Tag Archives: South Salem NY Real Estate

HGAR news | South Salem Real Estate

New York COVID Hospitalizations, Deaths Hit Record Low
New York Gov. Andrew Cuomo, who announced the opening of the 3.6-mile shared bicycle and pedestrian path on the new Gov. Mario M. Cuomo Bridge today, reported that the total number of hospitalizations (1,607) and 27 COVID-19 related deaths (Sunday, June 14) were the lowest since the pandemic began in March.
In connection with the reopening process, he said he would be raising the maximum amount of people allowed at gatherings in regions in phase three of the reopening from 10 to 25. Western New York enters phase three tomorrow and the Capital Region will progress to that stage on Wednesday.
The Mid-Hudson is eligible to enter phase three on Tuesday, June 23. For further information on the new bicycle-pedestrian path on the bridge, go to the governor’s announcement.
NEW YORK STATE NEWS
Governor Threatens to Reverse Reopenings if Safety Rules Not Followed
On Sunday Gov. Andrew Cuomo, frustrated over 25,000 reports of reopening violations, predominantly in Manhattan and the Hamptons, warned that the state would take action against businesses and localities that violate or fail to enforce safety regulations.
He stressed that local governments are charged with compliance and that a region’s reopening could be reversed or delayed if these violations are allowed to continue.
“Lots of violations of social distancing, parties in the street, restaurants and bars ignoring laws,” Cuomo said on Twitter. “Enforce the law or there will be state action.” Today, he told local governments: “Do your job.” See governor’s announcement.
Local Sales Tax Collections Down $437M in May
The coronavirus pandemic continues to batter the New York State economy.
Sales tax revenue for local governments in May fell 32.3% compared to the same period last year, according to a report released Friday by New State Comptroller Thomas P. DiNapoli. Sales tax collections for counties and cities in May totaled $918 million, or $437 million less than 2019.
The sharp decline in revenues was widespread across the state, ranging from a drop of 19.5% in Westchester County to a 41.5% decline in Tioga County. New York City experienced a 31.9% decline, calculating out to $196 million in lost revenues for the month. View further information on the sales tax report.
NATIONAL NEWS
CMBS Delinquency Rate Posts Highest Increase Since Great Recession
The CMBS delinquency and special servicing rate in May recorded the largest increase since the metric was introduced in 2009, according to a Trepp report.
The delinquency rate in May for commercial mortgage-backed securities increased to 7.15%, according to the Trepp May CMBS Delinquency Report. A total of 5% of those troubled loans were identified as 30 days past due. In May, $9.4 billion involving 243 commercial loan notes were sent to special servicing, according to servicer and watchlist data compiled by Trepp.
The Trepp report states that initial reports in June indicate troubled commercial mortgages are centered on single-asset or single-borrower deals, most backed by hotels or malls. Click Here for further coverage.
Multifamily Rents Continue to Struggle
In what is normally prime leasing season, multifamily rents continue their decline thanks to the coronavirus.
In May, rents declined nationally by .3% month-over-month, with the largest drops in gateway markets, according to a report released by YardiMatrix.
The May numbers were an improvement over the previous month when rents fell by .5%. The markets that were hit the hardest included Boston and San Francisco, each down 1%; Chicago was down .9%; and Los Angeles saw a decline of .7%. For further details, see Globest.com report.

Bidding Wars Are Back in Housing Market | South Salem Real Estate

It’s the surprise of a spring selling season that’s been anything but normal: Buyers returning to the housing market have been battling over the few available properties.

While sales are way down, the lack of inventory has propped up prices and led to bidding wars, even as economic fallout from the pandemic mounts and real estate agents adjust to new public health guidelines that have made it more difficult to market homes.

“Since the pandemic began, demand fell off a cliff,” said Taylor Marr, an economist at Redfin Corp. “What most people overlook is that sellers also pulled back.”

The supply-demand imbalance meant that roughly 40% of homebuyers that Redfin agents worked with recently faced competition when they tried to purchase a home. The rate was even higher in cities like San Francisco, Boston and even Fort Worth, Texas, where more than 60% of properties the company’s clients bid on received multiple offers.

The U.S. housing market went into the Covid crisis with a supply shortage that was driving up prices beyond the reach of many buyers, even with years of low interest rates. That problem hasn’t gone away, despite the economic uncertainty. The number of active listings shrank by almost a quarter in April, compared with a year earlier, according to Redfin.

