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Daily Archives: April 21, 2012
Mt Kisco Real Estate | Online Mortgages Come of Age
Introduced about 15 years ago, sites accepting online mortgage applications continue to increase market share. The latest data from an online lending leader suggests that today’s home buyers are shopping and applying for mortgages on the Internet a never before.
Mortgage applications nearly doubled in the first quarter of 2012 compared with the same period last year, according to MortgageMarvel.com, an online mortgage-shopping website that delivers real-time mortgage offers from multiple lenders and purchase mortgages were up about 40 percent over a year ago.
“The increase in online applications is a clear indication that home buyers are applying on line in greater numbers than ever, said Rick Allen, Chief Operating Officer of Mortgage Marvel, who noted that the spike in online applications far exceeded the 10 percent increase in purchase applications reported by the Mortgage Bankers Association for the first quarter.
Applicant credit scores averaged 733 in the first quarter of 2012 compared with 716 in the same period in 2011 and the average median household income of mortgage applicants rose from $79,400 to $87,450, indicating that lending standard may have tightened over the past year.
Mortgage Marvel data is compiled from loan applications submitted to lenders using Mortgagebot’s online lending platform. Mortgagebot, which owns and operates Mortgage Marvel, licenses its technology to over 1,100 lenders nationwide to facilitate mortgage applications through every delivery channel — consumer-direct via the Internet, in the branch or call center, or through professional loan officers. In 2011, more than 500,000 loan applications were submitted through Mortgagebot’s online lending platform. As a result, Mortgagebot has a rich database to use for analyzing interest rate and buying trends in the housing market.
Nationally, average interest rates for a 30-year, fixed rate, conforming mortgage climbed slightly during the first quarter of 2012 yet still remained at historically low levels. “On January 1, 2012, the average rate for this type of loan through our lender clients was 4.02 percent,” Allen said. “Rates reached a low of 3.92 percent on February 2 and a high of 4.18 percent on March 20. On March 30, the last business day of the quarter, the average rate stood at 4.06 percent.”
The consumer-estimated, average home price for applications in the Mortgage Marvel study was virtually unchanged, coming in at $267,204 in the first quarter of 2012 and $266,507 in the first quarter of 2011. The average loan amount fell slightly — from $188,528 to $185,223 — indicating a small increase in average down payment amounts.
“Things are improving, but, even though rates are at record lows, the total mortgage market in 2011 was less than a third of what it was in 2003 — roughly $1.2 trillion versus $3.8 trillion,” Allen said. “This shows just how much the housing and mortgage markets have been impacted by economic conditions.”
North Salem NY Real Estate | Prices Zoom in Foreclosure Epicenters
Most of markets with the highest median year-over-year list price increases in March also experienced the largest reductions in their for-sale inventories and were among the hardest hit by the foreclosure crisis.
Although foreclosed properties continue to account for a high proportion of their overall sales, the four markets with the largest year-over-year increase in median list prices –Phoenix AZ, Miami FL, Boise City ID, and Punta Gorda FL- now appear to be into the recovery process as their list prices are on the increase, according to the Realtor.com Real Estate Trend Data report for March.
The total US for-sale inventory in March 2012 was down by -21.48 percent compared to March 2011, declining in all but two of the 146 markets covered by Realtor.com. The median age of the inventory fell by -19.82 percent on a year-over-year basis and the median national list price was up by 5.56 percent.
“These positive indicators contrast with the situation at the beginning of the 2011 home buying season, when the median list price was down by -4.81% on an annual basis and the age of the inventory was up by 26.14 percent. If the market continues to hold its own, 2012 could confirm the beginning of a broad-based housing recovery,” the report said.
While some of the hardest hit markets — Las Vegas and many parts of California – still lag, markets that didn’t experience the dramatic run-up in housing values preceding the housing crisis- Chicago and Philadelphia– now exhibit persistent signs of weakness. These patterns suggest the nature of the country’s housing challenges have fundamentally changed, and conditions once attributed to the decline of the housing boom now primarily reflect weaknesses in local economies.
The nationwide median list price for single family homes, condos, townhomes and co-ops was $189,900 in March 2012, up from $188,000 in February 2012 and 5.56 percent higher compared to a year ago. At the same time last year-the beginning of the 2011 home buying season–the median national list price was $179,900, 4.81 percent below the median list price in March 2010. While higher list prices don’t always translate into higher sales prices, they can signal a growing optimism on the part of sellers about their local market conditions and buyer demand.
The national for-sale inventory was up by 1.45 percent in March compared to February, a largely seasonal effect associated with the start of the spring home buying season. On a year-over-year basis, the total number of listings was down by -21.48 percent in March 2012, another positive sign that the overall market is in a stronger position than it was one year ago.
The median age of the inventory of for sale listings was 89 days in March 2012, down from 111 days in February and -19.82 percent below the median age in March 2011. While the monthly reduction in the age of the inventory is seasonal in nature, the year-over-year decline in the median age of the total for-sale inventory is consistent with a significantly stronger market heading into the 2012 home buying season. Last year at this time, the median age of the inventory was up by 26.14 percent on an annual basis.
