Category Archives: South Salem

Home equity withdrawals fall to new low | South Salem Real Estate

House

After declining for two consecutive quarters, tappable equity rose in the first quarter of the year, but it appears homeowners are still reluctant to touch it.

According to the latest report from Black Knight, homeowners tapped just 1% of available equity in the first quarter – the lowest share since it began tracking the metric in 2008.

Nearly 44 million homeowners with a mortgage have more than 20% equity in their home, which comes to about $136,000 of available equity per person and an aggregate amount of $5.98 trillion.

Last summer, the aggregate amount of tappable equity reached an all-time high of $6.06 trillion, a milestone Black Knight says we’ll likely surpass as home prices continue to rise this summer.

That said, while tappable equity is growing, the rate of that growth is slowing significantly along with home prices, falling from 16% a year ago to just 3% in the first quarter.

Major cities, including San Jose, San Francisco, Seattle, Houston, Portland, and Baton Rouge have all seen tappable equity volumes decline in the last year, the report shows.  

Meanwhile, Los Angeles continues to hold the title of the city where homeowners have the most tappable equity. In fact, California itself holds 37% of the nation’s equity, nearly seven times more than the runner-up, Texas.

But despite considerable equity gains, homeowners continue to show a reluctance to touch this source of wealth.

Black Knight’s report shows that just $54 billion in equity was withdrawn in the first quarter, the lowest volume in four years.

Both cash-out refinance withdrawals and HELOCs were down, with HELOC withdrawals hitting a five-year low and falling below cash-out refi volume for the first time in eight years.

Black Knight says rates are likely to blame.

“HELOC withdrawals as a share of available equity have been cut in half over the past three years as homeowners have increasingly steered away from the product,” the report states. “Cash-out withdrawals as a share of available equity are down a much more modest 16% over that same span. Rising interest rates have likely been the driving force behind declining HELOC equity withdrawals.”

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https://www.housingwire.com/articles/49466-home-equity-withdrawals-fall-to-new-low?utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=74236288&_hsenc=p2ANqtz–_RPpnTr_PWGur1iiM83XvQEyPJM69u5aoyeLA1IlZzU3FG1tVQjkNDrO80nlHOtt23STTcCE-tkx6xvBN1Dx1U2ckcA&_hsmi=74236288

SALT workaround officially squashed by Treasury | South Salem Real Estate

The Treasury Department on Tuesday issued final regulations that will officially prohibit high-tax states from utilizing workarounds to evade the new cap on state and local tax (SALT) deductions.

As part of the Tax Cuts and Jobs Act, SALT deductions were capped at $10,000 – which is well below the average amounts claimed by individuals residing in states such as New York, California and New Jersey. The average deduction claimed in California, for example, is $22,000, according to Kevin de Leon, a Democratic member of the California state senate.

Therefore, in response, a number of state governments proposed or enacted legislation that would allow taxpayers to make charitable contributions to an established state fund in order to earn a credit. The goal would be to allow the residents to take the full amount given as a deduction by transforming a non-deductible payment into a charitable contribution.

However, the IRS blocked that strategy through guidelines issued on Tuesday, which require taxpayers to subtract the value of their state and local tax deductions from their charitable contributions.

The regulations also provide exceptions for state tax deductions and tax credits of no more than 15 percent of the amount of the donation.

The regulations apply to contributions made after Aug. 27, 2018.C

Treasury Secretary Steven Mnuchin said in 2017 that he hoped it sent a message to state governments that “they should try to get their budgets in line.”

Meanwhile, Democrats have said they would try to undo the cap on state and local tax deductions. New York Gov. Andrew Cuomo has said the new tax change would lead to a decline in revenues in the state because taxpayers would leave.

The Treasury said it would continue to evaluate the issue and release further guidance if necessary.

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https://www.foxbusiness.com/personal-finance/salt-workaround-squashed-treasury-department

Mortgage rates hit two year low | South Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate fell to 3.82 percent, the sixth consecutive weekly decline and its lowest level since September 2017.

Sam Khater, Freddie Mac’s chief economist, says, “While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates that there can be a wide dispersion among mortgage rate offers. By shopping around and getting a single additional mortgage rate quote, a borrower can save an average of $1,500.”

“These low rates are also good news for current homeowners. With rates dipping below four percent, there are over $2 trillion of outstanding conforming conventional mortgages eligible to be refinanced – meaning the majority of what was originated in 2018 is now eligible,” he says.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.82 percent with an average 0.5 point for the week ending June 6, 2019, down from last week when it averaged 3.99 percent. A year ago at this time, the 30-year FRM averaged 4.54 percent. 
  • 15-year FRM averaged 3.28 percent with an average 0.5 point, down from last week when it averaged 3.46 percent. A year ago at this time, the 15-year FRM averaged 4.01 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent with an average 0.4 point, down from last week when it averaged 3.60 percent. A year ago at this time, the 5-year ARM averaged 3.74 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Mortgage rates average 3.99% | South Salem Real Estate

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate dropped below four percent for the first time since January 2018.

