Exsisting Home Sales Expected To Continue To Accelerate

DSNEWS

Existing home sales in June reached their highest level in eight years, since before the recession, and they are expected to continue their surge in July, according to online real estate marketplace Auction.com’s Real Estate Nowcast.
The latest Nowcast predicts that existing home sales in July will fall between annual rates of 5.49 and 5.84 million annual sales, with a targeted number of 5.67 million. This represents an increase of 3.2 percent from June and a year-over-year increase of 11.7 percent, according to Auction.com.
“May and June existing home sales have both been very encouraging for anyone looking for proof that the housing market is in recovery, and our July Nowcast indicates that this positive momentum will continue into July,” Auction.com EVP Rick Sharga said. “One potential area of concern is the steeper-than expected increase in home prices. While this is driven by limited inventory, and a declining number of distressed home sales, affordability may start to become an issue if home price increases continue to outpace wage growth. And if the Fed does move to raise interest rates as expected this fall, we could see home sales volume begin to weaken.”
The latest existing home sales report from the National Association of Realtors (NAR), released earlier this week, found that existing home sales were at an annual rate of 5.49 million in June, their highest level in eight years and a 3.2 percent jump from May. This figure was in line with Auction.com’s June Nowcast, which estimated an annual sales rate of 5.55 million for existing homes (revised downwardly from 5.57 million). NAR’s revised May figure of 5.32 million nearly matched Auction.com’s estimate for the month of 5.32 million.
According to Auction.com, from a price perspective, the housing market has shifted from recovery to expansion due to a June increase in existing home prices up to $236,400 as reported by NAR. This figure, in addition to representing a 6.5 percent year-over-year increase, beat the all-time high of $230,400 set in July 2006. June’s total also fell within Auction.com’s predicted range of $217,482 and $240,375.
The July Auction.com Nowcast predicts that existing home prices will fall between $227,170 and $251,082 during the month, with a target price of $239,126. The target price for existing homes would be a 4.6 increase month-over-month and a 7.7 percent increase year-over-year, according to Auction.com, and would also set a new record for median home prices.
First-time buyer share dropped from 32 percent to 30 percent from May to June, according to NAR. Still, first-time buyer share remained higher than earlier in the housing recovery. Limited entry level inventory, tight credit, and rapidly-rising prices will present challenges to first-time buyers, according to Sharga. Also, all-cash sales (an indicator of true investor purchases) fell to 22 percent in June, down from 24 percent in May and 32 percent from a year earlier.
“This is not surprising given the big increases in prices that are making return hurdles harder and harder to meet,” Auction.com Chief Economist Peter Muoio said. “This is the lowest level of all-cash sales since December 2009. Similarly, distressed sales accounted for just 8 percent in June, matching an August 2014 low. Taken together these indicators signify a housing recovery on more solid ground, with fickle investors playing a smaller role, the vast majority of sales non-distressed, prices back to pre-bust levels and sales increasing sharply.”

Bidding wars return

NEW YORK – July 21, 2015 – Bidding wars are returning to U.S. housing markets with too few homes for sale.

A number of conditions led to the current lack of for-sale inventory, including an unexpectedly sluggish rebound in home construction. At the same time, millions of homeowners aren’t listing their home because they don’t believe they’ll qualify for a new mortgage, or that they cannot afford the costs associated with a sale.

As of May 31, there were 2.3 million existing U.S. houses on the selling block – enough inventory to last 5.1 months at the current sales pace but shy of the six to seven months of supply that typically signals a balanced market.

But in more than 33 percent of the 300 biggest metro areas tracked by Realtor.com, listings have been on the market a median of less than two months, indicating a rapid turnover as demand for residential properties exceeds supply. Those include such large markets as Dallas and San Francisco along with smaller markets like Vallejo, California, and Kennewick, Washington.

Even in the face of a tight home listing inventory, some economists hope renters will add demand to the sector as rent increases continue, prompting many to pursue ownership. Apartment rents have climbed almost 16 percent in the United States since 2010, calculates Reis Inc.

Source: Wall Street Journal (07/20/15) P. A1; Hudson, Kris

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

The top 3 mistakes made by first-time buyer

NEW YORK – July 30, 2015 – First-time homebuyers are emerging as a bigger force in the housing market. But getting approved for a mortgage, finding the right home and staying within budget can pose a challenge for them.

Bankrate.com notes some of the most common first-time buyer mistakes:

1. Judging only the mortgage payment: Some first-time homebuyers mistakenly focus only on the monthly mortgage payment, which they can afford, and forget that a home comes with other expenses, which they can’t afford.

