Why Wait For Spring? Winter Is A Great Time To House Hunt

By Pauline Millard
December is usually when people are looking to deck their own halls—not buy new ones. But buying a home in December and January can be a smart move.
Michael Corbett, Trulia TRLA -2.28%’s real estate expert and a bestselling author, is a big fan of the holiday season, what he likes to call “the lull.” He says that savvy home buyers should take advantage of this time if they’re serious about buying.
Why?
“Mortgage rates are low now, although they are higher than they were six months ago, and higher than they were last March,” Corbett says. “The price increases that were common in metro markets such as Las Vegas, Fort Lauderdale and Orlando are slowing. Even Atlanta, which had an average 19% price increase last year, is showing signs of cooling.”
Corbett explains why the holidays are no time to take a long winter’s nap if you want to buy a home.
LearnVest: What do you like about what you call The Lull, which is in December and January?
Corbett: There isn’t a lot of competition. People know they’re going to be busy or traveling during the holidays, so most deals have been wrapped up or people have put off looking until after the New Year. There are still homes on the market, but not as many people gunning for them. This is an advantage to both buyers.
If it’s a slow season, doesn’t that mean inventory will be lower?
Yes, but the sellers are motivated. These are likely the homes that for whatever reason didn’t go during the peak season. The sellers will want to get the deal closed, especially for tax purposes. For a lot of people, it’s mental. It’s the end of the year and they want to tie up loose ends. This is an advantage for buyers, especially if there are points to negotiate.
Would other key people in the equation, such as realtors and mortgage brokers, also be scarce?
I know a lot of realtors who love this time of year. They say they get a lot of business done because the people who are out looking are serious. As a buyer, your broker will have more time to focus on you, as opposed to other times of the year when they might be juggling more clients. You may not be able to close before the end of the year, but it’s a good time to get something under contract.

Could a homebuyer miss or overlook something while buying in the dead of winter?
Buying in winter may be the ultimate litmus test for a home, since all the big systems such as heating, plumbing and the roof and gutters are put to the test in the cold. Some of the curb appeal may be gone, but fixing landscaping is a lot less expensive than finding out months later that your boiler doesn’t work.
Would a slow winter market be prime time for investors?

Investors are looking for fresh properties, often things that aren’t even on the market yet. The chances of getting outbid by an investor during a winter house hunt is unlikely. Few brand-new properties come on the market this time of year, so the investors won’t be circling.

'Boomerang' Buyers Expected to Boost Recovery in the New Year

12/26/2013BY: HOWARD GOLDTHWAite 

Housingforeclosure authorities at LoanSafe.org andYouWalkAway.com have created a new website to help people re-enter the housing market after having been through a previous foreclosure. The website is calledAfterForeclosure.com and helps those most affected by the housing crisis take charge of their financial future and own their own home again.

Based on a poll of their combined members, LoanSafe.org and AfterForeclosure.com are confident that these potential buyers will make 2014 the year of the “boomerang” buyer.

Changes in lending guidelines and population shifts make these buyers essential to the recovery of the housing market. Jon Maddux, co-founder of AfterForeclosure.com says: “Alienating this large and growing pool of potential buyers does not bode well for the market in an environment where natural housing advancement has been largely disrupted.”

College graduates are laden with student debt and limited employment options, while baby boomers are aging. Maddux continues: “There are literally millions of ex-homeowners who may be qualified to buy a home again, but are unaware of the help that is readily available to them through existing and new loan programs.”

According to a poll of LoanSafe.org and AfterForeclosure.com’s members:

• 79 percent of those who lost their homes are interested in buying again.
• 41 percent have incomes higher than when they first purchased.
• 63 percent report that their other debt obligations are lower (30 percent said “significantly lower”).
• 46 percent report the desire to purchase in a lower price range, and 29 percent report wishing to purchase in the same price range.

“Boomerang” buyers are investing more into the purchase of a new property than in the past by putting down more than the minimum required. Over half stated that they plan to make a down payment of 10 percent or more on their next home purchase. The zero-percent down payment programs of the past made it easier for homeowners to walk away from properties. Higher down payments suggest that “After Foreclosure” buyers are in for the long haul and don’t intend to make the same mistakes the second time around.

In the past, rapidly rising prices led many to believe that they’d get “priced out” of the housing market altogether, leading to hasty purchases that may not have happened under less duress. “Boomerang” buyers will likely be more careful on their next purchase.

Considering the importance of “Boomerang” buyers, the Federal Housing Administration recently implemented the “Back to Work” program. This program allows the purchase of a new property as soon as twelve months following a foreclosure or short sale provided that the borrower can prove that their prior default was the result of a financial hardship. “Financial hardship” is strictly defined as an employer-driven loss of at least 20 percent in income for six months or more. Although the program is definitely a step in the right direction, it leaves those who were self-employed out in the cold.

Sadly, word of the FHA program is not getting out. According to a poll of the former foreclosure demographic, 81 percent had never heard of the program

Sales of Existing Homes Decline Annually for First Time in 29 Months

12/19/2013 By: Tory Barringer 

Existing-home sales dipped on both a monthly and annual basis in November, marking the first year-over-year decline in sales in nearly two and a half years.

The National Association of Realtors (NAR) calculated an adjusted annualized sales rate of 4.90 million for existing homes last month, representing a drop from 5.12 million in October and 4.96 million in November 2012. The figure includes completed transactions of single-family homes, townhomes, condominiums, and co-ops.
According to the group, it was the first time in 29 months that sales fell below year-ago levels.
Singling out single-family home sales, transactions were at an adjusted pace of 4.32 million, down 3.8 percent month-over-month (from 4.49 million) and 0.9 percent year-over-year (from 4.36 million).
Explaining the decline, NAR chief economist cited the usual factors. “Home sales are hurt by higher mortgage interest rates, constrained inventory, and continuing tight credit,” he said.

Total housing inventory as of November 30 was an estimated 2.09 million existing homes available for sale, representing a 5.1 month supply at the current sales pace. While inventory was down, the slower rate of sales brought months’ supply up from 4.9 in October.
The median time on market for all homes was 56 days in November, up from 54 in October but well below the 70 day median recorded a year ago.
Tighter inventory was one factor providing lift to the median existing-home price in November, which was up 9.4 percent year-over-year to $196,300. Compared to October, the median price was down 1.6 percent.
As far as the challenge of tight credit is concerned, NAR expects new underwriting regulations—scheduled for implementation January 10—will impact some borrowers at the outset, affecting sales. However, the association remains optimistic.
“[The new rules mean] qualified borrowers are getting a loan that they are very likely to be able to repay, but some borrowers may wind up paying much more for their mortgage, or not get a loan at all due to the tougher standards,” said NAR president Steve Brown. “The new rules may tighten credit too much, but we’re hopeful regulators will make adjustments if this proves to be true.”
Existing-home sales dropped compared to October in all regions, falling 3.0 percent in the Northeast, 4.1 percent in the Midwest, 2.4 percent in the South, and 8.5 percent in the West. Median prices were higher in all four regions compared to November 2012.

