HARP Refinancing Continues to Surge.

HARP Refinancing Continues to Surge

About a third of all Fannie Mae and Freddie Mac loans refinanced in June went through the recently revamped Home Affordable Refinancing Program (HARP). That’s up from a 20 percent share in April.

Additionally, the number of HARP refinancing deals with high loan-to-value (LTV) ratios went up substantially. According to Mortgage News Daily, changes to the previous HARP program, such as removing the 125 percent LTV ceiling and eliminating fees, seem to be driving increased participation.

Freddie and Fannie refinanced 382,539 loans in June, 125,866 of which were though HARP. The total number of loans written under the restructured HARP in the first six months of this year totaled 422,969, exceeding the 400,024 written during 2011.

Source: “HARP Refinancing Continues to Surge, High LTV Share Skyrockets,” Mortgage News Daily

First-Time Home Buyers? The 5 Popular Markets.

First-Time Home Buyers? The 5 Popular Markets.

Loans backed by the Federal Housing Administration often are a lure to first-time home buyers with its low down payment requirements. In some areas, FHA-backed loans are more common than others, creating hot-spots for first-time home buyers.

Inman News recently identified the top housing markets for first-time home buyers, factoring in where FHA-backed loans are the highest and the lowest median housing costs.

The following five markets made its list for top first-time home buyers spots:

1.   Wilmington, Del.

Percent of total sales to first-time buyers with FHA loans: 31

First Quarter 2012 median sales price for new and existing homes: $170,000

2.   Charleston, West Va.

Percent of total sales to first-time buyers with FHA loans: 30.7

Median sales price for new and existing homes: $131,500

3.   Visalia-Porterville, Calif.

Percent of total sales for first-time buyers with FHA loans: 30.5

Median sales price for new and existing homes: $118,000

4.   Merced, Calif.

Percent of total sales for first-time buyers with FHA loans: 29.6

Median sales price for new and existing homes: $107,000

5. Fresno, Calif.

Percent of total sales for first-time buyers with FHA loans: 28.8

Median sales price for new and existing homes: $135,000

See what other cities made the list.

Source: “10 Best Housing Markets for First-time Home Buyers,” Inman News (July 12, 2012)

Retiring? How Long Should You Work?

Retiring? How Long Should You Work?

How much longer are you prepared to work in the real estate industry before retiring? A new study says that any employee should plan to work up until age 70 if they want to be comfortable in retirement.

About 51 percent of working households are at-risk if they are retiring at age 65, according to a study by the Center for Retirement Research at Boston College. Yet, 86 percent of households would be prepared if they are retiring by age 70, the study shows.

Alicia Munnell, director of the Center for Retirement Research at Boston College, says the goal should be to delay dipping into savings for retirement as long as possible.

“How Social Security payments are calculated in retirement plays an important part of the work-longer strategy,” USA Today reports on the study. “A [baby boomer] who starts taking Social Security benefits at age 70 would have roughly a 75 percent larger base benefit than if the same person started drawing Social Security retirement benefits at 62.” Age 62 is the earliest retirement age for Social Security benefits, but the study finds that only about 30 percent of households would be prepared to retire at that age.

Every year a person delays retiring and receiving Social Security up to 70, he stands to possibly get an extra 7 percent to 8 percent per year (for those born 1943 or later), according to the study.

Source: “Working Until 70 Could Ease Retirement Finances,” USA Today (July 4, 2012)

US Mortgage Applications Fell Last Week.

US Mortgage Applications Fell Last Week

US Mortgage Applications fell last week on lower demand for both new purchase and refinance loans, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of US Mortgage Applications activity, which includes both refinancing and home purchase demand, fell 1.8 percent in the week ended Aug 3.

The MBA’s seasonally adjusted index of refinancing applications fell 1.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 1.4 percent.

The refinance share of total mortgage activity held steady at 81.2 percent of US Mortgage Applications from the week before.

Fixed 30-year mortgage rates averaged 3.76 percent in the week, up 1 basis point from 3.75 percent the week before.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Source (http://www.cnbc.com/id/48564240)

Improving Housing Markets in nearly 1/4 of the Metros.

Improving Housing Markets in nearly 1/4 of the Metros

Eighty U.S. metro areas are holding a spot in this month’s Improving Housing Markets Index, a housing index that spotlights housing markets showing gains over at least six consecutive months.

The National Association of Home Builders/First American’s August index shows that 75 metro areas kept their spot on this month’s list, with the addition of five new ones.

The five metros added to this month’s Improving Housing Markets index are:

• Miami
• Palm Bay, Fla.
• Hinesville, Ga.
• Terre Haute, Ind.
• Lubbock, Texas

The index measures improvements in housing permits, employment, and housing prices over at least six months.

“The list of improving housing markets in August includes metros across every region of the country, all of which have distinctly different characteristics in terms of their economic and employment bases as well as other factors,” says Barry Rutenberg, NAHB chairman. “One thing that most markets have in common, however, is the tight lending environment for both builders and buyers that continues to drag on their positive momentum.”

To view a complete list of the 80 metro areas on the IMI, visit www.nahb.org/imi.

Source: National Association of Home Builders

Gen Y Buyers brought to starter homes by builder.

Gen Y Buyers brought to starter homes by builder

A national home builder is wooing Generation Y renters with back-to-basics homes that offer all of the advantages of home ownership on a comfortable budget.