Still, the market has cooled. Sales of existing homes are projected to fall 20% in April from a month earlier, according to estimates compiled by Bloomberg. That would follow an 8.5% drop in March. Construction of new houses plunged by the most on record in April, with builders waiting out the virus. That means new supply will be slower to materialize.

The market dynamics are a shock to some buyers. Kenzo Teves, a 24-year-old business analyst for a pharmaceutical company, decided to start shopping for his first house this spring, because interest rates were so low. He had money saved for a down payment and was secure in his job — factors he thought would help him find a home near Boston.

In late April, he made his first bid on a three-bedroom house in Chelsea, Massachusetts, that was listed for $420,000. The property got six other offers and even bidding $30,000 over the asking price wasn’t enough to cinch the deal.

“It’s pretty strange,” he said. “I would have thought that it would have tipped more to my favor as a buyer.”

The inventory shortage is being felt in smaller cities, too. Kim Park, an agent with Keller Williams Realty in Boise, Idaho, said her business is down about 20% because sales have slowed. But bargains are still hard to find.

She’s working with a young family with two kids and a rental lease coming up for renewal next month. To buy a house for almost $300,000, they had to fight off three other bidders and pay $10,000 above asking price, Park said. They got it only because the winning bidder’s financing fell through.

Homeowners in Boise are staying put, worried about about letting potential buyers in during the pandemic or upgrading to a more expensive property when employment is so tenuous.

“It’s made our tight market that much tighter,” Park said.

In Los Angeles, Sally Forster Jones said two of her clients bid unsuccessfully this month on two different houses. One was listed for about $800,000 and the other for less than $1.5 million. Each received more than 30 offers and are now in escrow at above the listed price. Jones declined to share specifics on the homes because her clients made backup offers and she doesn’t want to invite more competition.

“I’m encouraging my sellers to put their property back on the market,” she said. “The fact that there’s limited inventory is to their advantage right now.”

Not all real estate agents see cutthroat competition. Nina Hatvany, a luxury agent with Compass in San Francisco, said buyers are coming back to the market but the complications of showing houses during a pandemic has weeded out all but the most motivated people. And, even then, there’s sometimes a mismatch between what people think a property is worth.

“I’ve got plenty of buyers saying, ‘I’m ready to buy if it’s a good price,’” she said. Meanwhile, “the sellers are worried about taking a big hit.”

Home prices will hold up, at least through the summer, but declines are coming, said Mark Zandi, chief economist at Moody’s Analytics. Once foreclosure moratoriums and forbearance programs end, lenders will start repossessions as unemployment persists. Ultimately, as many as 2 million homeowners will lose properties because of the the pandemic, he said.

In the near term, buyers are going to have to slug it out, especially for the types of property that are most in demand. Redfin’s data show that houses listed below $1 million were the most competitive, partly because banks have tightened standards for jumbo loans, said Marr. With everyone sheltering in place, buyers are also more eager to buy single-family houses than condos.

“Everyone wants a home with a yard,” Marr said.

read more…

 bloomberg.com

The real deal breaks down stimulus bill | South Salem Real Estate

A breakdown of what it means for developers, landlords, agents and lenders

“In moments of crisis,” the legendary developer Big Bill Zeckendorf was fond of saying, “one’s world tends to become simplified.” Even those with big dreams (pretty much every successful real estate professional) get down to the basics: survival.

This is a crisis unlike one we’ve ever seen. The world has stopped. “It’s the first time ever that we’ve had a chain of supply shock to the system and a demand shock,” developer Steve Witkoff said. To help the U.S. economy recover from that shock, the government has passed a $2 trillion economic stimulus package, the largest of its kind in modern U.S. history. 

What sort of help can the real estate industry expect? 

The Real Deal‘s editorial team has broken down key aspects of the stimulus package that are most relevant to different stakeholders from across the industry, from multifamily landlords to residential brokers, from lenders to builders to investors. So much of what exactly the stimulus will mean for real estate is still being hammered out, but this is a snapshot of the current state of play. 

“A good first step,” is how REBNY president Jim Whelan described the stimulus to us. He did note, however, that “increasing attention is going to have to be paid to the commercial market — mortgages, lenders, as well as landlords.”

Landlords and Investors 


The stimulus package offers no direct relief for landlords. They might see respite indirectly, however, through the one-time $1,200 check to most individuals making up to $75,000. Unemployment insurance has been expanded to include gig workers, with the federal government offering up to an additional $600 per week on top of what states provide. Renters (and homeowners) can use that cash to make their monthly payments. 


