Inflation on the Rise Year over Year | Katonah NY Real Estate
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Daily Archives: November 17, 2012
Jobless Claims for Bedford Hills New York | Bedford Hills Real Estate
Homeownership rate to fall even as more become homeowners | Bedford NY Real Estate
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The Graying of Homeownership: Tight Credit is Tough on Younger, Single Buyers | Bedford Corners NY Real Estate
High lending standards that make it virtually impossible for millions of younger, single home buyers to get a mortgage are creating an older, more married and wealthier population of homeowners.
The latest Profile of Home Buyers and Sellers by the National Association of Realtors found that dual income households comprise a greater portion of the housing market and singles are declining. Sixty-five percent of all buyers are married couples, 16 percent are single women, 9 percent single men, 8 percent unmarried couples and 2 percent other; percentages of single buyers were slightly higher in 2011.
However, just two years ago, 58 percent of buyers were married, 20 percent were single women, 12 percent single men and 7 percent unmarried couples; the overall market share of single buyers declined a total of 7 percentage points over the past two years. Before 2010, the market shares moved within a very narrow range, generally a percentage point or two.
The study shows the median age of first-time buyers was 31 and the median income was $61,800 in 2011. The typical first-time buyer purchased a 1,600 square-foot home costing $154,100, while the typical repeat buyer was 51 years old and earned $93,100. Repeat buyers purchased a median 2,100-square foot home costing $220,000. First-time home buyers had a 39 percent market share in the past. Long-term survey averages show that four out of 10 buyers are typically first-time buyers, who are critical to a housing recovery because they help existing home owners to sell and make a trade.
Mortgage approvals have improved slightly in recent months but about half the national adult population has a credit score too low to get a loan. Median scores for adults in the prime first time buyer age groups, 25-34 and 35-44 are far below the median scores of FHA and conventional purchase mortgages being approved today.
The September closing rate for applications for mortgages to purchase a home was 61 percent, the highest approval rate for purchase loans all year. The median FICO score for all conventional purchase mortgages closed in September was 762 and for FHA purchase mortgages, popular among first-time buyers because of their low down payment requirement and used by 46 percent of first-time buyers in 2011, was 701, according to Ellie Mae, whose software platform processes about 20 percent of all U.S. mortgage originations.
The national median FICO score is 723 today, but median scores for younger adults are considerably lower. For ages 25-34, the median is 652 and for the 35-44 age group, it’s 659.
Paul Bishop, NAR vice president of research, said the study is painting a clearer picture of the impact of mortgage limitations. “We’ve known for some time that stringent mortgage credit standards have been holding back home sales, but these findings show single buyers have been hurt the most over the past two years. Total home sales would be 10 to 15 percent higher without these unnecessary headwinds,” he said.
“The continued growth in married couples as single buyers shrink demonstrates that households with dual incomes are more successful in obtaining a mortgage. However, given the historically favorable housing affordability conditions, most single-income buyers could also purchase a home and stay well within their means, if lending requirements were more sensible,” Bishop said.
Sandy States Get Clobbered with Foreclosures | Chappaqua Real Estate
New Jersey , New York and Connecticut got hit with a storm of new foreclosures just days before Superstorm Sandy smashed homes and a knocked out power to missions of homeowners.
RealtyTrac reported foreclosure filings on 186,455 U.S. properties in October, an increase of 3 percent from September but down 19 percent from October 2011.
“We continued to see vastly different foreclosure trends across the country in October, depending primarily on how each state’s foreclosing infrastructure was able to handle the high volume of delinquent loans during the worst of the foreclosure crisis in 2010,” said Daren Blomquist, vice president of RealtyTrac.
“Unfortunately the three states dealing with the biggest rebound in deferred foreclosure activity — New Jersey, New York and Connecticut — also had to deal with the devastation to homes inflicted by super storm Sandy. The foreclosure moratoriums being put into effect as a result of the storm will likely extend the already-lengthy time to foreclose in these states, further prolonging a fundamentally sound housing recovery.”
