Daily Archives: November 11, 2014

Easier mortgage rules, stable rates bring back U.S. home buyers | South Salem Real Estate

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Many U.S. home buyers are returning to the market after almost a year as interest rates stabilize and regulators propose more relaxed rules on mortgage lending.

U.S. homebuilders D.R. Horton Inc and Toll Brothers Inc reported jumps in orders this week at rates not seen since last year.

“We’re definitely seeing a lot more purchase business than we have in the past,” said Matt Hackett, underwriting manager at Equity Now, a New York-based mortgage lender.

Interest rates fell in October to their lowest since June 2013 after rising steadily for the past year. Although up slightly since, they are still at historic lows.

New rules proposed will allow Americans to buy homes with down payments as low as 3 percent.

“The buyers realize that they’re never going to get this kind of low interest rate environment,” said David Crowe, chief economist at the National Association of Home Builders.

Wayne Wellington, a 47-year old inspector at the Broward County housing authority in Florida, said he wanted to upgrade his current house for a larger property before rates spiked.

“Interest rates look like they’re on the verge of moving up a little bit and I’ve got to capitalize now on these wonderful rates,” he told Reuters.

The improvement in buyer sentiment is bringing much needed relief to homebuilders, which reported an underwhelming spring selling season this year. Spring selling is to homebuilders what the holiday season is to retailers.

“First-time home buyers are the ones missing from the marketplace (and) part of the reason we’ve had a relatively slow recovery in housing. Some relaxation in the overly restrictive lending standards will bring the first-time home buyer back,” Crowe said.

The Dow Jones U.S. home construction index rose about 4 percent this year to Monday’s close, after doubling between January 2012 and January 2014.

Five of the largest U.S. homebuilders – D.R. Horton, Toll Brothers, Lennar Corp, PulteGroup Inc and KB Home – trade below their intrinsic values, according to StarMine.

The StarMine model measures how much a stock should be worth when considering expected growth rates over the next 15 years.

 

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http://finance.yahoo.com/news/easier-mortgage-rules-stable-rates-182541447.html

Don’t expect full housing recovery ’til 2018: Poll | Bedford Hills Real Estate

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Home prices may have hit bottom in early 2012, but the housing recovery still has a long way to go. In fact, home values may not exceed their prerecession peak until the early part of 2018, according to a quarterly survey of more than 100 experts sponsored by Zillow (Z).

“We’ve reached a point in the recovery where the only real cure-all is time,” Zillow Chief Economist Stan Humphries said. The survey included economists, real estate professionals, investment and market strategists, and was conducted for Zillow by Pulsenomics LLC.

The panelists predicted that U.S. home values will finish out 2014 with a gain of 4.8 percent from 2013, with the median home value at $176,760. Most blamed shifting demographics and the weak financial state of today’s potential first-time home buyers for the slower-than-expected recovery.

Millennials are facing high rents, which prevent them from saving for a down payment. They are also marrying later in life; marriage is one of the top drivers of home ownership.

“The market remains very challenging for younger, first-time home buyers who face an uphill battle saving for a down payment, qualifying for a mortgage and finding an affordable home to buy. At the same time, many older homeowners are trapped underwater or are unable to find buyers for their homes,” Humphries said.

The experts predicted a leveling off of annual price increases nationally starting in 2015, with gains averaging 3.7 percent through 2019. That is a stark 20 percent drop from the gains originally expected for the year.

 

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https://homes.yahoo.com/news/full-housing-recovery-delayed-til-140800658.html