Annual Price Gains Accelerate to 7-Year High

12/18/2013BY: TORY BARRINGEr

Declines in mortgage and sales activity weren’t enough to stop the ongoing rise in home prices in October—but they did slow the pace once more.

The latest Residential Price Index (RPI) from FNC Inc. shows October prices were up an average 0.3 percent nationally from September to October. The increase was the weakest monthly gain in FNC’s index in the last eight months.

“The deceleration in the pace of price increase is expected as the housing market heads into the winter low season

after strong growth in the spring and summer,” FNC said in a release.

Part of the slowdown also stemmed from an increase in completed foreclosure sales, which were up half a percentage point to 13.9 percent of total home sales. Again, FNC explained the trend is seasonal, with banks disposing of distressed properties more quickly in winter months.

Year-over-year, it was a different story: October’s prices were up 6.5 percent nationally compared to last year, accelerating to the fastest growth pace in seven years.

On a monthly basis, the 30-city and 10-city composites rose an unadjusted 0.4 percent and 0.3 percent, respectively. Annually, both composites were up 7.0 percent.

Measuring the cities in the 30-market composite, six experienced month-over-month declines in October: St. Louis, Missouri (-0.1 percent); Phoenix, Arizona (-0.1 percent); Nashville, Tennessee (-0.8 percent); New York, New York (-0.9 percent); Denver, Colorado (-1.2 percent); and Cincinnati, Ohio (-2.7 percent). Compared to last year, only St. Louis (-0.3 percent) and Chicago (-0.5 percent) posted declines.

FHA Replenishes Fund, Expects to Meet 2% Reserve Mandate by 2015

12/16/2013 By: Tory Barringer 

More than a year after reporting a shortfall of $16.3 billion in the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance (MMI) fund, HUD announced significant improvements in the agency’s financial situation—though the fund remains in the red.

An actuarial report released Friday shows FHA’s insurance fund for single-family home loans has regained $15 billion dollars in value over the last year, bringing it to -$1.3 billion dollars and a capital ratio of -0.11 percent. By law, the federal insurer is supposed to maintain a capital reserve ratio of 2 percent, a goal it expects to meet in 2015.
As of now, the agency maintains more than $48 billion in liquid assets to pay expected claims.
“What is clear from the independent actuarial report is that the aggressive steps we have taken have made FHA stronger and put it on a sustainable path to fulfill its dual mission of supporting access to homeownership for underserved and low-wealth borrowers as well as supporting and stabilizing the housing market,” said HUD Secretary Shaun Donovan.
“We look to the future and remain committed to continuing our progress to strengthen the MMI Fund so that ladders of opportunity are available to all Americans for generations to come,” he added.
The actuarial report points to a number of factors driving the improvement in FHA’s finances, including declines in early payment defaults—to their lowest levels in seven

years, thanks to improved underwriting in more recent books of business—and drops in serious delinquency and foreclosure rates as a result of enhanced loss mitigation efforts.
To keep up the momentum, FHA says it plans to continue pushing for further legislative changes that would allow the agency to seek indemnification from all classes of approved lenders, grant the authority to terminate approval on a national—rather than regional—basis, and facilitate servicing by specialty servicers.
Though FHA still has some ground to make up, Friday’s news was taken as a largely positive sign by industry groups.
“Today’s report, while recognizing FHA’s current shortfall, shows clear improvement over last year and is a sign that the MMI Fund is headed in the right direction and could soon be positive,” said David Stevens, president and CEO of the Mortgage Bankers Association (MBA), adding that with a tighter credit environment on the horizon, “policymakers must continue to protect and improve the MMI fund in order to ensure that FHA can serve its critical mission in the single family market.”
On the other hand, FHA’s critics are likely to be less than impressed—in particular Rep. Jeb Hensarling (R-Texas), who has proposed legislation to reform FHA and drive down the government’s presence in the market.
In a November op-ed for the Washington Times, Hensarling criticized FHA Commissioner Carol Galante’s moderate approach to revising the agency’s practices, saying FHA has “refused to make full use of the tools it has at its disposal, such as raising premiums to their maximum or increasing minimum down payments.”
His criticism carries heavy weight in light of the fact that FHA just recently had to take its first-ever taxpayer-funded bailout.
“Americans deserve and demand a healthy economy. We cannot borrower, spend or bail out our way to prosperity,” he goes on to say in the Washington Times piece. “If government continues to dominate the housing market, we may never have a truly healthy and sustainable economy.”

Holidays can be good time to buy a home

Vera Gibbons Zillow

Dec. 9, 2013 at 1:24 PM ET

Mario Tama / Getty Images

The holidays can be a good time to buy a home.

If you’re house hunting over the holidays, you’re likely a serious buyer with an immediate need. Perhaps you have to relocate for a new job opportunity, or there’s been a change in your personal life? Regardless, while you may assume it’s not an ideal time to be looking — namely because there isn’t much to look at — there are some advantages to buying this time of year.
Less competition
Let’s start with the obvious one: less competition. This lowers the chances of multiple offers and bidding wars (something we saw a lot of last spring/summer), and should translate into a bigger discount for you. Know your market! This is where sites like Zillow come in handy. Start your research here for comps in your area and to see what homes are selling for.
Serious home sellers
Why would sellers pick such an inconvenient time — while everyone is busy entertaining family and friends and enjoying the spirit of the holidays — to list their properties? Probably because they need to sell and may feel compelled to do so before the end of the year for tax purposes. What this means for you: less hassle when it comes to negotiating; a greater willingness, on the part of the seller, to agree to concessions; less chance of the seller waffling; and greater respect for your offer, even if it’s a little lower than the seller was perhaps expecting.
Faster mortgage approval
Lenders aren’t as busy this time of year, and less volume could mean faster approval. Some lenders might even be willing to reduce fees during the off-peak season in hopes of gaining your business. Regardless, don’t just go with the first lender who comes along. It pays to shop around. Get multiple quotes and check out lender reviews on Zillow Mortgage Marketplace.
Greater affordability
Sure, home prices have been rising, but they’re typically lower in December than during any other month (so you don’t have to be as aggressive with your initial first offer, compared with buying during peak to high season). Zillow’s third quarter Real Estate Market Reports showed home value appreciation slowing. As we enter the slower home shopping season many overheated markets are moving away from bubble brink and ultimately becoming more affordable than they have been historically. If you want to take advantage of low interest rates, the time to act is now.