Sam Khater, Freddie Mac’s chief economist, says, “While economic data points to continued strength, financial sentiment is weakening with the spread between the 10-year and the 3-month Treasury bill narrowing as fears of the impact of the trade war with China grow. Lower rates should, however, give a boost to the housing market, which has been on the upswing with both existing and new home sales picking up recently.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.99 percent with an average 0.5 point for the week ending May 30, 2019, down from last week when it averaged 4.06 percent. A year ago at this time, the 30-year FRM averaged 4.56 percent. 
  • 15-year FRM averaged 3.46 percent with an average 0.5 point, down from last week when it averaged 3.51 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.60 percent with an average 0.4 point, down from last week when it averaged 3.68 percent. A year ago at this time, the 5-year ARM averaged 3.80 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Home prices fall | South Salem Real Estate

In March, the nation’s home-sale prices remained virtually stagnant, inching backward only 0.1% from 2018 levels, according to new data from Redfin.

This means U.S. home-sale prices reached a median of $295,000 in March, marking the first year-over-year price decrease on record since February 2012.

Despite this decline, Redfin’s data determined that only nine of the 85 largest metros saw a year-over-year decline in their median price.

This was especially so for San Jose, California, which saw its home prices fall 13% in March. That being said, other California cities like San Francisco experienced declines as little as 1%.

When it comes to home sales, the report revealed that expensive West Coast markets like Los Angeles, Orange County and Seattle posted double-digit year-over-year sale declines.

However, large markets on the East Coast saw big annual sales gains, as market affordability worked in their favor.

“Homebuyers have backed off in West Coast metros where home prices have risen far out of their budgets,” Redfin Chief Economist Daryl Fairweather said. “The opposite is happening in more affordable metros where buyers are eager to buy now to take advantage of low mortgage rates. In California, where the tax burden is high, some people are finding they have to move out of state to afford to buy a home. As a result, home sales are down in metros throughout the state.”

In fact, Redfin’s analysis indicated March’s home sales fell in 37 of the 85 largest housing markets. Whereas, only 24 of these markets saw double-digit year-over-year increases in home sales.

Interestingly, the housing markets that did experience the biggest declines features homes that were 2.5 times more expensive than homes belonging in areas where sales surged, according to Redfin.

The image below highlights March’s home-price growth:

Redfin: U.S. home price growth

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https://www.housingwire.com/articles/48894-redfin-us-home-sale-prices-experience-first-annual-decrease-in-7-years?id=48894-redfin-us-home-sale-prices-experience-first-annual-decrease-in-7-years&utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=72168543&_hsenc=p2ANqtz-_iiwPf0Pdj4oHXWtcdoJ_X0DvTAceDo4oONh3pBS_CfzJWZfssQVvUIFs1DGZYy0IvTqMHRxUGxX_XrVphjhKmUHjaWw&_hsmi=72168543

Housing starts fall | South Salem Real Estate

Total housing starts fell 8.7% in February to a seasonally adjusted annual rate of 1.16 million units from an upwardly revised reading in January, according to a report from the U.S. Housing and Urban Development and Commerce Department that was delayed due to the partial government shutdown.

The February reading of 1.16 million is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts fell 17% to 805,000 units following an unusually high reading of 970,000 units in January. Meanwhile, the multifamily sector, which includes apartment buildings and condos, increased 17.8% to 357,000.

“The overall lower starts numbers are somewhat deceiving given the revised single-family starts figure in January was at a post-recession high,” said Danushka Nanayakkara-Skillington, AVP for forecasting and analysis at the National Association of Home Builders (NAHB). “Absent the surge last month, the drop in single-family production in February is not as huge as it appears. Still, builders continue to remain cautious due to affordability concerns, as illustrated by the flat permits data.”

“The February starts figures are somewhat in line with flat builder expectations and serve as a cautionary note that affordability factors continue to affect the marketplace,” said Greg Ugalde, chairman of NAHB and a home builder and developer from Torrington, Conn. “Excessive regulations, a scarcity of buildable lots, persistent labor shortages and tariffs on lumber and other key building materials are having a negative effect on housing affordability.”

Regionally, combined single-family and multifamily starts in February fell 29.5% in the Northeast, 18.9% in the West and 6.8% in the South. Starts posted a 26.8% increase in the Midwest.

Overall permits, which are often a harbinger of future housing production, edged 1.6% lower in February to 1.30 million units. Single-family permits held steady at 821,000, while multifamily permits fell 4.2% to 475,000.

