Monthly Archives: April 2015

House Price Appreciation Moderates | Armonk Real Estate

The Federal Housing Finance Agency (FHFA) recently released the House Price Index (HPI) data for February, 2015. Figure 1 shows the House Price Index (HPI) data from January 1991 to February 2015. The annual growth rate is also presented in Figure 1.


House price appreciation has been volatile but averaged approximately 5% from 1991 to 2003 prior to the housing boom. Appreciation accelerated after 2003 and house prices rose rapidly through 2005 with annual growth of reaching 10%. Beginning in 2006, the rapid house price growth reversed with price appreciation slowing sharply and turning negative by 2007. House price declines slowed after 2008 but the annual growth rates didn’t turn positive until 2012. Since turning positive house price growth rates have recovered returning to the roughly 5% average that was the norm before the boom.

The trend line shows that house prices have declined from their boom-inflated peaks, recovered some of the lost value from the bust, and are now in line with where the trend was headed before the boom and bust cycle, suggesting that current levels and rates of growth are sustainable.


Figure 2 provides a more geographically detailed analysis, looking at house price appreciation in the nine Census divisions. Regionally, eight of the nine Census divisions posted positive growth for the month of February and all were above year ago levels.  All nine divisions have seen substantial price growth since hitting their respective troughs.

It should be noted that among the four divisions with the greatest cumulative growth, including Pacific, Mountain, West South Central, and South Atlantic, three of those included bubble states that fell the farthest during the housing bust (California, Nevada, Arizona and Florida). The stronger than average cumulative growth is a reflection of partial price recovery after deep losses, rather than inherent strength. In contrast, the above average cumulative growth in the West South Central division reflects inherent strength in the housing market. This division includes Texas, Oklahoma, and Louisiana, where the local economies benefited from the strong performance of the energy sector, but also avoided much of the housing boom excesses experienced in other areas.

The Home Price Index data reported by the Standard and Poor’s/Case-Shiller shows the same house price dynamics as the FHFA index. The Case-Shiller index shows the steady growth before the boom, the acceleration and subsequent price declines, and the more recent return to more normal and sustainable growth rates.


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Bedford-bred Upstart could break New York’s Kentucky Derby drought | #Bedford Real Estate


Although Empire City Casino’s Kentucky Derby Day and fancy hat contest are local traditions, this year’s Derby-related activities have the added appeal of a hometown favorite: Upstart, a Bedford-bred horse, will try to bring home a Derby win for New York for the first time in more than a decade.

The three-year-old Upstart, owned by Ralph Evans and bred by Sunnyfield Farms Owner Joanne Nielsen, has a solid record, with a career total of seven starts: three first-place finishes, three seconds, and one third.

The first New York horse to win the Kentucky Derby was Funny Cide in 2003. Since then, no New York horse has made it to the top of this crème de la crème of horse races. Upstart, who won the Holy Bull and was a runner-up in the Florida Derby, has been given 15-1 odds—not impossible, certainly, but he’ll need a bit of luck to pull out a win. Coincidentally, his foalhood nickname was “Lucky;” he was born on April, 13, 2012—a lucky Friday the 13th. And given that only 20 thoroughbreds make it to the Kentucky Derby out of the approximately 30,000 that are born yearly, one could argue luck has always been on Upstart’s side.

It’s not every year New Yorkers get to see a hometown contestant in the Kentucky Derby, so be sure to tune in and root for Upstart. Coverage starts at 4 pm on Friday on NBC.


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Buy Julia Roberts’ Hanalei Bay Estate in Kauai, Hawaii for $30 Million | North Salem Real Estate

Julia Roberts has listed her Hanalei, HI estate with more than 200 feet of beachfront for $29.85 million, Pacific Business News reports.

The estate, which the actress bought for $13.4 million in 2011, is called “The Faye Estate” for the sugar plantation manager who bought it in 1915, four decades before Hawaii became a state.

“H.P. Faye had the vision and the finances to purchase not one but two lots in the best part of the Bay,” according to the listing, which is held by Neal Norman of Hawai’i Life Real Estate Brokers.

The 2-acre property has views “mauka and makai,” meaning toward the mountains and seaward.

The 3,792-square-foot home was built in 1946 and has 7 bedrooms and 4 bathrooms. Building may be permitted for up to 9,000 square feet for more buildings and a pool.


