equity home loan

Chicago, IL - December, 2012

The housing market has continued to show improvements over the past several months, with home prices increasing across the country and foreclosures decreasing. Now, Fannie Mae's November 2012 National Housing Survey shows that there is improving consumer attitudes toward the housing market.

The improvements that have been shown in the survey could push the housing market toward further recovery over the next few years, which would support overall economic growth.

The results show that there has been significant movement across many of the indicators in the housing market. According to respondents, now is a better time to sell a home, with the number of Americans agreeing increasing by 5 percentage points in November to 23 percent.

"Consumer attitudes toward both the economy and the housing market continue to gather momentum, with many of our 11 key National Housing Survey indicators at or near their two-and-a-half-year highs," said Doug Duncan, senior vice president and chief economist of Fannie Mae. "On the housing front, attitudes about the current selling environment continue to improve, with a significant increase in those saying it would be a good time to sell. This growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy."

More Americans believe economy's on the right track
Duncan added that consumers who believe that the economy is on the right track toward recovery increased to 44 percent while consumers who said it's on the wrong track has decreased to 50 percent, which is the smallest gap since the survey was created in June of 2010. The survey also showed that the percentage of respondents who expect mortgage rates to increase jumped 4 percentage points to 14 percent.

According to Corelogic, prices for homes declined by 0.2 percent from September to October, which was the second drop after six straight months of increases. Even though home prices declined month-over-month, they showed increases on a year-over-year basis, jumping by 6.3 percent in October. The largest increases in home prices were seen in Arizona and Hawaii, which reported a 21.3 and 13.2 percent rise, respectively.

Considering the housing market is beginning to show more consistent improvements, more first-time home buyers may consider it a perfect time to secure financing for the home of their choice.

Selasa, 11 Desember 2012

The ins and outs of credit scores

December, 2012

With the holiday season quickly approaching, many Americans are looking to purchase presents for their loved ones, but also keep their credit score in the best condition. Considering the number of Americans who will use their credit cards during the holiday season, financial advisors are giving consumers keys to understanding their credit scores and methods of keeping them intact in case they want to make a new home purchase in 2013.

Banks and other financial institutions have been using FICO scores for years in order to determine how much of a risk borrowers are. FICO scores, named after the company that created it, Fair Isaac & Company, typically range between 300 and 850, with 300 being the lowest and 850 being the highest.

Close to 60 percent of people have credit scores of 700 and above and credit experts suggest that a 720 or above is the best score to have to be attractive to lenders because it would place them in the same category as people with a score of 800 or 820.

Ray Martin, financial expert, recently broke down exactly how a FICO score is determined, stating that 35 percent of the score depends on payment history, 30 percent depends on amount owed, 15 percent on length of credit history, 10 percent on new credit and another 10 percent on types of credit in use.

"Opening several new credit accounts in a short period of time can lower your credit score," Martin added. "Also multiple credit report inquiries can represent a greater risk, but this does not include any requests made by you, an employer or by a lender who does so when sending you an unsolicited, "pre-approved" credit offer. Also, to compensate for rate shopping, the score counts multiple inquiries in any 14-day period as just one inquiry."

Keeping a close watch on credit scores
With the number of Americans expected to use their credit cards for presents on the holidays, representatives from FreeCreditScore.com encouraged consumers to also be cautious of identity thieves while also keeping an eye on their own credit score.

"Understanding how shopping behavior can affect credit scores during the holiday season leads to better buying decisions," said Ken Chaplin, senior vice president of marketing for freecreditscore.com. "We offer a variety of articles and tools on freecreditscore.com that help educate people about credit information, which can help holiday shoppers stay on the financial 'nice' list this year."

Kamis, 06 Desember 2012

Number of mortgage applications increases

The Federal Savings Bank | VA and FHA Home Loans

The Federal Savings Bank
December, 2012

CHICAGO (The Federal Savings Bank) - According to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending November 30, mortgage applications increased from one week earlier.

The statistics include an adjustment for the Thanksgiving holiday, showing that the housing market is continuing to make considerable strides toward a recovery. The Market Composite Index, which is a measure of mortgage loan application volume, jumped 4.5 percent on a seasonally adjusted basis from a week earlier while the index increased 49 percent compared to the previous week on an unadjusted basis.

The refinance share of mortgage activity also increased, to 83 percent of total applications from 81 percent the previous week, while the HARP share of refinance applications was boosted from 26 percent the previous week to 27.

Mortgage interest deduction
More homeowners are also now beginning to take advantage of the mortgage interest deduction, which is one of the most popular provisions of the tax code. Even though the number of Americans taking advantage of the deduction is increasing, the Internal Revenue Service reported that only a quarter of tax filers claim it.

"This is going to have an impact on the real estate market, especially as we're just coming out of a recession," said Mark Feinroth, a lobbyist for the Maryland Association of Realtors. "It's a particularly bad time to bloody the nose of the home industry again."

