a negative point, so the implication is that home prices will continue to decline as the foreclosures transition through the pipeline."
Most of the projected increase will come as the government begins to unload its backlog. The government-sponsored enterprises and HUD, analysts estimate, will liquidate roughly 595,000 properties in 2013 alone.
Total REO liquidations wouldn't drop below 1 million until 2015, according to BofAML.
The Obama administration began work last month developing new strategies for selling this mass of properties, which may involve renting more of them. The Federal Housing Finance Agency is also working on a way to refinance more underwater borrowers to entice them from walking away.
"I would essentially rent the house back to those who are living in them now," said Susan Woodward, an economist with Sand Hill Econometrics. "I don't think it makes a lot of sense to push 4 million people out of their homes when they're victims of a slower economy they had nothing to do with."
Other analysts were skeptical of anyone who could predict accurately what the GSEs or Washington would do, especially after the elections in 2012.
"Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?" said Scott Sambucci, chief analyst at Altos Research.
He said even if unemployment improved by a full percentage point or two — which he said would be a stretch — the market would still struggle to meet such a supply influx.
"It would crash the market, so no, it'll never happen," Sambucci said.
Daren Blomquist at RealtyTrac, which monitors foreclosure filings across the country, said the sale of REO is on track to reach 825,000 by the end of 2011.
"We do expect the REOs to pick back up in 2012 as lenders push through some of the foreclosures delayed by processing and paperwork issues," Blomquist said, adding the inventory needed to be sold could reach well into the millions.
If half of the 800,000 mortgages currently somewhere in the foreclosure process and another half of the 1.5 million loans in serious delinquency end up REO, it could mean an additional, 1.15 million properties that would need to be liquidated — not including new foreclosures that enter the process, according to RealtyTrac.
"That's very possible given continued high unemployment rates and high underwater rates," Blomquist said. RealtyTrac estimates roughly 27% of all outstanding mortgages are worth more than the underlying property.
Woodward said refinancing borrowers, in negative equity or not, down to current market rates could result in a total savings for U.S. households at $250 billion annually. When asked if private investors would return to fund the future mortgage market after such a radical change, she said they would.
"I think the whole world would see this as a one-time fix. We did similar extreme things during the Great Depression," Woodward said.
Investors themselves, though, showed little confidence they would take on such a risk again. In fact, most are trying to keep the government involved in the housing market for the future, to keep risks as low as possible. Otherwise, foreign investors would flee.
While the estimates on how many REO will be sold in the future are extremely difficult to nail down, the size of the best projections share a common and threatening scale. Analysts said major refinancing schemes or new strategies for liquidating REO on a local level would need to be completed soon to rescue house prices from the still increasing pressure of mounting foreclosures.
"The need for policy support would therefore be considered urgent," the BofAML analysts said.
URL to original article: http://www.housingwire.com/2011/10/17/reo-sales-may-not-peak-until-2013
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, October 17, 2011
Inventory for sale hits four-year low
Source: Wall Street Journal
The number of homes listed for sale in September fell to the lowest level in more than four years, offering a mixed signal about the health of the U.S. housing market.
The 2.19 million homes listed for sale was down by 3.3% from August, which had been the previous low for the year, and about 20% from the year-earlier period, according to data compiled by Realtor.com. It is also the lowest level since Realtor.com began its count in January 2007.
Falling inventories are typically a sign of health because that leads to less downward pressure on home prices. But real-estate agents and home buyers across the country have increasingly voiced frustration with what many say are slim pickings. As a result, the latest inventory declines may point instead to the housing market’s continued disrepair.
Banks have slowed down their foreclosure processes over the last year, which could lead to lower volumes of bank-owned properties hitting the market. Meanwhile, sellers, frustrated with lowball offers, could be taking their homes off the market to wait for a sign that prices have stopped falling.
The decline in inventory is also troubling because it suggests that there are fewer opportunities for buyers and sellers to strike deals and engage in price discovery. That can further chill sales as buyers become afraid to overpay while sellers are similarly cautious about under-pricing their home.
During the month of September, listings of unsold homes fell by 7% in Portland, Ore.; by 6.6% in Dallas; and by 5.6% in Atlanta. None of 30 major markets tracked by Realtor.com posted an increase.
Home inventories typically decline by around 3% in September, according to Zelman & Associates, a research firm. Inventories surged in July 2010 following the expiration of tax credits for home buyers and fell steadily until May 2011.
For the 12-month period ending in September, median asking prices rose by 26% in Miami, by 6.7% in Washington, D.C., and by 5% in Fort Lauderdale, Fla. Median asking prices fell by 11% in Las Vegas, by 10% in Detroit, and by 8.6% in Atlanta and San Francisco.
The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t include all homes for sale, including those that are “for sale by owner” and other properties that aren’t marketed through multiple-listing services.
URL to original article: http://www.builderonline.com/builder-pulse/inventory-for-sale-hits-four-year-low.aspx?cid=BP:101711:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
The number of homes listed for sale in September fell to the lowest level in more than four years, offering a mixed signal about the health of the U.S. housing market.
The 2.19 million homes listed for sale was down by 3.3% from August, which had been the previous low for the year, and about 20% from the year-earlier period, according to data compiled by Realtor.com. It is also the lowest level since Realtor.com began its count in January 2007.
Falling inventories are typically a sign of health because that leads to less downward pressure on home prices. But real-estate agents and home buyers across the country have increasingly voiced frustration with what many say are slim pickings. As a result, the latest inventory declines may point instead to the housing market’s continued disrepair.
Banks have slowed down their foreclosure processes over the last year, which could lead to lower volumes of bank-owned properties hitting the market. Meanwhile, sellers, frustrated with lowball offers, could be taking their homes off the market to wait for a sign that prices have stopped falling.
The decline in inventory is also troubling because it suggests that there are fewer opportunities for buyers and sellers to strike deals and engage in price discovery. That can further chill sales as buyers become afraid to overpay while sellers are similarly cautious about under-pricing their home.
During the month of September, listings of unsold homes fell by 7% in Portland, Ore.; by 6.6% in Dallas; and by 5.6% in Atlanta. None of 30 major markets tracked by Realtor.com posted an increase.
Home inventories typically decline by around 3% in September, according to Zelman & Associates, a research firm. Inventories surged in July 2010 following the expiration of tax credits for home buyers and fell steadily until May 2011.
For the 12-month period ending in September, median asking prices rose by 26% in Miami, by 6.7% in Washington, D.C., and by 5% in Fort Lauderdale, Fla. Median asking prices fell by 11% in Las Vegas, by 10% in Detroit, and by 8.6% in Atlanta and San Francisco.