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GDP Growth in the First Quarter – Stormy Weather? | Mt Kisco Real Estate

The Bureau of Economic Analysis (BEA) reported real GDP grew at a seasonally adjusted annual rate of 0.2% in the first quarter of 2015. Real GDP grew at an annual rate of 2.2% in the fourth quarter of 2014. The slowdown in economic growth was expected but the extent of the slowdown was a surprise. Harsh weather, a strong dollar, stalled trade at west coast ports and falling energy prices all played a role. In the same report the BEA reported that the price index tracking components of GDP, the broadest measure of price movements across the economy, declined by an annualized rate of 0.1% in the first quarter, after rising only 0.1% in the fourth quarter.

A strong dollar and stalled trade combined to shrink exports by an annual rate of 7.2% shaving almost a full percentage point from growth, but the stalled trade likely restrained imports given the rise in the value of the dollar, which would have depressed growth further. The trade dispute has been resolved, but the strong dollar is likely to persist and be a drag on growth in the near term.

Record low temperatures around the country in February can be considered a one-off event with little impact on growth going forward, but falling energy prices have put the brakes on a previously booming energy sector and contributed to an annualized 23.1% decline in the structures component of fixed investment. Investment in equipment, intellectual property and housing (residential fixed investment) all contributed to growth in total fixed investment, but less than in the previous quarter.

Inventory investment increased when it probably should have declined, adding nearly three quarters of a percentage point to growth in the current quarter, but will likely subtract from growth in the next quarter as payback. Personal consumption expenditures (PCE) slowed to 1.9% growth from an unsustainable 4.4% last quarter but will need to reaccelerate if the overall growth outlook is to improve.


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Weekly mortgage applications drop | #Waccabuc Real Estate

Mortgage applications gave back their gains last week, falling exactly as much as they had risen the previous week. This as interest rates increased ever so slightly.

Total application volume fell 2.3 percent on a seasonally adjusted basis for the week ending April 24th, but is up nearly 34 percent from a year ago, according to the Mortgage Bankers Association (MBA). Applications to refinance home loans fell four percent, while those to purchase a home were unchanged for the week.

“Applications for conventional purchase loans are at their highest level since August 2014,” said Mike Fratantoni, chief economist for the MBA. “With the recent pickup in existing home sales, this is another sign that housing markets are strengthening.”

Still, the stall in purchase application volume is a red flag, given that they had been on a tear, up 13 percent in the past four weeks. It could be a one-week aberration, but it is somewhat unexpected right in the heart of the spring season, traditionally the busiest for home sales. Home price gains have been increasing, as strong buyer demand comes up against very tight supply. That may be playing into the drop in applications—simply that people are not finding the right homes at the right price.


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Homeownership rate drops | South Salem Real Estate

In the latest sign of a changing housing market, homeownership rates are at a quarter-century low, while the rental-vacancy rate is close to the slimmest proportion in more than two decades, according to government data released Tuesday.

The seasonally adjusted homeownership rate, which shows the share of occupied homes in which an owner lives, fell to 63.8% in the first quarter — the lowest proportion since the end of 1989, the U.S. Census Bureau said.

Families with income both above and below the median have seen drops in homeownership rates over the past year.

Weak income growth and difficult-to-get mortgages are likely behind homeownership drops, experts say. Home prices that are running higher aren’t helping, either. Nor are the millions of properties that are underwater — these homes are worth less than owners owe for their mortgage — with borrowers struggling to make monthly payments,

However, long-term trends show that the drop in homeownership is actually pushing the U.S. back to “normal” levels, said Sam Khater, deputy chief economist at CoreLogic, an Irvine, Calif.–based analysis firm. The market may even see further drops, he added.

“In the mid-1990s pro-homeownership policies led to an expansion in mortgage credit and the homeownership rate peaked in 2004 at 69%,” Khater said. “Homeownership rates are back to roughly their long-term trend between the 1960s and 1990s.”

Meanwhile, the rental-vacancy rate ticked up to 7.1% in the first quarter, clinging close to 7% reached at the end of 2014, which was the slimmest share in 21 years. High demand has enabled landlords to crank up rents well past broader inflation growth.


