Housing market affected by Hurricane Sandy

Housing market affected by Hurricane Sandy

The Federal Savings Bank

October, 2012

Hurricane Sandy is the biggest tropical gale to hit the Atlantic seaboard, according to Bloomberg. Although the storm has subsided, many Americans are expected to feel the effects of the damage for months to come, especially those who have sustained damage to their homes.

The housing market has shown significant improvements over the past few months, but the effects of the hurricane could cause the industry to face setbacks from flooding and property damage.

The storm affected homes along the east coast, which account for one out of every five real estate sales in the country, also affecting inland areas with flooding and blackouts. Transactions were put on hold by lenders, which might create a problem when the numbers for the housing market along the east coast are released for the month.

“We’ll definitely see lower numbers in new sales and new applications,” said David Stevens, president of the Mortgage Bankers Association. “We do expect to see lenders put a freeze on properties across the northeast on the shoreline until they can be inspected and assessed for damages.”

According to a report by CoreLogic, a mortgage software and data firm in Irvine, California, there is almost $88 billion of homes in seven states that are at risk of damage. New York accounts for the property damage that could be reported since the state has $35.1 billion of property in harm's way while New Jersey has $22.6 billion and Virginia has $11.3 billion.

“Given the magnitude of the storm there will be some impact on performance but more so on smaller properties, to the extent there is structural damage to the property and they require significant capital expenditures,” said Deutsche Bank AG debt analyst Harris Trifon to Bloomberg.

U.S. airlines were was also forced to cancel flights while the U.S. stock trading was closed for two days, marking the first back-to-back shutdown for weather since 1888.

First-time home buyers who were looking along the east coast should not be discouraged from purchasing a home in the area, as home prices are still more affordable than they've been in previous years as a result of the housing market improving, which is made evident by the continued rise in prices recorded by the S&P Dow Jones Indices.

* Here are your most common questions:

- What if I don't have a big down payment ?

- How much house can I afford?

- How do I select the right Realtor?

- How to write a strong purchase offer?

- What does Pre-Approved mean?!

Bailout less than expected

Bailout less than expected

The Federal Savings Bank

October, 2012

Fannie Mae and Freddie Mac could begin paying back money that was borrowed from taxpayers sooner than previously expected as a result of the improvements in the housing market.

A report was recently released by the Federal Housing Finance Agency, Fannie Mae and Freddie Mac's federal regulator, showing the two companies are estimated to pay between $32 billion and $78 billion to the U.S. Treasury through 2015, which is much earlier than expected.

Predictions have assumed that the companies would ultimately cost taxpayers $76 billion by the end of 2015, which is a large decrease from the current debt of $142 billion.

Last year, the government estimated that the debt would decrease to $124 billion by 2014 and the latest predictions are significantly better than those that were issued a year ago as a result of home prices showing better numbers, which has improved the mortgage-finance companies' bottom lines. The Obama Administration and FHFA in August remodeled the method used for the companies to repay their debts to the government.

The two companies will no longer pay a 10 percent dividend on the total money they have received from the U.S. Treasury, but will send their profits to the Treasury in quarters when they turn a profit. They also won't be required to pay dividends in periods where they report losses.

With home prices improving and more advancements being made in the housing market, more first-time home buyers might dive into putting a down payment on a home before prices continue to increase. The past couple years, the housing market has been tailored toward buyers who had great credit, as lenders became more strict on their standards and home prices continued to sink lower.

The housing market recently hit a new high in September, as construction started to increase significantly. Construction starts in the month were at an 872,000 annualized rate, which is a 15 percent month-over-month increase and a 35 percent increase year-over-year.

"As consumer confidence rises and jobs return, more local markets and more consumers will join the buyer market and I expect housing construction to continue a modest but fairly steady rise throughout 2013 and into 2014," said David Crowe, chief economist at the National Association of Home Builders in a blog post.

Here are your most common questions:

- What if I don't have a big down payment ?

- How much house can I afford?

- How do I select the right Realtor?

- How to write a strong purchase offer?

- What does Pre-Approved mean?!

Builder confidence increases in October

Builder confidence increases in October

The Federal Savings Bank

October, 2012

According to the recently released National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence increased in the market for newly built, single-family homes category in October, marking the sixth straight month of gains.

The latest gain of one point brought the index to a score of 41, which is the strongest level its been since June of 2006.

"The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” said NAHB Chief Economist David Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”

The survey was taken from the monthly survey that NAHB has conducted for the past 25 years, gauging builder perceptions of single-family home sales and sales expectations for the next six months. Home builders can rate the traffic of prospective buyers as "high to very high," "average" or "low to very low."

Scores from every component are then used to calculate a seasonally adjusted index where any number over 50 indicated that more homebuilders view the condition of the sales market a good than poor.

"The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” added NAHB Chief Economist David Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”

Builder confidence continued to show increases in three out of four regions in October, including the Midwest, South and Western areas of the country.

First-time home buyers who are interested in getting a newly-built home might be in luck considering the current state of the housing market nationally. Lower prices have led to more Americans being able to afford homes across the country, turning the housing industry into a buyer's market.

First Time Home Buyers!