The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t include all homes for sale, including those that are “for sale by owner” and other properties that aren’t marketed through multiple-listing services.
URL to original article: http://www.builderonline.com/builder-pulse/inventory-for-sale-hits-four-year-low.aspx?cid=BP:101711:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage rates under 4% becoming harder to find, Freddie Mac says
Source: The Los Angeles Times
Fixed-rate 30-year mortgages beginning with a "3" are becoming harder to find, as the latest Freddie Mac survey of lenders shows.
The big government-controlled loan buyer reports that lenders were offering the loans to well-qualified borrowers early this week at an average rate of 4.12%. That was a jump higher from 3.94% a week earlier, the only sub-4% rate recorded in the survey's 40-year history.
As usual in the Freddie Mac survey, borrowers would have paid less than 1% in upfront lender fees to obtain the loan. Rates lower than those in the survey often are available to solid borrowers who shop around or pay additional points upfront.
Rates for 15-year fixed loans and adjustable-rate mortgages also rose, according to Freddie Mac, which looks at loans of up to $417,000.
Jumbo mortgages, which vary by region but are defined as more than $625,500 in much of coastal California, were running more than half a percentage point higher, with Wells Fargo listing its jumbo rate at 4.75% Thursday morning.
Freddie Mac economist Frank Nothaft said a better-than-expected unemployment report had fewer investors running for the safety of U.S. government securities.
That pushed the yield higher on the 10-year Treasury note, and mortgage rates followed as they usually do.
"The economy added 103,000 workers in September, aided by the return of striking Verizon workers," Nothaft wrote. "In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls."
Thus, as so often happens, better news for the economy meant higher rates for people buying or refinancing houses.
URL to original article: http://latimesblogs.latimes.com/money_co/2011/10/mortgage-rates-back-freddie-mac-says.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
Fixed-rate 30-year mortgages beginning with a "3" are becoming harder to find, as the latest Freddie Mac survey of lenders shows.
The big government-controlled loan buyer reports that lenders were offering the loans to well-qualified borrowers early this week at an average rate of 4.12%. That was a jump higher from 3.94% a week earlier, the only sub-4% rate recorded in the survey's 40-year history.
As usual in the Freddie Mac survey, borrowers would have paid less than 1% in upfront lender fees to obtain the loan. Rates lower than those in the survey often are available to solid borrowers who shop around or pay additional points upfront.
Rates for 15-year fixed loans and adjustable-rate mortgages also rose, according to Freddie Mac, which looks at loans of up to $417,000.
Jumbo mortgages, which vary by region but are defined as more than $625,500 in much of coastal California, were running more than half a percentage point higher, with Wells Fargo listing its jumbo rate at 4.75% Thursday morning.
Freddie Mac economist Frank Nothaft said a better-than-expected unemployment report had fewer investors running for the safety of U.S. government securities.
That pushed the yield higher on the 10-year Treasury note, and mortgage rates followed as they usually do.
"The economy added 103,000 workers in September, aided by the return of striking Verizon workers," Nothaft wrote. "In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls."
Thus, as so often happens, better news for the economy meant higher rates for people buying or refinancing houses.
URL to original article: http://latimesblogs.latimes.com/money_co/2011/10/mortgage-rates-back-freddie-mac-says.html
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, October 14, 2011
Home prices could dip another 7%: Barclays
by KERRI PANCHUK
Home prices could fall up to 7% by the end of the 2012 first quarter, Barclays Capital said Friday in a report to clients.
Barclays also noted the worst-case scenario for a further home price collapse, where property value falls another 15 to 20% from current levels, is low.
Fannie Mae's recent survey of a sample pool of Americans found that most of those surveyed believe home prices will fall another 1.1% over the next year.
Home prices recently experienced a minor decline.
In August, home prices decreased 0.4% on a month-over-month basis, the first monthly decline in four months, according to CoreLogic.
Meanwhile, Clear Capital expects another home price dip is on the way.
Home prices rose nationally 3.5% in the third quarter over the previous quarter, according to the latest home data index from Clear Capital.
However, the company also predicts another minor decline in home prices for the fourth quarter of 2011, and a continued slide through the end of the first quarter of 2012.
URL to original article: http://www.housingwire.com/2011/10/14/home-prices-could-dip-another-7-barclays
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home prices could fall up to 7% by the end of the 2012 first quarter, Barclays Capital said Friday in a report to clients.
Barclays also noted the worst-case scenario for a further home price collapse, where property value falls another 15 to 20% from current levels, is low.
Fannie Mae's recent survey of a sample pool of Americans found that most of those surveyed believe home prices will fall another 1.1% over the next year.
Home prices recently experienced a minor decline.
In August, home prices decreased 0.4% on a month-over-month basis, the first monthly decline in four months, according to CoreLogic.
Meanwhile, Clear Capital expects another home price dip is on the way.
Home prices rose nationally 3.5% in the third quarter over the previous quarter, according to the latest home data index from Clear Capital.
However, the company also predicts another minor decline in home prices for the fourth quarter of 2011, and a continued slide through the end of the first quarter of 2012.
URL to original article: http://www.housingwire.com/2011/10/14/home-prices-could-dip-another-7-barclays
For further information on Fresno Real Estate check: http://www.londonproperties.com
Yearly housing inventory down 20%, home sales up
by ANDREW SCOGGIN
National home sales and median price listings in September rose from a year ago with the home inventory down about 20%, according to multiple reports Thursday.
These positive signals were offset by a continued slight downward trend in home sales prices, down 3.3% from a year ago according to RE/MAX.
But with home sales up, RE/MAX CEO Margaret Kelly said the hope is that sales price will follow. Of the 53 markets surveyed by the company, 17 saw yearly sales price increases, including Detroit (13.4%), Miami (8.4%) and Orlando, Fla. (7.8%).
Home sales nationally went up 7.6% from September 2010 with increases in 44 of 53 markets, including Des Moines, Iowa, (31.3%) and Minneapolis (30.1%).
Single-family home, condo, townhouse and co-op inventory was down 3.27% from August and down 20.09% from September last year, according to Realtor.com.
This year-over-year decrease could mean a return to seasonal patterns and higher prices in the coming months, though markets are still fragile and could weaken in bad economic conditions.
Data firm RealtyTrac said Wednesday that the decline in foreclosure filings may have hit bottom and that foreclosure activity will likely grow.
The shrinking for-sale inventory could also be due to homeowners waiting to list their homes during a 6-month leveling of list prices. The year-over-year median list price was up 1.6% in September at $190,000.
