Tag Archives: Cross River Luxury Real Estate

Americans Move Less and Impact the Economy Less | Cross River Real Estate

The median tenure homeowners plan to stay in their homes soared with the housing recession in 2008 for good reasons. Millions of owners were underwater and millions more lacked the 20 percent equity need to sell their home.  Many facing the need to move for job or space reasons found it easier to move and keep their old home to rent out.  Thus was born the phenomenon of “accidental landlording”.

The housing economy has changed dramatically.  Values have almost regained their peaks at the top of the housing boom, far above the levels of 2008.  Yet owner tenure has not changed and repeat buyers’ expectations today are twice as long as actual tenure ten years ago.  Are longer tenures now locked in stone?

One of the leading motivations to move—change in employment—is also changing. Workers stick with the same job longer today than they did 10, 20, and 30 years ago.  U.S. workers had an average job tenure of 4.6 years in 2012, the last year for which figures are available—that’s up from 3.7 years in 2002 and 3.5 in 1983, according to the Bureau of Labor Statistics. The trend holds up within almost every age and gender category—so it cannot be explained away by women’s increased presence in the workplace, or people working past traditional retirement age.

First-time buyers now expect to live in their homes 15 years or longer 2016-10-27_9-19-07

Another contributing factor could be the popularity of “aging in place” among the Boomer generation.  More and more elderly are staying in their family homes rather than downsizing, or moving to retirement communities or rentals.  According to AARP, 87 percent of adults age 65 plus want to stay in their current home and community as they age. Among people age 50 to 64, 71 percent of people want to age in place.

The Recession Changed Ownership Patterns

According to a new analysis by economists at the National Association of Realtors, in 1985, the median tenure for sellers remaining in their home was five years, the lowest in since NAR started tracking the data in the 30-year period. From 1987 to 2008, the median tenure for sellers was a steady six years throughout the course of about a 20-year period. The only exception was in 1997 when the median tenure jumped up one year to seven years for sellers.

As the U.S. housing market entered the recession, the median tenure for sellers began to rise—seven years in 2009, eight in 2010, and to nine years in 2011 where it has remained steady through 2015. The only exception is in 2014 when the median tenure for sellers reached an all-time high at 10 years, but came back down to nine last year. Thus market changes in the last decade have caused sellers to remain in their homes longer, increasing the median number of years in the home by 50 percent more than they did 20-30 years prior.

In 2006, first-time buyers reported that their median expected tenure was just six years and nine years for repeat buyers, the lowest since we started collecting the data for both buyer types. For repeat buyers, that bumped up to 10 years in 2007, 12 years in 2009, and then up to 15 years in 2010 where it has remained steady for the past six years. For first-time buyers, the median expected tenure in the home jumped to 10 years in 2008 where it has remained ever since.

It is no surprise that repeat buyers expect to remain in their home longer than first-time buyers. It is interesting, however, to see that first-time buyers in 2006 expected to sell in just six years. Fast forward a decade to 2015 and first-time buyers expect to sell in almost double the amount of time.

Economic Implications of Longer Tenure

Significantly longer ownership tenure means that homes will change hands less frequently, which hasmajor economic implications:

  • Volumes of transactions will fall for real estate brokers and lenders.  The coming of age of the Millennial generation could theoretically offset the effects of longer tenure except that the first symptom of extended tenure could be the chronic shortage of inventories over the last two years that has plagued home sales and limited opportunities for Millennials to buy;
  • Demand for remodeling and renovation will increase as owners choose to fix up their current homes rather than sell them.  Increased home repair will create new business for Home Depot and hardware stores.

 

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http://www.realestateeconomywatch.com/2016/10/americans-move-less-and-impact-the-economy/

Why Foreclosures are Never-ending Credit Nightmares | Cross River Real Estate

The popular belief that the seven million Americans who lost their homes to foreclosure during the Housing Crash are healed, whole and forgiven of their debts after seven years have passed is only partly true.

