Foreclosures Jumped in January

Foreclosures Jump. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

The number of repeat foreclosures inched higher in January compared to a year ago – the first time in more than two years this has occurred, according to a new report by Black Knight Financial Services.

Repeat foreclosures occur after a home owner begins the foreclosure process, but is then able to keep the home through either a loan modification or new payment program. The situation becomes a repeat foreclosure when, despite the modification, borrowers still are unable to make their payments and the home falls back into foreclosure.

New repeat foreclosures ticked up 11 percent in January from December and accounted for more than half of all new foreclosures, according to Black Knight Financial Services. The uptick was most apparent in “judicial” states – where a judge’s approval is required for a foreclosure and backlogs of foreclosures are more common.

Some housing analysts aren’t shocked by the uptick. “So much tinkering was done with defaulted borrowers over the last five or six years,” Guy Cecala, CEO and publisher of Inside Mortgage Finance, told CNBC. “It’s not surprising they’re running into problems again.”

Source: “Housing’s New Worry: Repeat Foreclosures Return,” CNBC.com (March 9, 2015)

Who Has the Highest Property Taxes?

Who Has the Highest Property Taxes? Image courtesy of ddpavumba / FreeDigitalPhotos.net

Home owners who have owned five to 15 years had the highest effective property tax rates while those who have owned more than 20 years had the lowest, according to the U.S. Property Tax Rates Report for 2014, conducted by RealtyTrac. The report provides average property taxes and effective property tax rates for single-family homes among more than 1,000 counties nationwide.

For home owners who have owned between 10 and 15 years, the average effective property tax rate was 1.35 percent, while home owners who have owned between 5 and 10 years it was 1.34 percent. The average effective property tax rate was 1.18 percent for home owners who have owned less than a year and 1.15 percent home owners who have owned more than 20 years, finds the report.

“State laws like Prop 13 in California give a property tax advantage to home owners who have owned for a longer time, but the bell curve in effective property tax rates in the middle of the years-owned spectrum indicates that many who purchased during the housing bubble — or in the years leading up to the housing bubble — may be paying taxes based on a still-inflated valuation of their properties,” says Daren Blomquist, vice president at RealtyTrac. “These home owners should consider appealing their property’s assessment if that is an option available to them in their county.”

The report also found that higher-end homes accounted for more than half of all property tax dollars nationwide. Single-family homes valued $300,000 and higher comprised 25 percent of all single-family homes nationwide, but the property taxes paid on those homes accounted for 54 percent of all property taxes collected nationwide.

The following states had the highest average property taxes in dollars for single-family homes, according to the report:

• New York: $15,625
• New Jersey: $8,108
• New Hampshire: $5,795
• Connecticut: $5,646
• Hawaii: $5,024

On the other hand, the states with the lowest average property taxes in dollars for single-family homes are:

• Alabama: $618
• West Virginia: $931
• New Mexico: $1,096
• Tennessee: $1,116
• Indiana: $1,418

Source: “Property Taxes Highest for Home Owners Who Have Owned Between 5 and 15 Years, Own High-End, or Low-End Homes,” RealtyTrac (March 3, 2015)

Housing Markets That Are Heating Up

Housing Markets That Are Heating Up. Image courtesy of hywards / FreeDigitalPhotos.net

Just in time for spring selling season to start, sellers are finally starting to put their homes on the market, upping the selections for buyers, according to the latest analysis from realtor.com®. Higher inventories and buyer demand are expected to boost closings this month, according to realtor.com®.

“The biggest macro trend is that we’re finally seeing inventory grow,” says Jonathan Smoke, realtor.com®’s chief economist. “This is a very important trend for many reasons – in particular, because it will help keep prices at a more moderate level down the road.”

Affordability had become a chief concern recently in the housing market. So what’s changed and why are more sellers putting their homes on the market?

Smoke says home owners are being encouraged by the current higher prices. But Smoke says those will level out as supply rises to meet demand.