Markets in Florida saw significant reductions in inventories as well as rising median list prices, suggesting a measure of stability. Miami had the largest inventory reduction year-over-year at 49.31%, while the median list price in Fort Myers-Cape Coral, Fla., was up 34.46% from last year, the highest in the nation. The markets with the five largest yearly price increases were all in Florida.
Chicago (11.56%), Las Vegas (11.05%) and Detroit (11.01%) saw the largest decreases in year-over-year median listing price. Detroit (3.33%) also saw the biggest monthly decline in median price.
URL to original article: http://www.housingwire.com/2011/10/13/yearly-housing-inventory-down-20-home-sales-up
For furhter information on Fresno Real Estate check: http://www.londonproperties.com
National home sales and median price listings in September rose from a year ago with the home inventory down about 20%, according to multiple reports Thursday.
These positive signals were offset by a continued slight downward trend in home sales prices, down 3.3% from a year ago according to RE/MAX.
But with home sales up, RE/MAX CEO Margaret Kelly said the hope is that sales price will follow. Of the 53 markets surveyed by the company, 17 saw yearly sales price increases, including Detroit (13.4%), Miami (8.4%) and Orlando, Fla. (7.8%).
Home sales nationally went up 7.6% from September 2010 with increases in 44 of 53 markets, including Des Moines, Iowa, (31.3%) and Minneapolis (30.1%).
Single-family home, condo, townhouse and co-op inventory was down 3.27% from August and down 20.09% from September last year, according to Realtor.com.
This year-over-year decrease could mean a return to seasonal patterns and higher prices in the coming months, though markets are still fragile and could weaken in bad economic conditions.
Data firm RealtyTrac said Wednesday that the decline in foreclosure filings may have hit bottom and that foreclosure activity will likely grow.
The shrinking for-sale inventory could also be due to homeowners waiting to list their homes during a 6-month leveling of list prices. The year-over-year median list price was up 1.6% in September at $190,000.
Markets in Florida saw significant reductions in inventories as well as rising median list prices, suggesting a measure of stability. Miami had the largest inventory reduction year-over-year at 49.31%, while the median list price in Fort Myers-Cape Coral, Fla., was up 34.46% from last year, the highest in the nation. The markets with the five largest yearly price increases were all in Florida.
Chicago (11.56%), Las Vegas (11.05%) and Detroit (11.01%) saw the largest decreases in year-over-year median listing price. Detroit (3.33%) also saw the biggest monthly decline in median price.
URL to original article: http://www.housingwire.com/2011/10/13/yearly-housing-inventory-down-20-home-sales-up
For furhter information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, October 13, 2011
Jobless claims down slightly last week
by JASON PHILYAW
Initial jobless claims remained essentially flat last week, staying higher than 400,000.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Oct. 8 fell by 1,000 to 404,000 from 405,000 the previous week, which was revised upward 4,000.
Analysts surveyed by Econoday expected 405,000 new jobless claims last week with a range of estimates between 395,000 and 425,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, decreased by 7,000 claims to 408,000 from the prior week's revised 415,000.
The seasonally adjusted insured unemployment rate for the week ended Oct. 1 slid to 2.9% from 3%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended Sept. 24 fell to 6.82 million from 6.86 million the prior week.
URL to original article: http://www.housingwire.com/2011/10/13/jobless-claims-down-slightly-last-week
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims remained essentially flat last week, staying higher than 400,000.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Oct. 8 fell by 1,000 to 404,000 from 405,000 the previous week, which was revised upward 4,000.
Analysts surveyed by Econoday expected 405,000 new jobless claims last week with a range of estimates between 395,000 and 425,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, decreased by 7,000 claims to 408,000 from the prior week's revised 415,000.
The seasonally adjusted insured unemployment rate for the week ended Oct. 1 slid to 2.9% from 3%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended Sept. 24 fell to 6.82 million from 6.86 million the prior week.
URL to original article: http://www.housingwire.com/2011/10/13/jobless-claims-down-slightly-last-week
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, October 12, 2011
Mortgage applications increase 1.3%
by KERRI PANCHUK
Mortgage application filings increased 1.3% this past week as refinance and purchase activity picked up, an industry trade group said Wednesday.
The Mortgage Bankers Association reported that the market composite index – a measure of loan application volume – jumped 1.3% on a seasonally adjusted basis from last week.
The refinance index also edged up 1.3%, while the purchase index grew 1.1% over a week ago.
The increases in both categories were driven by government loans, the MBA said.
The government purchase index alone shot up 2.4%.
The refinance share of mortgage activity remained unchanged overall, representing 79.1% of all activity.
In terms of interest rates, the adjustable-rate mortgage fell to 6% from 6.4% of total applications.
The 30-year, FRM increased to 4.25% from 4.18%, while the 30-year, FRM on jumbos increased to 4.59% from 4.49%. The 30-year fixed backed by the FHA grew to 4.06% from 4.05%, while the 15-year FRM increased to 3.53% from 3.49%. The 5/1 ARM increased to 3.03% from 3.02%.
The average loan size in the U.S. hit $210,863, down from $212,736 in August.
The average loan in refinancing was valued at $237,632, compared to $241,323 a month ago.
URL to original article: http://www.housingwire.com/2011/10/12/mba-mortgage-applications-increase-1-3
For further information on Fresno Real Estate check: http://www.londonproperties.com
Mortgage application filings increased 1.3% this past week as refinance and purchase activity picked up, an industry trade group said Wednesday.
The Mortgage Bankers Association reported that the market composite index – a measure of loan application volume – jumped 1.3% on a seasonally adjusted basis from last week.
The refinance index also edged up 1.3%, while the purchase index grew 1.1% over a week ago.
The increases in both categories were driven by government loans, the MBA said.
The government purchase index alone shot up 2.4%.
The refinance share of mortgage activity remained unchanged overall, representing 79.1% of all activity.
In terms of interest rates, the adjustable-rate mortgage fell to 6% from 6.4% of total applications.
The 30-year, FRM increased to 4.25% from 4.18%, while the 30-year, FRM on jumbos increased to 4.59% from 4.49%. The 30-year fixed backed by the FHA grew to 4.06% from 4.05%, while the 15-year FRM increased to 3.53% from 3.49%. The 5/1 ARM increased to 3.03% from 3.02%.
The average loan size in the U.S. hit $210,863, down from $212,736 in August.
The average loan in refinancing was valued at $237,632, compared to $241,323 a month ago.
