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Bedford Corners Luxury Homes

Mortgage rates average 3.42% | Bedford Corners Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates largely unchanged ahead of this week’s employment report.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.42 percent with an average 0.5 point for the week ending October 6, 2016, unchanged from last week. A year ago at this time, the 30-year FRM averaged 3.76 percent.
  • 15-year FRM this week averaged 2.72 percent with an average 0.5 point, unchanged from last week. A year ago at this time, the 15-year FRM averaged 2.99 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent this week with an average 0.4 point, down from last week when it averaged 2.81 percent. A year ago, the 5-year ARM averaged 2.88 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.

Attributed to Sean Becketti, chief economist, Freddie Mac.

“The 10-year Treasury yield leaped to a two-week high following reports of the European Central Bank retreating from its bond-buying program ahead of its initial March deadline. In contrast, the 30-year fixed-rate mortgage remained unchanged at 3.42 percent. Over the past two weeks, mortgage rates have remained fairly flat while Treasury yields have fallen and risen. This Friday’s jobs report will provide clarity on whether or not mortgage rates follow the recent upward trend in Treasury yields.”



Housing market improves across the country | Bedford Corners Real Estate

Freddie Mac (OTCQB: FMCC) today released its Multi-Indicator Market Index® (MiMi®), showing the spring homebuying season staying on course in most areas of the country, with two additional metros — Charlotte, North Carolina, and Knoxville, Tennessee — entering their benchmark ranges.

The national MiMi value stands at 84.1, indicating a housing market that’s on the outer range of its historic benchmark level of housing activity, with a +0.27 percent improvement from March to April and a three-month improvement of +1.63 percent. On a year-over-year basis, the national MiMi value has improved +7.37 percent. Since its all-time low in October 2010, the national MiMi has rebounded 42 percent, but remains significantly off from its high of 121.7.

News Facts:

  • Thirty-six of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with the District of Columbia (102), Hawaii (97.4), Utah (95.9) and Colorado, Montana and Oregon all having the same value (95.8) and being closest to their benchmark averages.
  • Sixty-seven of the 100 metro areas have MiMi values within range with Nashville, TN (99.9), Honolulu, HI (99.8), Salt Lake City, UT (99.0), Los Angeles, CA (98.6) and Austin, TX (102.6) ranking in the top five.
  • The most improving states month over month were Mississippi (+1.29%), Tennessee (+1.27%), Massachusetts (+1.15%), Florida (+0.98%) and Nebraska (+0.97%). On a year-over-year basis, the most improving states were Florida (+15.34%), Colorado (+14.73%), Nevada (+14.62%), Oregon (+14.46%) and New Jersey (+13.48%).
  • The most improving metro areas month over month were Lakeland, FL (+2.06%), Chattanooga, TN (+2.04%), Modesto, CA (+1.83%), Orlando, FL (+1.82%), and New Haven, CT (+1.78%). On a year over year basis, the most improving metro areas were Orlando, FL (+20.17%), Tampa, FL (+17.47%), Denver, CO (+17.39%), Cape Coral, FL (+16.69%), and Portland, OR (+15.99).
  • In April, 42 of the 50 states and 86 of the top 100 metros were showing an improving three-month trend. The same time last year, 46 of the 50 states, and all of the top 100 metro areas were showing an improving three-month trend.

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

“Seven years into the recovery from the Great Recession most of the nation’s housing markets remain below their historical benchmarks, but continue to grind higher month-by-month. Nationally, MiMi in April 2016, is 84.1, a 7.37 percent year-over-year increase and the 48th consecutive month of year-over-year increases. Over this four-year timeframe, MiMi has increased 36.5 percent and now stands just 15.9 percent below its historic benchmark average.

“Out of the 50 states and the District of Columbia 49 posted positive year-over-year changes. North Dakota and Wyoming, two states heavily reliant on the energy sector, were the only states with year-over-year declines. Out of the 100 metro areas MiMi tracks, 99 posted positive year-over-year gains, with Tulsa, Oklahoma — also with deep ties to the energy sector — posting no change year-over-year.

