This week in Real Estate: August 10, 2015

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Following the release of the Labor Department’s strong July Jobs Report on Friday the most significant chatter This Week in Real Estate was the continued speculation that the Federal Reserve will increase interest rates in September. Below are a few of the highlights from the first week in August that influence our business:

* Home Prices Rose an Amazing 6.5% Annually in June. Home prices nationwide, including distressed sales, increased 6.5% in June 2015 compared with June 2014, according to the June 2015 CoreLogic Home Price Index. This change represents 40 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.7% in June 2015 compared to May 2015. Including distressed sales, 35 states and the District of Columbia were at or within 10% of their peak prices in June 2015. Fifteen states and the District of Columbia reached their new price peaks. Excluding distressed sales, home prices increased by 6.4% in June 2015 compared with June 2014 and increased by 1.4% month-over-month compared with May 2015. Highlights as of June 2015: including distressed sales, the five states with the highest home price appreciation were: Colorado (9.8%), Washington (8.9%), New York (8.3%), South Carolina (8%) and Nevada (8%). Excluding distressed sales, the five states with the highest home price appreciation were: Colorado (9.3%), New York (8.5%), Washington (8.3%), Oregon (8.2%) and Nevada (7.9%).

Full story… http://www.housingwire.com/articles/34674-corelogic-home-prices-rose-an-amazing-65-annually-in-june

* Solid U.S. Jobs Report in July. U.S. employment rose at a solid clip in July and wages rebounded after a surprise stall in the prior month, signs of an improving economy that opened the door wider to a Federal Reserve interest rate increase in September. 215,000 jobs were added in July according to the Labor Department. The economy has added around 2.9 million jobs over the past 12 months. That’s down slightly from earlier this year, when the 12-month pace surpassed three million, but it is still well ahead of the 2.5 millions jobs added for the year ended July 2014. Job growth over the past three months reached its highest level since February, with an average of 235,000 jobs added per month. The unemployment rate held steady at 5.3%. A string of 16 out of 18 months over 200,000 additional jobs going into the September meeting may give the Fed the confidence it seeks to pull the trigger in September. “We view this report as easily clearing the hurdle needed to keep the Fed on track for a September rate hike. The bar for not moving is much higher,” said Rob Martin, an economist at Barclays in New York. The U.S. central bank said its policy-setting committee anticipated it would be appropriate to raise lending rates when it has seen “some further improvement” in the jobs market. It has not raised rates since 2006. Given the accumulated progress to date and the most likely near term improvements, today’s employment report brings us one step closer on the path to a September liftoff. Full story… http://blogs.wsj.com/economics/2015/08/07/the-july-jobs-report-in-12-charts/?mod=marketbeat&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29

Smallest Share of Distressed Sales Since 2007. Sales of lender-owned real estate (REO) in May represented the smallest share of home sales in nine years. CoreLogic said that the overall share of distressed properties sold during the month, including short sales as well as REO, fell to 9.9 percent. This was 1.7 percentage points lower than the April share and 2.8 percentage points lower than a year earlier. Short sales have remained fairly stable at less than 4 percent share – 3.5 percent in May – since mid-2014, but REO has fallen steadily – in May it accounted for a 6.4 percent share. At the peak of market distress in January 2009, distressed sales totaled 32.4 percent of all sales. There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it would reach that “normal” 2-percent mark in mid-2018. Full Story… http://www.mortgagenewsdaily.com/08062015_corelogic_distressed_sales.asp

* Markets Continue to Move Toward Normal. The NAHB/First American Leading Markets Index (LMI) increased one point to .92 in the second quarter of 2015. The index measures proximity to a normal economic and housing market with three components: single-family housing starts, employment and home prices. A value of 1 means the market (or country) is back to the last levels of normality. About one-fifth of the 364 metro areas have a LMI value of 1 or better meaning those markets are back to or beyond the last normal. Of the three measures of normality, house prices has recovered the most with an average score of 1.29 and the national score is 1.35 meaning prices are 35% higher than the last normal. Ninety-five percent of the markets have a house price component value of 1 or above. The employment component is very close to normal with an average across all markets of .96. Single-family housing starts remains the farthest from normal with an average score across all markets of .49 and the national component index of .46, or less than half way back to normal. Only 26 markets are fully recovered in terms of single-family permits. Full Story… http://eyeonhousing.org/2015/08/markets-continue-to-move-toward-normal/

Have a productive week!