Housing Affordability Challenges 

By Michael Fenner, Monday, 9 December 2013 - 11:11am

 

A growing number of renters are finding it more difficult to find housing they can afford, according to a new report by the Harvard Joint Center for Housing Studies. Half of U.S. renters pay more than 30 percent of their income on rent, which is a 12 percent increase from those who did so a decade earlier. More startling, 27 percent of renters pay more than half their income on rent, up from 19 percent 10 years ago.
The report attributes the trend to rising rental prices combined with falling wages: Between 2000 and 2012, median rents increased by 6 percent, while median renter income fell 13 percent. The percentage of Americans who rent housing rose from 31 percent in 2004 to 35 percent in 2012.
Falling ownership rates have boosted demand for single-family rental homes: approximately 3 million existing homes went from owner-occupied to rental occupancy between 2007 and 2011, the study finds. This demand has depleted rental inventory and pushed rents higher, but that has triggered growth in the recently struggling new-home construction market.
“The gravity of the situation for the large proportion of renters spending so much of their incomes on housing is plain,” says Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard.
“We are losing ground rapidly against a chronic problem that forces households to cut essential spending. With little else to cut in their already tight budgets, America’s lowest-income renters with severe cost burdens spend about $130 less on food each month, and make similar reductions in healthcare, clothing, and savings. And while many choose longer commutes to lower their housing costs, the combined cost of housing and transportation means even less remains for other expenses.”

Housing Momentum Stalled by Cautious Consumers

12/10/2013 By: Howard Goldthwaite 

According to Fannie Mae’s November National Housing Survey, positive momentum in the housing market has slowed as Americans remain cautious about their personal finances and the overall state of the economy.

Nearly two-thirds of those surveyed believe the economy is on the wrong track. Twenty-two percent expect their personal finances to worsen during the next year, and only 45 percent expect home prices to increase within the next 12 months.
According to Doug Duncan, SVP and chief economist at Fannie Mae: “We continue to see caution as the defining feature of Americans’ attitudes toward the economy and their personal financial situation. In this environment, the housing recovery is likely to improve, but only at a gradual pace.”
Duncan continued: “Our November National Housing Survey results show a loss of momentum in expectations for home prices and personal finances. Also, the majority of consumers expecting higher mortgage rates implies a slowing of housing market momentum. As the economy continues to improve and household balance sheets for most Americans are slow to repair, we continue to see the transition to a full housing recovery as a slow process.”
Additional survey highlights reveal:
•The average 12-month home price change expectation continued its fall, down 2.5 percent.

•Consumers who say mortgage rates will go up in the next 12 months increased by 2 percentage points to 59 percent.
•Only 64 percent feel it is a good time to buy a house, which is an all-time low for the survey.
•Rental prices are expected to fall 2.8 percent.
•In spite of falling home rental prices, 50 percent of those surveyed say home rental prices will go up in the next 12 months.
•Fifty percent say it would be easy for them to get a home mortgage today, an increase of 4 percent from the previous month’s survey.
•Those who say they would buy if they were going to move decreased slightly to 68 percent.
•The share of respondents who say the economy is on the right track increased to 32 percent, but this is a lower total than earlier this year.
•Respondents who expect their personal financial situation to worsen in the next 12 months held steady at 22 percent.
•Respondents who say their household income is significantly lower than 12 months ago increased to 17 percent.
•Thirty-three percent of respondents say their household expenses are significantly higher than 12 months ago.
The Fannie Mae National Housing Survey has been conducted monthly since June 2010. It polls about 1,000 households via telephone to assess attitudes on home rental or ownership, the economy, and overall consumer confidence. Fannie Mae shares its survey results to help industry partners and market participants stabilize the housing market and provide support in the future.
Visit the Fannie Mae Monthly National Housing Survey page on the GSE’s website for detailed findings from the November 2013 survey, an audio podcast synopsis of the survey results, and survey questions asked. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies.

Foreclosures, Foreclosure Inventory, Serious Delinquencies All Falling

12/09/2013 By: Krista Franks Brock 

Foreclosures are declining but continue to remain well above pre-crisis norms, according to CoreLogic’s October National Foreclosure Report released Monday.

During the month of October, the company reports 48,000 foreclosures were completed. That’s down 30 percent from the 68,000 reported in October of last year and down 25.6 percent from 64,000 in September.
While these declines are significant, CoreLogic pointed out in its report that prior to the crisis—between 2000 and 2006—foreclosures averaged about 21,000 per month, well below the current rate.
Regardless, foreclosures declined year-over-year in all 50 states and the District of Columbia in October.
States with the fewest foreclosures completed during the 12 months ending in October were the District of Columbia with just 57 foreclosures in a year’s time, followed by North Dakota (411 foreclosures), Hawaii (491), West Virginia (514), and Wyoming (694).
Five states accounted for half the nation’s foreclosures during the 12-month period. Those states include Florida (115,000), Michigan (50,000), California (46,000), Texas (43,000), and Georgia (39,000).
Just as completed foreclosures declined, so too did the industry’s foreclosure inventory, meaning the number of properties still in some stage of foreclosure.

The national foreclosure inventory stood at 879,000 homes, according to CoreLogic’s October data, down 31 percent from last October’s 1.3 million.
October’s foreclosure inventory accounted for 2.2 percent of all homes with outstanding mortgages, according to CoreLogic, which is down from a foreclosure inventory rate of 3.1 percent in October 2012.
“This is good news for the housing and mortgage finance markets, but the rate remains elevated relative to the pre-crisis level of about 0.6 percent,” said Mark Fleming, chief economist for CoreLogic.
A “normal level” of foreclosure inventory “would be only a quarter of the current stock,” according to Fleming.
States with the highest percentages of foreclosure inventory are mostly located in the Northeast, which continues to lag the national recovery.
Florida, the No. 1 state for foreclosure inventory, is the only state in the top five that is not located in the Northeast. By CoreLogic’s assessment, Florida’s foreclosure inventory comprised 7.1 percent of its homes with outstanding mortgages in October.
New Jersey was not far behind with a rate of 6.7 percent, followed by New York (4.9 percent), Maine (3.8 percent), and Connecticut (3.7 percent).
The national serious delinquency rate stood at 5.1 percent, after falling more than 25 percent since last October, according to CoreLogic. This is its lowest level for serious delinquencies in almost five years, the company says.
As with completed foreclosures and foreclosure inventory, Florida also ranks highest when it comes to serious delinquencies with a rate of 11.6 percent. New Jersey falls in with the second highest rate, registering 10.6 percent.
These two judicial states are the only states in the nation where the serious delinquency rate is in the double-digits, according to CoreLogic’s data.

Fed Cites Improvements in Real Estate in Half of Districts

12/05/2013 By: Tory Barringer 

“Modest to moderate” economic growth continues to be the theme at the Federal Reserve, which this week released its Beige Book, tracking expansion across the 12 Fed districts from October through mid-November.

The Fed reported improvements in residential real estate activity in Boston, Philadelphia, Chicago, St. Louis, Minneapolis, and San Francisco, with slower single-family home sales softening real estate in most of the remaining districts.
Meanwhile, increased demand, “low to declining” inventory levels, and slowly improving new home construction were cited by most districts as factors contributing to rising home prices, though increases have slowed. Inventory levels were reported as being particularly low in Philadelphia, Richmond, Kansas City, Dallas, and Chicago, with the last city reporting a record low in the number of homes for sale.
In financing, banking conditions reportedly remained stable in a majority of districts.

