Mar 24, 2013

U.S. mortgage rates hold steady

Long- and short-term mortgage rates saw little change this week, but they remain below year-ago levels.

A 30-year fixed-rate averages 4.88 percent this week, up from 4.87 percent last week. A year ago, 30-year mortgages averaged 4.95 percent.

The average rate on a 15-year fixed-rate mortgage is 4.15 percent, unchanged from last week.

A one-year adjustable rate fell to 3.21 percent from 3.23 percent.

Mortgage applications jumped nearly 16 percent last week, according to the Mortgage Bankers Association, as potential buyers and existing homeowners continue to try to lock in rates before they rise. Applications to refinance rose 17.2 percent while purchase applications rose 12.5 percent, to the highest level of the year.

“An improving job market is beginning to pave the way for an improving housing market,” said MBA vice president of research Michael Fratantoni.

Low mortgage rates have continued to help nudge housing sales higher nationwide. However, home sales in Dayton have continued to lag and dropped 5 percent in 2010.

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Mar 22, 2013

Foreign buyers picking up US Homes at record rate

This is an interesting read - particularly if one is in the processing business, and trying to figure out the implications on our own business impact ... NAR report shows that these foreigners are snapping up great deals, and they are doing so for a number of purposes. Some are wealthy investors who are reacting positively to the slow signs of economic recovery in the U.S., and who are bullish on the real estate market. Others are looking for vacation homes in tourist destinations such as Miami and Orlando. There are some new immigrants in the mix as well; foreigners who have filed for extended visas and are applying for residency status for academic, business and lifestyle reasons.

Real Estate Agents Welcome Foreign Buyers
The strong demand for single-family residences and apartments has prompted the NAR to make changes to its website to make it more attractive to foreigners. More than 4 million listings across the U.S. can now be browsed from several countries in different languages.

Foreign home buyers are welcomed by real estate agents and even some mortgage brokers. Real estate financing has become difficult for many Americans, and for foreigners it is even more restrictive. As a result, many of the housing acquisitions by foreigners are closed in cash. The sunnier regions of the country are thus far favored by foreign home shoppers, and not just because of the warmer climates. Arizona, California, Florida, and Texas are also attractive due to the large inventory of unsold and distressed homes available.

What the Future Holds
Those who are concerned that foreigners will one day rule the American real estate market underestimate the huge inventory of the domestic market, valued at over one trillion dollars. At this moment, foreign real estate investors are doing their part to shore up the ailing housing market.

Real estate agents are naturally welcoming foreign buyers with open arms, and some lawmakers have proposed bills that would allow foreigners to obtain U.S. visas if they specifically make a significant investment in American housing. While there are a number of visa programs in place for foreigners who wish to buy a home in the U.S., this bill aims to attract investors willing to purchase homes valued at more than $500,000.

Anyone with half a million - will they require a mortgage? And if so who will finance these homes? And on what basis? Would be interesting to see ...

Great news for everyone ! - More Homeowners Returning to Positive Equity

Thousands of homeowners are seeing improvements in their home equity as the housing market continues its recovery, however, they represent a dent in the surface of total underwater mortgage holders. Approximately 200,000 residential properties returned to a state of positive equity during the fourth quarter of 2012, according to data from CoreLogic.

This brings the total number of properties that moved from negative to positive equity in 2012 to 1.7 million, bringing the total of mortgaged residential properties with equity to 38.1 million.

Despite steady gains in home prices, the number of homeowners who have moved into positive territory is overshadowed by a vast number of those still underwater. Negative equity, often referred to as “underwater” or “upside down,” can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Data show that 10.4 million, or 21.5% of all residential properties with a mortgage were still in negative equity at the end of the fourth quarter of 2012, down from 10.6 million (22%) in the third quarter.
Also of note is that out of the 38.1 million properties with positive equity, 11.3 million have less than 20% equity.

Underwriting constraints may make it more difficult for these borrowers to obtain new financing for their homes, according to CoreLogic. Even more disadvantaged are the 2.3 million properties that had less than 5% equity by the end of the fourth quarter 2012. These “near-negative equity” borrowers are at risk should home prices drop, writes CoreLogic. Under-equited mortgages accounted for 23.3% of all residential properties with a mortgage nationwide in the fourth quarter of 2012, the average amount of equity for all properties with a mortgage being 31%. “The scourge of negative equity continues to recede across the country. There is certainly more to do but with fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen,” said Anand Nallathambi, president and CEO of CoreLogic. “The trend toward more homeowners moving back into positive equity territory should continue in 2013.”

Of the 38.1 million residential properties with positive equity, 11.3 million have less than 20 percent equity. Borrowers with less than 20 percent equity, referred to as "under-equitied," may have a more difficult time obtaining new financing for their homes due to underwriting constraints. At the end of the fourth quarter, 2.3 million residential properties had less than 5 percent equity, referred to as near-negative equity. Properties that are near negative equity are at risk should home prices fall. Under-equitied mortgages accounted for 23.2 percent of all residential properties with a mortgage nationwide in the fourth quarter of 2012. The average amount of equity for all properties with a mortgage is 31 percent.