URL to original article: http://www.housingwire.com/2011/10/12/mba-mortgage-applications-increase-1-3
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, October 11, 2011
Zillow: Monthly home values steady, but yearly prices down 4.5%
by ANDREW SCOGGIN
URL to original article: http://www.housingwire.com/2011/10/11/zillow-monthly-home-values-steady-but-yearly-prices-down-4-5
For further information on Fresno Real Estate check: http://www.londonproperties.com
Home values saw minimal monthly gains, and the foreclosure rate stayed steady in August, according to Zillow (Z: 26.24 +0.15%).
Housing prices increased 0.1% from July to August, with mostly marginal gains in 68 of the 157 markets covered by Zillow. The national average price of a home was $172,600, down 4.5% from August 2010, and down 28.3% since its peak in June 2006.
Pittsburgh, Pa., was the only metro area of the largest 25 covered by Zillow to see year-over-year gains on home values, up 2.8%. (Click on chart to expand the view.)
Zillow pegged the national foreclosure rate at 9.2 out of every 10,000 homes for August, down from 10.9 in October 2010. That decrease is due to the controversy surrounding robo-signing, according to Stan Humphries, Zillow’s chief economist.
Humphries said that the foreclosure rate eventually “will pick up again,” driving down home values. Prices will not bottom out until 2012 at the earliest, he said.
Hard-hit metro areas in California, Nevada and Arizona saw continuing high foreclosure rates, including 32.3 out of every 10,000 homes in Phoenix and 25.2 in Riverside, Calif.
URL to original article: http://www.housingwire.com/2011/10/11/zillow-monthly-home-values-steady-but-yearly-prices-down-4-5
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, October 10, 2011
Fannie survey shows Americans expect more declines in home prices
by KERRI PANCHUK
Americans believe home prices will drop another 1.1% over the next year while mortgage rates maintain record low levels, Fannie Mae said in its September national housing survey.
Fannie Chief Economist Doug Duncan said the September survey showed a marked deterioration in consumer expectations for home prices, making it the weakest month on record over the last 18 months.
"Despite a decline in negative economic headlines during September — in contrast to their ubiquity during the debt ceiling debate in August — consumers continue to demonstrate very negative attitudes," Duncan said. "At the same time, the share of consumers expecting mortgage rates to go up dropped sharply to the lowest level we have recorded, likely influenced by the news that the Federal Reserve will attempt to keep interest rates low for years to come. All these factors together do not bode well for the housing market."
In fact, pessimism abounds in the housing market, with one-third of respondents expecting mortgage rates to go up in the next year. And for the fourth consecutive month, most Americans taking the Fannie survey said they expect home prices to decline from year-ago levels.
About 68% of those surveyed said it's a good time to buy a home, while only 10% believe it's a good time to sell a house.
URL to original article: http://www.housingwire.com/2011/10/10/fannie-survey-shows-americans-expect-more-declines-in-home-prices
For further information on Fresno Real Estate check: http://www.londonproperties.com
Americans believe home prices will drop another 1.1% over the next year while mortgage rates maintain record low levels, Fannie Mae said in its September national housing survey.
Fannie Chief Economist Doug Duncan said the September survey showed a marked deterioration in consumer expectations for home prices, making it the weakest month on record over the last 18 months.
"Despite a decline in negative economic headlines during September — in contrast to their ubiquity during the debt ceiling debate in August — consumers continue to demonstrate very negative attitudes," Duncan said. "At the same time, the share of consumers expecting mortgage rates to go up dropped sharply to the lowest level we have recorded, likely influenced by the news that the Federal Reserve will attempt to keep interest rates low for years to come. All these factors together do not bode well for the housing market."
In fact, pessimism abounds in the housing market, with one-third of respondents expecting mortgage rates to go up in the next year. And for the fourth consecutive month, most Americans taking the Fannie survey said they expect home prices to decline from year-ago levels.
About 68% of those surveyed said it's a good time to buy a home, while only 10% believe it's a good time to sell a house.
URL to original article: http://www.housingwire.com/2011/10/10/fannie-survey-shows-americans-expect-more-declines-in-home-prices
For further information on Fresno Real Estate check: http://www.londonproperties.com
Housing industry jobs down for fourth month in September
by LIZ ENOCHS
The housing industry lost 5,700 jobs in September, marking its fourth consecutive month of employment shrinkage, preliminary figures from the Department of Labor show.
Residential building employment rose by 1,800, but was offset by 7,500 job losses in the real estate industry, according to seasonally adjusted data from the Labor Department.
Given the housing crash and the market's current anemic performance, it's hard to expect industry employment to do anything but move sideways for a while, said Paul Dales, senior U.S. economist with Capital Economics, a Toronto-based research consultancy.
The numbers bear out his point, as housing industry employment started to flatten out last year and has remained fairly steady since then.
"If you go back and look at how many people were employed in those sectors two years or even four years ago, there would have been a hell of a lot more people employed," Dales said.
"Any industry that’s been exposed to the housing market has really seen a lot of job losses over the last few years."
The ranks of mortgage brokers are also continuing to thin out.
Employment among mortgage and non-mortgage loan brokers declined by 1,500 in September, although that data was not adjusted for seasonal variations, which are substantial in the housing industry.
The trend, though, is clear. The mortgage loan brokerage industry has lost more than 100,000 jobs since employment peaked at 148,200 in April 2006, Labor Department data shows. Employment in September was 47,400, according to the Department's preliminary estimate.
"These industries have suffered a lot and they’ll probably continue to suffer," said Dales.
URL to original article: http://www.housingwire.com/2011/10/07/housing-industry-jobs-down-for-fourth-month-in-september
For further information on Fresno Real Estate check: http://www.londonproperties.com
The housing industry lost 5,700 jobs in September, marking its fourth consecutive month of employment shrinkage, preliminary figures from the Department of Labor show.
Residential building employment rose by 1,800, but was offset by 7,500 job losses in the real estate industry, according to seasonally adjusted data from the Labor Department.
Given the housing crash and the market's current anemic performance, it's hard to expect industry employment to do anything but move sideways for a while, said Paul Dales, senior U.S. economist with Capital Economics, a Toronto-based research consultancy.
The numbers bear out his point, as housing industry employment started to flatten out last year and has remained fairly steady since then.
"If you go back and look at how many people were employed in those sectors two years or even four years ago, there would have been a hell of a lot more people employed," Dales said.
"Any industry that’s been exposed to the housing market has really seen a lot of job losses over the last few years."
The ranks of mortgage brokers are also continuing to thin out.
Employment among mortgage and non-mortgage loan brokers declined by 1,500 in September, although that data was not adjusted for seasonal variations, which are substantial in the housing industry.
