Mortgage Rates Land Near 2016 Low

Mortgage Rates Land Near 2016 Low

Average fixed mortgage rates declined after nudging slightly higher for three consecutive weeks, according to the recently released Freddie Mac Primary Mortgage Market Survey® (PMMS®).

The 30-year fixed-rate mortgage (FRM) averaged 3.43 percent with an average 0.5 point for the week ending August 4, 2016, down from last week when it averaged 3.48 percent. A year ago at this time, the 30-year FRM averaged 3.91 percent.

Additionally, the 15-year FRM this week averaged 2.74 percent with an average 0.5 point, down from last week when it averaged 2.78 percent. A year ago at this time, the 15-year FRM averaged 3.13 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.73 percent this week with an average 0.5 point, down from last week when it averaged 2.78 percent. A year ago, the 5-year ARM averaged 2.94 percent.

“Treasury yields fell last week following both the FOMC’s meeting and a disappointing advance estimate for second quarter GDP,” says Sean Becketti, chief economist, Freddie Mac. “Mortgage rates, which had moved up 7 basis points over the past three weeks, responded by erasing most of those gains, falling 5 basis points to 3.43 percent this week for the 30-year fixed-rate mortgage. Mortgage rates have been below 3.5 percent every week since June 30. Borrowers are taking advantage of these low rates by refinancing. The latest Weekly Applications Survey results from the Mortgage Bankers Association show refinance activity up 55 percent since last year.”

For more information, visit www.FreddieMac.com.


Home Values 77 Percent Higher in Zip Codes with Good Schools

Home Values 77 Percent Higher in Zip Codes with Good Schools

Homes in zip codes with at least one good elementary school have higher values and stronger home price appreciation over the long term than homes in zip codes without any good elementary schools—where homes lost more value during the housing downturn but have seen stronger appreciation during the housing recovery of the last five years. This data comes from the recently released ATTOM Data Solutions 2016 Schools and Housing Report.

For the report, ATTOM Data Solutions analyzed 2016 home values and price appreciation along with 2015 average test scores in 18,968 elementary schools nationwide in 4,435 zip codes with a combined 45.9 million single family homes and condos. For purposes of this report, a good school was defined as any with an overall test score at least one-third above the state average.

Out of 1,661 zip codes with at least one good school, the average estimated home value as of July 2016 was $427,402, 77 percent higher than the average home value of $241,096 in 2,774 zip codes without any good schools.

“While good schools are one of the top items on most homebuyer checklists because of the quality-of-life benefit they provide, this report shows that high-performing schools also come with a financial benefit for homeowners in most markets—at least over the long term,” says Daren Blomquist, senior vice president at ATTOM Data Solutions (parent company of RealtyTrac). “Meanwhile, home prices in zip codes without any good schools tend to be more volatile, which might work to a homeowner’s financial benefit in the short term but not over the long term of at least 10 years.”

83 percent of metro areas post higher home values in zips with good schools
Out of 173 metropolitan statistical areas analyzed for the report, 143 metros (83 percent) had higher average home values in zip codes with good schools than in zip codes without good schools, including Los Angeles (65 percent higher); Chicago (65 percent higher); Atlanta (91 percent higher); New York (52 percent higher); and Miami (31 percent higher).

Metro areas where home values in zip codes with at least one good school were at least 95 percent higher than home values in zip codes without any good schools included Birmingham, Alabama (169 percent higher); Flint, Michigan (129 percent higher); and St. Louis (99 percent higher); Detroit (97 percent higher); and Baltimore (95 percent higher).

“In my experience, buyers will almost always choose to buy a home in a good school district. In turn, this creates greater demand for homes in high-performing school districts and causes these sub-markets to appreciate in value at higher rates than other neighborhoods,” says economist Matthew Gardner, covering the Seattle market where average home values were 64 percent higher in zip codes with goods schools than in zip codes without good schools. “Interestingly, we see demand for these homes from buyers without school-aged children as well because they look at the school district as an added layer of protection should home prices start to soften.

Homeowners gained $51K more since purchase in zips with good schools
Homeowners in zip codes with at least one good school have gained an average of $74,716 in value since purchase, an average return on investment of 32.0 percent. Meanwhile homeowners in zip codes without any good schools have gained an average of $23,311 in value since purchase, an average return on investment of 27.5 percent.

Average ROI for homeowners was higher in zip codes with at least one good school than in zip codes without any good schools in 114 of the 173 metro areas analyzed for the report (66 percent), including Chicago, Atlanta, New York, Miami and San Francisco. Notable exceptions where homeowner ROI was higher in zip codes without any good schools included Los Angeles, Riverside-San Bernardino in Southern California, Sacramento, Orlando and Washington, D.C.