The three states with the biggest annual increases in foreclosure activity in October were New Jersey (140 percent), New York (123 percent) and Connecticut (41 percent). Other states with sizable increases were Maryland (27 percent), Ohio (24 percent) and Illinois (19 percent).
An analysis of foreclosure activity and inventory in the counties most impacted by super storm Sandy in Connecticut, New Jersey and New York shows foreclosure activity in October was down 8 percent from September but up 92 percent from a year ago, and an estimated $41 billion in foreclosure inventory in those counties.
Florida posted the nation’s highest foreclosure rate for the second month in a row, with one in every 312 housing units with a foreclosure filing in October, followed by Nevada, Illinois, California and Arizona.
Scheduled foreclosure auctions in October increased 9 percent from September, while default notices and bank repossessions (REO) were virtually unchanged from the previous month.
Foreclosure activity increased on a month-over-month basis in more than half of the 212 metro areas tracked in the report, and jumped significantly in some hard-hit metro areas, including Modesto, Calif. (up 68 percent), Sarasota, Fla. (up 53 percent), Las Vegas, Nev. (up 45 percent), Columbus, Ohio (up 61 percent), and Columbia, S.C. (up 58 percent).
Analysis of foreclosure activity and rates in counties
In the 34 counties impacted by Sandy in Connecticut, New Jersey and New York that are being given individual assistance by FEMA, a total of 6,380 properties had foreclosure filings in October, down 8 percent from September but an increase of 92 percent from October 2011. Despite the sharp year-over-year increase, the foreclosure rate in those counties combined was less than half the national average: one in every 1,467 housing units with a foreclosure filing.
As of the end of October, total inventory of properties in some stage of foreclosure or bank owned in these counties was 124,608, up 15 percent from the previous month and up 54 percent from October 2011. The estimated combined market value of foreclosure inventory in the impacted counties was more than $41 billion.
Fannie Mae owned the biggest percentage of REO inventory of any lender in the impacted counties in all three states, with 29 percent in New York, 25 percent in New Jersey, and 22 percent in Connecticut. Other lenders with large percentages of REO inventory in the impacted counties included Wells Fargo, US BankCorp and Deutsche Bank.
Foreclosure starts up slightly
Foreclosure starts — default notices or scheduled foreclosure auctions, depending on the state — were filed for the first time on 89,209 U.S. properties in October, a 2 percent increase from September but still down 19 percent from October 2011 — the third straight month with an annual decrease in foreclosure starts.
Foreclosure starts increased from the previous month in 26 states, including Nevada (54 percent), Tennessee (52 percent), Minnesota (28 percent), North Carolina (26 percent), New York (17 percent) and Georgia (16 percent).
Foreclosure starts increased from a year ago in 15 states, including New Jersey (286 percent), Washington (163 percent), New York (163 percent), Pennsylvania (42 percent), North Carolina (38 percent), and Nevada (20 percent).
Bank repossessions decrease annually for 24th straight month
Lenders completed the foreclosure process on 53,478 U.S. properties in October, down less than 1 percent from the previous month but down 21 percent from October 2011 — the 24th straight month with an annual decrease in REO activity.
REO activity decreased annually in 37 states and the District of Columbia. Some of the biggest decreases were in Oregon (81 percent), Virginia (72 percent), Washington (56 percent), Nevada (50 percent), Texas (41 percent), Michigan (35 percent), Arizona (33 percent), and California (20 percent).
States with some of the biggest annual increases in REO activity included Connecticut (44 percent), Maryland (38 percent), South Carolina (37 percent), New York (33 percent) and Georgia (22 percent).
