Home Buyers Plan to Make a Move This Winter

Home Buyers Plan to Make a Move This Winter. Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net

Home buyers who weren’t successful this summer at finding a home due to limited inventories and competition from all-cash offers are looking to retry their luck in the winter, according to realtor.com®’s Winter Home Buyer Report.

“This summer and spring, home-buying season was particularly challenging for buyers, especially first-time home buyers trying to compete with all-cash offers and bidding wars because of reduced inventory,” says Alison Schwartz, vice president of corporate communications at realtor.com®. “In fact, a quarter of the winter home buyers revealed they are in the market now because they were unable to find a home during this last home-buying season.”

But winter home buyers know they’ll face some challenges. Forty-five percent of those surveyed say they believe they will be up against inventory challenges again, with few homes for sale within the price range they desire. Twenty-nine percent also say that winter weather makes house-hunting unpleasant.

But they believe that the winter can be a good time to buy a home. Twenty-six percent say winter is a good time to buy because they feel sellers will be more motivated and willing to negotiate. Twenty-four percent also say they think home prices will be better.

Of those looking to buy this winter, 23 percent are planning to make a down payment of 10 to 20 percent, according to the realtor.com® survey. Twenty-two percent are planning to put down 21 to 99 percent in cash; 19 percent plan to put down 100 percent cash; and 13 percent are planning to make a down payment of 3.5 percent to qualify for a Federal Housing Administration loan.

Source: “Survey: Tight Inventory Tops Winter Home Buyers’ Challenges,” realtor.com (Nov. 20, 2013)

Home Remodeling Posts Strongest Growth in Years

Home Remodeling Posts Strongest Growth in Years. Image courtesy of Carlos Porto / FreeDigitalPhotos.net

Home remodeling is posting a strong recovery as more home owners regain equity and look to spruce up their homes.

“In the near term, homeowner spending on improvements is expected to see its strongest growth since the height of the housing boom,” says Kermit Baker, director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies.

Home remodeling projects surged 14 percent in September over year-ago levels, according to BuildFax, which tracks building permits.

However, smaller remodeling projects — those under $10,000 — are dropping in number.

One reason behind the trend is that regular home owners may be starting to renovate more and spend more as they regain equity. In recent years, remodeling activity was mostly dominated by smaller projects from investors who had purchased single-family homes to turn into rentals. Investors are lessening their share in remodeling as regular home owners show more interest in home remodeling.

Source: “Remodeling? Now you can snoop inside your neighbors’ kitchen,” CNBC (Nov. 19, 2013)

Census: Big Cities’ Home Values Fared Worse in Recession

Census: Big Cities’ Home Values Fared Worse in Recession. Image courtesy of porbital / FreeDigitalPhotos.net

The largest metros in the country saw some of the most significant declines in median home values following The Great Recession, according to a newly released Census report.

The report shows that 43 of the 40 largest counties posted significant declines in median home values – compared to only four of the 50 least populous counties post-recession.

The Census Bureau compared home values and home ownership rates among counties and states during a three-year period before (2007-2009) and after the recession (2010-2012).

The home ownership rate from 2007 to 2009 stood at 66.4 percent, but has continued to fall since that time. It was 64.7 percent from 2010 to 2012.

Of the largest cities, 43 of the 50 tracked saw a decline in home ownership rates, and 23 of those cities saw percentage decreases more than the national average, the Census Bureau reports.

On the other hand, small cities fared the best. Only 17 of the 50 smallest cities saw a decline in home ownership rates.

Overall, the nation saw a median decline of $17,300 in home values after the recession to a median value of $174,600. Nineteen states bucked that trend posting significant increases, with North Dakota the leader, seeing home values increase at $18,200.

Source: “Home Values in Big Cities Took Biggest Hit in Recession, Study Says,” Credit.com (Nov. 14, 2013) and “Home Prices in Smaller U.S. Counties Made Softer Landing,” Mortgage News Daily (Nov. 14, 2013)

Home Repossessions Fall as Investors Step in.

Home Repossessions Fall as Investors Step in. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

The number of foreclosures and repossessions by banks is dropping, and investors may be the ones driving the decrease. Investors are increasingly buying up properties when they go on sale at public auction, according to RealtyTrac.

With an improving housing market, “investors are back in the game,” says Daren Blomquist, a vice president at RealtyTrac.

The percentage of homes completing the foreclosure process fell 29 percent in October compared to year ago levels, according to RealtyTrac data. Foreclosure starts have been dropping nationwide for 15 consecutive months. Repossessions have decreased for 11 consecutive months.

