Signs Now Point to a ‘Sustainable’ Recovery

Daily Real Estate News

Last year, the spring selling season failed to meet market expectations, but many housing analysts say that 2015 will be different and the market may have finally reached a long-awaited “sustainable recovery

In cities that have seen major job growth, home sales surged to double-digit gains in March year-over-year. For example, Seattle has seen a 17.7 percent increase in sales year-over-year and a 20.3 percent sales gain has occurred in Charlotte, N.C. In Jacksonville, Fla., sales of existing homes were up 18 percent in March year-over-year.

“It feels like 2005 again,” Sanford Davidson, a Redfin real-estate agent in Jacksonville, told The Wall Street Journal. “Homes are moving that quickly, especially if they’re in the right neighborhood and priced right.”

Home sales are expected to post further gains across the country too, according to the National Association of REALTORS®’ pending home sales index, which tracks signed home contracts. The pending home sales index in February surged 12 percent year-over-year. Pending sales were up 30.6 percent in Houston; 30 percent in Jacksonville, Fla.; 27.8 percent in San Diego; 24.2% in Seattle; and 23.7 percent in the Riverside and San Bernardino markets in California.

Sales of newly built homes in February reached its strongest pace in seven years. New-home starts were at a seasonally adjusted annual pace of 539,000 in February, the Commerce Department reported.

The uptick in home sales in recent months is early indication that the “market is continuing to improve at a very steady pace,” Stuart Miller, chief executive of Lennar Corp., said in a conference call with investors last month. The nation’s second largest homebuilder reported an 18 percent sales gain in the quarter ending Feb. 28, compared to a year earlier.

Last year, the spring selling season failed to meet market expectations, with sales of new and existing homes in 2014 mostly flat. The dismal selling season last year was most attributed to, at the time, continued weak consumer confidence, steep home price increases from the previous year, and an uneven economic recovery, The Wall Street Journal reports.

But housing analysts believe 2015 is different. Here are a few reasons why:

  • An improved economy: The economy has added 3.1 million jobs in the past year alone. Also, low gas prices lately have helped to lift consumer confidence.
  • Mortgage lending is easing: Lenders have shown signs of easing tight borrowing requirements and costs.
  • Boomerang buyers return: Former home owners who had lost their home to foreclosure in the aftermath of the financial crisis have repaired their credit and many are stepping back in to try to qualify to buy a home again


Mortgage Loan Calculators

Fannie, Freddie to Cut Mortgage Fees, Slightly

Daily Real Estate News:

Seems like the cost of doing business is going up to the point where people can’t afford doing the business. It’s often hard to find affordable housing. It gets even harder to afford the Lenders high business fees on top of the cost of a home. Well there may be some relief on the horizon as mentioned in the following article.

The Federal Housing Finance Agency is reportedly set to announce that Fannie Mae and Freddie Mac will lower the mortgage fees for some borrowers, but the changes are expected to be very minimal. FHFA, the regulator of the mortgage giant insurers, is expected to change the fees that Fannie and Freddie charge lenders to guarantee mortgages.Some borrowers may only see a small benefit – amounting to less than one-tenth of a percentage point, The New York Times reports.

“For most people taking out a loan, the change will be negligible,” The Wall Street Journal reports. “Some riskier borrowers, who make lower down payments and have lower credit scores, will see slight savings that could translate to hundredths of a percentage point on a mortgage rate.”

To balance out the cost of the fee reduction, Fannie and Freddie are expected to raise fees for other borrowers, like those who purchase investment properties, according to The New York Times.

Some housing advocates say the change in fees don’t go far enough to the bigger reductions they were hoping for. “Hopefully over time we can go further,” says Julia Gordon, senior director of housing and consumer finance for the Center for American Progress. “It is important that this not be the last word” on fees.


The Home Buyer’s Guide to Preparing for a Mortgage

by Courtney Soinski:

Have you checked your credit and decided that it’s time to buy your first home? Well, it’s no surprise that making a home purchase can be an overwhelming process. Fortunately, there are ways to stay ahead of the game while keeping your stress under control. Before you jump into a new mortgage, let’s learn some preparation techniques to achieve the best possible outcome.


1. Check your credit report.

As soon as you apply for a mortgage loan, this is the first thing that lenders will look for. It’s always a good idea to check and monitor your credit score, and keep an eye out for any factors that may be harming your scores. Make sure that your credit report is as accurate as possible, and that no one else is getting access to your credit. Remember, the ultimate goal is to prove your creditworthiness to the lender in order to get the best rates.

2. Correct any inaccurate information in your report.

If you see any inaccurate information on your credit report or if you notice any accounts that you didn’t open or addresses that aren’t yours, dispute it with the credit bureaus. Three of the major credit bureaus are Equifax, Experian, and TransUnion.

