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Bedford Corners Real Estate

Mortgage rates average 4.16% | Bedford Corners Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving higher for the seventh consecutive week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.16 percent with an average 0.5 point for the week ending December 15, 2016, up from last week when it averaged 4.13 percent. A year ago at this time, the 30-year FRM averaged 3.97 percent.
  • 15-year FRM this week averaged 3.37 percent with an average 0.5 point, up from last week when it averaged 3.36 percent. A year ago at this time, the 15-year FRM averaged 3.22 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.19 percent this week with an average 0.4 point, up from last week when it averaged 3.17 percent. A year ago, the 5-year ARM averaged 3.03 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.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“As was almost-universally expected, the FOMC closed the year with its one-and-only rate hike of 2016. The consensus of the committee points to more rate hikes in 2017. However, the experience of this year combined with the policy uncertainty that accompanies a new Administration suggests a wait-and-see outlook.

“This week’s mortgage rate survey was completed prior to the FOMC announcement. The 30-year mortgage rate rose 3 basis points on the week to 4.16 percent. The MBA’s Applications Survey posted drops in both refinance and purchase applications, registering the impact of recent mortgage rate increases. If rates continue their upward trend, expect mortgage activity to be significantly subdued in 2017.”

Housing Affordability Edges Lower in Third Quarter | Bedford Corners Real Estate

Ongoing home price appreciation offset a small decline in mortgage interest rates to move housing affordability slightly lower in the third quarter of 2016, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).

In all, 61.4 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $65,700. This is down from the 62.0 percent of homes sold that were affordable to median-income earners in the first quarter.

hoi-ppt-q316

The national median home price increased from $240,000 in the second quarter to $247,000 in the third quarter. Meanwhile, average mortgage rates edged lower from 3.88 percent to 3.76 percent in the same period.

Elgin, Ill., was rated the nation’s most affordable major housing market, where 94.3 percent of all new and existing homes sold in this year’s third quarter were affordable to families earning the area’s median income of $82,500. Meanwhile, Fairbanks, Alaska, was rated the nation’s most affordable smaller market, with 97.7 percent of homes sold in the third quarter being affordable to families earning the median income of $93,800.

For the 16th consecutive quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. There, just 9.7 percent of homes sold in the third quarter were affordable to families earning the area’s median income of $104,700.

 

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http://eyeonhousing.org/2016/11/housing-affordability-edges-lower-in-third-quarter/

Number of baths in new homes increases | Bedford Corners Real Estate

In its Survey of Construction (SOC), the US Census Bureau publishes data on the number of bathrooms in new homes started. In the last several years, the share of new single-family homes with 3 or more full bathrooms has increased, which may reflect the move by builders to focus on higher-end, larger homes in the post-recession period. However, recent data indicate that this trend started to reverse: the median square feet of new homes declined in the second quarter of 2016. Growth in the number of smaller homes, such as townhomes, may emerge going forward in response to first-time buyers returning to the market.

Of new single-family homes started in 2015, 4 percent have 1 or less full bathrooms, 59 percent have 2 full bathrooms, 27 percent have 3 full bathrooms, and 10 percent have four or more full bathrooms.

Figure 1 displays the shares of new single-family homes started by the number of full bathrooms from 2005 to 2015. Over this time frame, the shares of new homes with 2 bathrooms and with 1 or less bathrooms edged downward. Meanwhile, the shares of new homes with 3 bathrooms and with 4 or more bathrooms increased.
bathroomsv2

Differences in the share of new single-family homes started in 2015 with 3 or more full bathrooms can be observed by Census Division (Figure 2). Figure 2 shows that the South Atlantic division has the largest share of new homes with 3 or more full bathrooms (42 percent). Other divisions with large shares include the Mountain (39 percent), the Pacific (38 percent), and the West South Central divisions (38 percent). Regions with smaller shares of new homes with 3 or more bathrooms include the New England (30 percent), the West North Central (30 percent), and the East North Central divisions (24 percent).

soc_bathrooms

 

 

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http://eyeonhousing.org/2016/10/bathrooms-in-2015-new-homes/

British house prices flat in October | Bedford Corners Real Estate

British house prices were unchanged in October after rising in monthly terms each of the previous 15 months, mortgage lender Nationwide said on Wednesday, a new sign of the market cooling after the Brexit vote.

House prices were flat last month, compared with a monthly increase of 0.3 percent in September and a median forecast for a rise of 0.2 percent in a Reuters poll of economists.