This Week in Real Estate: August 3, 2015

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While the most significant headline This Week in Real Estate was the Pending Home Sales Index decrease in June the favorable news is the PHSI has experienced healthy year-over-year appreciation. Below are a few of the highlights from the final week in July that influence our business:

* Pending Sales – Another Bump in the Ride Up. The Pending Home Sales Index declined in June after reaching the highest level in over nine years in May. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by NAR, decreased 1.8% in June, but is up 8.2% from the same month a year ago, and has increased year-over-year, and has increased year-over-year for ten consecutive months. Year-over-year, the PHSI was up 12.0% in the Northeast, 10.4% in the West, 7.8% in the South and 5.0% in the Midwest. The earlier string of positive pending sales releases in 2015 was consistent with a strong report last week as existing sales reached a pre-recession level. The June PHSI is a small bump in the road, and follows last week’s similar decline in new home sales. However, the longer view suggests continued good news for the existing sales market and for builders in 2015. Full story… http://eyeonhousing.org/2015/07/pending-sales-another-bump-in-the-ride-up/

* Fannie Mae: Mortgage Serious Delinquency Rate Declined in June, Lowest Since August 2008. Fannie Mae reported Friday that the single-family serious delinquency rate declined in June to 1.66% from 1.70% in May. The serious delinquency rate is down from 2.05% in June 2014, and this is the lowest level since August 2008. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%. Mortgage loans that are three monthly payments or more past due or in foreclosure are considered seriously delinquent. Full story… http://www.calculatedriskblog.com/2015/07/fannie-mae-mortgage-serious-delinquency.html

* Freddie Mac: Mortgage Serious Delinquency Rate Declined in June, Lowest Since November 2008. Freddie Mac reported that the single-family serious delinquency rate declined in June to 1.53%, down from 1.58% in May. Freddie’s rate is down from 2.07% in June 2014, and the rate in June was the lowest level since November 2008. Freddie’s serious delinquency rate peaked in February 2010 at 4.20%. Full Story… http://www.calculatedriskblog.com/2015/07/freddie-mac-mortgage-serious.html

Have a productive week!

Jason


This Week in Real Estate: July 27, 2015

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A few of the most noteworthy headlines This Week in Real Estate continue to report that the real estate market is experiencing the highest levels of activity in nearly a decade. In other welcomed news the CFPB finalized the TRID disclosure rule start date delaying it to October 3. Below are a few of the highlights from the third week in July that influence our business:

* Existing U.S. Home Sales Climb to Highest Level in 8 Years as Home Prices Surpass July 2006 Peak. Existing-home sales increased in June to their highest pace in over eight years, while the cumulative effect of rising demand and limited supply helped push the national median sales price to an all-time high, according to the National Association of Realtors. Sales are now at their highest pace since February 2007, have increased year-over-year for nine consecutive months and are 9.6 percent above a year ago. The median existing-home price in June surpasses the peak median sales price set in July 2006. June’s price increase also marks the 40th consecutive month of year-over-year gains. Unsold inventory is at a 5.0 month supply. Full story… http://www.realtor.org/news-releases/2015/07/existing-home-sales-rise-in-june-as-home-prices-surpass-july-2006-peak

* Economy Building Momentum into Second Half of the Year. Incoming data suggest that domestic economic activity was stronger than expected in the second quarter, paving the way for accelerated growth in the second half of the year. “Our housing forecast remains largely unchanged, with leading housing indicator pointing to continued improvement heading into summer,” said Fannie Mae Chief Economist Doug Duncan. “We expect to see strong sales, lean inventories, and rising confidence through the rest of the year, which should support increased home building activity and give an added boost to economic growth. Full story… http://www.fanniemae.com/portal/about-us/media/financial-news/2015/6275.html
* Foreclosure Inventory Drops to Lowest Level Since 2007. The national foreclosure inventory continued to drop and dipped to the lowest level since 2007, the latest First Look report from Black Knight said. The delinquency rate is down 3% from May and down nearly 16% from one year ago. Additionally, June’s 79,000 foreclosure starts mark the second lowest post-crisis volume. Full story… http://www.housingwire.com/articles/34561-black-knight-foreclosure-inventory-drops-to-lowest-level-since-2007
* CFPB Finalizes October 3 Effective Date for TRID. The Consumer Financial Protection Bureau (CFPB) issued a final rule moving the effective date of the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures Rule, to October 3. The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rule. The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. Full Story… http://www.consumerfinance.gov/newsroom/cfpb-finalizes-two-month-extension-of-know-before-you-owe-effective-date/

Have a productive week!

