Just In: Renters Can Buy a Home—Without Spending More Money

Rents are so high that the average renter could buy a home worth approximately 50 percent more than the median home value without spending any more money, according to a recent analysis by Zillow.
 
The national median rent, $1,416, is enough to cover the monthly expense (including insurance, maintenance and taxes) of owning a home worth $289,505—considerably more than the national median home value of $196,500.
 
Similar outcomes shake out in the majority of cities analyzed:
 


 
"Renters hesitant to enter the home-buying market for fear of not being able to find an affordable home should be encouraged to discover they may have more options than they thought," says Dr. Svenja Gudell, chief economist at Zillow.
 
"However, it's worth noting that many of the more affordable homes for sale may be older, smaller and/or located in less-desirable neighborhoods than they might like," Gudell says. "The decision between buying and renting is a financial trade-off between saving more each month on a mortgage payment versus spending more on rent, but taking advantage of the location and lifestyle amenities urban renting often offers."
 
Scraping together enough for a down payment is another issue—though lesser now that rents are losing steam.
 
"Recent slowdowns in rent growth may take some of the edge off for renters saving to become homeowners," says Gudell. "This is good news, since saving a down payment, qualifying for a loan and finding a home available at a manageable price remain hurdles for millions of aspiring buyers."
 
For more information, please visit www.zillow.com

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

Reprinted with permission from RISMedia. ©2017. All rights reserved.


Mortgage Rates Descend to Lowest Level of the Year

The average 30-year fixed mortgage rate descended this week to its lowest level so far in 2017, according to Freddie Mac's recently released Primary Mortgage Market Survey® (PMMS®). The 30-year fixed rate mortgage came in at 4.08 percent, down from 4.10 percent the previous week.
 
"Following a weak March jobs report, the 10-year Treasury yield dropped about five basis points," says Sean Becketti, chief economist at Freddie Mac. "The 30-year mortgage rate fell two basis points to 4.08 percent. Not only did the average 30-year fixed-rate mortgage decline for the fourth consecutive week in our survey, it also fell to a new 2017 low."
 
The 15-year fixed mortgage rate followed suit, falling two basis points, as well, to 3.34 percent. The 5-year Treasury-indexed hybrid adjustable mortgage rate fell one basis point to 3.18 percent.
 
Source: Freddie Mac

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

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Boomers Anxious About Housing Affordability

The road to retirement is supposed to lead toward a more relaxed, enriched phase of life. But these days, it seems to be fraught with anxiety.

According to a survey of 1,000 Americans aged 55+ from The NHP Foundation, a not-for-profit provider of affordable housing, 30 percent of Americans experience anxiety at least once a month about being able to afford where they live, with 42 percent of retirees reporting such anxiety at least once daily. The greatest anxiety comes from being able to afford “desirable retirement living.”

Sixty-four percent of boomer parents also experience anxiety over their adult children’s ability to afford their rent or mortgage, with 43 percent most concerned about the next generation’s ability to save for retirement.
 
If housing affordability is a concern for you or your loved ones, here are some tips from IMB Bank to ease the burden:

  • Consider becoming a “rentvestor”; purchase a home in a more affordable location as an investment and rent a smaller place for yourself in your ideal location.
  • Consider buying an apartment. Not only will this most likely be more affordable, it may allow you to live in the area you most desire.
  • Consider buying a home with another family member or close friend, or converting part of your existing home into rental space.
  • Consider a fixer-upper and plan to affordably space out remodeling projects over time. 

By rethinking your approach to housing, not only will you uncover ways to make your living situation more affordable, but you will also gain a much-needed level of peace of mind.
 
Contact me today for more tips to help ease the anxiety associated with housing affordability.

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

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Report: Closing Window Tightens in February

The closing window for mortgage loans tightened in February, down to 46 days from 51 days in January, according to Ellie Mae's latest Origination Insight Report. The time to close a purchase loan was 45 days, while the time to close a refinance loan was 47. Closing rates ticked down roughly two points, to 70.6 percent.
 
All told, purchase loans grew to 57 percent in February—an increase from 53 percent in January—with the average FICO score at 686 for FHA purchase loans, 707 for VA purchase loans, and 752 for conventional purchase loans.
 
The average FICO score for FHA refinances, over the same period, was 649; the average score for VA refinances was 702; and the average score for conventional refinances was 728.
 
"The purchase market led the way in February, representing 57 percent of total closed loans," said Jonathan Corr, president and CEO of Ellie Mae, in a statement. "Along with the growing purchase market, we're seeing the time to close all loans decrease and FICO scores decline—trends that we will continue to watch in the coming months."
 