Home price appreciation more volatile in zips without good schools
The report also found that home price appreciation has been more volatile in zip codes without any good schools over the past decade compared to zips with at least one good school.

Year-to-date 2016 median home prices in zip codes without any good schools on average are still 1 percent below median home prices during the same time period in 2006, while median home prices in zip codes with at least one good school are up 4.5 percent on average compared to 10 years ago.

10-year home price appreciation in zip codes with good schools outpaced 10-year HPA in zip codes without good schools in 128 of the 173 metro areas analyzed for the report (74 percent), including Los Angeles, Chicago, Atlanta, New York and Miami.

Meanwhile, home prices in zip codes without good schools dropped more precipitously during the housing downturn. Between 2006 and 2011 median home prices in zip codes without any good schools decreased an average of 28.9 percent while median home prices in zip codes with at least one good school decreased 23.0 percent during the same time period.

Home price appreciation in zip codes without any good schools has outpaced HPA in zip codes with at least one good school over the past five years during the real estate recovery (47.9 percent increase versus 42.2 percent increase respectively).

Ranking of “Good School Bargain” zip codes
The report also ranked 117 zip codes as “Good School Bargains.” All of these zip codes had at least one good school along with a year-to-date 2016 median home sales price of $150,000 or lower. School scores and home prices have improved compared to one year ago and five years ago in all of these zip codes, with the ranking based on 10-year home price appreciation, from lowest to highest (lowest indicating the best bargain relative to the peak).

The Top 10 zip codes with good schools that represent the best bargain home buying opportunities nationwide include zips in Chicago; Cleveland; Saginaw, Michigan; Milwaukee; Tampa-St. Petersburg; Orlando; Las Vegas; Homosassa Springs, Florida; and Riverside-San Bernardino, California.

For more information, visit www.RealtyTrac.com.


55+ Housing Market Remains in Positive Territory

55+ Housing Market Remains in Positive Territory

Builder confidence in the single-family 55+ housing market remains in positive territory in the second quarter with a reading of 57, up one point from the previous quarter, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI) released today. This is the ninth consecutive quarter with a reading above 50.

“Builders and developers for the 55+ housing sector continue to report steady demand,” says Jim Chapman, chairman of NAHB’s 55+ Housing Industry Council and president of Jim Chapman Homes LLC in Atlanta. “However, there are many places around the country facing labor and lot shortages, which are hindering production.”

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number above 50 indicates that more builders view conditions as good than poor.

One of the three index components of the 55+ single-family HMI posted an increase from the previous quarter: traffic of prospective buyers increased four points to 42. Present sales held steady at 61 while expected sales for the next six months dropped two points to 69.

The 55+ multifamily condo HMI dipped one point to 47. The index component for expected sales for the next six months rose three points to 54, while present sales remained even at 49 and traffic of prospective buyers fell seven points to 38.

Three of the four indices tracking production and demand of 55+ multifamily rentals decreased in the fourth quarter. Present production fell nine points to 51—from a record-high reading in the previous quarter—while current and future demand for existing units both dipped one point to 68 and 67, respectively, and expected future production rose three points to 56.

“Much like the overall housing market, this quarter’s 55+ HMI results show that this segment continues its gradual, steady recovery,” says NAHB Chief Economist Robert Dietz. “A solid labor market, combined with historically low mortgage rates, are enabling 55+ consumers to be able to sell their homes at a favorable price and buy or rent a home in a 55+ community.”

For the full 55+ HMI tables, visit www.nahb.org/55hmi.


Mortgage Rates Drop to Record Lows

Mortgage Rates Drop to Record Lows

Average fixed mortgage rates dropped further to new 2016 lows in the wake of the Brexit vote, according to the recently released Freddie Mac Primary Mortgage Market Survey® (PMMS®). At 3.41 percent, the 30-year fixed-rate mortgage is just 10 basis points from its November 2012 all-time record low of 3.31 percent.

“Continuing fallout from the Brexit vote drove Treasury yields lower again this week,” says Sean Becketti, chief economist, Freddie Mac. “The 30-year fixed-rate mortgage followed Treasury yields, falling 7 basis points to 3.41 percent in this week’s survey. Mortgage rates have now dropped 15 basis points over the past two weeks, leaving them only 10 basis points above the all-time low.”