The trend, though, is clear. The mortgage loan brokerage industry has lost more than 100,000 jobs since employment peaked at 148,200 in April 2006, Labor Department data shows. Employment in September was 47,400, according to the Department's preliminary estimate.
"These industries have suffered a lot and they’ll probably continue to suffer," said Dales.
URL to original article: http://www.housingwire.com/2011/10/07/housing-industry-jobs-down-for-fourth-month-in-september
For further information on Fresno Real Estate check: http://www.londonproperties.com
Friday, October 7, 2011
GSE mortgage prepayments surge in September
by JON PRIOR
Prepayments, mostly through refinancing, on mortgages backing Fannie Mae and Freddie Mac securities increased substantially in September, higher than what some analysts expected.
Average mortgage rates slipped below 4% on the Freddie Mac survey last week. But unemployment remained elevated and the 11 million underwater homeowners are shut out of taking advantage of the lower rates.
Still, Treasury Secretary Timothy Geithner said the administration is moving forward with plans to help more homeowners refinance out of higher rates, and the Federal Reserve is busy pushing rates even lower with its so-called Operation Twist," which started Monday.
"While increases were expected given the continued decline in mortgage rates, we would characterize the September fixed-rate [conditional prepayment rate] as being on the high end of our expected range," said analysts at Keefe, Bruyette & Woods.
The conditional prepayment rate is the percentage of remaining principal outstanding in a pool of loans expected to be paid off that particular month. In September, the total prepayments for Fannie Mae jumped to a CPR of 21.7%, up from 17.5% expected the prior month and 15.4% in July.
Prepayments for Freddie Mac went to a CPR of 22.1% in September from 17.4% in August and 15.2% in July.
A Freddie executive said recently refinancings accounted for roughly 85% of the firm's business in the first quarter.
"We expect prepayments to continue to trend up in coming months driven by organic refi activity," KBW said.
URL to original article: http://www.housingwire.com/2011/10/07/gse-mortgage-prepayments-surge-in-september
For further information on Fresno Real Estate check: http://www.londonproperties.com
Prepayments, mostly through refinancing, on mortgages backing Fannie Mae and Freddie Mac securities increased substantially in September, higher than what some analysts expected.
Average mortgage rates slipped below 4% on the Freddie Mac survey last week. But unemployment remained elevated and the 11 million underwater homeowners are shut out of taking advantage of the lower rates.
Still, Treasury Secretary Timothy Geithner said the administration is moving forward with plans to help more homeowners refinance out of higher rates, and the Federal Reserve is busy pushing rates even lower with its so-called Operation Twist," which started Monday.
"While increases were expected given the continued decline in mortgage rates, we would characterize the September fixed-rate [conditional prepayment rate] as being on the high end of our expected range," said analysts at Keefe, Bruyette & Woods.
The conditional prepayment rate is the percentage of remaining principal outstanding in a pool of loans expected to be paid off that particular month. In September, the total prepayments for Fannie Mae jumped to a CPR of 21.7%, up from 17.5% expected the prior month and 15.4% in July.
Prepayments for Freddie Mac went to a CPR of 22.1% in September from 17.4% in August and 15.2% in July.
A Freddie executive said recently refinancings accounted for roughly 85% of the firm's business in the first quarter.
"We expect prepayments to continue to trend up in coming months driven by organic refi activity," KBW said.
URL to original article: http://www.housingwire.com/2011/10/07/gse-mortgage-prepayments-surge-in-september
For further information on Fresno Real Estate check: http://www.londonproperties.com
Thursday, October 6, 2011
Homeownership rate experiences biggest drop in 70 years
by LIZ ENOCHS
The U.S. homeownership rate experienced its biggest drop in 2010 in 70 years, dropping to 65.1%, down from 66.2% in 2000, according to data from the Census Bureau.
The decline came even as the nation added 15.8 million housing units, increasing the total housing inventory by 13.6%, the Census Bureau said Thursday.
Eleven states suffered declines of at least two percentage points in their homeownership rates, led by South Carolina, with a decrease of 2.88 percentage points.
Nevada, the state that experienced the biggest housing boom in the nation over the past decade, saw its homeownership rate fall by 2.09 percentage points. The state's housing units grew by 41.9% from 2000 to 2010. Housing growth outpaced population growth — which was already the fastest in the nation — by almost 7 percentage points.
Nevada, also registered the biggest growth in vacancy rates. The state’s vacancy rate, a measure of the share of unoccupied units on the Census survey, rose by 5.1 percentage points in 2010 from 10 years earlier. It stood at 14.3% at the end of 2010.
That increase "was almost completely driven by the increase in Clark County," said Ellen Wilson, a statistician in the Census Bureau’s Economic and Housing Statistics Division, on a conference call Thursday. Clark County, home to Las Vegas, saw a 6.4 percentage point increase in vacant units.
Nevada's vacancy rate was followed by Florida, (up 4.2 percentage points); Michigan (up 4 percentage points); and Georgia (up 3.9 percentage points).
The 10 states with the highest housing unit growth rates were in the West and South. After Nevada, Arizona clocked the second-largest gain, as its housing inventory rose by 29.9%, followed by Utah, with a 27.5% gain, and Idaho, with a 26.5% increase.
California had the most total housing units in 2010, as it did in 2000, with an inventory of 13.68 million units. Texas was next, with 9.98 million units, followed by Florida, which gained enough housing units to surpass New York.
URL to original article: http://www.housingwire.com/2011/10/06/census-bureau-says-homeownership-rate-at-lowest-level-in-70-years
For further information on Fresno Real Estate check: http://www.londonproperties.com
The U.S. homeownership rate experienced its biggest drop in 2010 in 70 years, dropping to 65.1%, down from 66.2% in 2000, according to data from the Census Bureau.
The decline came even as the nation added 15.8 million housing units, increasing the total housing inventory by 13.6%, the Census Bureau said Thursday.
Eleven states suffered declines of at least two percentage points in their homeownership rates, led by South Carolina, with a decrease of 2.88 percentage points.
Nevada, the state that experienced the biggest housing boom in the nation over the past decade, saw its homeownership rate fall by 2.09 percentage points. The state's housing units grew by 41.9% from 2000 to 2010. Housing growth outpaced population growth — which was already the fastest in the nation — by almost 7 percentage points.
Nevada, also registered the biggest growth in vacancy rates. The state’s vacancy rate, a measure of the share of unoccupied units on the Census survey, rose by 5.1 percentage points in 2010 from 10 years earlier. It stood at 14.3% at the end of 2010.
That increase "was almost completely driven by the increase in Clark County," said Ellen Wilson, a statistician in the Census Bureau’s Economic and Housing Statistics Division, on a conference call Thursday. Clark County, home to Las Vegas, saw a 6.4 percentage point increase in vacant units.