“Among the four MiMi indicators, Purchase Applications increased the most in April, rising 1.77 percent from March and up 15.27 percent year over year. The strong positive momentum in home purchase applications is a good sign for a housing market likely to post the best year in home sales since 2006. Despite strong house price growth, the MiMi Payment-to-Income indicator fell 1.05 percent in March, reflecting the impact of lower mortgage rates. If global factors like the Brexit put significant downward pressure on long-term mortgage rates, the U.S. housing market could benefit from increased affordability, helping to partially offset the impact of house prices, which are rising around six percentage points year over year nationally.”

The 2016 MiMi release calendar is available online.

MiMi monitors and measures the stability of the nation’s housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 100 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.

South Florida home flippers still on the hunt as prices rise | Bedford Corners Realtor

Even as local real-estate prices soar, home flipping is still a big business in South Florida.

While it’s getting harder to find a good deal, flippers say they’re riding the wave of rising home values to steady profits— and they don’t expect a crash that will leave them underwater.

Nearly 1,400 single-family homes were flipped in Miami-Dade, Broward and Palm Beach counties during the second quarter of 2015, according to a report from RealtyTrac released Thursday.

That’s about 10 percent of overall home sales, the highest rate among major metro areas in the U.S. Around the nation, only 4.5 percent of sales were flips. RealtyTrac defines a flipped home as one that sells twice in a single year.

“South Florida is a hot spot,” said Daren Blomquist, vice president at RealtyTrac.

Blomquist said that the region’s high rate of foreclosuresand strong record of price growth make flipping a good bet in South Florida.

Even so, local home flipping is slowing somewhat, with the number of flips down about six percent year-over-year. “The prices are starting to hit a level that is out of the sweet spot for a lot of flippers,” Blomquist said. “We’re seeing the number of flips come down and that to me is a sign that we’re in a sustainable housing economy and not a bubble.”

Flips accounted for nearly 14 percent of all sales in South Florida during the headiest days of the bubble, RealtyTrac found.

Although flipping is down slightly, the profits are still there. The average flipped home in South Florida cost $220,000 to buy but sold for $302,000 about six months later, RealtyTrac found. That’s a healthy gain even after repairs and closing costs are taken out

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Hamptons real estate sales slowing down | Bedford Corners Real Estate

After a record breaking number of home sales in the Hamptons in 2014, things are beginning to cool down in the luxury real estate destination.

Both sales and median prices of Hamptons real estate are down in 2015 from where they were last year, according to a report by Douglas Elliman Real Estate.

The median sales price for a home in the Hamptons declined 6.5 percent to $849,000 compared to 2014, according to the report. The number of homes that were sold fell 15.7 percent to 590 this year, down from 700 sales at this time last year. However, average home price rose 2.5 percent year over year.

The conflicting data are a result of a reaction in the market from last year’s sales, said Jonathan Miller, president of Miller Samuel Real Estate Appraisers, who authored the report.

Last year saw an explosion of pent-up demand as people began to consider real estate again for the first time since the housing crisis, Miller said. That demand resulted in 700 sales, a record number.

“That demand has mostly been absorbed, so what we have now is the prices showing mixed trends, but sales are down,” he said. “There isn’t the same sense of urgency by buyers that there was a year ago, but there is still above-average activity occurring. It’s just not at the breakneck pace it was last year.”

The current market in the Hamptons is just returning to normal, the CEO of Douglas Elliman, Dottie Herman, said. While sales aren’t record breaking, they are still healthy.

She also noted that in a small market like the Hamptons, big outliers can move data.

For the fabulously wealthy, a Hamptons property is soon to hit the market at $95 million, according to real estate agents at Sotheby’s. The estate, known as Burnt Point, is an 18,000-square-foot shingle traditional built on 25 acres with water on three sides. The home is being sold by the Stewart J. Rahr Foundation, and the proceeds will continue to fund the foundation’s philanthropic efforts.