Americans who use the deductions vary across the country, ranging from a high of 37 percent of taxpayers in Maryland to as low as 15 percent in North Dakota and West Virginia, according to a USA Today analysis of IRS data.

The government is now dealing with what some are calling a possible 'fiscal cliff,' which will occur at the end of the year once tax cuts that were imposed under former President George W. Bush expire. Mortgage interest deductions are part of the deal that government leaders are attempting to settle on, and is a major issue as a result of the deduction costing the treasury $108 billion a year.

Although there is uncertainty with the current state of the housing market, prices are still at historically low rates, which should encourage first-time home buyers to consider purchasing the home of their choice.

Rabu, 05 Desember 2012

Home price index increases for eighth straight month

December, 2012

CoreLogic, one of the leading providers of information, analytics and business services, recently released its October CoreLogic Home Price Index report, showing home prices have increased nationwide on a year-over-year basis.

The home prices that increased in October included distressed sales, jumping by 6.3 percent when compared to October 2011, representing the largest increase since June 2006 and the eighth straight increase in home prices on a year-over-year basis.

“The housing recovery that started earlier in 2012 continues to gain momentum ,” said Mark Fleming, chief economist for CoreLogic. “The recovery is geographically broad-based with almost all markets experiencing some appreciation. Sand and energy states continue to experience the most robust appreciation and some judicial foreclosure states are even recording increasing prices.”

On a month-over-month basis, home prices were down by 0.2 percent in October compared to September.

More declines are expected month-over-month in home prices as the housing market enters the offseason, and many potential home buyers put off finding a house until the spring.

“We are seeing an ongoing strengthening of the residential housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “Reduced inventories and improving buyer demand are contributing to stability and growth in home prices which is essential to the long term health of the housing market and the broader economy.”

Housing prices are expected to continue increasing on a year-over-year basis, with November expected to come in at a 7.4 percent increase from November 2011, also increasing by 0.5 percent month-over-month.

The five states that had the highest home price appreciation were Arizona, Hawaii, Idaho, Nevada and North Dakota. The states with the greatest home depreciation were Illinois, Delaware, Rhode Island, New Jersey and Alabama.

Construction spending increase
Construction spending is also increasing across the country, which could encourage first-time home buyers to dive into the market for a newly remodeled house. According to the Commerce Department, construction spending increased by 1.4 percent in October, which was the largest gain since a jump of 1.7 percent in May.

The increase brought construction spending to a seasonally adjusted annual rate of $872.1 billion, which is 17 percent higher than a 12-year low that was reported in February.

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Jumat, 30 November 2012

Homebuilder confidence continues to increase

November, 2012

The National Association of Home Builders/Wells Fargo index of builder confidence recently increased to the highest level that has been reported since May 2006, jumping from 41 to 46 in October.

Recent numbers showed that confidence among homebuilders in the country increased in November to a six-year high.

“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” Barry Rutenberg, chairman of the National Association of Home Builders and a builder from Gainesville, Florida, said in a statement. “Many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates.”

The index last reached a level that indicates negative sentiments about the housing market in April 2006. With more homebuilders looking at the housing market favorably and possibly building more homes over the next couple years, now is a great time for first-time home buyers to purchase a home in the state of their choice.

While homebuilder confidence is showing improvements, pending home sales also increased in October to the highest level its been in more than five years.

"Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West," said Lawrence Yun, NAR chief economist. "The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West."

With the housing market continuing to show signs of improving, more Americans might take advantage and move into one of the areas where housing prices are the lowest in the country. According to Business Insider, Medford, Oregon, is one the best housing markets that Americans should consider in the next five years.

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Selasa, 27 November 2012

Predictions for next year's housing market

December, 2012

The housing market is beginning to pick up its pace from the previous few years in which the recession hobbled the economy. With the last couple months resulting in improvements for the housing market, real estate experts at RealtyPin recently released predictions for what the organization believes will happen with the housing market in 2013.

One of the predictions made by RealtyPin is that Americans will benefit from years of underbuilding. The country has experienced years of a surplus of vacant houses, which was worsened during the recession. Once the recession began, 3 percent of the nation's existing homes were vacant, which was an all-time high for a figure that is normally about 1.5 percent.

As of mid-November, the vacancy rate had decreased to 2.1 percent. Since the vacancy rate has been so high, many homebuilders haven't had the opportunity to build any new homes, which will result in existing homeowners having an easier time selling their houses in 2013 since they won't have anything new to compete with.

Another prediction made by RealtyPin is that rent prices will hit a plateau. While rent is at all-time highs in some areas of the country, mortgages have decreased, making owning a home a more attractive option for some Americans.