Florida, Nevada, Illinois post highest state foreclosure rates
Florida registered the nation’s highest state foreclosure rate for the second month in a row. One in every 312 Florida housing units had a foreclosure filing in October — more than twice the national average. A total of 28,783 Florida properties had a foreclosure filing in October, up 2 percent from the previous month and a 12-month high, but the October 2012 total was still 13 percent below the October 2011 total.
A 41 percent monthly increase in overall foreclosure activity helped push the Nevada foreclosure rate to the second highest in the nation in October, up from the nation’s fifth highest foreclosure rate in September. One in every 352 Nevada housing units had a foreclosure filing during the month, twice the national average. Foreclosure starts (NOD) in Nevada increased 54 percent from the previous month and were up 20 percent from a year ago — the first annual increase in Nevada foreclosure starts after 32 consecutive months of annual decreases. Nevada REOs increased 69 percent from the previous month but were still down 50 percent from a year ago.
One in every 356 Illinois housing units had a foreclosure filing in October, the nation’s third highest state foreclosure rate. A total of 14,899 Illinois properties had a foreclosure filing during the month, a 6 percent increase from the previous month and a 19 percent increase from a year ago — the 10th consecutive month where Illinois documented an annual increase in foreclosure activity.
Other states with foreclosure rates among the nation’s 10 highest were California (one in every 379 housing units with a foreclosure filing), Arizona (one in 420 housing units), Georgia (one in every 439 housing units), Ohio (one in every 476 housing units), Colorado (one in 563 housing units), South Carolina (one in every 601 housing units), and Michigan (one in every 607 housing units).
Foreclosure activity increases from previous month in 53 percent of metros
October foreclosure activity increased from the previous month in 113 of the 212 metropolitan statistical areas tracked in the report (53 percent). Six of the metro areas with the 10 highest foreclosure rates documented a monthly increase in foreclosure activity, including Modesto, Calif. (68 percent), Visalia-Porterville, Calif. (58 percent), Palm Bay-Melbourne-Titusville, Fla. (71 percent).
Twenty-six of the metro areas with the 50 highest foreclosure rates documented a monthly increase in foreclosure activity, including Sarasota, Fla. (53 percent), Las Vegas, Nev. (45 percent), Columbus, Ohio (61 percent) and Columbia, S.C. (58 percent).
Down Payments Fall to Three Year Low | Armonk Homes for Sale
The median downpayment made by all homebuyers in 2012 was 9 percent, ranging from 4 percent for first-time buyers to 13 percent for repeat buyers. The median down payment was the lowest since 2009 but still far above the levels during the housing boom, when nearly half of first-time buyers made no downpayment at all.
First-time buyers who financed their purchase used a variety of resources for the down payment: 76 percent tapped into savings; 24 percent received a gift from a friend or relative, typically from their parents; and 6 percent received a loan from a relative or friend. Eleven percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-three percent of entry-level buyers chose a fixed-rate mortgage, reported the National Association of Realtors.
Forty-six percent of first-time buyers financed with a low-downpayment FHA mortgage, and 10 percent used the VA loan program with no downpayment requirements. Forty-two percent cut spending on luxury items to buy their first home, 35 percent cut spending on entertainment and 27 percent cut spending on clothes.
In 2005, the median first-time home buyer scraped together a down payment of only 2 percent to buy a $150,000 home . Two years later, in 2007, the median downpayment by first-time buyers was still only 2 percent and 45 percent purchased with no money down – the same as in 2006. That year 43 percent of first-time home buyers purchased their homes with no-money-down loans.
After lenders tightened standards in the wake of the housing crash, the median down payment soared , reaching 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. 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 2011 Profile of Investment and Vacation Buyers.
“First-time buyers historically make small down payments, but repeat buyers like to put down 20 percent if they can to avoid paying mortgage insurance,” NAR’s Paul Bishop said. “The general loss in home value since the peak of the housing boom means many repeat buyers in recent years had to make smaller downpayments. Fortunately, prices have turned up this year and are showing sustained increases, so we’re on the road to a recovery in home equity.”