“Loan volume showed a modest increase in Philadelphia, Chicago, and San Francisco, while Boston and Atlanta reported a moderate rise. Dallas noted that loan demand softened across most lines of business during the reporting period,” the Fed reported.
Lower residential mortgage activity was reported in many districts, attributed by some banks to increased interest rates.
On the brighter side, “[s]everal Districts reported increased credit quality, as delinquencies have continued to decline and fewer problem loans have been reported.”
Commercial real estate activity was mixed at the local level, though many districts said activity was stable or had improved slightly. Demand for space was driven according to regional interests:
“Philadelphia, Cleveland, Richmond, Chicago, St. Louis, and Minneapolis all saw gains in industrial construction, while Boston, Chicago, and St. Louis cited a rise in hotel construction,” the Beige Book said. “The technology sector drove demand for commercial real estate in the San Francisco District, and Cleveland saw gains in affordable housing and shale-gas-related activity.”
According to the Fed, market participants in Philadelphia, Atlanta, Kansas City, and Dallas maintain a forecast of continued improvement in commercial real estate, while “contacts were cautiously optimistic in Boston and Cleveland.”
Finally, builders in several districts continue to face labor problems, indicating a possible drag in construction over the coming year. High-skilled trade labor has been particularly scarce in the Philadelphia, Cleveland, Kansas City, and San Francisco districts.

October Home Prices Maintain Trend of Slow but Steady Gains

12/03/2013BY: TORY BARRINGER

Home prices just barely bumped up in October compared to September, keeping the trend going for slow month-to-month improvements.

CoreLogic’s Home Price Index (HPI) report for October shows the national home price (including distressed sales) rising 0.2 percent from September, edging just above the company’s predictions from last month. Year-over-year, the national price increased 12.5 percent, marking the 20th straight month of annual price increases nationally.

Removing distressed sales, home prices increased 0.4 percent month-over-month and 11 percent year-over-year in October.

“In terms of home price appreciation, the housing market appears to be catching its breath as we head into the final months of 2013,” said CoreLogic president and CEO Anand

Nallathambi. “The deceleration in month-on-month trends was anticipated as strong gains in home prices over the spring and summer slow in line with normal seasonal patterns and the impact of higher mortgage interest rates.”

Including distressed sales, the states with the highest price appreciation in October were Nevada (+25.9 percent), California (+22.4 percent), Georgia (+14.2 percent), Michigan (+14.1 percent), and Arizona (+14 percent). Only one state reported depreciation: New Mexico (-0.5 percent).

Taking distressed sales out of the equation, the list of the top states mostly comprised those struggling from low inventory and what’s left of the post-crash fallout: Nevada (+22.5 percent), California (+18.5 percent), Utah (+13.3 percent), Florida (+13 percent), and New York (+12.4 percent). No states posted price depreciation with distressed sales excluded.

For November, CoreLogic’s Pending HPI projects home prices (including distressed sales) will sit at roughly the same level as October, with an anticipated year-over-year increase of 12.2 percent.

“Based on our pending HPI, the monthly growth rate is expected to moderate even further in November and December,” said Dr. Mark Fleming, chief economist for the company. “The slowdown in price appreciation is positive for the housing market as almost half the states are now within 10 percent of their respective historical price peaks.”

Higher Price Gains Align with Higher Levels of Distressed Sales

12/02/2013BY: KRISTA FRANKS BROCK

While analysts across the industry are reporting waning price gains as we head toward winter, Clear Capital also points out another interesting – and perhaps counterintuitive – trend occurring in the housing market. Prior to the recovery, high saturations of distressed sales correlated with falling prices, but today’s market reveals a switch such that high levels of distressed sales are taking place alongside higher price gains.

Currently, distressed sales are more prevalent among higher-performing markets, according to Clear Capital’s Home Data Index Market Report released Monday.

The average annual price growth among the 15 top-performing markets is 19.2 percent, and distressed sales make up 24.5 percent of sales in these markets.

In contrast, prices in the lowest-performing markets average 4.9 percent over the year, and distressed sales make up a lower 17.2 percent of sales in these markets, according to Clear Capital.

This is part of what Clear Capital has termed the “First-In-First-Out” recovery, in which hard-hit markets have made the strongest and quickest comebacks in the housing recovery.

“The Phoenix MSA has embodied this behavior as one of the first markets to exhibit a sustained recovery alongside its high levels of distressed sale saturation,” Clear Capital said in its press release Monday.

“After significant gains, the market’s growth is now moderating with quarterly growth of 2.4%, less than half of the current annual rate of growth when annualized,” Clear Capital continued.

In fact, Phoenix, having spent close to a year at the top of Clear Capital’s highest-performing list, has slid off the list completely.

Nationally, price gains are starting to let up as well, according to Clear Capital.

National home prices increased 1.8 percent in the rolling quarter ending in November, almost half of the previous quarter’s 3.3 percent gain.

“Though some market observers may take this as a sign of a deflating bubble, we see this as a natural, and welcomed evolution on the horizon of the new housing landscape,” said Alex Villacorta, VP of research and analytics at Clear Capital.

“Understandably, many current homeowners would like to see hot gains continue for some time to come,” he added. “Market participants, however, are better served by a cooler and more sustainable recovery.”

On an annual basis, prices rose 10.8 percent year-over-year during the rolling quarter ending in November, according to Clear Capital. This is down from an 11 percent gain in the previous quarter.

REOs and short sales made up 21.6 percent of home sales during the three-month period ending in November, which according to Clear Capital is “substantially lower” than the 41 percent high reached in 2011.

On an annual basis, the Northeast and South posted single-digit price gains as opposed to the West and Midwest’s double-digit gains.

Prices in the Northeast increased 6 percent over the year. In the South prices were up 8.7 percent.

In the West and Midwest, prices rose 19.3 percent and 10 percent, respectively.

On a more local level, Clear Capital found eight of the 15 highest performing major metro markets over the quarter were located in California with San Francisco, Riverside, and Sacramento topping the list.

The lowest performing metro, and the only one to post a quarterly decline, was the Houston, Texas, metro, which experienced a 1.4 percent price decline over the quarter.

Birmingham, Alabama, and Honolulu followed with price gains of 0.3 percent and 0.4 percent, respectively.

Rate of Appreciation Slows but Unseasonal Gains Remain Elevated

11/26/2013 By: Tory Barringer 

Home prices continued to advance in September, bringing third-quarter growth to 3.2 percent, according to the S&P/Case-Shiller Home Price Indices released Tuesday.