Landlords have taken advantage of tenants recently by charging high prices for rent because they're aware that many Americans are hesitant to jump into the housing market and purchase the home of their choice, but many renters might soon have no choice since mortgages have decreased to be cheaper than rent in some areas of the country.

RealtyPin also suggested that quantitative easing will backfire. The aim of the Federal Reserve's Quantitative Easing plan is to make sure interest rates are kept low, which has been a working plan over the past couple years.

Federal Chairman Ben Bernanke has expressed that he wants to keep interest rates low until 2015, which could cause some first-time home buyers to delay purchasing a house, but low prices should be taken advantage of immediately since home prices will continue to increase during the recovery from the recession.

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Senin, 26 November 2012

Number of homeowners with underwater mortgages decreases

November, 2012

According to the third quarter Zillow Negative Equity Report, negative equity decreased in the the quarter, with 28.2 percent of all homeowners reporting having underwater mortgages.

The 28.2 percent of homeowners who reported they were underwater on their mortgages decreased from the 30.9 percent that was reported in the second quarter of the year, signaling improvement in the housing market.

After years of showing historically low numbers, the housing market is finally beginning to show signs of life, as home prices and sales are beginning to increase across the country.

This is also the first time that negative equity has decreased below 30 percent in the Zillow report and the figures were the largest quarter-over-quarter decrease in negative equity since Zillow revised its way of determining negative equity in the first quarter of 2011.

"The fall in negative equity rates means homeowners have additional options for refinancing or selling their homes," said Zillow Chief Economist Dr. Stan Humphries. "But while we're moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing re-sale market despite the desires of their owner. The housing market has found real momentum of its own, but is not immune from shocks to the broader economy."

Humphries added that if negotiations focused on resolving the fiscal cliff aren't inspiring confidence in investors and consumers, recent home value increases and falling could stall.

Out of the 30 largest metropolitan areas that are covered by the Zillow report, the five that had the largest declines in negative equity were Phoenix, Las Vegas, Denver, Sacramento, California, and Orlando.

A large portion of the decline in negative equity is credited to U.S. home values rising by 1.3 percent in the third quarter of the year compared to the second quarter, to a median value of $153,800.

More than 14 million U.S. homeowners that have a mortgage in negative equity owed more on their mortgage than their homes were worth, which has sparked the government to combat these cases to make sure that first-time home buyers receive lower rates through FHA loans that require a lower down payment than others.

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Rabu, 21 November 2012

Housing market continuing improvement

Housing market continuing improvement
The Federal Savings Bank
November 20, 2012

According to the recently released October National Housing report from RE/MAX, which is a survey of MLS data in 52 metropolitan areas, there was a continuation of the positive trends that have been experienced for the housing market over the past year.

The report showed that closed transactions increased by 17.8 percent over October 2011, and the median home price increased by 2.1 percent over the median that was experienced last October.

Falling inventory has been one of the significant concerns of those in the housing industry. The number of homes that were put up for sale decreased in October to 28.9 percent than it was last October. The lower number of inventory has resulted in prices increasing, but has also presented a challenge for many home buyers because multiple offers are being put up on a lower number of homes, causing bidding wars. With the housing market improving, first-time home buyers should take advantage of the low prices.

"As we enter the fourth quarter, 2012 is looking like the turn-around year for housing, with significant increases in sales and prices," said Margaret Kelly, CEO of RE/MAX. "However, we recognize that this recovery is still fragile and dependent on more reasonable lending and regulation. If qualified buyers can obtain mortgages and more inventory comes to market, this recovery could become even stronger next spring."

The October RE/MAX National Housing Report showed that home sales were 17.8 percent higher than they were in October 2011, representing the 16th consecutive month that sales were higher than the same month in the previous year.

Sales of homes were also up by 5.4 percent compared to the previous month, which housing experts say is an impressive performance considering the seasonal patterns typically see a slight drop from September to October.

The median sales price for homes that were sold in October was $158,900, which represents a 3.7 percent decrease from the median price that was reported in September. The $158,900 was also a 2.1 percent increase from October 2011, marking the ninth straight month that higher prices were seen compared to the same time last year.

Green building has also become more popular recently, which is encouraging more homeowners to look at energy-saving homes to reduce their carbon footprint on the environment.

Tagged As : First Time Homebuyers

Selasa, 20 November 2012

Home sales increase in October

Federal Savings Bank

November, 2012

According to the National Association of Realtors, sales of existing home increased during October despite the damage caused by Hurricane Sandy, which ripped across the east coast and damaged thousands of homes.

Total existing-home sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops. Existing home sales increased by 2.1 percent to a seasonally adjusted annual rate of 4.79 million during October from a downwardly revised 4.69 million in September.

In addition, existing-home sales are 10.9 percent above the 4.32 million-unit level in October 2011.

"Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country," said Lawrence Yun, NAR chief economist. "We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions."