“They have an idea of what their mortgage payment is going to be, but they don’t realize there’s much more to it,” says attorney Rafael Castellanos, a managing director at Expert Title Insurance. Property insurance, taxes, homeowner association dues, maintenance and utility bills can add up too.

2. Emptying out their savings for a downpayment: It’s a mistake to spend everything in the savings account for a downpayment, says Ed Conarchy, a mortgage planner and investment adviser at Cherry Creek Mortgage in Gurnee, Ill. “Some people scrape all their money together to make the 20 percent downpayment so they don’t have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all,” he says. “I’d take paying for mortgage insurance any day over not having money for rainy days. Everyone – especially homeowners – needs to have a rainy-day fund.”

3. Getting new credit before the deal is closed: When borrowers prequalify for a loan, they need to avoid big-ticket purchases until the loan closes. Lenders pull credit reports before the closing to make sure the borrower’s financial situation has not changed since the loan was approved. Any new loans on their credit report could cause a closing delay.

First-time buyers “sign the contract and they want to buy new furniture for the house or a new car,” says Steve Anderson, a broker and owner at RE/MAX Benchmark Realty in Las Vegas. “I remember one case where, just before closing, the buyer drove to the office and says, ‘Look at my brand-new car.’ I told them, ‘You’d better go back to that dealership.'”

Source: “5 First-Time Homebuyer Mistakes to Avoid,” Bankrate.com (June 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Removing squatters: Rules vary by district

MIAMI – June 12, 2015 – Is removing a squatter a civil matter or a crime? It depends.

Overall, two things impact squatting: The police department system in the jurisdiction and its procedures for handling a squatting complaint, and the steps a property owner takes when he or she first discovers the squatter.

Miami-Dade County police noted an increase in squatters last year. Working with local groups, including Realtors, the city proposed and passed an ordinance creating a system for dealing with squatter complaints.

Following the change, the Miami Association of Realtors hosted a “Removing Illegal Occupants from Residences” seminar. An important distinction noted by Miami-Dade Police Department Sgt. David Goldberger during the conference had to do with an owner’s reaction to a squatter.

Goldberger’s advice specific to Miami-Dade County’s squatting rules:

  • Squatters can be removed under trespassing laws, but officers must verify certain information and documentation before they can act.
  • If an owner identifies a squatter, he or she should call the police bureau (in Miami-Dade it’s the Economic Crimes Bureau) during normal business hours. Squatting is not considered a “911” emergency telephone call.
  • If calling after hours, request that a uniform officer go to the home.
  • If the property is located within an incorporated city’s boundaries rather than unincorporated Miami-Dade County, ask the local police department about their policy. If the response is, “It’s a civil matter,” you should verify that. Under certain circumstances, squatting does become a civil matter.
  • Owners or their representatives with a squatter complaint must provide proof of ownership. Acceptable documentation is a writ of possession, a certified copy of the certificate of title or a certified copy of the final summary judgment. Agents must have a limited power of attorney to act on the owner’s behalf.

After documentation is verified, the owner/representative needs to provide a verbal trespass warning in the officer’s presence. Under the trespass warning, the squatter will be instructed to leave immediately or within a reasonable timeframe (for example, 30 minutes to gather belongings).

Important note: The owner/representative should not give the squatter additional time to get out (such as 24 hours to clear everything), because doing so gives the squatter permission to remain in the home. That “permission” could make the problem a civil rather than criminal matter.

It’s okay for the owner/representative to make arrangements with the squatter to return and gather the remainder of their belongings. An officer will respond if needed to keep the peace.

Realtors with squatter questions can call Florida Realtors Legal Hotline, a free service for members.

© 2015 Florida Realtors®

Average 30-year mortgage rates top 4%

Mortgage Rate Trend Index

A substantial majority (80%) of industry experts polled this week by Bankrate.com think rates will continue to go up over the short term. Only 20% think they’ve peaked, and none believe they’ll lower.

WASHINGTON (AP) – June 12, 2015 – Average long-term U.S. mortgage rates jumped this week to their highest levels this year, with the key 30-year rate topping 4 percent for the first time since late 2014.

Rates have been surging amid signs of improvement in the economy, which have pushed bond prices lower and bond yields higher. Mortgage rates often follow the yield on the 10-year Treasury note, which reached a high for the year of 2.49 percent Wednesday. That was up from 2.37 percent a week earlier.

The increase in mortgage rates has come during the height of the spring homebuying season.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage climbed to 4.04 percent this week from 3.87 percent a week earlier. It’s the first time the benchmark average rate has exceeded 4 percent since last November, when it was 4.02 percent. The rate on 15-year fixed-rate mortgages increased to 3.25 percent from 3.08 percent.