For foreclosures, Fannie Mae and Freddie Mac set a seven-year waiting period before defaulters can apply for a mortgage, measured from the completion date of the foreclosure action.  With time foreclosures, bankruptcy filings and tax liens disappear from credit records but the impact of their misfortune lingers for years in the form of substandard credit ratings and scores.

A new study from the Urban institute, The Lasting Impact of Foreclosures and Negative Public Records, corrects the conventional wisdom by chronicling the painful punishment suffered by victims of the foreclosure floods and the Great Recession that began in earnest a decade ago and the impact not just upon individual families but on the economy as a whole.

The researchers found that It takes a long time for a consumer’s credit score to recover from the impact of a foreclosure—far longer than the seven years the foreclosure remains on the credit report.

 

2016-11-18_14-39-13

From 2004 through 2015, 7.1 million borrowers experienced a foreclosure filing, and 34.4 million consumers acquired an adverse public record other than foreclosure. Altogether, 41.5 million people, or 16 percent of the 264 million US consumers with credit records, experienced a financial crisis that impacted their credit.

“We believe this extended impact at least partially explains the slow recovery after 2010, the study found,” wrote the authors, Wei Li, Laurie Goodman and Denise Bonsu.

More than 60 percent of consumers with these negative financial events still had VantageScore credit scores below 620 in 2015. More than 60 percent of them had delinquent debt in 2015, and only 8 percent of them were able to obtain new mortgages as of 2015. And, more than 70 percent of them were the age that preferred homeowning (between 29 and 59 years old) in 2015; this large group of potential borrowers with negative financial events profoundly affects the homeownership rate.

At least at the peak of crisis, when the spike in foreclosure filings jammed up judicial foreclosures, the long judicial foreclosure process might have prevented foreclosed-upon borrowers from moving on.

A large number of consumers will retain adverse events on their records for a considerable time, making it hard for many of them to borrow again. At the end of 2018, 22.8 million consumers—almost 9 percent of the adult consumer population—will still have a foreclosure or adverse public record.

Middle-aged consumers were hit hardest by these credit blemishes. Seventy-three percent of consumers (30 million) who experienced foreclosure or other adverse public records were between 29 and 59 years old in 2015, yet this age group accounts for only 53 percent of adult consumers. The middle-aged consumers hit hardest by these adverse credit events have had a profound impact on the homeownership rate because their age group has the strongest preference for homeownership.

 

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http://www.realestateeconomywatch.com/2016/11/why-foreclosures-are-never-ending-credit-nightmares/

NAR Lowers Sales Forecast | Cross River Real Estate

The National Association of Realtors has reduced its outlook for existing sales in 2016 from a 3 percent increase over 2015 (5.45 million sales) to an increase of only 1 to 2 percent (5.30 to 5.40 million sales).

The new forecast, three months before the opening of the home sales season, amends an early one made at NAR’s annual meeting in November.

“This year the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” said NAR Chief Economist Lawrence Yun in a video posted on the NAR site. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

With one month of data remaining for 20151, Yun expects total existing-homes sales to finish the year up 6.5 percent from 2014 at a pace of around 5.26 million –the highest since 2006, but roughly 25 percent below the prior peak set in 2005 (7.08 million).

Yun did not alter his November price forecast. The national median existing-home price for all of 2015 will be close to $221,200, up around 6 percent from 2015.  Yum calls for prices to soften to a 5 to 6 percent increase in sold prices.