Looking at regional permit data, permits rose 1.5% in the Northeast, 4% in the South and 1.1% in the Midwest. Permits fell 15% in the West.

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https://lbmjournal.com/february-housing-starts-down-january-surge/

Lower rates should boost spring sales | South Salem Real Estate

The steady mortgage-rate decline is making purchasing a home more affordable just as the spring buying season heats up.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dipped to 4.35 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.37 percent a week ago and 4.40 percent a year ago. The 30-year fixed rate has fallen 16 basis points since the first of the year. (A basis point is 0.01 percentage point.)

The 15-year fixed-rate average slipped to 3.78 percent with an average 0.4 point. It was 3.81 percent a week ago and 3.85 percent a year ago. The five-year adjustable rate average dropped to 3.84 percent with an average 0.3 point. It was 3.88 percent a week ago and 3.65 percent a year ago.

“Today’s news from Freddie Mac should give buyers some optimism this spring as mortgage rates remain at one-year lows,” said Danielle Hale, chief economist at Realtor.com. “But this spring won’t be without its challenges. Most markets are continuing to see rising home prices, which means many buyers will have to make some trade-offs in order to close this year.”6

The National Association of Realtors said Thursday that sales of existing homes declined 1.2 percent to a seasonally adjusted annual rate of 4.94 million last month, the slowest sales rate since November 2015.

During the past 12 months, sales have plunged 8.5 percent. Would-be home buyers are increasingly priced out of the market as years of climbing prices and strained inventories have made ownership too costly. Declining mortgage rates could aid buyers.

The Federal Reserve released the minutes from its January meeting this week, which showed central bank officials unsure about the need for interest rate increases in 2019. Although the Fed doesn’t set mortgage rates, its decisions influence them.

“Wednesday’s release of the minutes from January’s (Federal Open Market Committee) meeting paints a picture of a more muted outlook for interest rates over the next year,” said Aaron Terrazas, Zillow senior economist. “All eyes are on a string of Fed speakers over the coming week, when we will also see a slew of housing market data, which was a soft spot in the economy at the end of last year. However, the January data are unlikely to provide a definitive judgment on the underlying health of the economy. The market signal in January home sales and permits is likely blurred by the partial federal government shutdown and the polar vortex that hit much of the country mid-month.”

Mixed economic news is putting a damper on rates. More than 84 percent of purchase borrowers and 81 percent of refinance borrowers were offered rates below 5 percent last week, according to LendingTree’s weekly mortgage comparison shopping report.

Bankrate.com, which puts out a weekly mortgage rate trend index, found nearly two-thirds of the experts it surveyed say rates will remain relatively stable in the coming week. Michael Becker, branch manager at Sierra Pacific Mortgage, is one who predicts rates will hold steady.

“Mortgage rates follow the 10-year Treasury and have similarly been consolidating with small differences in rates on a day-to-day and week-to-week basis,” Becker said. “At some point, rates will break out of this tight range and we will see either a spike or drop in rates. If global economic concerns dominate markets, then we will see a drop in rates. If optimism based on progress on trade wars or central bank dovishness prevails in the markets, then there will be a spike in rates. For now, I think rates continue their consolidation pattern and that mortgage rates will be flat in the coming week.”

Meanwhile, mortgage applications have finally started to pick up, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — increased 3.6 percent from a week earlier. The refinance index rose 6 percent from the previous week, while the purchase index grew 2 percent.

The refinance share of mortgage activity accounted for 41.7 percent of all applications.

“After slumping over the past month, purchase mortgage applications reversed course, rising nearly 2 percent over the past week and 2.5 percent from a year ago,” said Bob Broeksmit, MBA president and CEO. “With mortgage rates lower than in previous months and holding steady, lenders are indicating that prospective buyers may be eager to start their home search before the spring buying season gets underway.”

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https://www.chicagotribune.com/business/ct-biz-mortgage-rates-keep-falling-20190221-story.html

Mortgage rates average 4.41% | South Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage fell to a 10-month low. Sam Khater, Freddie Mac’s chief economist, says, “The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months. This is great news for consumers who will be looking for homes during the upcoming spring home buying season. Mortgage rates are essentially similar to a year ago, but today’s buyers have a larger selection of homes and more consumer bargaining power than they did the last few years.”

News Facts     30-year fixed-rate mortgage (FRM) averaged 4.41 percent with an average 0.4 point for the week ending February 7, 2019, down from last week when it averaged 4.46 percent. A year ago at this time, the 30-year FRM averaged 4.32 percent. 

15-year FRM this week averaged 3.84 percent with an average 0.4 point, down from last week when it averaged 3.89 percent. A year ago at this time, the 15-year FRM averaged 3.77 percent. 