However, Fannie Mae and Freddie Mac are offering borrowers impacted by the pandemic up to 90 days of forbearance as long as they do not evict renters. For those who own Section 8 properties, the stimulus provides a total of $1 billion in funds to help maintain normal operations and “make up for any reduced tenant payments as a result of the coronavirus,” according to law firm Nixon Peabody. 


Alan Hammer, a multifamily-focused attorney at Brach Eichler, is urging clients to reach out to existing lenders to see what programs they could qualify for, in lieu of federal or state help.


“There’s nothing really in the CARES Act that provides for landlords,” Hammer said, referring to the stimulus package’s official name — Coronavirus Aid, Relief, and Economic Security Act. “But you’ll never hear me complain that life has been unfair to landlords as a group.”

Image

Jay Martin, Executive Director of landlord group CHIP

Francis Greenburger, who heads development firm Time Equities, said the plan “could be better,” adding that 90-day forbearance programs may not be helpful in the long run.

“Kicking the can down the road is not as good as it sounds if the crisis is still here in three to four months,” Greenburger said.

There is, however, one provision tucked into the bill that could see big landlords reap big savings. 

Under the existing tax code, landlords can use losses including depreciation to offset other taxes up to a total of $250,000 for individuals and up to $500,000 for joint filers. The new stimulus lifts that restriction for three years, and the New York Times, citing a draft congressional analysis, estimated that the program could result in investors saving $170 billion over 10 years. (All taxpayers with depreciable assets or losses will also be eligible, so it’s unclear how much of that sum would represent savings in real estate.) 

Depreciation on prime real estate holdings can easily come out to millions of dollars a year. According to one tax attorney, a $100 million building with “straight-line” depreciation over a 40-year lifespan would yield $2.5 million in depreciation losses a year. Depending on the owner’s income in a given year, the removal of the “excess business loss” cap could yield substantial tax savings. If you are moving homes in the Bournemouth area then bournemouth-removals.co.uk are very professional and cost effective.

The stimulus also allowed lawmakers to mend a “drafting error” from the 2017 tax bills — also known as the “retail glitch” — which made interior improvements for nonresidential properties ineligible for bonus depreciation. Retailers and restaurants will now have the option to deduct 100 percent of the cost of such improvements in the first year, instead of depreciating it over several years — an option which machinery owners, for example, already had.

Affordable Housing Developers

The bill would also add significant liquidity to municipal markets. The Fed is now exercising its power to buy municipal bonds, which the stimulus expanded to include all types of bonds, not just short-term ones. Because bonds allow municipalities to raise money cheaply, that’s good news for affordable housing developers who use tax credits to finance their projects.


Developers say enabling the construction of such product is more important than ever.


“Affordable housing could be more dramatically affected in the short term,” said Ron Moelis, CEO of L+M Development Partners, one of the most active affordable housing developers in New York City. Moelis said more of those tenants may lose their jobs because “they don’t have as much of a social safety net.”


Agents and Brokerages

Brokers used to eating what they kill are usually left out of government bailouts, but not this time.  


Unlike with previous stimulus packages, this one extends unemployment insurance to independent contractors, which is how the majority of the nation’s 2 million real estate agents operate. (The amount is based on individual state formulas, and would be in addition to the up to $1,200 provided to individuals earning $75,000 or less.


For brokerage firms, the Small Business Association has two loan programs — including one that may cover the cost of lost commission.

The Paycheck Protection Program provides loans up to $10 million to cover rent, mortgage interest, utilities and payroll. According to the National Association of Realtors, lost commissions count as payroll. The other loan program, dubbed the Economic Injury Disaster Loan, provides a $10,000 advance on emergency loans. The loans are limited to $2 million.

SBA loan payments will also be deferred for six months.


REBNY’s Whelan said he was happy to see the small business assistance programs centered around employment. “That was thoughtful and will hopefully play a critical role in getting businesses back on their feet,” he said. 


The measures come as welcome news for firms that are already reckoning with significant layoffs or pay cuts, among them CompassRealogy, and Meridian Capital Group. But given that commissions are the bulk of a broker’s income, layoffs even in bad times are less common compared to other industries. “There isn’t a tendency to go in that direction,” said CBRE’s Mary Ann Tighe.


Rent, however, is a real concern. “I promise you other brokerages are not paying rent,” said Stephen Shapiro of L.A. luxury firm Westside Estate Agency.  


Retailers and Small Businesses

Similar to brokerages, retailers, restaurants and other small businesses are eligible for the Paycheck Protection Program. 