Jason


This Week in Real Estate: July 21, 2015

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My apologies for delivering This Week in Real Estate a day later than normal. It is hard to imagine in today’s age of how convenient and accessible technology is everywhere, that you find a place that has no cell service and no wi-fi connection, but my family and me found such a place this weekend. A fantastic week of reporting with respect to housing starts, builder confidence and foreclosure starts top the headlines in This Week in Real Estate. Below are a few of the highlights from the second full week in July that influence our business:

* Housing Starts in U.S. Surge to Second Highest Level Since 2007. U.S. housing starts rebounded strongly in June and building permits surged to a near eight-year high, pointing to a rapidly strengthening housing market. Groundbreaking increased 9.8 percent to a seasonally adjusted annual pace of 1.17 million units, the Commerce Department said on Friday. Permits for future home construction increased 7.4 percent to a 1.34 million-unit rate, the highest level since July 2007. A survey on Thursday showed builders’ confidence held at a more than 9-1/2-year high in July, suggesting that both permits and groundbreaking have scope to rise further. Full story… http://www.cnbc.com/2015/07/17/strong-us-groundbreaking-building-permits-boost-housing-outlook.html

* Builder Confidence Highest Since 2005. The NAHB/Wells Fargo Housing Market Index (HMI) reached 60 in July and along with the one-point upward revision to June’s index mark a high in the index not seen since November 2005. The HMI measures builder confidence in the market for newly built, single-family homes. Two of the three components of the index also rose to levels last seen in late 2005. The index of current sales rose one point from the June level to 66, topping almost 10 years of values below that level. The index for expected sales rose two points from June’s 69 to 71 also the highest in almost 10 years. The index for traffic fell one point to 43 from the six month high in June of 44. Full story… http://eyeonhousing.org/2015/07/builder-sentiment-reaches-new-high/

* U.S. Foreclosure Starts Come at 10-Year-Low. First-half foreclosure starts 2015 were at their lowest level in any year since RealtyTrac began tracking in 2006 – a 10-year low. RealtyTrac recently released its Midyear 2015 U.S. Foreclosure Market Report, which shows total number of U.S. properties with foreclosure filings down 13% from the previous 6 months and down 3 percent from the same time period in 2014. A total of 304,439 U.S. properties started the foreclosure process in the first half of the year, down 4 percent from a year ago and 18 percent below foreclosure starts in the first half of 2006 before the housing price bubble burst in August 2006. “U.S. foreclosure starts have not only returned to pre-housing crisis levels, they have fallen well below those pre-crisis levels and are still searching for a floor, down 4 percent from a year ago,” says Daren Blomquist, vice president at RealtyTrac. Full story… http://www.realtytrac.com/news/foreclosure-trends/midyear-2015-foreclosure-market-report/

Have a productive week!

Jason


This Week in Real Estate: July 13, 2015

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As the second half of the year gets under way the news This Week in Real Estate remains consistent with common first half themes – healthy consumer confidence, increased sales, distressed inventory levels continue to drop and a rate increase expected later this year. Below are a few of the highlights from the first full week in July that influence our business:

* Consumer Housing Attitudes Signal Healthier Purchase Market Ahead. Americans’ outlook toward the current home selling market and the future of home rental prices may bode well for purchase activity this year, according to results from Fannie Mae’s June 2015 National Housing Survey. In a response to a question about the timing of home sales, 52% of consumers in June said they believe now is a good time to sell. That’s the first time that figure has surpassed 50% in the history of Fannie Mae’s monthly National Housing Survey. At the same time, the share who said they expected home rental prices to go up in the next 12 months rose four percentage points to 59 percent, also an all-time survey high. With an increase in housing supply from those ready to sell, combined with higher rental cost expectations, more potential homebuyers may be encouraged to leave the sidelines.
Full story… http://www.fanniemae.com/portal/about-us/media/corporate-news/2015/6267.html