The 15-year FRM this week averaged 2.74 percent with an average 0.4 point, down from last week when it averaged 2.78 percent. A year ago at this time, the 15-year FRM averaged 3.20 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.68 percent this week with an average 0.5 point, down from last week when it averaged 2.70 percent. A year ago, the 5-year ARM averaged 2.93.


Gated Community Homes Demand Higher Prices

Gated Community Homes Demand Higher Prices

Homes in gated communities command significantly higher prices – almost $30,000 on average – but these neighborhoods’ additional amenities can also reduce sale prices because they bring maintenance costs that outweigh the benefits of the amenities, according to recent research published by the American Real Estate Society (ARES).

“This study provides clear evidence that homes in gated communities sell at a premium relative to comparable homes in non-gated communities,” said ARES Publication Director Ken Johnson, Ph.D., real estate economist at Florida Atlantic University’s College of Business and co-developer of the Beracha, Hardin and Johnson Buy vs. Rent Index.

Johnson refers to a study published by ARES in the Journal of Real Estate Research, conducted by professor Evgeny L. Radetskiy, Ph.D., of La Salle University and professors Ronald W. Spahr, Ph.D., and Mark A. Sunderman, Ph.D., of the University of Memphis.

The study examined a sample of 11 gated communities and a sample of matched non-gated properties, using a data set of housing sales in Shelby County, Tennessee. The researchers found that residential properties in gated communities command a noticeable price premium of approximately $30,000, most likely resulting from actual or perceived benefits associated with additional privacy, homeowner associations’ tighter controls on maintenance, home design and the added assurances against crime and other undesirable activities.

However, the study also found the presence of additional amenities – clubhouses, community swimming pools, tennis courts, etc. – within gated communities reduces sale prices by approximately $19,500. Sunderman explains that “additional maintenance costs associated with these amenities often outweigh their benefits, and it appears that while a gate has value, additional neighborhood amenities do not always provide additional value.”

So, what does all this mean to buyers and sellers? “The long-held belief that gates add value is supported by the data, as long as the impact of the amenities is properly factored in,” Johnson says. “This should set buyers’ minds to rest as to whether or not they are actually receiving a boost in value when they purchase inside a gated community.”

Sunderman adds: “From the perspective of both the buyer and the seller, this information should help each to better price property. A good understanding of what adds value and what does not should help create increased marketability of gated homes.”

For more information, visit www.fau.edu.


5 Stress Relieving Tips for First-time Homebuyers

5 Stress Relieving Tips for First-time Homebuyers

By Meghan Belnap

Moving into a new place is both exciting and challenging, and that is especially true if it’s your first time as a homeowner. Instead of allowing the process to overwhelm you, keep some tips in mind to help navigate through this exciting journey in your life.

Don’t Proceed Alone
You don’t need to take on the process of searching for and buying a home without assistance. Maintain contact with a real estate agent throughout the process. A well-qualified agent can assist you in searching for the perfect property.

Open Your Mind
Right now, you may have a list of all the features that you want in a house. You may have decided that you will only live in the community with the lowest crime rate and the best schools. Keep in mind that all of these desires cost money and you probably do not have an unlimited budget. Instead of maintaining such a myopic view of your new home, open your mind to the possibility of making some concessions.

Define Your Financial Ability
Opting for a pre-approval is a good idea so you know how much of a loan you can receive approval for. Once you obtain that amount, you might decide to spend the maximum amount. Doing so will likely prove uncomfortable for your budget. If you or your partner lost your job, you might not have the ability to keep your house at all. Try to start small with your first house purchase and avoid spending money beyond your means.

Take Your Time
Once you decide that you are in the right place to buy a house, you might be so eager that you rush through the process. Weigh the pros and cons of each house you look at. If possible, plan an adequate amount of time around the buying process to ensure that you have considered all your best options.

Prepare for Other Expenses
You need to find out if you are expected to pay closing costs upfront or if you can roll them into your loan. In some areas, the sellers will agree to pay for the closing costs. Not only do you need money for these expenses, but you’ll also need to cover other costs that are associated with moving into a new house.

Buying your first home can be both terrifying and wonderful all at once. Be prepared to invest in a financial investment like this by hiring professionals and making smart decisions. If home is where the heart is, allow yourself the time and care in finding the best possible place for you and your family.

This post was originally published on RISMedia’s blog, Housecall. Check the blog daily for top real estate tips and trends.


8 Banking Tips for Millennials

Nearly half of millennials feel “chronically stressed” about money—with good reason. But a strong financial footing, says Rob Nichols, president and CEO of the American Bankers Association (ABA), is not as difficult to come by as some may perceive.