In March 2012, the median list price was up by 1% or more on an annual basis in the majority (111 MSAs) of the 146 MSAs monitored by Realtor.com, and up year-over-year by 5 percent or more in 70 MSAs. The median list price was down by -1 percent or more in 17 markets on a year-over-year basis, with only 2 markets registering declines of -5 percent or more. The remaining 18 markets haven’t experienced a significant change in median list prices compared to a year ago. These statistics represent a steady and significant year-over-year improvement in median list prices in the majority of markets monitored by Realtor.com since the onset of the 2011 home buying season. While higher listing prices may not necessarily translate into higher sales prices, these data suggest a growing optimism on the part of sellers that the market is beginning to turn around.
Five of the ten markets with the largest year-over-year increases in median list price in March 2012 are in Florida. Phoenix-Mesa, Washington DC, and Boise, ID also appear on the list of top 10 MSAs with the largest year-over-year increases in media list prices for March 2012. The relatively large increases in the median list price in most Florida markets compared to one year ago suggest that these hard-hit areas may have reached bottom and are now into the recovery mode. However, the large shadow inventory of potential foreclosures in the state could easily undermine the nascent recovery process.
In contrast to Florida, median list prices continue to be down on a year-over-year basis initially hard-hit areas, including Las Vegas and many parts of California. However, markets that never experienced a rapid run-up in housing prices are now registering among the highest rates of list price declines. This pattern suggests a shift in both the nature and location of the nation’s housing problems-away from the sand states and into older, more industrialized areas that are experiencing the brunt of the economic downturn. The ten markets with the largest year-over-year list price declines in March are shown below.
Cross River NY Real Estate | Down Payments Remain Elevated
Down payments greater than or equal to 20 percent were made by 34 percent of all residential home purchasers last month, a percentage that has remained relatively stable over the past year, according to the latest Realtor Confidence Index survey from the National Association of Realtors.
However, over the past several years, lenders have been raising down payment requirements. In 2011, median down payments for conventional loans were approximately 22 percent, according to Zillow. That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.
Both these surveys show higher down payment costs than NAR’s 2011 Profile of Home Buyers and Sellers, which is based n part on 2010 transactions. For both conventional and FHA loans, which require only a 3.5 percent down payment, NAR reported the median down payment for all buyers was 11 percent in 2010-2011. First time buyers put about 5 percent down in 2011. Repeat buyers, pooling equity with savings, typically put down about 15 percent. However, investment and vacation-home buyers have been paying higher down payments than those buying a primary residence. The median down payment for both was 27 percent, according to NAR’s Profile of Investment and Vacation Buyers.
In January, Lending Tree reported that states with the highest median down payments were Washington, D.C. (13.5 percent), New York (13.47 percent), Hawaii (13.33 percent) and California (13.22 percent). The state with the lowest average down payment is North Dakota, where buyers put down an average of 11.34 percent.
Attention has focused on down payments in recent months for two reasons. Down payments are a major barrier to first-time buyers, whose market share has dwindled since the home buyer tax credits expired in 2010. A survey of buyers by Move, Inc. last fall found that half of all potential buyers planning to buy in two years or more are waiting in part because they lack the money for a down payment or closing costs.
A second focus has been a proposed regulation called QRM that would create incentives for lenders to offer loans at 20 percent or more. The regulation, being reviewed by regulators, is opposed by many housing, consumer and minority groups concerned that it would put homeownership out of reach of many American families.
Waccabuc NY Real Estate | Lenders Hang Tough as Sales Season Opens
Lenders haven’t budged an inch on tough origination standards as the 2012 spring sales season opened last month and conventional purchase and FHA loans gained greater market share.
Median FICO scores for denied loans remained close to 700 and for the average loan, lenders required more than 15 percent in equity or a down payment. On average, there was an 8-point spread between back-end DTI ratios for approved-versus-denied loans last month, according to the Ellie Mae Origination Insight Report.
“In March, as we moved into the Spring selling season, underwriting standards for both purchase and refinance loans continued to be highly conservative,” said Jonathan Corr, chief operating officer of Ellie Mae. “On average, there was an 8-point spread between back-end DTI ratios for approved-versus-denied loans last month. The average denials for conventional refinances and purchases continued to have significantly higher FICOs, lower LTVs and more restrictive DTIs than the overall averages.”
Ellie Mae found that nearly 47 percent of all applications closed, with a higher percentage of purchase mortgages closing (56.4 percent). However, February purchase loan closings were 60.1 percent, suggesting the quality of applications declined slightly with the beginning of the buying season.
“The numbers showed a significant pick up in the percentage of purchase loans to 39% in March versus 33% in February, and a corresponding increase in FHA share: 28 percent of closed loans versus 25% in February,” said Corr. “The increase in FHA share was not surprising given FHA originations tend to skew more heavily towards purchase.