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New-home sales rise 2.2% in May to fastest pace in more than 7 years | Bedford Corners Homes

New single-family homes in the U.S. sold at an annual rate of 546,000 in May, hitting the fastest pace since February 2008, with growth in two of four regions, the government reported Tuesday. Economists polled by MarketWatch had expected a sales rate of 525,000 in May, compared with a prior estimate of 517,000 for April. On Tuesday the U.S. Commerce Department revised April’s rate to 534,000. May’s pace was up 19.5% from a year earlier, signaling a healthy pick up, though recent sales rates remain below long-term averages. The median price of new homes, meanwhile, fell 1% to $282,800 compared with May 2014. The supply of new homes was 4.5 months at May’s sales pace, down from 4.6 months in April. Economists caution over reading too much into a single monthly report. A confidence interval of plus-or-minus 16.7% for May’s growth of 2.2% shows that the government isn’t sure whether the sales pace rose or fell last month.


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Distressed Sales: 10 Percent of Sales in April 2015 | Bedford Corners Real Estate

In the monthly REALTORS® Confidence Index Survey, NAR asks REALTORS® about the characteristics of their last sale for the month. For reported sales for April 2015, distressed sales accounted for 10 percent of sales (10 percent in March 2015; 15 percent in April 2014). About 7 percent of reported sales were foreclosed properties, and about 3 percent were short sales.[1]

With rising home values and a declining foreclosure inventory (except for states with judicial foreclosures such as NY, NJ, CT), sales of foreclosed properties have declined as well. The decline in foreclosed properties on the market may help to explain to some degree why investment sales have generally been on the decline.

Foreclosed property sold at an average 20 percent discount, while short sales sold at an average 14 percent discount.  For the past 12 months, distressed properties in “above average” condition were discounted by an average of 9-11 percent, while properties in “below average” condition were discounted at an average of 15-20 percent. Having fewer foreclosures creates further pressure for prices to move up in the coming months.


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NAHB Updates Local Impact of Home Building Numbers | Bedford Corners Real Estate

In addition to studies customized to a particular area, NAHB has traditionally produced a “typical local” report using national average inputs.  This report—showing the jobs, income and taxes generated by residential construction in a typical local area—is available free to everyone on NAHB’s web site.

In April 2015, NAHB updated the typical local report.  A quick summary of the new numbers is as follows:

The updated estimates of the one-year impacts (including income earned during construction and the ripple effect that occurs when some of the income is spent) of building 100 single-family homes are

  • $28.7 million in local income,
  • $3.6 million in taxes and other revenue for local governments, and
  • 394 local jobs.

And the annual, ongoing impacts (resulting from the home becoming occupied and the occupants participating in the local economy) are

  • $4.1 million in local income,
  • $1.0 million in taxes and other revenue for local governments, and
  • 69 local jobs.

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Move Quickly through the Mortgage Approval Process before Rates Climb | #BedfordCorners Real Estate

If you’ve got the itch to ditch your landlord and take the leap to homeownership, mortgage rates are still low by historical standards. But beware because they are expected to begin creeping higher throughout the year.

“The cost of renting is really high right now. Rents have been rising and rising,” says Lawrence Yun, chief economist at the National Association of Realtors. “Renters are getting squeezed, and some want to convert to ownership.”.

The NAR expects 30-year, fixed-rate mortgages to average 3.80 percent in the first quarter. However, mortgage rates are forecast to start inching higher throughout the year. The NAR forecasts an average 4 percent rate in the second quarter, 4.3 percent in the third quarter and 4.7 percent in the fourth quarter.

Economic forces, including an improving U.S. labor market and faster economic growth, are conspiring to push mortgage rates higher this year. “The Federal Reserve is likely to raise short-term interest rates in the summer, which will be a signal for the rest of the market for rates to go higher,” Yun says.