Businesses with fewer than 500 employees are eligible for the loan, which is designed to keep workers on payroll. The U.S. Small Business Administration said it will forgive loans “if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.” 


“This should give landlords some comfort that their tenants will be able to pay rent eventually,” said Jeff Friedman, a partner at law firm Hall Estill, “if not immediately.” 

Lenders

Tom Barrack already thinks it’s the end of CMBS as we know it. 

The founder of Colony Capital and close associate of President Trump penned a dire letter on Medium on March 22, in which he predicted that the coronavirus pandemic and subsequent shutdown of sectors of the U.S. economy could lead to margin calls, foreclosures, evictions and potential bank failures. The impact, the polo-playing billionaire warned, could be greater than that of the Great Depression.

What happens to mortgage servicers remains unclear. Last week, the Mortgage Bankers Association estimated that lenders could be on the hook for at least $75 billion on short notice, and possibly more than $100 billion if homeowners and landlords sought forbearance en masse. 

But the association noted that the stimulus “includes funding that can be leveraged to create a broad, dedicated Federal Reserve liquidity facility.” It called for the government and the Fed to rapidly establish a program to help mortgage servicers provide the necessary forbearance.

Heidi Learner, chief economist for Savills, noted that “while servicers can go into the facility to borrow from the Fed, the fact of the matter is that it’s a cash-negative position.”

“They have to borrow to advance cash that’s not coming in,” Learner said. “I don’t see how this is sustainable.”


Construction 

Hardhats can expect significant support. Infrastructure and construction could be eligible for $43 billion of the $340 billion in funds outlined in the appropriations section of the package, according to trade publication Engineering News-Record

Trade group Associated General Contractors told the publication that the stimulus provisions that would help the industry include ones that allow companies to delay paying payroll taxes through Jan. 1, and allowing firms to “carry back” net operating losses for five years to offset past earnings. Another section of the bill allows firms structured as partnerships, S-corporations and other pass-through entities to deduct all 2020 losses in the current tax year.

Construction workers could also avail of direct payments from the government, and smaller construction businesses would also be eligible for the same types of SBA loans brokerages can take advantage of. 


REITs

Real estate investment trusts were mentioned briefly in the bill — but only to exclude them from part of a temporary change to rules around net operating losses. 

Most companies that paid taxes in recent years but had losses later on may be able to obtain tax refunds by carrying those losses back for up to five years.

In a memo analyzing the stimulus package, law firm Skadden Arps said that “despite the provision of this relief, loans, leases and other contracts likely will need to be restructured and renegotiated. Property owners, operators and lenders will need to collaborate to make this happen.”

Big Bill Zeckendorf would have agreed with that sentiment. The rotund tycoon accumulated suits with the same gusto that he did properties, and once said of his tailor: “By now he knew that I would always pay. But he also knew that he might have to wait.”

This special report was written by Hiten Samtani and Danielle Balbi,
with reporting from TRD’s Georgia Kromrei, Rich Bockmann,
Kevin Sun, E.B. Solomont and Kathryn Brenzel.

www.therealdeal.com

Home Price Appreciation up 3.8% | South Salem Real Estate

National home prices continued to increase in December 2019. Nineteen metro areas had positive home price appreciation while Cleveland saw home price decline in December.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index, released by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 5.7% in December, following a 5.8% increase in November. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 3.8% annual gain in December, up from 3.5% in November. It was the highest year-over-year gain since February 2018. Home prices are expected to continue rising in 2020 as tight inventory remains a concern.

Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 7.6% in December, after a 3.3% increase in November. On a year-over-year basis, the FHFA Home Price NSA Index rose by 5.2% in December, after an increase of 5.0% in November.

In addition to tracking home price changes nationwide, S&P also reported home price indexes across 20 metro areas. In December, the annual growth rates of the 20 metro areas ranged from -1.6% to 11.4%, while nine of the 20 metro areas exceeded the national average of 5.7%. Among the 20 metro areas, Phoenix, Seattle and San Francisco had the highest home price appreciation in December. Phoenix led the way with an 11.4% increase, followed by Seattle with a 9.4% increase and San Francisco with an 8.7% increase. Cleveland (-1.6%) had negative home price appreciation in December.

read more…

Building Regulation Most Restrictive on the Coasts | South Salem Real Estate

In December, the National Bureau of Economic Research (NBER) released a working paper announcing the release of an updated version of the Wharton Land Use Regulatory Index. The paper’s lead author, Joseph Gyourko, is a professor at the Wharton School who is well known for his research in this area and worked with the previous version of the index.