Nevada's vacancy rate was followed by Florida, (up 4.2 percentage points); Michigan (up 4 percentage points); and Georgia (up 3.9 percentage points).
The 10 states with the highest housing unit growth rates were in the West and South. After Nevada, Arizona clocked the second-largest gain, as its housing inventory rose by 29.9%, followed by Utah, with a 27.5% gain, and Idaho, with a 26.5% increase.
California had the most total housing units in 2010, as it did in 2000, with an inventory of 13.68 million units. Texas was next, with 9.98 million units, followed by Florida, which gained enough housing units to surpass New York.
URL to original article: http://www.housingwire.com/2011/10/06/census-bureau-says-homeownership-rate-at-lowest-level-in-70-years
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims climb back over 400,000
by JASON PHILYAW
Initial jobless claims rose last week, climbing back over 400,000 after dipping below that threshold the prior week for the first time in months.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Oct. 1 increased by 6,000 to 401,000 from 395,000 the previous week, which was revised upward 4,000.
Analysts surveyed by Econoday expected 410,000 new jobless claims last week with a range of estimates between 395,000 and 415,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, fell by 4,000 claims to 414,000 from the prior week's 418,000.
The seasonally adjusted insured unemployment rate for the week ended Sept. 24 slid to 2.9% from 3%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended Sept. 17 fell to 6.86 million from 6.98 million the prior week. On Friday, the Labor Department reports nonfarm payroll data and many analysts expect the unemployment rate to rise somewhat from 9.1% for August.
Earlier this week, the ADP National Employment Report showed the private sector added 91,000 jobs in September. TrimTabs Investment Research estimates the economy added just 64,000 jobs last month.
URL to original article: http://www.housingwire.com/2011/10/06/initial-jobless-claims-climb-back-over-400000
For further information on Fresno Real Estate check: http://www.londonproperties.com
Initial jobless claims rose last week, climbing back over 400,000 after dipping below that threshold the prior week for the first time in months.
The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Oct. 1 increased by 6,000 to 401,000 from 395,000 the previous week, which was revised upward 4,000.
Analysts surveyed by Econoday expected 410,000 new jobless claims last week with a range of estimates between 395,000 and 415,000. Most economists believe weekly jobless claims lower than 400,000 indicate the economy is expanding and jobs growth is strengthening.
The four-week moving average, which is considered a less volatile indicator than weekly claims, fell by 4,000 claims to 414,000 from the prior week's 418,000.
The seasonally adjusted insured unemployment rate for the week ended Sept. 24 slid to 2.9% from 3%, according to the Labor Department.
The total number of people receiving some sort of federal unemployment benefits for the week ended Sept. 17 fell to 6.86 million from 6.98 million the prior week. On Friday, the Labor Department reports nonfarm payroll data and many analysts expect the unemployment rate to rise somewhat from 9.1% for August.
Earlier this week, the ADP National Employment Report showed the private sector added 91,000 jobs in September. TrimTabs Investment Research estimates the economy added just 64,000 jobs last month.
URL to original article: http://www.housingwire.com/2011/10/06/initial-jobless-claims-climb-back-over-400000
For further information on Fresno Real Estate check: http://www.londonproperties.com
Wednesday, October 5, 2011
American Dream becomes a four-letter word ... wait
Source: Reuters
(Reuters) - Recovery will elude the troubled U.S. housing market in the near-term as stringent standards to qualify for mortgages and a lack of jobs discourage Americans from buying homes, a survey showed on Tuesday.
The Hanley Wood's maiden survey of homeowners and renters found no sense of urgency among Americans to buy a home even though they still believed in homeownership and the importance of the housing market to the economy.
"We thought people would be soured after watching home values fall, but instead we found the typical American still places high value on homeownership," said Frank Anton, chief executive officer of Hanley Wood, a media and data research company.
The survey covered about 3,000 homeowners and renters and was conducted in the final week of June. More than 68 percent of respondents believed now was a good time to buy a house.
One in five homeowners and a third of renters would like to buy a house over the next two years.
Their aspirations, however, are tempered by the harsh realities of the mortgage market, uneasiness about job security, employment opportunities, and the general direction of both the housing market and the overall economy.
"As long as buyers are uncertain about what's happening in the economy and where house prices are headed, they are going to be slow to move. There is no urging the market," said Kent Colton, a senior fellow at Harvard University's Joint Center for Housing Studies, who conducted the survey.
There is a ray of hope on the horizon. The worst downturn since the Great Depression of the 1930s has led to a surge in the number of Americans moving in with family and friends.
Colton sees this so-called doubling-up as a source of future demand for housing should the economy start creating jobs at a more robust pace. More than one third of owners and about a quarter of renter households are doubling-up.
This confirms the trend found by the government's census.
"It means you have up to 2 million people that are part of what can be easily considered a pent-up demand when the time changes," Colton told Reuters.
Stringent underwriting standards for mortgages as well as requirements for hefty down-payments are pushing housing beyond the reach of many Americans, even though home prices are cheap and mortgage rates are at record low levels.
Banks and other mortgage providers are tightening their lending practices after lax underwriting standards caused the collapse of the housing market four years ago.
Federal Reserve Chairman Ben Bernanke on Tuesday lamented the inability of prospective buyers to get home loans.
The U.S. central bank last month announced it would sell $400 billion in short-term Treasury securities and invest them into longer-dated ones to try to put downward pressure on borrowing costs over a longer period.
"The Fed has done a lot to try and bring mortgage rates down. But that's not effective if people can't get mortgage loans," Bernanke told lawmakers.
About 65 percent of renters said they could afford a deposit of only 5 percent or less.
URL to original article: http://www.builderonline.com/builder-pulse/american-dream-becomes-a-four-letter-word-----wait.aspx?cid=BP:100511:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
(Reuters) - Recovery will elude the troubled U.S. housing market in the near-term as stringent standards to qualify for mortgages and a lack of jobs discourage Americans from buying homes, a survey showed on Tuesday.
The Hanley Wood's maiden survey of homeowners and renters found no sense of urgency among Americans to buy a home even though they still believed in homeownership and the importance of the housing market to the economy.
"We thought people would be soured after watching home values fall, but instead we found the typical American still places high value on homeownership," said Frank Anton, chief executive officer of Hanley Wood, a media and data research company.
The survey covered about 3,000 homeowners and renters and was conducted in the final week of June. More than 68 percent of respondents believed now was a good time to buy a house.
One in five homeowners and a third of renters would like to buy a house over the next two years.