“There’s a window of opportunity for buying and refinancing at crazy-low rates, but it’s closing,” says Gina Pogol, loan expert at Charlotte, North Carolina-based LendingTree.

If this is the year you want to sign on the dotted line and become a homeowner, experts have several suggestions to help you move quickly through the mortgage approval process.

The overall lending environment remains stringent, and the best mortgage rates will be awarded to those with higher credit scores. Your credit score is a three-digit number generated using information on your credit report, and generally, the higher it is, the better. Here’s what you need to do to get the best rates.

Mind your credit score. “Minimum credit scores required by lenders have steadily dropped, and mortgage insurers’ underwriting guidelines have also loosened a bit, but it’s still a little tough,” Pogol says. “Average FICOs of applicants approved for home loans continue to come down, but they’re still hovering around the 700 mark. Unfortunately, three-fourths of U.S. consumers have scores lower than 700.”

What’s an ideal credit score? “To get the best rate, strive for above 740. That is the benchmark for A-plus lending,” says Jeannie Meronk, assistant vice president and mortgage loan officer at First State Bank of Illinois.

Visit your lender before you hit the open houses. Create a game plan that makes sense for your budget. It pays to talk to a lender about what you can afford and qualify for before you fall in love with a home outside your price range.

“It is really important from a budget standpoint to be shopping in the right price range,” Meronk says.

Just because you qualify for a certain loan amount doesn’t mean that is what you should spend. Consider your monthly budget, and determine what level of monthly payment feels comfortable. Remember that there will be other costs relating to homeownership, including property taxes, maintenance and unexpected repairs.

Also know that most sellers won’t take an offer seriously unless you have been preapproved for a loan. “Preapproval means actually applying for a loan, having your credit checked and your income documented. Preapproved means that as long as the property meets the lender’s requirements, you can close,” Pogol says.

Don’t make any changes to your financial picture. Once you’ve been preapproved, this is not the time to open new credit cards, change jobs, transfer large sums of money or make big-ticket purchases using credit. “Once you are preapproved, don’t apply for any new credit. If you go ahead and finance furniture, it can mess up the amount that you were preapproved for,” Meronk says.

If you are fortunate enough to have a parent, in-law or relative who is willing to gift you some or all of your intended down payment, be sure to talk with your lender about this. You will need to document this properly with a letter for your lender.

If you are thinking of buying a rental property, however, gift money can’t be used toward a down payment. It only can be used for a primary residence, according to Meronk.

If you are self-employed, expect to jump through more hoops. Be prepared to provide two years’ worth of tax returns. If your income fluctuated from one year to the next, underwriters will average the income from the two years. Also, underwriters will look at your income after your business deductions have been taken.

“It often comes as a surprise to self-employed applicants that their gross income isn’t counted by underwriters. It’s their taxable income that’s used. So if you write off every meal and every vacation as a business expense, that comes off the top of your income,” Pogol says.


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Consumers Prices Fall 0.7% in January | Bedford Corners Real Estate

The consumer price index fell for the third straight month as the price of gasoline continued its sharp decline. The prices on expenditures made by urban consumers decreased 0.1% over the past twelve months before seasonal adjustments. According to the latest release from the Bureau of Labor Statistics (BLS) the consumer price index decreased 0.7% on a seasonally adjusted month-over-month basis.

The energy price index fell 9.7% in January for seventh straight month-over-month decline. This was the largest month-over-month drop during that period. The driving force behind falling consumer prices and the energy index is the sharp drop in gasoline prices. The gasoline index, a component of the energy price index, fell 18.7% for the month and is down 35.4% for the year. The index for natural gas also fell for the month; dropping 3.4% on a seasonally adjusted month-over-month basis.

The food index was unchanged in January on a seasonally adjusted month-over-month basis. Over the past twelve months, however, the food index increased 3.2% before seasonal adjustments. The food at home index increased 3.3% over the last twelve month with a large increase in the meats, poultry, fish, and eggs group of 8.7% for the year.

