Mortgage Rates Edge Higher Entering 2014

Mortgage Rates Edge Higher Entering 2014. Image courtesy of cuteimage / FreeDigitalPhotos.net

Fixed mortgage rates continued an upward climb this week, with the 30-year fixed-rate mortgage starting the year more than a full percentage point higher than last year at this time, Freddie Mac reports in its weekly mortgage survey.

“Mortgage rates edged up to begin the year on signs of a stronger economic recovery,” says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for mortgage rates for the week ending Jan. 2:

• 30-year fixed-rate mortgages: averaged 4.53 percent, with an average 0.8 point, up from last week’s 4.48 percent average. Last year at this time, 30-year rates averaged 3.34 percent.
• 15-year fixed-rate mortgages: averaged 3.55 percent, with an average 0.7 point, rising from last week’s 3.52 percent average. A year ago, 15-year rates averaged 2.64 percent.
• 5-year hybrid adjustable rate mortgages: averaged 3.05 percent, with an average 0.4 point, rising from last week’s 3 percent average. Last year at this time, 5-year ARMs averaged 2.71 percent.
• 1-year ARMs: averaged 2.56 percent, with an average 0.5 point, holding the same average as last week. A year ago, 1-year ARMs averaged 2.57 percent.

Source: Freddie Mac

More Than 3 Million Regained Equity in 2013

More Than 3 Million Regained Equity in 2013. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Home prices rebounded in 2013, helping more than 3 million home owners regain long-lost equity, according to CoreLogic’s latest MarketPulse report.

“We’re encouraged by the improvements of the past year and have every reason to be cautiously optimistic about continued progress in 2014. That said, monitoring the current and potential headwinds the industry faces is critical,” says Anand Nallathambi, president and CEO of CoreLogic.

More than two-thirds of all homes with a mortgage now have at least 20 percent equity, giving home owners more options in the housing market in the new year and increasing their employment mobility.

Still, 6.4 million residential properties have negative equity, and a third of those are concentrated in five states: Nevada, Florida, Arizona, Ohio, and Georgia.

Some of the biggest jumps in home prices over the last six months has occurred in Chicago and Raleigh, N.C., CoreLogic reports.

“That acceleration is consistent with our prior analysis, which showed that Chicago has had the most rapid growth of any market for owner-occupied purchase transactions in the past two years,” the report said.

Source: “CoreLogic: 2013 marks year of rapid transition,” HousingWire (Dec. 30, 2013)

Dome Homes the Next Big Thing?

Dome Homes the Next Big Thing? Image courtesy of jannoon028 / FreeDigitalPhotos.net

Dome homes may become more popular in the future because of their reputation for holding up well against natural disasters.

Dome homes are reportedly strong enough to withstand the force of an EF5 tornado, a mammoth hurricane, and even a powerful earthquake. They are made of concrete and can deflect flying debris, such as trees and cars, and the roofs won’t blow off in a high-wind storm.

“People feel safer in a dome,” says Nanette South Clark, a design engineer with Monolithic Dome Institute. “Domes have a double curvature like an egg, so they’re very strong. They’re the buildings of the future.”

Gary Clark, vice president of Monolithic sales and marketing, insists that dome homes are the “strongest disaster-preventative shape that can be built for the dollar.”

The company has been building dome homes for residential and commercial use, and it concentrates on natural disaster-prone areas in the U.S. Dome homes cost between $125 and $135 a square foot to build, or about $125,000 to $135,000. That’s comparable to the average cost of a 1,000-square-foot home in Texas, according to Monolithic Dome.

In 2012, the Federal Emergency Management Agency built dome shelters in Texas communities that had been hard-hit by tornadoes.

Meteorologists are predicting more violent weather systems in the future, which may prompt more home owners worried about the safety of their homes to seek alternative structures that can withstand intense storms, dome advocates say.

However, one hindrance to the dome home growing in popularity may come down to aesthetics.

“Domes are very efficient and work well, but the majority of people don’t like them. They don’t fit people’s preconceived notion of what a house should look like,” says Peter von Ahn, a South Carolina architect.