Chicago, San Antonio, and St. Louis are the test markets that Centex Homes is using to convert younger tenants to Gen Y Buyers. Fred Ehle, vice president of marketing for PulteGroup, Centex’s parent company, told writer Mary Umberger that the huge demographic was poised for the transition.

“We’re marketing these homes to the Gen Y Buyers, not with an advertised sales price of $130,000, but with the monthly cost of that home,” Ehle said. “Our goal in designing these houses was to make sure we could compete with local rents.

“We can tell the Gen Y Buyers, for what you’re paying in rent, you could be in a new home — this is a revelation for them, because many people in this demographic don’t think they could afford it or they don’t think they could qualify for a loan. For this reason, we offer to connect each buyer to a mortgage adviser before they sign up to buy,” Ehle added.

Source: “Builder Woos Gen Y Renters,” Chicago Tribune (Aug. 2, 2012)

Housing Crash Effects on Home Ownership Views?

Housing Crash Effects on Home Ownership Views?

Depending on how Americans’ experienced the housing crash –

—whether they were a home owner or a bystander reading about it in the news—as well as their age influenced their perceptions of home ownership today, according to a new study by economists at the Boston Federal Reserve.

Two-thirds of Americans who did not personally suffer a loss directly from the Housing Crash and who knew of the housing crisis merely from the media have not changed their views toward home ownership. They still place a high value on the American Dream, the study finds.

However, younger home owners who experienced the Housing Crash first-hand saw the most after-affects in their views of home ownership, the study found. About one-third of individuals who suffered directly from the housing crisis, such as through foreclosure or seeing their home values fall, had their confidence in home ownership shaken. However, older Americans who also suffered direct losses still mostly retained their confidence in home ownership and say they’d still choose to buy over rent.

Nevertheless, the study found that the majority of Americans still say buying a home is better financially than renting a home.

“We find that recent housing market conditions had little effect on individuals whose exposure to the Housing Crash came through only, such as media accounts,” the authors wrote in the report, Shifting Confidence in Homeownership: The Great Recession. “For individuals who were not foreclosed on, did not lose a substantial amount of money in real estate, and did not have anyone close to them who did, attitudes toward the financial soundness of buying as opposed to renting were unchanged by the magnitude of the house price decline in their area. Information alone may not be sufficient to change attitudes; rather actual experience is necessary to change attitudes.

Furthermore, the effects of the crisis seem to be confined to attitudes toward buying a home, and do not extend to attitudes to other home ownership decisions, such as … general risk aversion.”

Source: “Boston Fed Study: Home Ownership Values Unchanged Among Most Americans,” RISMedia (Aug. 5, 2012)

Mortgage Closing Costs on the Decline.

Mortgage Closing Costs on the Decline

Mortgage Closing costs have dropped by 7 percent over the last year, according to an annual survey on closing costs conducted by Bankrate.com. Closing costs average $3,754 nationwide.

Title insurance and other third-party fees also saw a drop in the last year, falling 12 percent, and origination fees fell 1 percent, according to Bankrate.com’s survey.

“This is the second year in which lenders are required to estimate third-party fees within 10 percent of the final cost. It seems like they’re getting more accurate, which helps explain the sharp decrease in these fees over the past year,” Greg McBride, Bankrate.com’s senior financial analyst, said in a statement. “The main lesson of this survey for consumers is to shop around for at least three different estimates. While no one is going to move to a new state just because closing costs are lower, it’s important for people to realize that there is variation even within their neighborhood, and that they can save by being an educated consumer.”

5 States With Highest Average Mortgage Closing Costs

1. New York: $5,435
2. Texas: $4,619
3. Pennsylvania: $4,467
4. Florida: $4,395
5. Oklahoma: $4,352

5 States With the Lowest Average Mortgage Closing Costs

1. Missouri: $3,006
2. Kansas: $3,193
3. Colorado: $3,199
4. Iowa: $3,257
5. Arkansas: $3,325

View the survey, which contains all states’ average Mortgage Closing Costs.

Source: Bankrate.com

Housing Is on the Mend…

Housing Is on the Mend

Some Americans are still jittery over the housing market, but here are eight positive signs that should quell some of their fears.

1. Housing prices are on the rise across the country.
2. Foreclosures have slowed. Analysts suggest that as the supply of distressed homes slows, buyers will be forced into higher-price properties too.
3. Inventories of for-sale homes on the market are decreasing. In fact, inventories of for-sale homes have dropped 24 percent from a year ago.
4. Mortgage rates are at ultra record level lows, for those who can qualify
5. Housing starts rose 6.9 percent in June. Also, existing-home sales were up 4.5 percent higher in June compared to one year ago.
6. Home building stocks are on the rise.
7. For investors who are buying homes, rents are soaring, allowing them to cash in on their investments. Rental prices are at a 10-year high as median units rent for $710 a month.
8. Home affordability is at record highs for the median income family, due to falling home values and super low mortgage rates. In fact, a recent study found that it is cheaper to buy a home than rent in basically ever major city in the U.S. For those who buy, you can save the cost of renting by owning the home for five years or less.

But while the signs point to a housing market on the mend, some Americans still remain hesitant. Many Americans are still underwater on their mortgage, owing more on their home than it is currently worth. Also, the economy continues to weigh on the recovery, particularly a dampening employment outlook, which analysts see as tied to housing.

Still, The Wall Street Journal concludes in a recent article that if you take into account all the positive signs lately in the housing market, “housing presents an attractive long-term investment that should hold steady or even have upside surprise in the short term.”

Source: “Finally, It Is Time to Buy a House,” The Wall Street Journal (Aug. 1, 2012)