Both the 10- and 20-city composite indices rose 0.7 percent month-over-month and 13.3 percent year-over-year in September. Since bottoming out in March 2012, the 10- and 20-city composites have recovered 22.9 percent and 23.6 percent, respectively; compared to their June/July 2006 peaks, both indices are down about 20 percent.
Price gains decelerated on a monthly basis in 19 cities in September. Las Vegas and Tampa saw the greatest slowdown, with growth rates dropping 1.6 percentage

points compared to August. Miami was the only city where growth kept its pace at 0.8 percent.
Detroit was the strongest city in September, seeing a monthly price increase of 1.5 percent—though it remains the only market still below its January 2000 level. Meanwhile, Charlotte was the weakest, reporting a decline of 0.2 percent—the first drop for that city since November 2012.
Looking at annual changes, all 20 cities reported growth, and 13 fared better than they did in August. Cleveland posted the strongest acceleration (moving from 3.7 percent annual appreciation in August to 5.0 percent in September), though it remains the second-worst performing city, beating only New York.
Las Vegas, Los Angeles, San Diego, and San Francisco had the strongest year-over-year price improvements, each posting gains of over 20 percent. Las Vegas topped the rest with a year-over-year price increase of 29.1 percent.
David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said September’s numbers are proof that housing is making its way out of the rubble of the financial crisis.
“The longer run question is whether household formation continues to recover and if homeownership will return to the peak levels seen in 2004,” he said.

Negative Equity: A New Way of Life in the Recovery

11/22/2013 By: Krista Franks Brock 

Fast-paced price increases have helped bring many underwater homeowners afloat. In the third quarter, 1.4 million homeowners rose to the surface as their home values once again outranked their equity, according to the Zillow Negative Equity Report released Thursday.

The third quarter drop in negative equity rate was the largest on Zillow’s record, which dates back to the second quarter of 2011.
The negative equity rate now stands at 21 percent, down about one-third from its peak of 31.4 percent and from 23.8 percent in the second quarter, according to Zillow.
“Rising home prices and a greater willingness among lenders to engage in short sales have both contributed substantially to the significant decline in negative equity this quarter,” said Stan Humphries, chief economist at Zillow.
“We should feel good that we’re moving in the right direction and at a fast clip,” Humphries said.

However, with analysts—including Humphries-- predicting moderating price gains in the coming year, that “fast clip” is set for decline.
In fact, Humphries says negative equity will remain a persistent trait of the housing market and become “part of the new normal” for several years.
While 4.9 million homeowners have risen from underwater since the negative equity peak in 2011, one in five homeowners with a mortgage remains underwater today, according to Zillow’s data.
That’s about 10.8 million homeowners currently in a negative equity position.
The “effective” negative equity rate is even higher at 39.2 percent in the third quarter, according to Zillow.
The “effective” rate includes all homeowners who have less than 20 percent equity in their homes. This rate is significant because selling a home and purchasing a new one “requires equity of 20 percent or more to comfortably meet related expenses,” according to Zillow.
More than half of underwater homeowners are underwater by at least 20 percent, Zillow stated. Assuming Zillow’s estimate for home price growth at 3.8 percent over the next year, it will take a homeowner with 20 percent negative equity five years to rise to the surface.
Of the nation’s 30 largest metros, those with the highest concentration of negative equity are Las Vegas at 30.6 percent, Atlanta at 38.2 percent, and Orlando at 34.2 percent.

Recovering Housing Market to Spur Economic Recovery in New Year

11/20/2013BY: KRISTA FRANKS 

Next year will likely be the first year since 2000 that home purchases outpace refinances, according to Freddie Mac’s expectations. Furthermore, the rallying housing market should set the broader economy on a brighter path, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for November.

“Led by a resurgent housing sector, 2014 should shape up to be better than 2013,” Freddie Mac stated in its outlook.

Housing starts, which have been slow, should rise to a pace of about 1.15 million in 2014, according to Freddie Mac.

This is more in line with the historical average of 1.1 million per year reported by the Census Bureau. In comparison, the Census Bureau recently reported household formation over the first three quarters of this year at just 380,000.

Freddie Mac expects home sales to increase 5 or 6 percent in the new year, but tight inventory will prevent further increases.

Home values will continue to increase, albeit at a slower pace. Freddie Mac expects home price growth to be about the same as home sales growth—5 or 6 percent.

Rental prices will also continue to rise, but like housing prices, their pace will moderate. Freddie Mac expects rents to rise at a pace of about 5.3 percent next year.

Mortgage rates will reach about 5 percent for 30-year, fixed-rate mortgages by the end of 2014, according to Freddie Mac. While this will not threaten affordability in most markets, it may dampen affordability in a few higher-priced markets, according to the outlook.

Also, Freddie Mac noted there may be “some volatility in the short-term” resulting from uncertainty surrounding fiscal policies, such as the debt ceiling and the Federal Reserve’s tapering of its MBS purchases.

The overall good news for the housing market translates to good news for the broader economy, according to Freddie Mac.

The rise in housing starts should translate to 700,000 new jobs, according to economists at Freddie Mac.

These new jobs will help bring the unemployment rate below 7 percent “perhaps by mid-2014,” Freddie Mac stated.

Economic growth is expected at 2.5 to 3 percent for the year, which is “more than 0.5 percentage points better than is projected for 2013,” according to Freddie Mac.

Report: Delinquency Rate Continues to Plunge

11/13/2013 By: Ashley R. Harris

Homeowners are working harder to make timely mortgage payments, according recent data from TransUnion. The mortgage delinquency rate dropped 23.3 percent in the past year, ending Q3 2013 at 4.09 percent. Last year it stood at 5.33 percent. The mortgage delinquency rate also dropped on a quarterly basis, down 5.3 percent from 4.32 percent in Q2 2013, the seventh straight quarterly decline.

Around the United States, most states experienced a decline in their mortgage delinquency rate between Q3 2012 and Q3 2013. California, Arizona, Nevada, Colorado, and Utah experienced more than 30 percent declines in their mortgage delinquency rate. Three states—California, Florida, and Nevada—had double-digit percentage drops in the last quarter.
TransUnion cultivated the data from anonymized credit data from virtually every credit-active consumer in the United States. TransUnion’s forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices begin to depreciate once again.
“This isn’t a sample data set,” said Tim Martin, group VP of U.S. Housing for TransUnion’s financial services business unit.

“We looked at all 52 million installment-based mortgages in the U.S. and the trend is clear—the percentage of borrowers willing and able to make their mortgage payments continues to improve,” Martin continued. “The overall delinquency rate is still high relative to ‘normal,’ but a 23 percent year over year improvement is great news for homeowners and their lenders.”
The credit agency recorded 52.31 million mortgage accounts as of Q3 2013, down from 54.23 million in Q3 2012. This variable was as high as 63.14 million in Q3 2008 prior to the housing crisis.
Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 2.34 million in Q2 2013, up from 2.09 million in Q2 2012. This is a major increase from just two years ago when there were 1.32 million new account originations in Q2 2010.
“New mortgage originations showed good growth through the second quarter of this year, largely the result of increased refinance transactions driven by low rates and increasing home prices,” Martin said. “However, mortgage rates started to increase right around Memorial Day, and when the data come out next quarter, we expect it to show that new originations are decreasing as a result.”
TransUnion’s latest mortgage report also found that the non-prime population (those consumers with a VantageScore credit score lower than 700) continues to represent a smaller portion of all mortgage loans, more than 50 percent lower than was observed in 2007. Non-prime borrowers constituted 5.82 percent of all new mortgage originations in Q2 2013. In Q2 2008, non-prime borrowers represented 12.69 percent of the total.
TransUnion is forecasting that the downward consumer delinquency trend will continue in the final three months of 2013. The delinquency rate will likely be just under 4 percent at the end of the year.
“New originations will be down and non-prime borrowers will start to re-emerge,” Martin said. “At this point we believe delinquency rates will continue to decline.”