According to realtor.com®’s February data, 20 markets are already showing a big upswing based on the ratio of listing views at realtor.com® to the number of listings for-sale. Those 20 markets are:

1. Waco, Texas
2. Dallas-Fort Worth-Arlington, Texas
3. Santa Rosa, Calif.
4. Denver-Aurora-Lakewood, Colo.
5. Vallejo-Fairfield, Calif.
6. Ann Arbor, Mich.
7. Fort Wayne, Ind.
8. Santa Maria-Santa Barbara, Calif.
9. Charleston, W.Va.
10. San Luis Obispo et al, Calif.
11. Columbus, Ohio
12. Boulder, Colo.
13. Detroit-Warren-Dearborn, Mich.
14. Hartford-West Hartford et al, Conn.
15. Manchester-Nashua, N.H.
16.  San Francisco-Oakland et al, Calif.
17. San Diego-Carlsbad, Calif.
18. Charleston-North Charleston, S.C.
19. Toledo, Ohio
20. Boston-Cambridge-Newton, Mass.-N.H.

Source:”Spring Is Coming, and These 20 Markets Are Heating Up,” realtor.com® (March 6, 2015)

Mortgage Rates Drop, Near 2013 Lows

Mortgage Rates Drop, Near 2013 Lows. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

For the first time in four weeks, average fixed mortgage rates moved lower, according to Freddie Mac’s weekly mortgage market survey. Rates remain near May 2013 lows. The lower rates are attributed to a revision down of real GDP growth and the decline in consumer prices, said Freddie Mac’s deputy chief economist Len Kiefer.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 26:

• 30-year fixed-rate mortgages: averaged 3.75 percent with an average 0.6 point, down from last week when it averaged 3.80 percent. A year ago, the 30-year FRM averaged 4.28 percent.
•  15-year fixed-rate mortgages: averaged 3.03 percent with an average 0.6 point, down from last week when it averaged 3.07 percent. A year ago, the 15-year FRM averaged 3.32 percent.
•  5-year Treasury-indexed hybrid adjustable-rate mortgages: averaged 2.96 percent this week with an average 0.5 point, down from last week when it averaged 2.99 percent. A year ago, the 5-year ARM averaged 3.03 percent.
•  1-year Treasury-indexed adjustable-rate mortgages: averaged 2.44 percent this week with an average 0.4 point, unchanged from last week. A year ago, the 1-year ARM averaged 2.52 percent.

Source: Freddie Mac

The Most Affordable Town in Your State

The Most Affordable Town in Your State. Image courtesy of jscreationzs / FreeDigitalPhotos.net

With housing prices inching up in many areas across the country, buyers may be wondering where they can catch a break. Well, it turns out that every state in the union has a spot.

Business Insider recently examined Census data to find the most affordable small towns in each state. They looked at towns with populations between 1,000 and 10,000 where households spend no more than 30 percent of their annual income on housing costs. They also took care to include the average cost of three types of housing in their analysis: houses that are owned houses with a mortgage, houses that are owned without a mortgage, and rentals. They used an average of these results, weighted by the proportion of each type of home in the town.

Hawaii’s Maunawili had the lowest percentage of homes that fell in the affordable range at 74.5 percent. West Virginia gets the prize for most affordable, as the state’s small town of Boomer scored a whopping 100 percent.

Here’s the list, in alphabetic order by state. Learn more about the individual towns highlighted here at Business Insider’s report.