While existing-home sales increased during October, the national median home price for all housing types increased to $178,600 in October, which was an 11.1 percent increase compared to the same time last year. The increase in median home price marked the eighth consecutive monthly year-over-year increase, which hasn't been experienced since October 2005 to May 2006.

"Inflationary pressures are expected to build during the next two years," said NAR President Gary Thomas. "As a result, mortgage interest rates will also rise with inflation. Buyers who are currently held back by tight mortgage credit standards should work to improve their credit scores so they'll be able to qualify for a mortgage while conditions are still favorable."

Distressed homes, which include foreclosures and short sales that were sold at deep discounts, accounted for 24 percent of October sales. Twelve percent of the distressed homes sold were from foreclosures and the other 12 percent was from short sales. Foreclosures sold at an average discount of 20 percent below market value during October while short sales were discounted by 14 percent.

According to Freddie Mac, the national average commitment rate for a 30-year fixed-rate mortgage decreased to 3.38 percent in October from 3.47 percent in September.

Green building is also becoming more popular amongst Americans, which might encourage more first-time home buyers to secure a home that reduces their carbon footprint on the environment.

Tagged As : First Time Homebuyers

Rabu, 14 November 2012

Housing market improvements expected through 2014

November, 2012

According to predictions recently made by real estate experts at the 2012 Realtors Conference and Expo, the housing market recovery is right around the corner, as the sector is expected to continue improving in the coming years.

The housing market is expected to improve, but only if there are no further limitations on the availability of mortgage credit or a fiscal cliff, which was discussed by officials at the conference.

"Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases," said Lawrence Yun, chief economist of the National Association of Realtors. "Disruption from Sandy likely will be temporary, notably in New Jersey and New York, but the market is likely to pick up speed within a few months with the need to build new homes in damaged areas."

Yun predicted that there wouldn't be any signs of inflation in 2013, but projects it to be between 4 and 6 percent by 2015.

Coupled with rising demand, there has been an ongoing decline in housing inventory, which Yun expects is leading to significantly higher home prices.

"Real estate will be a hedge against inflation, with values rising 15 percent cumulatively over the next three years, also meaning there will be fewer upside-down home owners," Yun said. "Today is a perfect opportunity for moderate-income renters to become successful home owners, but stringent mortgage credit conditions are holding them back."

The national median existing-home price is expected to increase by 6 percent to $176,000 for the remainder of 2012. The number is expected to increase another 5.1 percent next year to $185,200, which is comparable to the expected gains experienced in 2014.

Existing-home sales are also expected to increase by 9 percent to $4.64 million, which will be followed by an 8.7 percent increase to $5.05 million in 2013.

TransUnion also recently reported that national mortgage loan delinquency rates continued to decrease in the third quarter, possibly encouraging more first-time home buyers to pursue securing a new home since the housing market is showing signs of improvement.

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Jumat, 09 November 2012

Mortgage rates still near record lows

November, 2012

Those who are interested in making a new home purchase might be encouraged to know that the mortgage rates have settled near record lows and now is a better time than ever to take advantage of the housing market.

Freddie Mac recently released the results of its Primary Mortgage Market Survey, which showed fixed mortgage rates continue to hover near record lows and have been there over the past six weeks. Last year, the 30-year fixed-rate mortgage averaged 3.99 percent, dropping below 4.00 percent for the first time since 1971, when Freddie Mac first began reporting its weekly mortgage rates survey.

The 15-year fixed-rate mortgage this week also averaged 2.69 percent with an average 0.7 point, a decrease from the previous week when it averaged 2.70. The 15-year fixed-rate mortgage last year at the same time was reported at an average of 3.30 percent.

"Mortgage rates remained near record lows following the employment report for October," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The economy added 171,000 jobs, above the market consensus forecast, and the two prior months were revised up a combined 84,000. The Labor Department also reported that the unemployment rate ticked up to 7.9 percent and that average hourly wages were unchanged."

While mortgage rates are still hovering near record lows, metro area home prices have continued to show strength, recovering from the downturn that was experienced during the recession.

According to the latest quarterly report from the National Association of Realtors, growth in metro area median home prices increased in the third quarter of the year. The median existing single-family home price increased in 120 out of 149 metro statistical areas based on closing in the third quarter compared to numbers reported at the same time in 2011.

Lawrence Yun, NAR's chief economist, reported that housing inventories have continued to decrease from a record that was set in the summer of 2007. He added that his organization expects normal appreciation patterns in 2013, but there is a risk of price acceleration if builders are unable to increase supply in order to meet demands.

The improvement in the housing market could be a result of unemployment numbers being under 8 percent for the first time in nearly four years, currently standing at 7.9 percent, according to the U.S. Bureau of Labor Statistics.

Tagged As: First Time Home Buyers

Kamis, 08 November 2012

How refinancing affects your credit