“Millennials are digital natives who understand the importance of staying connected socially, but staying connected to their bank can help their finances as they encounter life’s many milestones,” Nichols explains. “From enhanced mobile resources to free budgeting tools, banks offer a variety of products and services to complement millennials’ unique lifestyles and ease their worries as they prepare to make some of life’s biggest financial decisions.”

Your bank, says Nichols, can be a valuable partner in your financial journey. To make the most of that partnership—and see benefits as a result—Nichols suggests the following tips:

1. Cyber-shop for a bank that fits your style. There are lots of options out there with different advantages. Be selective and get the best prices, services, convenient locations and lowest fees for credit cards, bank accounts and loans.

2. Use your bank’s tools to save without thinking about it. Consider automatic payroll deductions or automatic transfer from checking to savings. Arrange to have a specific amount transferred to your savings account every pay period.

3. Download your bank's mobile app. Manage your finances from the palm of your hand. With the click of a button, you can easily make a deposit or access a record of all your recent transactions. Be sure to download the latest updates when they are available.

4. Sign up for email or text alerts. Get up-to-date info, on the go, the way you want it. Ask for an automatic alert when your balance falls below a certain level, or to confirm when certain types of transactions occur, such as online purchases or transactions of more than $500.

5. Use the personal finance tools your bank may offer. Banks offer an array of budgeting tools and resources to help you keep your finances in check. Access these via your bank’s mobile app and website.

6. Expect the unexpected. The last thing you want to be is stressed when life’s unexpected expenditures come knocking at your door. Set up a secondary checking or savings account for emergencies, or link an existing account to your main account as an added layer of protection.

7. Get a head start. Banks play a major role in helping customers prepare for life events, such as buying a house and planning for retirement. Ask your banker how you can establish credit or start a retirement account.

8. Stay connected with social media. Interact with your bank via social media to get the latest news on products and services, ask bank-related questions, join in on conversations and find links to exclusive bank content. 

Source: ABA

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Rethinking Your Landscape: Lush Lawns Offer More than Just a Pretty Face

By Paige Tepping

With summer quickly approaching, homeowners and renters alike are doing everything they can to prepare their lawns for family-friendly soccer games, neighborhood cookouts, evenings gathered around the fire pit roasting marshmallows and nights spent sleeping under the stars.

While a lush, healthy lawn will certainly go a long way toward making your neighbors jealous, the benefits don’t end there.
 
The following infographic, provided by the experts at the Outdoor Power Equipment Institute (OPEI), digs a little deeper, touching on some of the major benefits that lie just below your lawn’s surface.
 

 
This post was originally published on RISMedia's blog, Housecall. Check the blog daily for top real estate tips and trends.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Applications for New Home Purchases Jump 17 Percent

Data for March 2016 show mortgage applications for new home purchases increased by 17 percent relative to the previous month, according to The Mortgage Bankers Association (MBA) Builder Application Survey (BAS).

"Rising prices for existing homes and a strong job market are making the math work for new construction. In March, the Builder Application Index reached its highest level since its inception in 2012 and was more than 18 percent higher than one year ago. During the last three years, peak application activity for new homes has taken place in March and April suggesting the trend should continue next month," says Lynn Fisher, MBA's Vice President of Research and Economics.

By product type, conventional loans composed 67.5 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.0 percent. The average loan size of new homes increased from $328,370 in February to $339,296 in March.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 574,000 units in March 2016, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for March is an increase of 5.5 percent from the February pace of 544,000 units. On an unadjusted basis, the MBA estimates that there were 54,000 new home sales in March 2016, an increase of 14.9 percent from 47,000 new home sales in February.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

For additional information on MBA's Builder Applications Survey, please click here

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Q: What should I do to prepare my home for sale?

A: Start by finding out its worth. Contact a real estate agent for a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties. Or get a certified appraiser to provide an appraisal.

Next, get busy working on the home’s appearance. You want to make sure it is in the best condition possible for showing to prospective buyers so that you can get top dollar. This means fixing or sprucing up any trouble spots that could deter a buyer, such as squeaky doors, a leaky roof, dirty carpet and walls, and broken windows.

The “curb appeal” of your home is extremely important. In fact, it is the first impression that buyers form of your property as they drive or walk up. So make sure the lawn is pristine – the grass cut, debris removed, garden beds free of weeds, and hedges trimmed.

The trick is not to overspend on pre-sale repairs and fix-ups, especially if there are few homes on the market but many buyers competing for them. On the other hand, making such repairs may be the only way to sell your home in a down market.

 

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.