Mortgage Rates Reverse Trend, Heading Higher

11/07/2013 By: Tory Barringer 

Three weeks after the end of the showdown that closed the government, economic data has shown enough improvement to provide some lift to mortgage rates.

Freddie Mac’s Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaging a rate of 4.16 percent (0.8 point) for the week ending November 7, up from last week’s average of 4.10 percent. A year ago, the 30-year FRM was averaging 3.40 percent.
The 15-year FRM this week averaged 3.27 percent (0.7 point), rising from 3.20 percent.
“Fixed mortgage rates rebounded slightly this week on more positive economic data releases,” said Frank Nothaft, VP and chief economist at Freddie Mac. “Production in the

manufacturing industry expanded for the fifth month in a row in October to the strongest pace since April 2011. Similarly, the non-manufacturing sector grew for the second consecutive month in October and beat the market consensus forecast of a decline. These increases were widespread across the nation, from Chicago to Milwaukee to New York.”
Adjustable rates, on the other hand, were flat to down. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent (0.5 point) this week, unchanged from last week, while the 1-year ARM was 2.61 percent (0.5 point), down from 2.64 percent.
Financial site Bankrate.com reported similar findings in its weekly national survey, with the 30-year fixed average coming up to 4.35 percent and the 15-year fixed rising to 3.42 percent.
Bankrate’s measure for the 5/1 ARM, meanwhile, slid down 1 basis point to 3.25 percent.
“Mortgage rates moved higher this week as the post-government shutdown clouds have begun to lift. While the economic news hasn’t been stellar, it hasn’t shown that the economy cratered due to the shutdown and debt ceiling brinksmanship,” Bankrate said in a release. “This has been enough to lift yields on long-term government bonds and mortgage rates, leading in to this Friday’s release of the October jobs report.”

September Bucks Forebodings of Decelerating Price Gains

11/05/2013 By: Tory Barringer 

With recent predictions forecasting a falloff in home price increases over the next year, gains nevertheless continued at a strong pace in September, CoreLogic reported Tuesday in its monthly Home Price Index (HPI) report.

The company recorded a 12 percent annual gain in its HPI (including distressed sales) for September, representing the 19th straight monthly year-over-year increase and bringing the index to its highest point since May 2008.
The West claimed the top three spots for yearly appreciation, with Nevada (+25.3 percent), California (+22.5 percent), and Arizona (+14.6 percent) posting the highest percentages. Georgia (+14.4 percent) and Michigan (+13.9 percent) rounded out the list.

“U.S. home prices continued their ascent in September. Average home prices in nearly half the states are now within striking distance of their pre-downturn pricing peaks,” said Anand Nallathambi, CoreLogic’s president and CEO.
September’s report is of special significance, given the fact that the month marked the five-year anniversary of the start of the housing crisis. According to CoreLogic chief economist Dr. Mark Fleming, the five-year appreciation rate for all homes in the country was 3.4 percent.
On a monthly basis, home prices increased 0.2 percent over August, continuing a slowing trend that began earlier this year. Nallathambi said the deceleration in price gains “is natural and should help keep market fundamentals in balance over the longer term.”
Taking distressed sales out of the equation, CoreLogic reported a 10.8 percent annual increase and a 0.3 percent monthly increase in its HPI. Nevada (+22.4 percent) and California (+18.9 percent) were still the top spots for growth, with Utah (+13.2 percent), Arizona (+12.6 percent), and Florida (+12.6 percent) following.
CoreLogic’s Pending HPI, a proprietary metric that measures the current indication of price trends, predicts another strong month in October, with prices up 12.5 percent annually (including distressed sales). On a monthly basis, the recovery will continue to pump the brakes, resulting in an increase of only 0.1 percent.

What Does Fannie Mae's New LTV Threshold Accomplish?

11/01/2013 By: Krista Franks Brock 

As of November 1, Fannie Mae is no longer purchasing loans without minimum down payments of at least 5 percent. Industry experts with the Urban Institute’s Housing Finance Policy Center argue this move is arbitrary and likely to provide little benefit to the GSE or to taxpayers.

Fannie Mae’s decision to lower its maximum threshold for loan-to-value (LTV) ratios from 97 percent to 95 percent follows a similar decision by Freddie Mac a few years ago. While neither GSE will support loans with LTVs higher than 95 percent now, the Federal Housing Administration, Veterans Administration, and U.S. Department of Agriculture (USDA) will.
“Fannie’s policy change isn’t limiting taxpayer risk-rather it’s limiting options for borrowers,” according to Laurie Goodman and Taz George of the Housing Finance Policy Center.

In a blog post on the Urban Institute’s Metro Trends Blog site, Goodman and George said, “This change places yet another barrier in front of low- and moderate-income families, who are already facing a tightening credit box.”
While it would seem Fannie’s objective in lowering the LTV requirement would be to reduce risk, the two authors say this action would be a misguided attempt. They say, “If the intent was to reduce risk, this was a crude way to accomplish it,” mainly because among loans with LTVs of 80 percent or higher, credit scores are a better default forecaster than LTV ratios.
In fact, the default rate on loans with LTVs of 95 to 97 percent and high FICO scores is lower than the default rate for loans with LTVs of 90 to 95 percent and lower FICO scores, according to the Urban Institute.
Goodman and George also point out that historically, Fannie Mae has purchased very few loans with LTVs in the 95 to 97 percent range. From 1999 to 2012, these loans made up less than 1 percent of Fannie Mae’s purchases, and since 2005, the percentage drops even further.
“We would have hoped that the rich data provided by the Great Recession would give the GSEs the confidence to underwrite higher LTV loans with compensating factors, as the importance of these factors has been well tested and documented,” Goodman and George stated.
“Instead, Fannie Mae has chosen to draw sharp lines around a smaller permissible credit box without accounting for compensating factors,” they concluded.

Housing Market Performs Well Despite Rise in Interest Rates

10/24/2013 By: Krista Franks Brock 

Mortgage rates are inching higher and higher, but the market does not seem to be paying any heed as it continues to show signs of improvement, according to the HousingPulse Tracking Survey released Wednesday by Campbell Surveys and Inside Mortgage Finance.