Their aspirations, however, are tempered by the harsh realities of the mortgage market, uneasiness about job security, employment opportunities, and the general direction of both the housing market and the overall economy.
"As long as buyers are uncertain about what's happening in the economy and where house prices are headed, they are going to be slow to move. There is no urging the market," said Kent Colton, a senior fellow at Harvard University's Joint Center for Housing Studies, who conducted the survey.
There is a ray of hope on the horizon. The worst downturn since the Great Depression of the 1930s has led to a surge in the number of Americans moving in with family and friends.
Colton sees this so-called doubling-up as a source of future demand for housing should the economy start creating jobs at a more robust pace. More than one third of owners and about a quarter of renter households are doubling-up.
This confirms the trend found by the government's census.
"It means you have up to 2 million people that are part of what can be easily considered a pent-up demand when the time changes," Colton told Reuters.
Stringent underwriting standards for mortgages as well as requirements for hefty down-payments are pushing housing beyond the reach of many Americans, even though home prices are cheap and mortgage rates are at record low levels.
Banks and other mortgage providers are tightening their lending practices after lax underwriting standards caused the collapse of the housing market four years ago.
Federal Reserve Chairman Ben Bernanke on Tuesday lamented the inability of prospective buyers to get home loans.
The U.S. central bank last month announced it would sell $400 billion in short-term Treasury securities and invest them into longer-dated ones to try to put downward pressure on borrowing costs over a longer period.
"The Fed has done a lot to try and bring mortgage rates down. But that's not effective if people can't get mortgage loans," Bernanke told lawmakers.
About 65 percent of renters said they could afford a deposit of only 5 percent or less.
URL to original article: http://www.builderonline.com/builder-pulse/american-dream-becomes-a-four-letter-word-----wait.aspx?cid=BP:100511:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Tuesday, October 4, 2011
Six of every 10 renters says they'd own their home if they could
Source: Trulia Blog
Twice a year, we ask people across the U.S. (through an online survey conducted by Harris Interactive) if homeownership is still part of their personal American Dream along with a few other questions about the obstacles that are keeping them from buying at this time. So what did our Fall 2011 survey tell us? To give you the inside scoop, we put together an infographic to help us walk though all the key findings. Let’s get started…
Survey Says: American Dream (of Homeownership) is Alive and Well
This past year has been filled with a series of unfortunate events – from the economy hovering on the edge of another recession and a lackluster real estate market to politics that are making people second guess their 2008 vote. Given everything that has happened, it’s only natural to assume that fewer people would say buying a home is a good idea, right? Surprisingly, this is not the case.
What our survey told us is that a whooping 70% of Americans said they still see homeownership as being part of their personal American Dream. When we asked this same question back in January, it was also 70%. What this means is being a homeowner is still on most Americans’ “I’ve made it in the U.S.A.” to-do list and that nothing (that’s happening politically or economically) is going to bring them down. Even when you look at the data by age (as we did below), most said their American Dream includes owning a home. In particular, we thought this sentiment was pretty strikingly high among young people – the children of the 90s and 80s in this case – especially when you consider the fact that most do not own their own homes.
Homeowners Can’t Get Enough (Of Buying Homes)
Believe it or not, 57% of current homeowners said owning a home is among the best long-term investments they could make – even more than buying gold and putting cash under a mattress (go figure). If you think about it, that’s a bold statement considering how many people have lost their homes to foreclosure thus far. As a matter of fact, 80% of these folks say they want to buy another house in the future. But wait, there’s more. When we broke down this stat by age, we found out that an astonishing 69% of current homeowners age 55 years old or older (we’re talking retired or almost retired Baby boomers here) plan to buy another home. Must be something about that homebuying rush that they can’t get enough of, eh?
Buying A Home Ain’t No Walk In The Park
Most housing markets may be “offering” a blue light special on real estate all year long, but times have changed. The home buying process isn’t easy anymore.
Hands down, the biggest barrier to being a homeowners is saving up for a down payment (though this isn’t necessary a bad thing ’cause you should be putting at least 20% down. Letting people buy with zero down was one of many things that got us into this mess of a housing crisis). This especially rang true for Millennials (18-34 year olds) – 62% said this was among the biggest hurdles that they faced in trying to buy a home. On the flip side, qualifying for a mortgage and having a poor credit history were a bigger concern among Gen X’ers (35-54 year olds).
URL to original article: http://www.builderonline.com/builder-pulse/six-of-every-10-renters-says-they-d-own-their-home-if-they-could.aspx?cid=BP:100411:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
Twice a year, we ask people across the U.S. (through an online survey conducted by Harris Interactive) if homeownership is still part of their personal American Dream along with a few other questions about the obstacles that are keeping them from buying at this time. So what did our Fall 2011 survey tell us? To give you the inside scoop, we put together an infographic to help us walk though all the key findings. Let’s get started…
Survey Says: American Dream (of Homeownership) is Alive and Well
This past year has been filled with a series of unfortunate events – from the economy hovering on the edge of another recession and a lackluster real estate market to politics that are making people second guess their 2008 vote. Given everything that has happened, it’s only natural to assume that fewer people would say buying a home is a good idea, right? Surprisingly, this is not the case.
What our survey told us is that a whooping 70% of Americans said they still see homeownership as being part of their personal American Dream. When we asked this same question back in January, it was also 70%. What this means is being a homeowner is still on most Americans’ “I’ve made it in the U.S.A.” to-do list and that nothing (that’s happening politically or economically) is going to bring them down. Even when you look at the data by age (as we did below), most said their American Dream includes owning a home. In particular, we thought this sentiment was pretty strikingly high among young people – the children of the 90s and 80s in this case – especially when you consider the fact that most do not own their own homes.
Homeowners Can’t Get Enough (Of Buying Homes)
Believe it or not, 57% of current homeowners said owning a home is among the best long-term investments they could make – even more than buying gold and putting cash under a mattress (go figure). If you think about it, that’s a bold statement considering how many people have lost their homes to foreclosure thus far. As a matter of fact, 80% of these folks say they want to buy another house in the future. But wait, there’s more. When we broke down this stat by age, we found out that an astonishing 69% of current homeowners age 55 years old or older (we’re talking retired or almost retired Baby boomers here) plan to buy another home. Must be something about that homebuying rush that they can’t get enough of, eh?
Buying A Home Ain’t No Walk In The Park
Most housing markets may be “offering” a blue light special on real estate all year long, but times have changed. The home buying process isn’t easy anymore.