Core CPI, which excludes the more volatile food and energy prices, increased 0.2% on a seasonally adjusted month-over-month basis. Over the past twelve months core CPI increased 1.6% before seasonal adjustments.


The shelter index rose 0.3% month-over-month in January after increasing 0.2% month-over-month in December. Over the past twelve months, the shelter index increased 2.9% before seasonal adjustments.

The increase in the shelter index partly reflects increases in rental prices; the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines).

The growth in real rental prices continues to outpace growth in the CPI. The NAHB constructed real rent index increased 0.1% in January month-over-month. Real rental prices rose by 1.7% from one year ago.



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Adjustable Rate Mortgages: It’s All About Timing | Bedford Corners Real Estate

Rate shoppers naturally gravitate toward the lowest quotes, but a lower rate can lead to financial trouble if you don’t understand your loan terms. It’s important to know the relationship between rates and fixed terms so you can determine when it’s appropriate to use a shorter loan term instead of a longer one.

A 30-year fixed mortgage rate is higher than a five-year adjustable rate mortgage (ARM) rate because a financial institution is taking more risk to lend you the money for a longer period of time.

The reason for this goes to the root concept of how banks operate. A bank’s business model is to ensure that interest they collect on loans exceeds interest they must pay out on deposits.

Interest that banks must pay you on deposits rises as the economy expands, and falls as the economy contracts over time. It’s easier for banks to manage this interest rate risk in the short term.

For example, interest rates paid on checking and savings deposits are very low because you’re free to withdraw your money any time, while rates paid on certificate of deposit (CD) accounts are slightly higher because the bank requires you to keep those funds deposited for periods of one month to five years.

Because banks know  their expenses on deposits for periods up to five years, they know how to price mortgage loans up to five years. Today, many banks would pay you about 2.25 percent on a five-year CD, and they’d charge you about 3.25 percent for a five-year ARM.

But if you were getting a 30-year fixed loan, they might charge you about 3.875 percent — although these rates fluctuate. This rate is higher in order to compensate a bank for the interest rate risk they’re taking. Rates they must pay on deposits might be much higher during that 30-year period as the economy fluctuates, but your 3.875-percent mortgage rate is guaranteed.

Peg loan term to expected time in the loan

Let’s say you were buying a $300,000 home with 20 percent down, and chose the five-year term at 3.25 percent because the $1,044 payment sounded more affordable than the $1,129 payment on the 30-year fixed at 3.875 percent.

You must be aware that your rate is set for five years, then will adjust each year for 25 years. These adjustments protect the bank from interest rate risk by allowing the loan to move to a market rate when the five-year fixed period expires.

The initial fixed rate of 3.25 percent will change to a market rate comprised of a fluctuating index such as the one-year LIBOR rate (a benchmark for short-term interest rates worldwide) plus a base rate (called a margin) of about 2.25 percent. If the loan adjusted today, it would go down to 2.94 percent because LIBOR remains abnormally low — it was recently .69 percent — as the global economy struggles.

A more normal LIBOR rate is about 3.25 percent. Add that to the ARM margin of 2.25 percent, and your adjusted rate would be more like 6.5 percent, making your new payment in year six jump to $1,447 (which is calculated by amortizing the remaining balance at the five-year mark over the remaining 25 years of the loan).

This is $403 more than the payment on the initial five-year fixed period, and $318 more than the 30-year fixed you could’ve taken. And the loan will adjust to current LIBOR plus 2.25-percent margin once per year from that point forward.

It’s a lot of risk, and raises the question: How do you choose the right balance between the lowest rate and longest fixed term?

The answer is simple: Make sure your rate is fixed for as long as you expect to be in the home or in the loan.

If you know you’ll sell the home or pay off the loan in five years, a five-year ARM is appropriate. Other ARMs you can get have initial fixed periods of three, seven and 10 years, and rates rise as the terms lengthen. If you know you’ll be in the home or the loan longer than 10 years, then your safest budget move is to choose a 15-year fixed or 30-year fixed loan.


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