Americans Get More Confident About Home Buying

Americans Get More Confident About Home Buying

The percentage of Americans who have been waiting to buy a home over concerns about the economy has dropped by more than half since 2010, a new survey by FindLaw.com says.

Sixty-three percent of Americans surveyed said in 2010 that they were putting off home buying decisions because of the sluggish economy. In 2012, the percentage has dropped to 30 percent.

“Two years ago, the economic situation was driving a lot of potential home buyers to the sidelines,” says Stephanie Rahlfs, an attorney and editor with FindLaw.com. “But today we’re finding that the state of the economy is becoming less of a factor in keeping people out of the housing market.”

Many more factors are driving home buying decisions today, regardless of the state of the economy, Rahlfs adds. For example, she says home buying motivators can be income, housing prices, schools, commute times, job relocation’s, mortgage rates, and the ability to sell an existing home.

“Among middle and upper income levels Americans, we’re seeing a significant rise in people saying the economy is making them more likely to enter the housing market,” Rahlfs says, attributing that to the low mortgage rates and housing prices.

Source: “Survey Shows People Becoming More Likely to Participate in the Housing Market,”

Superstorm Sandy’s Damage Extends to Office Sector Values

Superstorm Sandy’s Damage Extends to Office Sector Values

Superstorm Sandy not only damaged residences across the East Coast but also destroyed several office buildings — which is particularly being hard-felt across Manhattan, real estate executives said at the New York University Schack Institute of Real Estate Capital Markets in Real Estate conference. Thousands of downtown Manhattan workers have been unable to return to work after last week’s hit of Superstorm Sandy.

“I think there’s been value erosion downtown,” Howard Lutnick, chairman and CEO of Cantor Fitzgerald LPand BGC Partners Inc, said during the conference. “It had just started to come back. The concept now of fear of flooding is going to affect values.”

According to a real estate services company, Jones Lang LaSalle Inc., about one-third of the 101 million square feet of office space in Manhattan was closed, powered by generators, or had no heat due to the flooding caused by Superstorm Sandy. The prolonged closures to these offices has likely taken a bite out of the property values, says Darcy Stacom, CBRE Group Incvice chairman.

“Will investors think about this when they look at buildings in hard-hit areas by Superstorm Sandy? Yes,” Stacom says.

Source: “Big Real Estate Investors Say Sandy Hurts Lower Manhattan Values,” Reuters News (Nov. 7, 2012)

Mortgage Demand Falls After Sandy

Mortgage Demand Falls After Sandy

Applications for home loans purchases and refinancing dropped 5 percent last week as tropical storm Sandy ravaged the East Coast and disrupted normal business activity, the Mortgage Bankers Association reported Wednesday.

Due to the severe storms, mortgage application demand posted the big falls in New Jersey, where applications fell 60 percent last week. In New York, mortgage demand dropped nearly 50 percent, and nearly 40 percent in Connecticut.

The storm had “a significant impact on application volumes in the East,” says Mike Fratantoni, MBA’s vice president of research and economics.

Meanwhile, other states in other parts of the country continue to show gains in mortgage demand last week, Fratantoni said.

Source: “U.S. Mortgage Applications Down as Sandy Hit Northeast,” Reuters (Nov. 7, 2012)

FHA Orders Foreclosure Halt for Sandy Victims

FHA Orders Foreclosure Halt for Sandy Victims

The FHA (Federal Housing Administration) has ordered a 90-day temporary suspension of foreclosures in areas affected by Hurricane Sandy last week, the U.S. Housing and Urban Development announced Monday.

“I directed all FHA lenders to impose a moratorium on any foreclosures for 90 days in disaster-affected areas,” Shaun Donovan, HUD secretary, told reporters. “We don’t want families to be victimized twice — once by the storm and once by a foreclosure.”

Following the storm last week that ravaged the East Coast, mortgage giants Fannie Mae and Freddie Mac also announced mortgage relief for Sandy victims. Sandy victims with Fannie- or Freddie-backed loans might also qualify for temporary forbearance on their mortgages, possibly even up to a year.

Source: “US Orders 90-day Suspension of FHA Foreclosures in Disaster Areas,” Reuters (Nov. 5, 2012)

Extend Mortgage Cancellation Tax Relief.

Extend Mortgage Cancellation Tax Relief

The National Association of REALTORS® sent out a call to action to its million-plus members this weekend, urging them to support an extension of tax relief on mortgage forgiveness.

Under federal law, cancelled debt is generally considered taxable income. Since 2007, however, the Mortgage Forgiveness Debt Relief Act has exempted home owners from paying taxes on the amount of money their mortgage lender forgives as a result of a loan modification, short sale, or foreclosure. The act is due to expire at the end of the year, but the bill would extend the relief through 2014.

“Over a quarter of all transactions still involve distressed properties. That is why you must take action now,” the association said in an e-mail sent Sunday. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”

The organization asked its members to contact their elected representatives and tell them to complete their “unfinished business” after the election. Legislation aimed at extending the act has been introduced in both houses of Congress with bipartisan support in all cases. Senate Bill 2250 has 19 co-sponsors and awaits action in the Finance Committee. In the House Committee on Ways and Means, House Resolutions 4202 and 4336 are identical versions of the Senate legislation, and have 47 and 34 co-sponsors, respectively.

“It’s enormously important that we support this legislation,” NAR President Moe Veissi said in a video to members. “This is a vital, important message not just for our community of REALTORS®, but for the American consumer.”

Foreclosed Home Owners Rebound Faster With FHA Loans.

Foreclosed Home Owners Rebound Faster With FHA Loans

Home owners who experienced foreclosures are finding themselves owning again sometimes only three years later—possibly even less—with FHA loans.

Mortgage giants Fannie Mae and Freddie Mac usually require a seven-year wait following a foreclosure. However, FHA loans will approve loans after three years, if the borrower can show good credit and ability to pay the mortgage.

The FHA insures loans with low down payments, such as 3.5 percent, and tends to have greater flexibility with income requirements too.

“There’s definitely a movement of folks who had a foreclosure to re-emerge and re-engage in the market,” says Dustin Hobbs with the California Mortgage Bankers Association.

According to FHA loans guidelines, the agency will insure loans of a home owner who once faced foreclosure as long as the home owner can document circumstances beyond the borrower’s control that led to the foreclosure, such as a serious illness or death of a spouse. FHA notes that divorce or the inability to sell a home because of a job relocation don’t constitute such extenuating circumstances.

Source: “FHA Home Owners Recover From Foreclosures More Quickly,” RISMedia (Nov. 4, 2012

Homes Are Selling Faster as Inventories Fall.

Homes Are Selling Faster as Inventories Fall

The median time a home is on the market nationwide? Just 69 days.

The number of days on the market nationwide has fallen nearly 30 percent from year-ago levels.

Meanwhile, inventory levels are hovering at all-time lows, with the number of homes for-sale down 31.2 percent from a year ago. The inventory is at a 6.4-month supply of homes on the market, as of July data.

“As inventory has tightened, homes have been selling more quickly,” says Lawrence Yun, the National Association of REALTORS®’ chief economist. “A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”

For comparison, the time on the market for non-distressed homes peaked at 10 weeks in 2009. During the housing boom between 2004 and 2005, for example, the median selling time was just four weeks.

Source: “Low Inventory Levels Sells Homes Quick,” Realty Times (Nov. 2, 2012)