Hands down, the biggest barrier to being a homeowners is saving up for a down payment (though this isn’t necessary a bad thing ’cause you should be putting at least 20% down. Letting people buy with zero down was one of many things that got us into this mess of a housing crisis). This especially rang true for Millennials (18-34 year olds) – 62% said this was among the biggest hurdles that they faced in trying to buy a home. On the flip side, qualifying for a mortgage and having a poor credit history were a bigger concern among Gen X’ers (35-54 year olds).
URL to original article: http://www.builderonline.com/builder-pulse/six-of-every-10-renters-says-they-d-own-their-home-if-they-could.aspx?cid=BP:100411:JUMP
For further information on Fresno Real Estate check: http://www.londonproperties.com
LPS: Foreclosure starts up 20% in August
by JASON PHILYAW
Foreclosure starts rose 20% in August from the prior month to the highest level of the year and mortgages facing foreclosure are delinquent an average of 611 days, the highest level yet.
Lender Processing Services' (LPS: 13.91 +6.10%) mortgage monitor report for August showed foreclosure starts fell more than 12% from a year earlier, and the national delinquency rate is 8.13%, which is 2.5% lower than the prior month.
In late August, the Federal Deposit Insurance Corp. said the combined delinquency rate on mortgages held by major banks dropped to 6.68% in the second quarter, the lowest level since the third quarter of 2009.
First-time delinquencies accounted for nearly one-quarter of new delinquencies in August, according to LPS. And 23% of the nearly 46 million loans that were current at the end of August are at risk of foreclosure due to negative equity.
LPS said more mortgages moved back into delinquent status from foreclosure in August than ever before, "suggesting that process reviews and potential loss mitigation activity are continuing."
The company said the average delinquency process in non-judicial states is about six months shorter than judicial states, where backlogs remain extremely high. LPS said loans delinquent more than 90 days declined to 2008 levels in August.
Florida, Mississippi, Nevada, New Jersey and Illinois had the highest percentage of loans in delinquency or foreclosure. The states with the lowest rates of non-current loans were Montana, Wyoming, Alaska, South Dakota and North Dakota.
URL to original article: http://www.housingwire.com/2011/10/04/lps-foreclosure-starts-up-20-in-august
For further information on Fresno Real Estate check: http://www.londonproperties.com
Foreclosure starts rose 20% in August from the prior month to the highest level of the year and mortgages facing foreclosure are delinquent an average of 611 days, the highest level yet.
Lender Processing Services' (LPS: 13.91 +6.10%) mortgage monitor report for August showed foreclosure starts fell more than 12% from a year earlier, and the national delinquency rate is 8.13%, which is 2.5% lower than the prior month.
In late August, the Federal Deposit Insurance Corp. said the combined delinquency rate on mortgages held by major banks dropped to 6.68% in the second quarter, the lowest level since the third quarter of 2009.
First-time delinquencies accounted for nearly one-quarter of new delinquencies in August, according to LPS. And 23% of the nearly 46 million loans that were current at the end of August are at risk of foreclosure due to negative equity.
LPS said more mortgages moved back into delinquent status from foreclosure in August than ever before, "suggesting that process reviews and potential loss mitigation activity are continuing."
The company said the average delinquency process in non-judicial states is about six months shorter than judicial states, where backlogs remain extremely high. LPS said loans delinquent more than 90 days declined to 2008 levels in August.
Florida, Mississippi, Nevada, New Jersey and Illinois had the highest percentage of loans in delinquency or foreclosure. The states with the lowest rates of non-current loans were Montana, Wyoming, Alaska, South Dakota and North Dakota.
URL to original article: http://www.housingwire.com/2011/10/04/lps-foreclosure-starts-up-20-in-august
For further information on Fresno Real Estate check: http://www.londonproperties.com
Monday, October 3, 2011
Investment manager survey shows no double-dip recession coming
by KERRI PANCHUK
Most investment managers foresee slow growth for several years, yet don't expect to see a double-dip recession, according to the latest Investment Manager Outlook survey by Russell Investments.
About 78% of respondents said strong corporate balance sheets and high profit levels will stave off any double-dip.
"We have seen a consistent spate of negative economic news that has certainly impacted investors' confidence in the markets and we continue to see notable volatility," said Rachel Carroll, client portfolio manager at Russell Investments.
"Yet among professional money managers we are seeing a focus on fundamentals such as strong corporate profits that is supporting an overall bullish sentiment, particularly for large cap U.S. corporate stocks," Carroll said. "While we believe managers' low expectations for overall economic growth are realistic, the collective bullish sentiment and their views on market valuations indicate that they see a buying opportunity in the equity markets."
The survey sample was split on the Federal Reserve's decision to keep interest rates low through mid-2013 with 49% expecting it to help the economy and 51% doubting its usefulness.
The investment managers' expectations for growth mirror those for housing. Rick Sharga, executive vice president with Carrington Mortgage Holdings, said recently that U.S. housing already hit its bottom this year and will remain flat through 2014.
Russell Investments surveys senior-level investment managers quarterly to gauge overall economic sentiment at equities and fixed-income firms.
URL to original article: http://www.housingwire.com/2011/10/03/investment-manager-survey-shows-no-double-dip-recession-coming
For further information on Fresno Real Estate check: http://www.londonproperties.com
Most investment managers foresee slow growth for several years, yet don't expect to see a double-dip recession, according to the latest Investment Manager Outlook survey by Russell Investments.
About 78% of respondents said strong corporate balance sheets and high profit levels will stave off any double-dip.
"We have seen a consistent spate of negative economic news that has certainly impacted investors' confidence in the markets and we continue to see notable volatility," said Rachel Carroll, client portfolio manager at Russell Investments.
"Yet among professional money managers we are seeing a focus on fundamentals such as strong corporate profits that is supporting an overall bullish sentiment, particularly for large cap U.S. corporate stocks," Carroll said. "While we believe managers' low expectations for overall economic growth are realistic, the collective bullish sentiment and their views on market valuations indicate that they see a buying opportunity in the equity markets."
The survey sample was split on the Federal Reserve's decision to keep interest rates low through mid-2013 with 49% expecting it to help the economy and 51% doubting its usefulness.
The investment managers' expectations for growth mirror those for housing. Rick Sharga, executive vice president with Carrington Mortgage Holdings, said recently that U.S. housing already hit its bottom this year and will remain flat through 2014.
Russell Investments surveys senior-level investment managers quarterly to gauge overall economic sentiment at equities and fixed-income firms.
URL to original article: http://www.housingwire.com/2011/10/03/investment-manager-survey-shows-no-double-dip-recession-coming
For further information on Fresno Real Estate check: http://www.londonproperties.com
Subscribe to:
Posts (Atom)