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.91 percent with an average 0.3 point, down from last week when it averaged 3.96 percent. A year ago at this time, the 5-year ARM averaged 3.57 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Con Ed cannot supply more natural gas halting development in Westchester | South Salem Real Estate

Local and state officials fear Westchester’s recent development renaissance will come to a screeching halt because Con Edison said it can’t take on new natural gas customers. 

Con Edison issued a statement Friday saying the demand for gas is “reaching the limits of the current supplies to our service area.” 

“As a result, and to maintain reliable service to our existing natural gas customers on the coldest days, we will no longer be accepting applications for natural gas connections from new customers in most of our Westchester County service area beginning March 15, 2019,” Con Edison said in its statement. 

Jim Denn, spokesperson for the Department of Public Service, said Con Ed didn’t propose a pipeline “to meet or address growing demand.”

“To help prospective customers meet their energy needs in light of these market dynamics, PSC will be monitoring Con Edison’s engagement with customers to explore options to reduce their energy needs or meet their needs through non-natural gas energy sources,” Denn said in a statement. 

State Assemblywoman Amy Paulin, D-Scarsdale, said it’s going to “devastate” local development, particularly in cities like New Rochelle and Yonkers, which are in the midst of redeveloping their downtowns. 

A portion of the 10 acres of solar panels atop the

A portion of the 10 acres of solar panels atop the headquarters of Diamond Properties in Mount Kisco. (Photo: Submitted)

“These projects are on a marginal budget, and we’re not going to get the economic development that we’re hoping for,” Paulin said. “Compounding the problem is affordable housing. Developers won’t be able to do them at all, so this is a huge problem for our county and it’s disappointing that we’re being told two months prior (to the start of the moratorium).”

AP
Assemblywoman Amy Paulin,D-Scarsdale, has put together a coalition to fight the IRS.

AP Assemblywoman Amy Paulin,D-Scarsdale, has put together a coalition to fight the IRS. (Photo: Associated Press)

New Rochelle’s downtown redevelopment attempts have historically started and crumbled, as it did in the 1980s, which left a pile of debris near the train station for more than a decade, and again during the most recent economic recession. 

The city experienced a development boom since it changed its downtown zoning code in 2015, with several projects already being built and more in the pipeline, but Paulin worries that this could put a pin in the balloon. 

“I’m worried it will (stop the redevelopment),” she said. “I spoke to the mayor, and he’s worried as well. We’re going to meet with Con Ed this week. I’m hoping we can figure out something that we can do.”

New Rochelle Mayor Noam Bramson said, “This obviously has serious potential implication for our entire region.”

“We are consulting with government and utility officials in order to better understand options and constructive paths forward,” Bramson said. “It is essential that solutions emerge.”

In Yonkers, Mayor Mike Spano said the city’s building boom could be affected for as long as this moratorium lasts. 

“Developers are already telling us they can’t build more housing or commercial buildings until this is resolved,” he said. “Con Ed and the Public Service Commission need to implement an immediate plan to solve this.”

Denn said the PSC ordered utility companies, including Con Ed, to increase energy efficient and create “demand-response programs to lower gas demand and save consumers money.”

“These programs are up and running,” he said. “As these gas efficiency and demand response measures take hold, as well as others to meet demand growth, the PSC will carefully review changing market conditions and consider most appropriate additional steps Con Edison should take to meet the needs of its customers.”

The northernmost sections of the county have more capacity and may still be able to accept new customers, Con Edison said in its statement, and existing customers are not affected by the moratorium.

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https://www.lohud.com/story/news/local/westchester/2019/01/18/con-eds-natural-gas-moratorium-halt-development-westchester/2616778002/

Mortgage rates fall | South Salem Real Estate

Bernadette Gatsby/Unsplash
Bernadette Gatsby/Unsplash

Several benchmark mortgage rates decreased today. The average rates on 30-year fixed and 15-year fixed mortgages both fell. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also declined.

30-year fixed mortgages

The average rate for the benchmark 30-year fixed mortgage is 4.51 percent, a decrease of 7 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 4.68 percent.

At the current average rate, you’ll pay a combined $507.28 per month in principal and interest for every $100,000 you borrow. That’s down $4.17 from what it would have been last week.

You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be and see the effect of adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.76 percent, down 4 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $728 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.

5/1 ARMs

The average rate on a 5/1 ARM is 3.94 percent, down 6 basis points since the same time last week.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.94 percent would cost about $474 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.

Want to see where rates are right now? See local mortgage rates.

ProductRateChangeLast week
30-year fixed4.51%-0.074.58%
15-year fixed3.76%-0.043.80%
30-year fixed jumbo4.42%-0.034.45%
30-year fixed refinance4.55%-0.084.63%

Last updated: January 1, 2019.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”

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https://www.bankrate.com/mortgages/rates/mortgage-rates-for-tuesday-january-1/