The index is based on a survey of over 2,400 primarily suburban jurisdictions across the U.S., conducted in calendar year 2018. Answers to the survey are used to construct twelve component indexes (capturing political pressure, number of approvals required, involvement of the state legislature and the court system and the local population in the process, explicit caps on production, density restrictions, presence of impact fees, and the time it takes to obtain approval).  The twelve components are combined into an overall index, scaled so that it has an average value of zero and a higher index number indicates more restrictive local land use regulation.

Averaging the index across each of the 44 metropolitan areas that had data on at least ten communities in 2018 clearly shows that the most restrictive regulatory regimes tend to be found on the coasts.  The metros with the most restrictive regulations, according to the 2018 Wharton Index, are San Francisco-Oakland-Hayward (with an average index of 1.18) and New York-Newark-Jersey City (with 1.04).

The working paper also compares the 2018 results with those from the previous survey (conducted from 2004 to 2006) to investigate possible changes in the regulatory environment over that span.  The comparison shows that there has been an increase in the number of local entities that need to approve a development, although only in cases where the development requires rezoning.

However, the major regulatory increase captured by that the Wharton surveys involves density restrictions.  In particular, the surveys showed that minimum lot sizes, already widespread in 2006, were even more common—as well as more restrictive—in 2018.  In the 2018 survey, 94 percent of the communities reported minimum lot sizes, and in a quarter of these the minimum lot size was at least one acre.

Impact fees were the only type of regulation that showed a significant decline between 2006 and 2018.  Just over half of communities reported imposing some type of impact fees in 2018 compared to slightly over three-quarters of those in the earlier survey.  It is important to remember that the earlier survey was conducted from late 2004 through early 2006—before the downturn, when housing production was at its peak, and when there was substantial concern about the number of property-flipping investors in many parts of the country.

A broad conclusion reached by the NBER paper is that the basic framework of the local regulatory environment has not changed much since 2018: communities have neither abandoned old types of regulation nor adopted radically new types.  The NBER paper is describing land use regulations specifically, however.   Complaints fielded by NAHB suggest that architectural restrictions on single-family homes (e.g., outlawing less expensive types of siding) have become an emerging local regulatory issue, but this is probably outside the scope of the Wharton survey.

For readers interested in more detail, the working paper is titled “The Local Residential Land Use Regulatory Environment Across U.S. Housing Markets: Evidence from a New Wharton Index.”  It can be purchased at a relatively modest cost (for an academic article) on the NBER web site.

Readers may also be interested in the housing supply regulation index created by Peter Ganong and Daniel Shoag, and the estimates of regulation as a fraction of single-family house price and multifamily development costs published by NAHB.  These different measures are estimated differently, serve somewhat different purposes, and are probably best viewed as complements to one another.

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Property Taxes Account for 40 Percent of State and Local Tax Revenue | South Salem Real Estate

NAHB analysis of the Census Bureau’s quarterly tax data shows that $594 billion in taxes were paid by property owners over the four quarters ending in Q1 2019.[1] It has been seven years since four-quarter property tax revenues declined.

After accelerating in the third and fourth quarters of 2017, the four-quarter growth rate of property tax revenue has slowed in each quarter since. Increasing by 18.1%, corporate income tax revenues grew at a much faster pace than any other major category of tax receipts on a year-over-year basis. State and local individual income tax revenues edged up 1.2% while property and sales tax collections increased by 3.3% and 5.2%, respectively.

Property taxes accounted for 39.6% of state and local tax receipts—the second consecutive quarterly increase. In terms of the share of total receipts, property taxes are followed by individual income taxes (28.2%), sales taxes (28.0%), and corporate taxes (4.2%).

The ratio of property tax revenue to total tax revenue from the four sources shown above remains 2.6 percentage points above its pre-housing boom average of 37%.

The share of property tax receipts among the four major tax revenue sources naturally changes with fluctuations in non-property tax collections. Non-property tax receipts including individual income, corporate income, and sales tax revenues, by nature, are much more sensitive to fluctuations in the business cycle and the accompanying changes in consumer spending (affecting sales tax revenues) and job availability (affecting aggregate income). In contrast, property tax collections have proven relatively stable, reflecting the long-run stability of tangible property values as well as the smoothing effects of lagging assessments and annual adjustments. Property tax receipts are the least volatile revenue source, followed by sales taxes, individual income taxes, and corporate income taxes, in order of increasing volatility.[2]

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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.

read more…

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

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

read more…

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

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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