A striking sign of improvement in the economy came last Friday, when the government reported that U.S. employers added 280,000 jobs in May. That was a surprisingly robust tally at a time when consumers are hesitant to spend and some key industries like energy and manufacturing have been struggling.

The report from the Labor Department showed that employers seem confident that the economy is regaining its footing after shrinking at the start of the year and that their customers’ demand will accelerate. And the new data led many economists to predict that the Federal Reserve will raise interest rates as early as September because the economy might no longer need the stimulus of near-zero rates. The Fed has kept them at that level for more than six years.

Despite their recent surge, though, mortgage rates remain low by historic standards. A year ago, the average 30-year rate was 4.20 percent and the 15-year was 3.31 percent.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan rose to 0.6 point from 0.5 point.

The average rate on five-year adjustable-rate mortgages increased to 3.01 percent from 2.96 percent; the fee declined to 0.4 point from 0.5 point. The average rate on one-year ARMs fell to 2.53 percent from 2.59 percent; the fee remained at 0.2 point.

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Are mortgage rates into ‘panic mode’?

NEW YORK – June 9, 2015 – The period where borrowers could lock in a 3.5 percent rate on a 30-year fixed-rate mortgage may have ended. Mortgage rates are showing signs of inching up.

Rates are “definitely in panic mode,” Matt Weaver, senior mortgage loan originator with PMAC Lending Services, told CNBC. “A lot of refinance clients are moving to locks immediately because the Fed talk is starting to be an eye opener for everyone.”

Weaver says there has been a rush to lock in a rate before they edge higher after mortgage rates, which can fluctuate every day, spiked last Wednesday. Mortgage rates loosely follow the yield on the 10-year Treasury.

“If the Wednesday surge of Treasury yields persists, the impact on mortgage rates is likely to result in a bout of affordability shock to many housing markets across the country,” says Len Kiefer, deputy chief economist at Freddie Mac.

The 30-year fixed-rate mortgage is up three-eighths of a percentage point since mid-May, averaging about 4.125 percent.

While three-eighths may not sound like much of an increase, “it’s more of what it’s going to look like, where we’re going. Is it a train that’s not stopping?” Weaver says. “When we see an eighth, a quarter, now it’s starting to become typical language. We would normally see a little bit of a pullback, and then it goes up again, and now that’s not happening. We’re slowly steadily increasing.”

Source: “Mortgage Rates: ‘Definitely in Panic Mode,'” CNBC (June 4, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Freddie Mac List Steps to avoid Modification And Foreclosure Scams

Freddie Mac Lists Steps To Help Distressed Borrowers Avoid Foreclosure Relief Scams
Checklist
Freddie Mac issued a list of “red flags” in a blog entry Monday for distressed borrowers seeking help with their mortgage to watch out for in order to avoid fraud.
Citing a Detroit Free Press story from April about Anthony Carta, who was sentenced to 30 to 99 years in prison for perpetrating a “faith-based” foreclosure relief scam in which he promised to help distressed borrowers avoid foreclosure in exchange for an up-front fee. Carta marketed the alleged foreclosure relief services of his company, Freedom by Faith Ministries, through various unwitting Christian channels from 2009 and 2013 and collected money but did not provide any of the promised services. For his part in the scam, Carta was ordered to pay $400,000 in restitution to more than 300 victims.
On the blog, Freddie Mac points out the number of recent mortgage relief or foreclosure relief scams that were perpetrated by exploiting the members of a particular community.
“The idea behind ‘affinity fraud’ is to exploit the baseline trust that generally exists within an ‘affinity group’ – i.e. a group defined by a common heritage, language, ethnicity, workplace, or circle of friends,” Freddie Mac wrote. “What happened in Detroit is a sad reminder that no group is inherently safe from fraudsters, including devout and religious people.”
One of the steps Freddie Mac lists for borrowers to take in order to avoid being the victim of a scam is, first and foremost, calling your servicer. The borrower’s servicer is the only one who can modify the mortgage or finalize a loss mitigation plan – anyone other than the servicer who professes the ability to do so is a scammer, especially if they require the payment of an upfront fee.
Second, outside of your servicer, borrowers can receive reliable advice by seeking free assistance from a HUD-approved housing counselor. Freddie Mac also says on the blog post that anyone who promises to pay the mortgage and rent the house back to the borrower in exchange for the title to the house should raise an immediate red flag. The GSE also warns borrowers against signing documents with errors or blank spaces, documents they don’t understand, or documents that transfer the title of the home – since genuine mortgage workouts or home retention solutions will never require the title of a home to be transferred.
Freddie Mac encourages anyone who suspects fraud to report it by calling (800) 4FRAUD8 or emailing mortgage_fraud_reporting@freddiemac.com.