3. Research, research, and research!

Buying a home is one of the largest financial decisions you will make, so it’s important that you gather all information and research multiple loans, rates and brokers before making your final decision. If you get to work now and start researching all the options out there, you may even end up with better terms and a better rate.

4. The down payment: bigger is better.

Before you even decide how much to put down on your first house, be sure you’re also being realistic about what you can honestly afford. When setting your budget, keep one crucial thing in mind: the larger the down payment, the better your terms will be. Besides, wouldn’t it be nice to pay less every month that you spend in your new home?

5. Watch out for pre-payment penalties.

Depending on the type of mortgage you get, there may also be pre-payment penalties. Find out whether or not you’ll get penalized for paying your mortgage loan off early before making any sort of commitment.

6. Applying for multiple loans over a long period of time can hurt your credit score.

Every single time you apply for a loan, lenders make an inquiry that will be visible on your credit report. By dragging out loan applications over a month or longer, you can actually end up doing damage to your score, which in turn, can affect the type of rate you get on the mortgage. However, if you apply for a few loans over a series of 2 weeks, that only counts as one inquiry on your report, not multiple.


Making a huge purchase like your very first home can be very stressful, so every bit of information helps. Refer to this checklist as you prepare to apply for a mortgage loan. Knowing how to prepare makes all the difference in the world when it comes to getting the best rate.



Home Prices Are Accelerating

The number of metro areas seeing double-digit price appreciation doubled in the first quarter of this year compared to last quarter, according to the National Association of REALTORS®’ latest quarterly housing report.

The 5 Most Expensive MarketsThe following metro areas had the priciest median existing single-family home price in the first quarter:

  1. San Jose, Calif.: $900,000
  2. San Francisco: $748,300
  3. Honolulu: $699,300
  4. Anaheim-Santa Ana, Calif.: $685,700
  5. San Diego: $510,300

The 5 Least Expensive Markets

The following metro areas had the lowest median existing single-family home price in the first quarter:

  1. Youngstown-Warren-Boardman, Ohio: $64,300
  2. Cumberland, Md.: $71,600
  3. Rockford, Ill.: $78,600
  4. Decatur, Ill.: $82,200
  5. Toledo, Ohio: $83,800

Strong demand mixed with tight inventories of homes for-sale continues to push up home prices nationwide. The median existing single-family home price rose in the first quarter in 148 out of the 174 metro areas NAR tracks. Only 25 areas recorded lower median prices compared to a year earlier, while 51 metros saw double-digit increases – a sharp increase from the 24 metro areas in the fourth quarter of 2014.

At the end of 2014, home prices had mostly moderated to healthier, more sustainable levels of growth, but now prices are picking up again, says Lawrence Yun, NAR’s chief economist.

“Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market,” Yun says. “However, stronger demand without increasing supply led to faster price growth in many markets. Sales could soften slightly in some of these markets seeing sharp price appreciation unless housing supply markedly improves and tempers its unhealthy level of growth.”

The median existing single-family home price in the first quarter was $205,200 nationwide, up 7.4 percent from the first quarter of 2014. Meanwhile, total existing-home sales decreased 1.8 percent to a seasonally adjusted annual rate of 4.97 million in that time frame.

Inventories remain tight. By the end of the first quarter, there were 2 million existing homes available for sale, with the average supply during the first quarter at 4.6 months – down from 4.9 months a year ago. Most economists consider a 6- to 7-month supply to be a healthy balance between buyers and sellers.

“Home owners throughout the country have enjoyed accumulating household wealth through the steady rise in home values in the past few years,” Yun says. “However, some home owners are hesitant to move up and sell because they aren’t confident they’ll find another home to buy. This trend – in addition to subpar homebuilding activity – is leading to the ongoing inventory shortages and subsequent run-up in prices seen in many markets.”

Regional Breakdown

Here’s a closer look at how existing-home sales performed across the country in the first quarter:

  • Northeast: Existing-home sales fell 11.2 percent in the first quarter but are 2.2 percent higher than the first quarter of 2014. Median price for single-family homes: $245,000 in the first quarter, up 2.4 percent from a year ago.
  • Midwest: Existing-home sales dropped 2 percent in the first quarter but are 6.3 percent higher than a year ago. Median home price: $156,600, up 8.9 percent from a year ago.
  • South: Existing-home sales dropped slightly by 0.5 percent in the first quarter but are 7.8 percent above the first quarter of 2014. Median home price: $182,300, up 8.2 percent compared to a year earlier.
  • West: Existing-home sales rose 1.5 percent in the first quarter and are 5.4 percent above a year ago. Median home price: $295,500, up 5.8 percent above year ago levels.

On the local front Redding too is experiencing price increases. The median price for Redding is $260,000. Last quarter it was at $240,000. This increase is less dramatic when compared to the rest of the Country. Redding’s economy has kept housing affordable for the most part. My concerns are for the first time home Buyers that will be affected where their income will not sustain a mortgage because the home pricing has risen thereby disqualifying them for a loan.