Home sales were down somewhat in September, but other indicators—such as distressed sales, time on market, sales-to-list-price ratio, and purchase offers—remained positive, according to the survey.
“The emerging slowdown in home purchases appears to be largely seasonal,” said Thomas Popik, research director for

the HousingPulse survey. “September is yet another month where higher mortgage rates have had only a moderate effect on the housing market.”
HousingPulse also tracks distressed property sales, finding the share of home purchases involving REOs and short sales decreased to 24.6 percent over the three-month period ending in September, marking a four-year low.
Time on market also fell to a four-year low last month, according to HousingPulse. Homes spent an average of 8.6 weeks on the market, based on the September data gathered. Notably, this is down from the spring homebuying season when time on market was about 10 weeks.
Homes are not only selling quickly, but they are also selling for a high percentage of their list price, according to HousingPulse. The sales-to-list-price ratio in September was 97.5 percent, up from 96.1 percent in September 2012.
The average number of purchase offers on non-distressed properties was 2.2 over the three months ending in September, down just slightly from a four-year high of 2.3 reached in early summer.

FHFA: August Marks 19 Months of Home Price Gains

10/23/2013 By: Krista Franks Brock 

Marking 19 consecutive months of appreciation, the Federal Housing Finance Agency’s (FHFA) House Price Index rose 0.3 percent on a seasonally adjusted monthly basis in August. On a yearly basis, the index is up 8.5 percent.

Prices are now 9.4 percent below their April 2007 peak, according to FHFA.

Of the nine census divisions, FHFA detected the greatest monthly price increase in the Mountain division, where prices increased 1.3 percent in August.
The greatest monthly decrease took place in the South Atlantic division, where prices declined 0.5 percent.
On a yearly basis, prices in all nine divisions were up, with the greatest increase taking place in the Pacific region, where prices rose 18.2 percent over the year.
The Pacific division was followed by the Mountain division—the only other region to report a double-digit gain over the year—at 13.8 percent.
Price appreciation was lowest in the Middle Atlantic and New England regions, where prices increased 4 percent and 4.2 percent, respectively.
The FHFA relies on price data from homes sold to or guaranteed by the GSEs for its House Price Index each month.

FHA Makes Concessions for Those Impacted by Shutdown

10/15/2013 By: Carrie Bay 

The Federal Housing Administration (FHA) called on all approved mortgagees and lenders to be sensitive to the financial hardships some borrowers are facing as a result of the federal government shutdown, including borrowers subject to furlough, layoff, or a reduction in income.
In a notice to its industry partners, FHA said it expects all approved mortgagees and lenders to “make every effort” to communicate with and assist affected borrowers “to the greatest extent possible” by extending informal forbearance plans and fully evaluating borrowers for

available loss mitigation options to avoid foreclosure whenever possible.
“These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries,” said FHA Commissioner Carol Galante in a letter to FHA-approved lenders and mortgagees. “In many instances these are the same employees who have already lost pay during recent sequestration related furloughs.”
The agency is also strongly encouraging all approved mortgagees and lenders to waive late fees for affected borrowers and to suspend credit reporting on borrowers nationwide who have been affected by the shutdown.
“FHA is working to ensure that the hard-won improvement in the housing market is not substantially compromised by the government shutdown and, in particular, that responsible FHA borrowers impacted by the shutdown receive the support they need,” Galante said.
FHA joins Fannie Mae, Freddie Mac, and the Veterans’ Administration in urging lenders to take action to protect those federal workers impacted by the shutdown.

Mortgage Rates Hold Steady Amid Stalemate on Capitol Hill

10/11/2013 By: Tory Barringer 

Fixed mortgage rates held more or less steady this week as Capitol Hill remained locked in debate over budgetary concerns.

According to data in Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 4.23 percent (0.7 point) for the week ending October 10, just up from 4.22 percent last week. A year ago at this time, the 30-year FRM averaged 3.39 percent.
The 15-year FRM this week averaged 3.31 percent (0.7 point), up from 3.29 percent previously.

News was similar for adjustable rates. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.05 percent (0.4 point), rising from 3.03 percent. The 1-year ARM averaged 2.64 percent (0.4 point), increasing a single basis point.
In addition to putting markets into a “wait and see” position, the federal debt impasse made for a “light week of economic data releases”-giving investors little to react to, explained Frank Nothaft, VP and chief economist for Freddie Mac.
Meanwhile, Bankrate.com recorded a fifth consecutive week of declines for fixed rates in its weekly national survey. According to the site, the 30-year fixed averaged 4.39 percent this week-down from 4.41 percent-while the 15-year fixed was flat at 3.47 percent.
The 5/1 ARM experienced the greatest movement, falling 6 basis points to 3.34 percent.
“The ongoing government shutdown and the looming debt ceiling deadline have made investors cautious. The prospect for slower economic growth has investors moving into longer-term government and mortgage-backed bonds, bringing yields lower,” Bankrate said in a release. “This has been good for mortgage rates, which are closely related to yields on long-term government bonds.”

Housing Market Running at 85% of Normal, Pre-Recession Activity

10/09/2013 By: Tory Barringer 

A new index from First American and the National Association of Home Builders (NAHB) suggests that about one in seven housing markets have returned to or surpassed their pre-recessionary levels of activity.

The new Leading Market Index (LMI), released for the first time this week, measures employment growth data from the Bureau of Labor Statistics, home price appreciation data from Freddie Mac, and single-family housing permit growth from the Census Bureau to measure overall improvements in each market.
While the LMI helps illustrate how far the recovery has come in the last several years, NAHB chairman Rick Judson said it also measures “how much further it has to go as we continue to face some significant headwinds in terms of credit availability, rising costs for lots and labor, and uncertainties regarding Washington policymaking.”

According to the association, the index registered a score of 0.85 nationwide, indicating that the national housing market is running at 85 percent of normal activity.
Of the nearly 350 metro markets examined, 52 have reported levels of activity at least equal to those before the recession hit. What’s more, housing markets in 118 metros scored 0.9 or higher, which Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., described as “a very encouraging sign of things to come.”
Baton Rouge, Louisiana, ranked highest on the list of improved major markets, posting an index score of 1.41-41 percent better than its last normal market level. Other major metros reporting growth include Honolulu, Hawaii; Oklahoma City, Oklahoma; Harrisburg, Pennsylvania; and Austin and Houston, Texas.
Widening the scope to include smaller metros, both Odessa and Midland, Texas, scored 2.0 or better, meaning their markets have doubled in strength compared to pre-recession years. Also topping the list of smaller metros are Casper, Wyoming; Bismarck, North Dakota; and Florence, Alabama.
“Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI,” said NAHB chief economist David Crowe. “This is very much in keeping with the results of our previous index for improving markets, and is an indication of the extent to which local economic conditions dictate the strength of individual housing markets.”

Delinquencies Plummet to Lowest Level Since Crisis

10/08/2013 By: Ashley R. Harris 

Delinquent mortgages dropped to their lowest level since November 2008 according to recent research by CoreLogic.