Source: Ellie Mae

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

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Mortgage Lending Standards Loosen in January

Mortgage lending standards loosened in January, with the Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI) increasing 1.1 percent to 177.1. The MCAI indicates the overall standard with which lenders are offering credit; an increase equates to loosening, while a decrease equates to tightening.
 
"Mortgage credit availability increased for the fifth consecutive month in January, driven by increased availability of jumbo loan programs," said Lynn Fisher, MBA's vice president of Research and Economics, in a statement. "We saw a particular increase in agency jumbo programs that focus on loans in high-cost areas that exceed the baseline conforming loan limit of $424,000 but are still eligible for purchase by the GSEs. While the change in GSE loan limits may have had an indirect impact on the jumbo MCAI, there were other factors at play, as several investors rolled out new jumbo loan programs in January."
 
The MCAI is comprised of four indices: Conforming, Conventional, Government and Jumbo. The Jumbo MCAI increased 4.7 percent in January, while the Conventional MCAI and Government MCAI increased 2.3 percent and 0.2 percent, in order. The Conforming MCAI decreased 0.1 percent.
 
Source: Mortgage Bankers Association (MBA)

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

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Experts Agree: The No. 1 Factor Shaping the 2017 Housing Market

Rising mortgage rates will have the most impact on the housing market in 2017, according to expert opinions recently assessed in Zillow's Home Price Expectations Survey, followed by limited housing supply and shifting demographics.
 
Rising rates, markedly, affect both sides of the transaction—as rates increase, homebuyers are further extended, while sellers hold off on listing to avoid a higher-priced mortgage. The experts surveyed expect the most significant changes to come when rates reach 5.5 percent. According to Freddie Mac, rates currently are in the neighborhood of 4 percent. 
 
"Rising mortgage rates, inventory shortages and demographic shifts will be the main drivers of the U.S. housing economy this year, especially for first-time buyers who will face tougher competition for entry-level homes and often operate with a tighter budget than move-up buyers," says Zillow Chief Economist Dr. Svenja Gudell. "When you combine higher mortgage rates with increasing home values, mortgage affordability starts to suffer, and buyers will have to spend more and more on their monthly payments. This makes it even more important for buyers to prepare their finances, and shop around to make sure they are getting the best possible rate."
 
Seventy-seven percent of homebuyers obtain a mortgage to finance a home purchase, according to Zillow—this widespread use, experts agree, will amplify the effects of rising rates on home price appreciation.
 
"Compared to their outlook in our previous survey just a few months ago, most of our panelists now expect somewhat stronger home value appreciation this year and next, as tight inventory conditions persist," says Terry Loebs, founder of Pulsenomics, which partnered with Zillow on the survey. "However, longer-term, the consensus still calls for decelerating prices, with the most pessimistic quartile of experts continuing to project negative inflation-adjusted returns for U.S. housing beyond 2017. The specter of rising mortgage rates and other affordability hurdles are clearly impacting these home value projections."
 
For more information, please visit www.zillow.com.

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

Reprinted with permission from RISMedia. ©2017. All rights reserved.


Foreclosures Fall 82 Percent from Recession Peak

Foreclosures are continuing their exodus from the housing market, with foreclosure inventory falling 30 percent and foreclosure completions falling 40 percent in 2016, according to CoreLogic's December 2016 National Foreclosure Report. Foreclosure completions totaled 21,000 in December, down from 36,000 one year prior and 82 percent from its recession peak.
 
Mortgage delinquencies in December also fell, 19.4 percent from one year prior. One million mortgages are in "serious" delinquency, or 90 days or more past due—the lowest amount since August 2007.
 
"Foreclosure and delinquency trends continue to head in the right direction powered principally by increasing employment levels, stringent underwriting standards and higher home prices over the past few years," says Anand Nallathambi, president and CEO of CoreLogic. "We expect to see further declines in delinquency and foreclosure rates in 2017. As the foreclosure inventory diminishes, we must look ahead and tackle tight housing supply and growing affordability issues, which are keeping many potential homebuyers, especially first-time buyers, on the sidelines."
 
Foreclosure inventory stands at 329,000, or 0.8 percent of all homes with a mortgage. Foreclosure inventory stood at 467,000, or 1.2 percent of all homes with a mortgage, in December 2015. New Jersey (2.8 percent), New York (2.7 percent), Maine (1.8 percent), Hawaii (1.7 percent) and the District of Columbia (1.6 percent) had the most foreclosure inventory in December 2016. Colorado (0.2 percent), Minnesota, Utah, Arizona, and California (all 0.3 percent) had the least.
 