The timeline from application to closing for the average loan was 42 days in March, two days shorter than February, which suggests that the industry was working through the surge in refinance applications that came in at the end of last year. “With rates at historically low levels, the percentage of borrowers opting for adjustable rate mortgages (ARMs) in March was at the lowest point in the past six months and roughly half of where it was at the end of last summer,” Corr said.
In 2011, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately two million loan applications, or 20 percent of all U.S. mortgage originations. The Origination Insight Report mines its application data from a robust sampling of approximately 33 percent of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae’s market share, the company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.
South Salem NY Homes | Foreclosure Discounts Shrink in 2012
The rates that foreclosures and short sales are discounted from full-price properties have declined significantly in 2012, especially discounts for higher priced properties and in some of the markets hit hardest by foreclosures in the past.
The latest Realtor Confidence Survey by the National Association of Realtors found that the foreclosure discount has fallen from approximately 22 percent in February to 18.8 percent in March. The discount for short sales has shrunk from18 percent in January fell to 15.8 percent in March. Results were based upon a survey of Realtors.
Separately, using data on sales of foreclosed and REO properties through February, the FNC Residential Price Index found that foreclosure discounts declined to below pre-crisis levels for higher value properties (over $250,000), but remained elevated for lower-priced homes. FNC also found that in the fourth quarter of last year, foreclosure discount s declined in a number of the hardest hit markets, including Phoenix, Tampa, Miami, Las Vegas and Atlanta, driven by sharp declines in foreclosure sales.
Discounts reported by RealtyTrac were far higher in the fourth quarter of last year. The average sales price of a bank-owned foreclosure in the fourth quarter was 36 percent below the average sales price of a non-foreclosure home, while the average discount on bank-owned homes for all of 2011 was 40 percent, according to RealtyTrac’s Fourth Quarter and Year-End 2011 U.S. Foreclosure Sales Report.
RealtyTrac also published its top ten list of REO markets, based on fourth quarter data and ranked by average discount size. Milwaukee (57.9 percent discount) ranked first, Philadelphia (52.52 percent) second, Boston (50.92 percent) third, Chicago (49.71 percent) fourth and Atlanta (48.12 percent) fifth. None of the top ten discount markets were located in the four “sand states,” the traditional center for most foreclosure activity.
Shrinking discounts now are thought to be a sign of market stabilization just as increasing discounts reflect instability and put downward pressure on property values. “The size of the difference-name the foreclosure price discount-underscores the impact of market distress and foreclosure activities on property values,” said FNC in a news release.
Katonah NY Homes | Foreclosure Drought and Declining Discounts Depress Investor Sales
The market share of foreclosures and short sales has fallen 27 percent from a year ago, pulling down March overall existing home sales 2.6 percent as inventories of foreclosures and short sales suddenly declined last month.
Foreclosures and short sales accounted for only 29 percent of March sales (18 percent were foreclosures and 11 percent were short sales), compared with 34 percent in February and 40 percent in March 2011, according to the National Association of Realtors. Distressed sales have hovered in the 30 to 35 percent range for a number of years, with heavy sales concentrations in a few states.
ForeclosureRadar, which covers five Western States, reports a similar dramatic drop in the number of properties sold at foreclosure auctions. Foreclosure sales in California are down 16.7 percent from February to March 2012 and down 53.1 percent from March a year ago. A total of 86,487 sales were scheduled to occur in California, but of those 80.0 percent postponed, and 10.6 percent were cancelled, leaving just 8,392 that were actually sold. Third parties, typically investors, purchased a record 38.6 percent of the properties that did sell in California.
Markets around the nation also report a decline in distressed sales. Colorado January 2012 foreclosure sales were down compared to January 2011 with a decrease of 23.3 percent from 1,499 to 1,150. The number of home sales in the Baltimore metro area that are not distress deals – neither foreclosures nor short sales – jumped about 25 percent in March from a year earlier, according to numbers released by the Metropolitan Regional Information Systems.
Investors purchased only 21 percent of all homes sold in March, down from 23 percent in February and 22 percent in March 2011. First-time buyers accounted for 33 percent of transactions in March; they were 32 percent in February and 33 percent in March 2011. All-cash sales, a measure of investor actifity, slipped to 32 percent of transactions in March from 33 percent in February; they were 35 percent in March 2011.
NAR said fewer numbers of foreclosures and short sales accounted for the decline in sales, but falling discounts may have also dampened investor interest. Foreclosures typically sold for an average 19 percent below market price in March, while short sales were discounted 16 percent, according to the National Association of Realtors. The average sales price of a bank-owned foreclosure in the fourth quarter was 36 percent below the average sales price of a non-foreclosure home, while the average discount on bank-owned homes for all of 2011 was 40 percent, according to RealtyTrac’s Fourth Quarter and Year-End 2011 U.S. Foreclosure Sales Report (see Foreclosure Discounts Shrink in 2012).
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