* New and Existing Home Sales Increase. The rate of new single-family home sales, as estimated by the Census Bureau, improved to a seasonally adjusted annual rate of 546,000 in May, the fastest pace in seven years and a 2.2% increase over April. New home inventory remained steady at 206,000. The months’ supply measure fell to 4.5, the lowest since June 2013. Low inventory and growing demand will support increases for single-family construction in the months ahead. Sales growth is occurring on the re-sale side of the market as well. NAR’s Pending Home Sales Index increased for the fifth straight month in June, rising to the highest level in nine years. This follows the NAR May existing home sales report, which increased to the highest pace in six years to a 5.35 million seasonally adjusted annual rate. The June sales rate was 5.1% higher in April and a 9.2% gain over May last year.
Full story… http://eyeonhousing.org/2015/07/eye-on-the-economy-new-and-existing-home-sales-increase/

* CoreLogic: April Distressed Sales Drop to Lowest Level Since 2007. Distressed sales – real estate-owned (REO) and short sales – made up 11.1% of total home sales in April, down 3 percentage points from April 2014 and down 1.5 percentage points from March. While distressed sales typically decrease month over month in April due to seasonal factors, this distressed sales share was the lowest from the month of April since 2007. Broken up, REO sales accounted for 7.4% and short sales made up 3.7% of total home sales in April. Additionally, the short sales percentage fell below 4% in mid-2014 and has remained stable since then. At its peak in January 2009, distressed sales totaled 32.4% of all sales, with REO sales representing 27.9% of that share. There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%. If the current year-over-year decrease in distressed sales share continues, the distressed sales share would reach that ‘normal’ 2-percent mark in mid-2017.
Full story… http://www.housingwire.com/articles/34428-corelogic-april-distressed-sales-drop-to-lowest-level-since-2007

* Yellen Reiterates Rates Likely To Increase This Year. Federal Reserve Chair Janet Yellen reaffirmed in a speech to the City Club of Cleveland that she still expects it will be appropriate later this year to take the first step to raise the federal funds rate and begin normalizing monetary policy. Back in May, Yellen said in a speech that the Fed is seeing widespread economic improvement and expects that improvement to continue. And if the economy improves as expected, she believes it will be “appropriate” for the Fed to raise the Federal Funds Rate this year. “My own outlook for the economy and inflation is broadly consistent with the central tendency of the projections submitted by FOMC participants at the time of our June meeting,” Yellen said.
Full story… http://www.housingwire.com/articles/34444-yellen-reiterates-rates-likely-to-increase-this-year

Have a productive week!

Jason


This Week in Real Estate: July 6, 2015

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This week marked the start of the second half of 2015 which begs the question: will the momentum of Q2 carry forward into Q3 and Q4? The Pending Home Sales Index suggests an affirmative yes to that question in This Week in Real Estate. Below are a few of the highlights from the first couple of days in July that influence our business:

* Price Gains Accelerating Again – Black Knight. Nationally the Home Price Index (HPI) is now within 7.6 percent of the peak value it reached in July 2006 of $268,000. Several states have already established new high-water marks for prices including Colorado and Texas which have done so nearly monthly for over a year. Among the largest metropolitan areas Austin, Dallas, Houston, and San Antonio all hit new peaks along with Columbus, Ohio, Denver, Honolulu, Nashville, San Francisco and San Jose. Both Boston and Portland, Oregon are now less than 0.75 percent away from doing so as well. Prices as measured by the HPI went up in every state from March to April, led by Washington with a 2.0 percent gain. Michigan and Colorado followed, each at 1.7 percent, Oregon at 1.6 percent, and both Minnesota and the District of Columbia at 1.3 percent. Full story… http://www.mortgagenewsdaily.com/06292015_black_knight_hpi.asp

* Pending Home Sales Continue Momentum. The Pending Home Sales Index increased for the fifth straight month to the highest level in over nine years. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors, increased .9% in May to 112.6, and climbed to 10.4% above the May level a year ago. It is now at its highest point since April 2006 when it hit 113.7. Regionally, the May PHSI increased 6.3% in the Northeast and 2.2% in the West. However, the May PHSI declined slightly by .6% in the Midwest and .8% in the South. Year-over-year, the PHSI was up 13% in the West, 10.6% both in the Northeast and South, and 7.8% in the Midwest. Full story… http://eyeonhousing.org/2015/06/pending-sales-continue-momentum/