At 45,000, Florida had the most foreclosure completions in December 2016, followed by Michigan (30,000), Texas (24,000), Ohio (21,000) and California (19,000). The least foreclosure completions were in North Dakota (182), the District of Columbia (254), West Virginia (312), Montana (630) and Alaska (668).
 
Source: CoreLogic 

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

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Report: Multifamily Marketplace Outlook 2017

The multifamily marketplace will continue to be propelled by growth in property values and rents in 2017, according to Yardi® Matrix's recently released Market Outlook report. The report, "Can the Good Times Keep Rolling?" projects that multifamily market fundamentals in most metropolitan areas will remain positive, even as rental growth slows.
 
"2017 is shaping up to be the biggest year for new supply since the financial crisis," the report states. "Demand for multifamily is poised to remain robust for years."

The prospect of new federal tax cuts, infrastructure spending and reduced business regulations could stimulate the economy, although potential tariffs and uncertainty surrounding the incoming administration’s policies could temper that growth, according to the report.
 
View the full report here.

For more information, please visit www.yardimatrix.com.

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

Reprinted with permission from RISMedia. ©2017. All rights reserved.


Hopes High as Home Builders Encouraged by New Administration

Home builders have high hopes for the year ahead, anticipating a solid real estate market while being encouraged by the promises of a new administration.
 
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) posted 67 this month, a decrease of only two points from December 2016, with the measure of "buyer traffic" at 51, the measure of "current sales conditions" at 72, and the measure of "sales expectations" at 76. An above-50 reading indicates more builders have a positive outlook than a negative one.
 
"Builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process," said Granger MacDonald, NAHB chairman, in a statement on the Index.
 
The current cost of complying with regulations is constraining construction businesses to the detriment of new housing stock, which remained severely limited at the beginning of the year. The shortage is especially pronounced in the starter home segment, which is preventing first-time homebuyers from entering the market. Lessening the burden could open up more build opportunities, alleviating demand.
 
Still, approximately 40 percent of those recently surveyed by the Associated General Contractors of America organization are "worried" that regulations will bear down further in the future.
 
"While the new administration and its stated policy objectives offer many reasons for optimism, there is a significant risk to the industry if the new Congress and administration under-deliver," Stephen Sandherr, CEO of the organization, said in a recent statement. "If plans to invest in infrastructure, reform healthcare laws and roll back regulations are delayed, many contractors will likely scale back their plans to expand headcounts."
 
Nearly three-quarters of construction businesses expect to hire more contractors in 2017, according to the AGCA, with the majority planning to grow between 1 and 25 percent. A lack of younger contractors is a factor, with the NAHB estimating the median age in the sector at 42.
 
"Concerns going into the year include rising mortgage interest rates, as well as a lack of lots and access to labor," said Robert Dietz, NAHB chief economist.

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

Reprinted with permission from RISMedia. ©2017. All rights reserved.


Buying a Home in Winter? What to Look for

By Maria Patterson

While spring and early summer reign as peek home-shopping seasons, there’s no good reason why you can’t find that perfect house in the middle of winter, too. In fact, you might even get a good deal from homeowners who are anxious to sell as soon as possible and don’t want to wait for the spring thaw.

Looking at homes in winter, however, requires a different strategy, so consider the following before you start your search:

– Winter weather may prevent you from getting a good sense of a home’s yard, particularly, if it’s covered in snow. Make sure you’re informed as to the exact size of the plot, patios and decks, and ask your agent to show you pictures of the yard and home’s exterior in the spring and summer, if there aren’t any posted online.

– Ditto for the landscaping. If gardens are a high priority for you, find out which perennials, bulbs, shrubs and flowering trees are planted on the property, and whether or not the owner maintained a vegetable garden. This will give you a sense of what will emerge come spring and what your options are for further gardening endeavors.

– While you can experience the quality of the home’s insulation and heating system first-hand in the winter, you won’t be able to get a feel for the central air. Find out how old the system is, when it was last maintained and make sure the inspector takes an especially close look.

– The natural lighting in a home can be drastically different in winter compared to summer. Take time to notice the number of leafy trees on the property to get an idea of how much shade cover there will be when summer arrives. This will also give you a sense of the leaf clean-up job on deck for fall.

– In cold or inclement winter months, when people tend to hibernate indoors, you may not get a full sense of the neighborhood. Ask the agent about the number of and age range of children in the neighborhood, how active the community is, common traffic patterns and noise level.

The good thing about buying a home in winter is that you’ll be all moved in and ready to enjoy the warm weather when it rolls around. So throw on an extra layer and start your search!

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

Reprinted with permission from RISMedia. ©2017. All rights reserved.