Compared with October last year, prices rose by 4.6 percent, slower than September’s increase of 5.3 percent and below a median forecast of 5.0 percent in the Reuters poll.

It was the slowest annual price growth since January, but Nationwide economist Robert Gardiner said it was still in line with rates since early 2015.

He said a 10 percent fall in housing market activity in recent months might be a lingering after-effect of April’s introduction of a higher level of tax on properties bought by landlords and second homes.

Howard Archer, an economist with Markit HIS, said he expected house prices to fall by about 3 percent next year when Britain launches its negotiations to leave the European Union, probably adding to uncertainty about the economy.

Another mortgage lender, Halifax, said last month that British house prices rose at their slowest pace in more than three years in the three months to September.

But there have been other signs recently that the housing market slowdown might be bottoming out

 

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http://uk.reuters.com/article/uk-britain-houseprices-nationwide-idUKKBN12X0LH

Housing is still really affordable | Bedford Corners Real Estate

The last full day of the Mortgage Bankers Association annual conference is underway, and the latest revelation is increasing home prices may not be as threatening as many think.

Many studies, including today’s S&P CoreLogic Case-Shiller Home Price Index, show that home prices gains are up more than 5% nationally. While that’s true, the story changes when economists bring in other factors.

In fact, when adjusting for inflation and the amount of purchase power provided by low interest rates, home prices actually dropped in the past 16 years, First American Chief Economist Mark Fleming said in an interview with HousingWire.

“Contrary to popular opinion, housing isn’t getting more expensive,” Fleming said. “In fact, on a purchasing-power adjusted basis, housing is becoming more affordable.”

“Interest rate declines, combined with meaningful gains in incomes, have provided the consumer with greater buying power, which increases housing affordability,” he said. “The growth in consumer house-buying power is actually outpacing the increases in nominal prices driven by remarkably tight inventories.”

The amount of purchasing power is determined by many economic factors including interest rates, inflation and household income.

Since July 2006, real home prices decreased 41% as of August. They did, however, increase 0.8% from July, but decreased 2.6% from August 2015. Real home prices decreased 20.7% from January 2000.

This chart shows that while home prices are near housing boom peaks, affordability is actually much better off:

Click to Enlarge

real home prices

(Source: Standard & Poors, First American)

“At the moment, affordability is actually increasing in more markets than it is decreasing, including San Francisco, San Jose, New York, Washington and Boston,” Fleming said. “The conventional wisdom that these markets are over-valued does not account for the meaningful growth in consumer house-buying power across the majority of major metropolitan markets.”

However, an increase in interest rates could decrease the demand for housing and put the brakes on rising home prices, Fleming told HousingWire. It would decrease the buying power of consumers.

And yet, MBA Chief Economist Mike Fratantoni still predicts double-digit increases in purchase mortgage originations in 2017, despite the possibility of a rate hike.

While a decrease in interest rates could also mean a decrease in purchasing power, according to Fleming it’s “not necessarily a bad thing.”

 

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http://www.housingwire.com/articles/38362-economist-home-price-gains-aside-housing-is-still-really-affordable?eid=311691494&bid=1568560

Consumer Confidence Rises | Bedford Corners Real Estate

The Consumer Confidence Index, reported by the Conference Board, rose in September. Compared with last month, consumers were more optimistic about both the current situation and the near term outlook.

The Consumer Confidence Index rose to 104.1, from 101.8 in August. The present situation index rose to 128.5, from 125.3, and the expectations index increased to 87.8, from 86.1.

Consumers’ assessments of current business conditions were mixed. Assessments shifted from both “good” and “bad” to “normal”. The share of respondents rating business conditions “normal” rose by 4.9 percentage points from 51.5% to 56.4%. A net decline of 2.9 percentage points in assessments of “good” combined with a 2.0 percentage point net decline in assessments of “bad” for the total.

Similar to consumers’ assessments of current business conditions, expectations of business conditions over the next six months were mixed. The share of respondents expecting future business conditions to be the same rose from 71.0% to 73.3%. About half of the increase was the result of a net decline in respondents expecting future business conditions to be worse, an upgrade, while the rest was the result of a net decline in respondents expecting future business conditions to be better, a downgrade.

Consumers’ assessments of current employment conditions improved. The share of respondents reporting that jobs were “hard to get” dropped to 21.6%, from 22.8%. Most of the 1.2 percentage point decline (1.1 percentage point) upgraded to “jobs plentiful”.