* Housing Prices – Slowing to Sustainable Growth. The Federal Housing Finance Agency (FHFA) and the Standard and Poor’s/Case-Shiller recently released their respective home price indices for April. House prices have been recovering since reaching the bottom of the downturn in 2012. The annualized growth rate of the FHFA price index has been volatile month-to-month but provides a detailed measure of the pre-boom stability, boom period acceleration, subsequent collapse and recovery of prices. The post-crash growth rate reached a double digit peak in 2013, but has decelerated to more sustainable levels since then. The annual growth rate is 3.4% in April, comparable with the 4.1% in March and lower than the 8.6% in February. House prices reported by the Standard and Poor’s/Case-Shiller show the same dynamics as the FHFA index, sharply rising prices during the boom followed by steep declines and finally recovery beginning in 2012. Full story… http://eyeonhousing.org/2015/06/housing-prices-slowing-to-sustainable-growth/

* Cash Sales Fall to Six Year Low; Distressed Sales Plummet. Only one out of four single family home and condo sales in May – 24.6 percent – were all-cash purchases, down from 30.4 percent a year ago to the lowest level since November 2009. The cash sales share in May was close to its long-term average going back to January 2000 of 24.8 percent and well below its recent peak of 42.2 percent in February 2011. Distressed sales also fell to a new low of 10.5 percent of all sales in May, down from 18.3 percent a year ago to the lowest level since January 2011. “As housing transitions from an investor-driven, cash-is-king market to one more dependent on traditional buyers, sales volume has been increasing over the last few months and is on track in 2015 to hit the highest level we’ve seen since 2006,” said Daren Blomquist, vice president at RealtyTrac.
Full story… http://www.realtytrac.com/news/foreclosure-trends/may-2015-u-s-home-foreclosure-sales-report/

Have a productive week!

Jason


This Week in Real Estate: June 29, 2015

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Good Morning!

The headliner This Week in Real Estate were the strong sales numbers reported in May for both new and existing homes. We are definitely in the middle of the strongest selling season we have experienced in the past six or seven years. Below are a few of the highlights from the final full week of June that influence our business:

* Sales of Existing U.S. Homes Reach Their Highest Level Since 2009. More first-time homebuyers took the plunge in May, helping catapult U.S. sales of previously owned properties to their highest level since 2009. Closings on existing houses rose 5.1 percent to a 5.35 million annualized rate. First-time buyers accounted for 32 percent of purchases during the month, matching the highest share since September 2012. Excluding November 2009, when demand was bolstered by the expiration of a federal government first-time homebuyer tax credit, sales last month were the strongest in more than eight years. Full story… http://www.bloomberg.com/news/articles/2015-06-22/sales-of-existing-u-s-homes-rose-in-may-to-highest-since-2009

* Sales of New U.S. Homes Rise to Highest Level in Seven Years. Purchase of new homes in the U.S. rose in May to the highest level in seven years, signaling the industry is gaining momentum heading toward the second half of the year. Sales climbed 2.2 percent to a 546,000 annualized pace, exceeding all forecasts in a Bloomberg survey of economists and the most since February 2008, Commerce Department data showed Tuesday in Washington. May 2015 sales were an astounding 19.5 percent higher than in May 2014. While housing starts declined 11.1 percent in May to a 1.04 million annualized rate, that followed a revised 1.17 million pace in April to cap the best back-to-back readings since late 2007. Permits for future projects rose to the highest level in almost eight years. Full story… http://www.bloomberg.com/news/articles/2015-06-23/sales-of-new-u-s-homes-increase-to-highest-level-in-seven-years

* OCC: Mortgage Performance Better in 1Q15. The performance of first-lien mortgages serviced by eight national banks improved during the first quarter of 2015, according to the Office of the Comptroller of the Currency’s quarterly report on mortgage performance. The OCC Mortgage Metrics Report, First Quarter 2015, showed 94.2% of mortgages included in this report were current and performing at the end of the quarter, compared with 93.1% a year earlier. The percentage of mortgages that were 30 to 59 days past due was 1.9% of the portfolio, a 7.0% decrease from a year earlier. Seriously delinquent mortgages made up 2.6% of the portfolio, a 16.4% decrease from a year earlier.
Full story… http://www.housingwire.com/articles/34312-occ-mortgage-performance-better-in-1q15

* FNC Index: April Prices Post Largest Seasonal Gain Since 2005. The latest FNC Residential Price Index (RPI) shows U.S. home prices climbed rapidly since March, as strong sales and limited inventory relative to demand continue to be the key narratives highlighting the spring housing market countrywide. April’s gain marks the largest March-to-April increase since spring 2005. Full story… http://www.fncresidentialpriceindex.com/ViewFile.aspx?ref=pr_95

Have a productive week!