Dome homes have been nicknamed “ball houses,” “igloos,” and “bubbles.”

Source: “Why your next home may look more like a snow globe,” CNBC (Dec. 29, 2013)

The Most Desirable Celebrity Neighbors

The Most Desirable Celebrity Neighbors. Image courtesy of cooldesign / FreeDigitalPhotos.net

Americans chose late-night TV host Jimmy Fallon as the most desirable celebrity neighbor for 2014, according to the recently-released seventh annual Zillow Celebrity Neighbor Survey.

Fallon nabbed 11 percent of the vote, dethroning last year’s “most desirable neighbor” duo—Miranda Lambert and Blake Shelton. In order to be Fallon’s neighbor, you’d have to move to Sagaonack, N.Y., where Fallon owns an nineteenth-century farmhouse that sits on more than two acres.

After Fallon, the survey found the following most desirable celebrity neighbors are:

• Miranda Lambert and Blake Shelton
• Jennifer Lawrence
• Sofia Vergara
• Robin Roberts
• Lebron James

On the other hand, topping the list as worst neighbors for this year: Reality star Kim Kardashian and singer Kanye West, according to the survey. The couple beat out the cast of “Here Comes Honey Boo Boo,” Justin Bieber, Miley Cyrus, Lady Gaga, and Alex Rodriguez as worst neighbors.

However, “what remains clear is that many people don’t want to live next to any celebrity, regardless of why they are famous,” says Amy Bohutinsky, Zillow’s chief marketing officer. Indeed, the survey found that more than one-third of Americans say they prefer a non-celebrity neighbor.

Source: “Jimmy Fallon Named Most Desirable Celebrity Neighbor for 2014,” Zillow Blog (Dec. 27, 2013)\

Housing’s Best Buys for 2014

Housing’s Best Buys for 2014. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

Home prices and mortgage rates are on the rise, and some investors are retreating from the market. However, Forbes believes there are still plenty of housing deals left for home buyers in the new year, and with possibly less competition.

Forbes recently released a list of cities where prices are still low but offer the potential of large growth in 2014. To compile its list, Forbes partnered with Local Market Monitor, which tracks home prices and local economic factors in more than 300 housing markets. Cities were ranked based on housing markets still considered “undervalued” in prices and that offer some of the largest job growth in their economies.

The following metros topped Forbes’ list for Best Buy Cities for 2014:

1. Fort Worth-Arlington, Texas
   • Median home price: $168,383
   • 3-year growth forecast: 25% (3-year growth forecast is prediction for cumulative rise in home prices over the next three years)
   • Prices are considered 20 percent below their actual value
2. Dallas-Plano-Irving, Texas
   • Median home price: $180,645
   • 3-year growth forecast: 29%
   • Prices are considered 12 percent below their actual value
3. Charlotte-Gastonia-Concord, N.C.-S.C.
   • Median home price: $201,855
   • 3-year growth forecast: 24%
   • Prices are considered 15 percent undervalued
4. Nashville-Davidson-Murfreesboro-Franklin, Tenn.
   • Median home price: $199,506
   • 3-year growth forecast: 23%
   • Prices are considered 16 percent undervalued
5. Houston-Sugar Land-Baytown, Texas
   • Median home price: $191,279
   • 3-year growth forecast: 24%
   • Prices are considered 13 percent undervalued
6. Atlanta-Sandy Springs-Marietta, Ga.
   • Median home price: $170,701
   • 3-year growth forecast: 26%
   • Prices are considered 26 percent undervalued
7. Oklahoma City, Okla.
   • Median home price: $159,713
   • 3-year growth forecast: 16%
   • Prices are considered 17 percent undervalued
8. Orlando-Kissimmee, Fla.
   • Median home price: $172,609
   • 3-year growth forecast: 35%
   • Prices are considered 17 percent undervalued

Source: “Best Buy Cities: Where to Invest in Housing in 2014,” Forbes (Dec. 26, 2013)

Investors Likely to Curb Buying in 2014

Investors Likely to Curb Buying in 2014 . Image courtesy of pixbox77 / FreeDigitalPhotos.net

Institutional investors who have been buying up thousands of foreclosed single-family homes will likely take a “more restrained” approach in 2014, according to a new report by RealtyTrac and Pintar Investment Co., a single-family rental investment company.