At the end of August, the company found there were approximately 2.1 million mortgages, or 5.3 percent of all outstanding home loans, in serious delinquency (defined as 90 days or more past due, including those loans in foreclosure or REO). The rate of seriously delinquent mortgages is at its lowest level since December 2008.
CoreLogic also reported a drop in completed foreclosures in August of 34 percent year-over-year. Foreclosures were only 1.3 percent higher from the previous month. The data shows 48,000 foreclosures were completed in August.

The news is no surprise to analysts who continue to see improving foreclosure inventory numbers industry-wide. Since the genesis of the financial crisis, approximately 4.5 million foreclosures have been completed.
“A surge in completed foreclosures and a rise in the foreclosure inventory is unlikely given continued house price improvements and shortages of supply in many markets,” said Dr. Mark Fleming, chief economist for CoreLogic.
In the middle of Q3, approximately 939,000 homes in the U.S. were in some stage of foreclosure, a 33 percent decline from the 1.4 million households facing foreclosure in August 2012. This decline lowered the foreclosure inventory by 454,000 homes in August year-over-year.
“The foreclosure inventory continues to improve, as exhibited by these recent numbers,” Fleming said.
Florida led the nation in both volume of foreclosure inventory (7.9 percent) and highest number of completed foreclosures (111,000).
According to CoreLogic’s research, Florida, Michigan, California, Texas, and Georgia account for almost half of all U.S. completed foreclosures.
Wyoming had the lowest foreclosure inventory levels (0.4 percent) and D.C. had the lowest number of completed foreclosures (94) during the 12 months ending in August.

FHFA and Zillow Talk HARP

10/03/2013 By: Tory Barringer 

Zillow partnered with the Federal Housing Finance Agency (FHFA) Thursday to review eligibility requirements for the Home Affordable Refinance Program (HARP) and respond to borrowers confused about the program.

Meg Burns, senior associate director for housing and regulatory policy for FHFA, joined Zillow for a Google+ Hangout session to field questions from underwater homeowners and explain HARP’s finer points. Hosting the call was Erin Lantz, Zillow’s director of mortgages.
Responding to borrowers’ worries about their financial situations, Burns reiterated that HARP has no minimum income or credit score requirements (though different lenders may have their own criteria).
“It’s a very streamlined product, which means lenders don’t do traditional underwriting. They don’t assess the borrowers’ income amount nor look at the credit report,” she said. “Most lenders really like that feature of the product because it makes it much easier for them to qualify a borrower for participation.”
Instead, borrowers are required to have a solid payment history, with no missed payments in the six months prior to refinancing and up to one missed payment in the 12 months prior. That history is used instead as a proxy for a borrower’s ability to pay.
“One of the great things about HARP is, if you continue to make payments on time, you ultimately will meet the payment history requirement,” Burns remarked.

She also stressed that the program can also be used for second homes and for investment properties, though the fees may be slightly higher.
Also discussed were several enhancements to the program (sometimes dubbed as “HARP 2.0”) that went into effect in 2012 and expanded eligibility to more borrowers. Because those changes went into effect well after HARP’s inception, Burns urged borrowers who applied prior to March 2012 to try again.
One of the biggest changes was the removal of the original HARP’s 125 percent ceiling on loan-to-value (LTV) ratios.
The elimination of that cap has been especially helpful for borrowers in states like Nevada, which has seen a significant boost in HARP refinances since eligibility opened up, Burns said.
In the second quarter of 2013 alone, loans with LTVs of 125 percent or higher made up nearly 20 percent of all HARP activity, FHFA revealed in its latest quarterly report.
Finally, answering a Realtor’s question regarding dubious advice offered by some companies to struggling borrowers, Burns warned consumers to be careful of who they trust—especially if that person recommends deliberately missing payments.
“Don’t ever go delinquent on your mortgage if you want to qualify for a program,” she said. “It’s highly likely, for one thing, that you’ll be rejected anyway, and it’s really bad for your credit score.”
Thursday’s question and answer session represented one way in which FHFA is working to spread knowledge of HARP and get more borrowers involved. In addition to loosening eligibility requirements last year, the agency has extended the program for an additional two years, bringing the expiration date to December 31, 2015. In addition, FHFA recently announced the launch of a public awareness campaign that has it partnering with HGTV personality Mike Aubrey.
Through the end of this year, FHFA will be working with Zillow on a HARP-specific blog created to answer questions about the program’s specifics and offer advice. More information can be found at Zillow.com/education/HARP.

Wells Fargo Predicts Market Rebound

10/02/2013 By: Hugh Moore 

Wells Fargo announced Tuesday that it anticipates a market rebound.

“The housing market is transitioning away from a rebound driven primarily by speculative forces to one where the underlying fundamentals will be much more important,” Wells Fargo said in a report. “Over the past few years investor purchases have been the primary driver of the housing recovery, helping clear inventories of foreclosed and lender-owned properties and pulling home prices dramatically higher. Home prices, which tumbled 33.7 percent from peak to trough using the S&P/Case-Shiller Home Price Index, have since rebounded 16.3 percent and are up 12.4 percent over the past year alone. The swing in prices exaggerates the extent of improvement and likely reflects the whipsaw effect of prices overshooting to the downside during the worst of the housing bust.”

Moody's Predicts Strong Market Despite Slowdown

09/27/2013 By: Hugh Moore 

 

Despite some softening housing indicators, Moody’s Analytics predicted this week that the housing market will remain strong through 2014 and 2015.

“The fundamental drivers of housing remain solid,” Moody’s reported in its monthly ResiLandscape report. “Employers are adding jobs, housing is still affordable and inventories of homes are low. Home sales, homebuilding and house prices will all head up this year and strengthen further in 2014 and 2015 as housing helps to fuel the broader economy’s expansion. These positive factors will offset the dampening impact of rising mortgage interest rates on demand for housing, although a faster than

expected run-up in rates could derail the housing rebound.”
Moody’s predicted that rising interest rates will cause a drop in refinancing, which in turn will prompt banks to loosen credit and underwriting requirements in an effort to generate new business. Pending home sales are still high and supplies of new homes are tight.
“The rapid price gains of the last year cannot be sustained and we expect the pace to decline substantially in the second half of this year,” Moody’s reported. “Strong investor demand helped to fuel those gains and investors are starting to
pull back as the supply of inexpensive distressed homes has dried up. A slower pace is a positive for housing demand and will help to keep affordability from further eroding.”
These conditions should “ignite a virtuous cycle,” in which homebuilding stimulates other sectors of the economy, including the manufacturing, retail and financial sectors, the report predicted. “Stronger job growth will in turn generate stronger housing demand. Indeed, despite some softening during the second quarter, housing is already a driver of broader economic growth.”
Moody’s warned that the greatest threat to this growth could come in the form of rapidly increasing mortgage rates that disrupt the housing recovery.