Jason


This Week in Real Estate: June 22, 2015

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Good Morning!

From a practitioner’s standpoint the best news This Week in Real Estate is the CFPB’s proposal to delay the effective date of TRID to October 1. There continues to be a lot of positive momentum as we move through our peak selling season. Below are a few of the highlights from the third week of June that influence our business:

* Builder Confidence Hits Yearly High in June. Builder confidence in the market for newly built, single family homes in June rose five points to a level of 59 on the NAHB/Wells Fargo Housing Market Index (HMI) released Monday. This is the highest reading since September 2014. Two of the HMI’s component indices reached the highest levels in nearly a decade. “The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe.  Full story… http://nahbnow.com/2015/06/builder-confidence-hits-yearly-high-in-june/?utm_source=newsletter&utm_medium=email&utm_campaign=mmb0615

* Aggregate Market Value of Housing Nearing 4th Quarter 2006 Peak. The aggregate market value of owner-occupied housing hit its high point in the last part of 2006, reaching a high-water mark of $22.5 trillion. Aggregate market value fell from that point until the fourth quarter of 2011, when it reached $16.1 trillion. Homeowner equity fell by $6.2 trillion to just 40% of aggregate value, as home values declined at the same time the amount of outstanding mortgage debt barely changed. By first quarter of 2015, the total market value of housing recovered to $21.1 trillion, 6% below the peak valuation. Full story… http://www.housingwire.com/articles/34245-aggregate-market-value-of-housing-nearing-4q06-peak

* CFPB Proposes to Delay TRID Date to October 1. The Consumer Financial Protection Bureau announced on Wednesday a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure (TRID) rule until October 1. It was originally set to go into effect on August 1. These new forms consolidate the TILA-RESPA forms and are meant to give consumers more time to review the total costs of their mortgage. The Loan Estimate is due to consumers three days after they apply for a loan, and the Closing Disclosure is due to them three days before closing. The public will have an opportunity to comment on this proposal and a final decision is expected shortly thereafter.
Full story… http://www.housingwire.com/articles/34226-cfpb-moves-trid-effective-date-to-oct-1

Have a productive week!

Jason

 

 


This Week in Real Estate: June 15, 2015

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Good Morning!

The most popular word to describe consumer’s feelings This Week in Real Estate is optimistic. There is a lot of positive momentum as we move through our peak selling season. Below are a few of the highlights from the second week of June that influence our business:

* Americans’ Housing Optimism Gains More Momentum. Consumer attitudes about the housing market showed marked improvement last month, according to results from Fannie Mae’s May 2015 National Housing Survey. Among those surveyed, the share who believe now is a good time to sell home continued its steady climb, reaching an all-time survey high in May – six percentage points higher than at the same time last year. Additionally, those saying they would prefer to buy rather than rent a home on their next move increased another three percentage points to 66 percent. Full story… http://www.fanniemae.com/portal/about-us/media/corporate-news/2015/6259.html

* 217,726 Reasons to Buy a Home Now! With interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today’s market have become very steep, according to the inaugural Opportunity Cost Report released by realtor.com. The report estimates that, based on today’s dollars, the average purchaser would accumulate $217,726 in increased wealth over a 30-year period. The cost, assuming projected increases in mortgage rates and continuing price appreciation, of waiting 1 year to buy is $18,672 and waiting 3 years to buy is $54,879. Full story… http://www.keepingcurrentmatters.com/2015/06/10/217726-reasons-to-buy-a-home-now/

* Households Remain Broadly Optimistic about Housing Market; Most Renters Want to Own. The Federal Reserve Bank of New York recently released the 2015 SCE Housing Survey. The survey revealed that most current renters would prefer owning and that 61.9% of them plan to buy a home within the next five years. 68.3% stated they would prefer owning (45.6% saying they ‘strongly’ prefer owning). When asked at what point in the future do they think they will own a primary residence: 8.2% said within a year, 15.3% said in 1 to 2 years and 38.4% said between 3 to 5 years. Of the 68.3% who would prefer to own, 2 out of 3 cited difficulty in getting a mortgage for the reason they do not own.
Full story… http://www.newyorkfed.org/microeconomics/sce/downloads/data/2015-SCE-Housing-Survey.pdf