• ALABAMA: Fayetteville, where 93 percent of the homes ranked as affordable
• ALASKA: Healy (91.5%)
• ARIZONA: Quartzsite (93.2%)
• ARKANSAS: Tontitown (86.8%)
• CALIFORNIA: Kettleman City (85.9%)
• COLORADO: Rangely (86.2%)
• CONNECTICUT: Weatogue (82.2%)
• DELAWARE: North Star (81.3%)
• FLORIDA: Yalaha (82.9%)
• GEORGIA: Morgan (84.9%)
• HAWAII: Maunawili (74.5%)
• IDAHO: Shelley (85.2%)
• ILLINOIS: Mitchell (91.1%)
• INDIANA: Harlan (93%)
• IOWA: New Sharon (92.7%)
• KANSAS: Colwich (87.5%)
• KENTUCKY: Reidland (93.4%)
• LOUISIANA: Lawtell (97.8%)
• MAINE: North Berwick (89.9%)
• MARYLAND: Chevy Chase (84%)
• MASSACHUSETTS: Brookfield (79.4%)
• MICHIGAN: Gwinn (89.8%)
• MINNESOTA: St. Augusta (87.6%)
• MISSISSIPPI: Helena (89%)
• MISSOURI: Stanberry (84.8%)
• MONTANA: Colstrip (89%)
• NEBRASKA: Scribner (89.3%)
• NEVADA: Carlin (91.1%)
• NEW HAMPSHIRE: Enfield (87.3%)
• NEW JERSEY: Collings Lakes (78.7%)
• NEW MEXICO: Waterflow (98.1%)
• NEW YORK: Peru (89.7%)
• NORTH CAROLINA: Icard (87.7%)
• NORTH DAKOTA: Thompson (92%)
• OHIO: Kalida (93.2%)
• OKLAHOMA: Byng (90.4%)
• OREGON: Pilot Rock (79.1%)
• PENNSYLVANIA: Wesleyville (87.3%)
• RHODE ISLAND: Carolina (82.3%)
• SOUTH CAROLINA: Joanna (93.2%)
• SOUTH DAKOTA: Clear Lake (88.6%)
• TENNESSEE: Harrogate (83.9%)
• TEXAS: Iraan (94.9%)
• UTAH: Oljato-Monument Valley (90.5%)
• VERMONT: Castleton (79.9%)
• VIRGINIA: Ferrum (94.2%)
• WASHINGTON: Burbank (82.9%)
• WEST VIRGINIA: Boomer (100%)
• WISCONSIN: Sherwood (86.6%)
• WYOMING: Wright (92.2%)

Source: “The most affordable small town in every state,” Business Insider (Mar. 2, 2015)

Builders Shy Away From Starter Homes

Builders Shy Away From Starter Homes. Image courtesy of jscreationzs / FreeDigitalPhotos.net

There may be demand for starter homes, but many home builders aren’t interested in building them. Entry-level new homes are becoming scarce, and are unlikely to see any rises in the future, according to a BUILDER Online article.

Indeed, the median new-home price entering 2015 was well over $280,000 – far from what many would consider an “entry-level” home.

“Entry-level refers to a price-brand at the lowest end of the home price spectrum; a true entry-level home lowers the barrier to entry to home ownership, typically for a renter to move into a home he or she owns,” the article states.

Here’s why the starter home is losing traction among those in the building industry:

• Land costs are high, and many of the lots during the first part of the housing recovery in the last three years have been mostly finished lots of “A” quality – with little attention devoted to B, C, and D lots that would be more geared toward entry-level homes. “Lots that could be programmed for entry-level or starter homes would–in a typical recovery cycle–involve high-density (attached) or outer-circumference tracts,” the BUILDER article explains. “Costs of lots in those two areas–and relief on some gnarly construction defects litigation trends on attached homes–need to come down measurably for there to be a return of entry level housing.”
• The higher fees in building such communities also may also deter entry-level buyers to the new-home market in general. In building these communities, builders often face significant infrastructure and expanded support service costs. As such, these fees and charges often must get added on to the price of a new home, which could add an extra 20 percent to 25 percent of the cost of a new home.
• The typical “entry-level” buyer may not want a “starter” home any longer. “They’ve waited longer to form households, pay down student debt, hook up with significant others, and amass their ‘ability to repay’ profile, and now they’re not going to settle for a mere deed that gets them a ticket out of monthly rental payments,” the article states.

The “starter” home may be moving to extinction. The idea of a home purchase that serves as the first step before buying a more permanent family residence may be fading as more entry level buyers start to favor stepping into their permanent residence from the start.

Source: “The Rise and Fall of the Entry-Level Home,” BUILDER Online (Feb. 9, 2015)