Mortgage rates still down as construction increases

Mortgage rates still down as construction increases

The Federal Savings Bank

October, 2012

According to the recently released results of the Primary Mortgage Market Survey, fixed rate mortgage rate averages were slightly lower for the week ending October 18, with a 30-year fixed rate mortgage averaging 3.37 percent.
The 30-year fixed-rate mortgage was just above its all-time record low of 3.36 percent while the 15-year decreased to an all-time record low of 2.66 percent.
"Mortgage rates remained more or less unchanged this week as home construction builds up steam," said Frank Nothaft, vice president and chief economist of Freddie Mac. "Construction on single-family homes jumped to an annualized rate of 11 percent in August, the strongest pace since August 2008. Over the first nine months of the year, single-family starts were 23 percent higher than the same period last year."
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.75 percent in the week ending October 18. The index grew an average 0.6 points, increasing from the 2.73 percent that is averaged last year.
Nothaft added that home builder confidence increased for the sixth consecutive month in October, jumping to the highest level since June 2006, according to the NAHB/Wells Fargo Housing Market Index.
Fox Business recently released figures showing that the economy is slowly recovering and more Americans are now able to afford homes that they once weren't able to as a result of more relaxed lending standards. The emergence of the economy is now sparking more interest in short sales, which is when a mortgage holder asks for permission from the bank to sell the home for less than owed on the mortgage.
According to RealtyTrac, in the second quarter of last year, short sales made up 12 percent of nationwide homes sales. Bank of America reported that it expects to process more than 100,000 short sales this year.
Fox reported that California has one of the highest rates of short sales in the nation and more than a quarter of all homes that were sold in the state in spring 2011 were through this process, which could be of interest to first-time home buyers.
The applications for refinancing homes that were processed by the FHFA during August totaled 99,000, which is nearly one-sixth of all HARP mortgage refinancings completed since the beginning of the year.

Here are your most common questions:

- What if I don't have a big down payment ?

- How much house can I afford?

- How do I select the right Realtor?

- How to write a strong purchase offer?

- What does Pre-Approved mean?!

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Mortgages going paperless

Mortgages going paperless

October, 2012

The Federal Savings Bank

Homeowners and first-time home buyers will likely be catapulted into the 21st century when it comes to making their mortgage payments as paperless mortgages are on the way.

The recently released eighth annual Path to Paperless survey from Xerox revealed the 43 percent of lenders believe more than half of all home loans will be closed electronically in the next four years. This is a 28 percent increase from last year.

"If you look at the last couple of years there's been a lot of turmoil…you need to be accountable," said Nancy Alley, vice president and general manager for Xerox Mortgage Services. "The survey revealed [lenders] are under pressure to comply with standards."

Alley added that with mortgage laws and regulations moving toward more stringent lending standards, lenders are in greater need for an audit trail that will help in disclosures to borrowers.

Currently, 15- and 30-year fixed-rate mortgage averages are near record lows, indicating that now is the time to buy a house if that is an investment that you're interested in.

First Time Home Buyer !!!

Home price index increases

October, 2012

The Federal Savings Bank

According to CoreLogic, a leading provider of information, analytics and business services, the August home price index increased 4.6 percent year-over-year.

The August Home Price Index report was recently released, showing the housing market is once again showing signs of improvement, and representing the largest year-over-year increase since July 2006.

“Again this month prices rose on a year-over-year basis and our expectation is for that to continue in September based on our pending HPI forecast,” said Mark Fleming, chief economist for CoreLogic. “The housing markets gains are increasingly geographically diverse with only six states continuing to show declining prices.”

Home prices also increased on a month-over-month basis, including distressed sales. The housing market experienced a 0.3 percent increase in August when compared to July, marking the sixth consecutive month of increases in home prices nationally on a year-over-year and month-over-month basis.

“Sustained economic recovery in the U.S. requires a healthy housing market," said Anand Nallathambi, president and CEO of CoreLogic. "You cannot have a healthy housing market without price stabilization and ultimately home price appreciation. Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market.”

The report also showed that, including distressed sales, the five states that had the highest home price appreciation were Arizona, Idaho, Nevada, Utah and Hawaii. Arizona's price appreciation totaled 18.2 percent.

The five states that had the largest home price depreciation were Rhode Island, Illinois, New Jersey, Alabama and Connecticut.

Out of all the states, there were only three that posted home price depreciation. They were Rhode Island, New Jersey and Alabama.

Clear Capital, one of the leading providers of data and real estate asset valuation, investment and risk assessment, recently released its Home Data Index, showing that Las Vegas has a yearly home price growth of 8 percent and 9.5 percent forecasted over the next six months. The improvement in the Las Vegas housing market could encourage more first-time home buyers to look to the city to secure a home.

How do I select the right Realtor?

Foreclosures in August

Report: 57,000 completed foreclosures in August

October, 2012

The Federal Savings Bank

According to CoreLogic, a leading provider of information, analytics and business services, there were 57,000 completed foreclosures in August.The report showed that the 57,000 foreclosures were down from 75,000 that were reported in the previous year.

“The continuing downward trend in foreclosures and a gradual clearing of the shadow inventory are important signals that the recovery in housing is gaining traction,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction in foreclosure volumes is to some degree being facilitated by the rising popularity of alternative resolution methods, such as short sales and loan modifications.”

According to the CoreLogic statistics, the five states with the highest number of completed foreclosures for the 12 months ending on August 2012 were California, Florida, Michigan, Texas and Georgia.

While the number of foreclosures are decreasing, mortgage rates are also falling, making now a perfect time for first-time buyers to dive into the housing market and take advantage of the low prices.

How much house can you afford right now?

Mortgage rates hit another all-time low

First Time Home Buyers

Mortgage rates hit another all-time low

October 05, 2012

Americans who are first-time home buyers might want to look into purchasing a home now, considering housing mortgage prices are at an all-time record low.

According to the recently released Primary Mortgage Market Survey from Freddie Mac, the average fixed-rate mortgage rates decreased to new record lows, showing the housing market is not improving as much as experts thought.

The 30-year fixed-rate mortgage averaged 3.36 percent with an average of 0.6 points for the week ending October 4.

"Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July's increase was revised downward."

Considering the number of foreclosures decreased in August, more Americans are now showing that they are able to pay their mortgages through help from the government and recovery of the economy.

View rate in your state HERE

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