 

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http://www.realestateeconomywatch.com/2016/01/nar-lowers-sales-forecast/

Mortgage rates average 3.95% | Cross River Real Estate

Freddie today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the average 30-year fixed mortgage rate declining slightly leading up to the Thanksgiving holiday. The average 30-year fixed rate mortgage hasn’t risen above 4 percent since the week of July 23rd of this year, which is helping homebuyer affordability in the face of rising house prices due to low levels of inventory in many markets.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending November 25, 2015, down from last week when it averaged 3.97 percent. A year ago at this time, the 30-year FRM averaged 3.97 percent.
  • 15-year FRM this week averaged 3.18 percent with an average 0.6 point, unchanged from last week. A year ago at this time, the 15-year FRM averaged 3.17 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.01 percent this week with an average 0.5 point, up from last week when it averaged 2.98 percent. A year ago, the 5-year ARM averaged 3.01 percent.
  • 1-year Treasury-indexed ARM averaged 2.59 percent this week with an average 0.3 point, down from 2.64 percent last week. 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.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM. Additionally, the regional breakouts will not be provided for the 30-year and 15-year fixed rate mortgages, and the 5/1 Hybrid ARM.

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

“In a quiet week leading up to the Thanksgiving holiday, the 30-year mortgage rate dipped 2 basis points to 3.95 percent. Economic releases over the last week contained no major surprises, and none are expected in the next few days. The year is winding down, and the only remaining market dates of note are December 4 — the last employment report of the year — and December 15-16, the long-awaited FOMC meeting.”

Mortgage rates average 3.85% | Cross River Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMM®), showing average fixed mortgage rates largely unchanged despite ongoing global growth concerns putting downward pressure on Treasury yields.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.85 percent with an average 0.6 point for the week ending October 1, 2015, down from last week when it averaged 3.86 percent. A year ago at this time, the 30-year FRM averaged 4.19 percent.
  • 15-year FRM this week averaged 3.07 percent with an average 0.7 point, down from last week when it averaged 3.08 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent this week with an average 0.4 point, unchanged from last week. A year ago, the 5-year ARM averaged 3.06 percent.
  • 1-year Treasury-indexed ARM averaged 2.53 percent this week with an average 0.2 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.42 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.

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

“In contrast to the volatility in equity markets, the 10-year Treasury rate — a key driver of mortgage rates — varied just a little more than 10 basis points over the last week. As a result, the 30-year mortgage rate remained virtually unchanged, dropping 1 basis point to 3.85 percent. This marks the tenth consecutive week of a sub-4-percent mortgage rate. Despite persistently low mortgage rates, the pending home sales index dropped 1.4 percent in August, suggesting possible tempering in existing home sales in September.”

Rotterdam to consider trialling plastic roads | Cross River Real Estate

Dutch city could be first to pave its streets with recycled plastic bottles, a surface claimed to be greener, quicker to lay and more reliable than asphalt

Plans unveiled for recycled plastic roads are being considered by Rotterdam city council.
Plans unveiled for recycled plastic roads are being considered by Rotterdam city council. 

 

The Netherlands could become the first country to pave its streetswith plastic bottles after Rotterdam city council said it was considering piloting a new type of road surface touted by its creators as a greener alternative to asphalt.

The construction firm VolkerWessels unveiled plans on Friday for a surface made entirely from recycled plastic, which it said required less maintenance than asphalt and could withstand greater extremes of temperature– between -40C and 80C. Roads could be laid in a matter of weeks rather than months and last about three times as long, it claimed.

The company said the environmental argument was also strong as asphalt is responsible for 1.6m tons of CO2 emissions a year globally – 2% of all road transport emissions.

Rolf Mars, the director of VolkerWessels’ roads subdivision, KWS Infra, said: “Plastic offers all kinds of advantages compared to current road construction, both in laying the roads and maintenance.”

The plastic roads are lighter, reducing the load on the ground, and hollow, making it easier to install cables and utility pipelines below the surface.

Sections can be prefabricated in a factory and transported to where they are needed, reducing on-site construction, while the shorter construction time and low maintenance will mean less congestion caused by roadworks. Lighter materials can also be transported more efficiently.

Mars said the PlasticRoad project was still at the conceptual stage, but the company hopes to be able to put down the first fully recycled thoroughfare within three years. Rotterdam, a keen supporter of sustainable technology, has already signalled its interest in running a trial.