The Associated Press reports that “the trend reflects a growing appetite among investors for buying homes before they exit the foreclosure process and end up on the market… Many large investors are eager to buy homes at public auction, where buyers are required to pay cash. That means they don’t have to compete against typical home buyers who must finance the home purchase.”

Still, the trend is not uniform across the country.

“We’re still firmly on the road back to normal foreclosure levels, but continue to see the foreclosure problem persist in areas that had delays in the foreclosure process,” says Blomquist, who notes states such as Florida, New York, and Illinois are seeing many of those delays since courts must sign off on foreclosures there.

Source: “Fewer Homes Being Repossessed, Thanks to Investors,” The Associated Press (Nov. 15, 2013)

Mortgage Rates Move Higher Again

Mortgage Rates Move Higher Again. Image courtesy of renjith krishnan / FreeDigitalPhotos.net

Fixed-rate mortgages are on their way up this week for the second consecutive week, with the 30-year fixed-rate mortgage reaching its highest level since Sept. 19 when it averaged 4.50 percent, Freddie Mac reports.

“Fixed mortgage rates increased this week following stronger than expected economic data releases,” says Frank Nothaft, Freddie Mac’s chief economist. Nothaft notes the employment report for October was stronger than expected with revisions adding 60,000 additional jobs to the prior two month of releases.

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 14:

• 30-year fixed-rate mortgages: averaged 4.35 percent, with an average 0.7 point, rising from last week’s 4.16 percent average. Last year at this time, 30-year rates averaged 3.34 percent.
• 15-year fixed-rate mortgages: averaged 3.35 percent, with an average 0.7 point, rising from last week’s 3.27 percent average. Last year at this time, 15-year rates averaged 2.65 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.01 percent, with an average 0.4 point, rising from last week’s 2.96 percent average. A year ago at this time, 5-year ARMs averaged 2.74 percent.
• 1-year ARMs: averaged 2.61 percent, with an average 0.4 point, holding the same average as last week. A year ago, 1-year ARMs averaged 2.55 percent.

Source: Freddie Mac

Government Shutdown Proved Costly to Taxpayers

Government Shutdown Proved Costly to Taxpayers. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

The Obama administration issued a report detailing the impact of the two-week government shutdown in October that furloughed government employees and has been blamed on putting the economy — including the housing market — in a holding pattern.

The shutdown caused back-pay of furloughed government employees to amount to $2 billion, and a loss of 120,000 private-sector jobs.

The shutdown resulted in 6.6 million days of lost work, the report said. Other effects from the shutdown also include missed fees from interest due on late payments, among other items.  The government shutdown also has been blamed on the fall of consumer and business confidence.

“Millions of Americans were impacted by the shutdown, due to furloughs of federal employees, reduced services for the public and delays in payments to federal grantees, states, localities, contractors and individuals,” Sylvia Mathews Burwell, the budget director, said in the report.

A report by Standard & Poor’s estimated the shutdown cost the U.S. economy $24 billion in losses and reduced fourth-quarter growth from 3 percent to 2.4 percent.

Unless Congress passes a budget or provides an alternative for financing the government, a second shutdown may loom at the beginning of 2014.

Source: “White House Puts Price on Government Shutdown,” The New York Times (Nov. 8, 2013)

Payday for Borrowers After Foreclosure?

Payday for Borrowers After Foreclosure? Image courtesy of Stuart Miles / FreeDigitalPhotos.net

More than 1,000 home owners who lost their homes to foreclosure in the Phoenix metro area may be eligible to recoup thousands of dollars in cash due to rising home prices. Many foreclosures are selling for more because of the general uptick in home prices, and some are even fetching more than what the original borrowers owed on their mortgages.

Typically in a foreclosure sale, the amount owed to the lender gets paid from the proceeds first. Then the remaining money goes to the county’s treasury office, where it remains for three years. During that time, second-mortgage lenders, homeowners associations, and others with a stake in the property have a chance to file a claim to the money. If the money never gets claimed, it rolls to the state.

In Phoenix’s Maricopa County Treasurer’s Office there is $24 million in unclaimed funds to date.

Some home owners who had been foreclosed on may be able to file a claim to the outstanding funds. AZCentral.com describes one couple, for example, who underwent a foreclosure on their rental home and now may be eligible to receive more than $86,000 under the “excess-proceeds” statute because the property was sold for more than what they owed on the home.

Source: “Phoenix-area foreclosed owners could get thousands,” AZCentral.com (Nov. 13, 2013)