Also, consumers’ expectations of employment over the next six months were more upbeat than in August. The share of respondents expecting “more jobs” rose to 15.1%, from 14.4%. Most of the 0.7 percentage point increase (0.5 percentage point) shifted from “fewer jobs”, while the rest shifted from “same jobs”.

sep-figure1

The Conference Board also reports the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home declined to 5.1%, from 6.9%. The share of respondents planning to buy a newly constructed home and an existing home were 0.6% and 3.5%, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home was 1.0%.

 

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http://eyeonhousing.org/2016/09/consumer-confidence-in-september-another-optimistic-month/

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.

Quote
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.”

 

 

Pending Sales Expand | Bedford Corners Real Estate

Led by the West, the Pending Home Sales Index increased 1.3% in July to the highest level since April, and increased 1.4% year-over-year. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased to 111.3 in July from a downwardly revised 109.9 in June.

Pending Home Sales July 2016

The PHSI surged to 108.7 in the West from 101.3 in June. The Northeast and South increased by 0.8% in July, while the Midwest declined by 2.9%. Year-over-year, the PHSI increased 6.2% in the West, 1.1% in the Northeast and 0.4% in the South, but decreased 1.1% in the Midwest.

Although existing sales decreased 3.2% in July, there was a 2.5% increase in the West last month. The housing recovery is reaching the point in the cycle when new residential construction is adding smaller entry-level homes into inventory. Townhouse construction outpaced the rest of the single-family market during the second quarter of 2016. That trend toward smaller and less expensive new single-family construction has begun to improve affordability in the West, sparking momentum that suggests increasing sales among first-time buyers across a wider range of markets in 2016.

 

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http://eyeonhousing.org/2016/08/pending-sales-expand/

Sales of previously owned houses surge | Bedford Corners Real Estate

Sales of previously owned houses surged 14.7 percent to a seasonally adjusted annual rate of 5460 thousand in December of 2015, better than market expectations of 5.2 million.

Sales of single family went up 16.1 percent and those of condos grew 4.9 percent. The average price increased 1.9 percent and the months’ worth of supply fell to 3.9.

Considering full 2015, existing homes sales rose 6.5 percent to 5.26 million units, the highest since 2006. Existing Home Sales in the United States averaged 3842.52 Thousand from 1968 until 2015, reaching an all time high of 7250 Thousand in September of 2005 and a record low of 1370 Thousand in March of 1970.

Existing Home Sales in the United States is reported by the National Association of Realtors.

Why the Housing Boom is Good for Minority Homeownership | Bedford Corners Real Estate

Fourteen years ago, improving minority homeownership was front burner issue.  In 2002, the Bush Administration even set a goal of expanding the number of minorities who owned their own homes by 5.5 million—approximately the number of existing homes sold in a very good year.

The subprime crash and housing depression put a sudden end to that effort.  Minority homeownership plummeted and, surprisingly, never achieved the attention from top policy makers in two Obama administrations that it enjoyed under their predecessor.

For homeownership in general, the housing depression was depressing.  For minorities, it was a disaster.  For African-American households, the homeownership rate peaked at 49.4 percent in 2004 and bottomed out at 41.9 in the first quarter of this year, a decline of 7.5 points.  Hispanic American homeownership reached a high of 49.8 percent in 2006 and fell to 44.1 percent in the first quarter of this year, down 5.7 points.  By comparison, white non-Hispanic homeownership peaked at 76 percent in 2004 and fell to 73.4 percent by 2013 when the housing recovery officially began, a decline of only 2.6 points.

Do Higher Prices Help Minorities?

Conventional wisdom maintains that rising prices are bad for minorities because they are priced out of affordable housing, especially in gentrifying urban neighborhoods where today young Millennial whites are driving prices sky high.  However, a new study by two economists at the Federal Trade Commission published in the Journal of Housing Economics this month suggest the exact opposite is the case.  Higher prices mean better times for minorities.

Rising prices are good for minorities, the economists argue, because they are accompanied by a loosening of lending standards.  Rising values alter lenders; judgments about acceptable levels of risk and expected rates of return on housing-related assets.  “This variation may then translate into changes in the out-comes experienced by minority borrowers relative to non-minorities,’ they concluded

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http://www.realestateeconomywatch.com/2015/12/why-the-housing-boom-is-good-for-minority-homeownership/