* REO Sales Share Below One-Third of Peak. At the peak in January 2009 distressed sales totaled 32.4 percent of all sales and REO sales for 27.9 percent. CoreLogic said on Monday that short sales and sales of owned real estate (REO) fell 3.2 percentage points from March 2014 to March 2015. REO properties accounted for 8.4 percent of home sales in March and short sales made up 3.7 percent for a total distressed property share of 12.1 percent. CoreLogic said there will always be some amount of distress in the housing market but the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share is maintained, that share would reach its “normal” 2 percent mark in mid-2017. Full story… http://www.mortgagenewsdaily.com/06082015_corelogic_distressed_sales.asp

Have a productive week!

Jason

 

 


This Week in Real Estate: June 8, 2015

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Good Morning!

The question every economist is asking This Week in Real Estate, is after a better than expected May jobs report, will the Fed raise rates this year—June, September, early 2016? Below are a few of the highlights from the first week of June that influence our business:

* The Employment Situation in May—Better Than You Think. A strong jobs report for May adds strength to the argument that the weakness in March was an aberration. The Bureau of Labor Statistics (BLS) reported that payroll employment expanded by 280,000 in May. Job gains in March were revised upward by 34,000 to 119,000 and April was revised downward 2,000 to 221,000. The best news in the report is the uptick in the unemployment rate. This is actually a strengthening rather than weakening of the labor market. The increases in the unemployment rate in January and May were based on strong job gains but stronger gains in the labor force. At 5.5% the unemployment rate is at or near what some economists consider a normal level, consistent with a dynamic labor force and job switching, rather than sustained unemployment. “Today’s report showed the U.S. labor market has tremendous momentum. All those factors that parked a weak jobs number in March were short-term,” said Andrew Chamberlain, chief economist at Glassdoor. Full story… http://eyeonhousing.org/2015/06/the-employment-situation-in-may-better-than-you-think/

* Home Prices Ignoring Predictions. For some time conventional wisdom has held that home price increases are slowing and would continue to do so, but the CoreLogic Home Price Index (HPI) has joined the S&P Down Jones Case-Shiller Index in belying that prediction. Its HIP has now posted larger year-over-year increase in prices every month but one since the beginning of 2015. “For the first four months of 2015, home sales were up 9 percent compared to the same period a year ago,” said Frank Nothaft, chief economist for CoreLogic. “One byproduct of the increased sales activity is rising house prices, and, as a result, month-over-month home prices are up almost 3 percent for April 2015 and up more than 6 percent from a year ago.”
Full story… http://www.mortgagenewsdaily.com/06022015_corelogic_hpi.asp

* Average Down Payment Drops to Three Year Low of 14.8% for U.S. Home Purchased in the First Quarter. The average down payment for single family homes, condos and townhomes purchased in the first quarter was 14.8 percent of the purchase price, down from 15.2 percent in the previous quarter and down from 15.5 percent a year ago to the lowest level since Q1 2012. The Q1 2015 U.S. Home Purchase Down Payment Report also shows that the average down payment for FHA purchase loans originated in the first quarter was 2.9 percent of the purchase price while the average down payment for conventional loans was 18.4 percent of the purchase price. “Down payment trends in the first quarter indicate that first time homebuyers are finally starting to come out of the woodwork, albeit gradually,” said Daren Blomquist, vice president at RealtyTrac. The share of low down payment loans – defined as purchase loans with a loan-to-value ration of 97 percent or higher, which would mean a down payment of 3 percent or lower—was 27 percent of all purchase loans in the first quarter, up from 26 percent in the fourth quarter and also 26 percent a year ago to the highest share since Q2 2013. Full story… http://www.realtytrac.com/news/home-prices-and-sales/q1-2015-u-s-home-purchase-down-payment-report/

* Owners Tend to Overvalue Homes. A new statistical study, published in the Journal of Housing Economics, found that homeowners on average “overestimate the value of their properties by about 8 percent.” Tapping into federal databases, researchers concluded that overvaluations are likely tied to erroneous owner estimations of the capital gains they’ve accumulated in the house.
Full story… http://www.seattletimes.com/business/real-estate/owners-tend-to-overvalue-homes/

Have a productive week!

Jason

 

 


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