Over the past two years, institutional investors have been scooping up thousands of single-family homes to turn into rentals. But as the number of distressed homes in many markets falls, investors’ presence is expected to slip too. RealtyTrac defines institutional investors as firms that purchase at least 10 single family homes within a calendar year. From January 2011 to November 2013, institutional investors purchased a combined total of 366,206 single-family homes.

“Investors will expand their holdings now and into 2014, but this expansion is likely to be decidedly more restrained than the binge of the past 18 months,” according to the RealtyTrac/Pintar report, “Back to Reality with Buy and Rent.”

Markets such as Memphis, Fresno, Charlotte, Atlanta, and Phoenix had seen a large spike in institutional investors in 2012, but a limited distressed inventory is prompting more investors to move on to other markets. According to the report, investors will most likely seek to acquire more homes in secondary markets. Many of those markets are expected to be in the southeast, in places such as Jacksonville, Fla.; Winston-Salem, N.C.; Tampa, Fla.; Lakeland, Fla.; and Macon, Ga.

Also in the new year, institutional investors will likely focus more on managing their geographically diverse, existing portfolios. Some investors are facing the realities that yields that may have looked good on paper aren’t always so favorable when it comes to often-overlooked factors such as rent delinquency and collection issues as well as unforeseen maintenance, according to the report.

Source: “Back to Reality with Buy and Rent,” Realty Trac/Pintar (December 2013) and “Higher REO Prices May Slow Investor Buying in 2014,” National Mortgage News (Dec. 24, 2013)

Buyers Facing Fewer Bidding Wars

Buyers Facing Fewer Bidding Wars. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

With bidding wars easing in many markets, buyers may face less competition in their attempts to snag a home this winter. That’s according to the latest Bidding War Report by the real estate brokerage Redfin.

According to the report, competition for homes hit its lowest point since 2011 last month. About 51 percent of Redfin agents nationwide reported facing bidding wars in November, down from 63.6 percent a year earlier. The home-buying competition rate has dropped for eight straight months, after peaking in March at 75.3 percent.

Still, the brokerage’s report does show demand growing stronger than expected at the end of the year. “Home buyers who failed to get an offer accepted early in the year have been stockpiling down payment money all year long,” says Amber Hancock, manager of Redfin’s San Francisco East Bay market. “They’re jumping back in this time as better qualified, more confident competitors, taking advantage of the easing late-fall market.”

Buyers are still using competitive strategies to get the house they want—with the use of all-cash offers, waived financing and inspection contingencies, and personal cover letters becoming more common in November, Redfin reports.

The two markets that saw the largest month-over-month decreases in competition were Seattle and Orange County, Calif. Meanwhile, bidding wars heated up in November in Washington, D.C., San Diego, Baltimore, and Los Angeles.

Source: Redfin

Underwater Home Owners Face Heavier Tax Burden

Underwater Home Owners Face Heavier Tax Burden. Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net

If Congress doesn’t act on the Mortgage Forgiveness Debt Relief Act, which expires at the end of this year, it could leave distressed borrowers with an additional financial burden in 2014.

The measure was designed to keep underwater homeowners from having to pay income taxes on the portion of their mortgage debt that was wiped out in a short sale or other mitigation tactic.

“What you’re looking at is people who have lost their house,” says Marceline White of the Maryland Consumer Rights Coalition. “And then to have them hit with this [tax] just boggles the mind.”

Maryland legislators plan to renew a measure exempting residents from state taxes even if the federal law sunsets, but few other states have similar protections in place. There are three bills on Capitol Hill seeking extension of the federal law, but it is uncertain how much of a priority the issue will be in Congress next year.

“We’re far from out of the foreclosure crisis,” White warned.  “We hope that policymakers look at longer-term solutions.”

Source: “Underwater Homeowners Could Face Extra Tax Burden in 2014,” The Washington Post (Dec. 26, 2013)