Jaap Peters, from the city council’s engineering bureau, said: “We’re very positive towards the developments around PlasticRoad. Rotterdam is a city that is open to experiments and innovative adaptations in practice. We have a ‘street lab’ available where innovations like this can be tested.”

 

http://www.theguardian.com/world/2015/jul/10/rotterdam-plastic-roads-trial-netherlands

Mortgage Rates at 4% | Cross River Real Estate

Freddia Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving lower from the previous week’s new highs for 2015 while housing data was generally positive.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.00 percent with an average 0.7 point for the week ending June 18, 2015, down from last week when it averaged 4.04 percent. A year ago at this time, the 30-year FRM averaged 4.17 percent.
  • 15-year FRM this week averaged 3.23 percent with an average 0.5 point, down from last week when it averaged 3.25 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 1-year Treasury-indexed ARM averaged 2.53 percent this week with an average 0.2 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.41 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.

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

“Mortgage rates were down this week while housing data were generally positive. Although housing starts dropped 11.1 percent to a seasonally adjusted pace of 1.04 million units in May, housing permits surged 11.8 percent to its highest level since August 2007. Reinforcing this positive momentum, the NAHB housing market index rose 5 points in June, suggesting home builders are very optimistic about home sales in the near future.”

Housing Recovery – Prices and Production | Cross River Real Estate

The Federal Housing Finance Agency (FHFA) and the Standard and Poor’s/Case-Shiller recently released the Home Price Index (HPI) for March.

The price index reported by the Federal Housing Finance Agency (FHFA) decelerated in March, slowing to an annualized growth rate of 4.2% from 7.8% in February. Monthly growth rates have been volatile but have trended down since the recent peak in 2013. The level of the index remains below the housing boom peak but has recovered to a level consistent with trend growth prior to the boom and bust extremes.

Figure 1_March

House prices reported by the Standard and Poor’s/Case-Shiller show the same dynamics as the FHFA index, sharply rising prices during the boom followed by steep declines and finally recovery beginning in 2012. The Case-Shiller index also shows volatile monthly growth rates and a deceleration in price growth since 2013.

 

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http://eyeonhousing.org/2015/06/housing-recovery-prices-and-production/

Mortgage rates move higher for third week in a row | Cross River Real Estate

Average fixed mortgage rates followed 10-year Treasury yields higher and rose for the third consecutive week, according to Freddie Mac.

At 3.85%, the average 30-year fixed-rate mortgage is just below the high for 2015.

“Mortgage rates rose for the third consecutive week as 10-year Treasury yields continued to climb,” said Len Kiefer, deputy chief economist for Freddie Mac.

“The labor market continues to improve with U.S. economy adding 223,000 jobs in April, a solid rebound from merely 85,000 job gains in March. Also, the unemployment rate dipped to 5.4% in April as the participation rate ticked up to 62.8% and jobless claims were far less than expected.”

The 30-year fixed-rate mortgage averaged 3.85% with an average 0.6 point for the week ending May 14, 2015, up from last week when it averaged 3.80%. A year ago at this time, the 30-year FRM averaged 4.20%.

The 15-year FRM this week averaged 3.07% with an average 0.6 point, up from last week when it averaged 3.02%. A year ago at this time, the 15-year FRM averaged 3.29%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.89% this week with an average 0.5 point, down from last week when it averaged 2.90%. A year ago, the 5-year ARM averaged 3.01%.

The 1-year Treasury-indexed ARM averaged 2.48% this week with an average 0.4 point, up from last week when it averaged 2.46%. At this time last year, the 1-year ARM averaged 2.43%.

 

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http://www.housingwire.com/articles/33891-mortgage-rates-move-higher-for-third-week-in-a-row

 

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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http://www.bloomberg.com/news/articles/2015-04-28/home-prices-in-20-u-s-cities-rose-at-faster-pace-in-february