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Slight Uptick in Rates on Loans for New Homes | Lewisboro Real Estate

This morning, the Federal Housing Finance Agency (FHFA) reported that interest rates on home mortgages increased slightly in March.  The same was true for the subset of mortgages used to purchase new homes.

Eff Rate Mar 15

On conventional mortgages used to purchase newly built homes, the average contract rate and average initial fees and charges each increased by 2 basis points.  The contract interest rate increased from 3.79 percent to 3.81, and the initial fees and charges increased from 1.11 percent to 1.13.  The result was an average effective interest rate (which amortizes initial fees over the estimated life of the loan) that edged up from 3.91 to 3.93 percent.  That marks the second month in a row that the effective rate has been below 4 percent, following 19 consecutive months above that threshold.

Loan Amt Mar 15

Meanwhile, the average size of the conventional loans used to purchase newly built homes continued to inch toward $340,000, increasing by $400 to $339,000 in March, which is an all-time high.

However, the average price of the new homes purchased with the loans in March declined by $3,800 (a little under 1 percent) to $445,700.  Consequently the loan-to-price ratio moved back up over 78 percent for the first time in three months.


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Home Prices in 20 U.S. Cities Increase at Faster Pace | Cross River Homes

Home prices in 20 U.S. cities climbed at a faster pace than forecast in the year ended February, a sign the housing industry may be gaining momentum amid low borrowing costs and continued job growth.

The S&P/Case-Shiller index of property values increased 5 percent from February 2014, the biggest year-to-year gain since August, after rising 4.5 percent in the year ended in January, the group said today in New York. The median projection of 28 economists surveyed by Bloomberg called for a 4.7 percent year-over-year advance. Nationally, prices rose 4.2 percent.

Higher real estate prices may persuade more homeowners to put their properties on the market, boosting the limited inventory that’s been holding some prospective buyers back. More supply, in addition to continued gains in the labor market and looser lending standards, will be needed to help the housing market accelerate after showing inconsistent progress.


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Westchester Property Taxes win Title for Highest | Katonah Real Estate

Barring floods and asbestos, property taxes are the highest cost of homeownership after a mortgage — and taxes never end.

In 2013, the median U.S. property tax bill was $2,132, according to a Zillow analysis that used the most recent data available.

That’s a whole lot less than residents paid in Westchester County, NY, where the median tax bill was $13,842. In Tunica County, MS, the median tax bill was $216.

All 10 of the most expensive counties for property taxes, based on the median paid for single-family homes, are in the same vicinity:

County Median taxes
Westchester, NY $13,842
Rockland, NY $10,550
Bergen, NJ $9,546
Essex, NJ $9,288
Nassau, NY $9,091
Passaic, NJ $8,978
Union, NJ $8,926
Morris, NJ $8,549
Hudson, NJ $8,407
Hunterdon, NJ $8,392

Four of the 10 least expensive counties are in Alabama, with the other six scattered among several states..


Mortgage Rates Down | Bedford Hills Real Estate

Freddie today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving down slightly this week and remaining near their 2015 lows as the spring homebuying season continues.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.65 percent with an average 0.6 point for the week ending April 23, 2015, down from last week when it averaged 3.67 percent. A year ago at this time, the 30-year FRM averaged 4.33 percent.
  • 15-year FRM this week averaged 2.92 percent with an average 0.6 point, down from last week when it averaged 2.94 percent. A year ago at this time, the 15-year FRM averaged 3.39 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week with an average 0.4 point, down from last week when it averaged 2.88 percent. A year ago, the 5-year ARM averaged 3.03 percent.
  • 1-year Treasury-indexed ARM averaged 2.44 percent this week with an average 0.4 point, down from last week when it averaged 2.46 percent. At this time last year, the 1-year ARM averaged 2.44 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Attributed to Len Kiefer, deputy chief economist, Freddie Mac.

“Mortgage rates fell slightly to 3.65 percent this week, positive news for potential homebuyers in the market this spring. Purchase applications in 60 of the 100 markets that MiMitracks are up from the same time last year, including 20 markets that are showing double-digit increases. Reinforcing this positive momentum, existing home sales surged 6.1 percent to a seasonally adjusted annual rate of 5.19 million units in March, the highest annual rate since September 2013. Housing inventory rose 5.3 percent to 2 million homes for sale, but unsold inventory was little changed at a 4.6 month supply.”