Daily Archives: February 11, 2015

Jobs Gains Will Support Housing Demand | Waccabuc Real Estate

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The end of 2014 saw an acceleration of job creation that compared favorably with the poor start to the year. Combined with the ongoing expansion of consumer confidence, these trends will help support housing demand and residential construction during 2015.

The Bureau of Labor Statistics (BLS) reported that payroll employment expanded by 257,000 in January, with an additional 147,000 jobs reported in November and December after data revisions. The unemployment rate inched up to 5.7% in January from 5.6% in December, which is in fact a positive development as this change was due to more individuals seeking work. In January, home builders and remodelers added 20,100 jobs on a seasonally adjusted basis. Over the last 12 months, the industry has created 162,000 jobs.

The separate BLS JOLTS survey of job openings and turnover suggests additional hiring ahead. For the overall economy, the job opening rate (number of unfilled jobs as a percent of total employment) reached 3.5% in December, the highest rate for the post-recession period.

The number of open construction sector jobs for December (on a seasonally adjusted basis) rose to 147,000. The December level marks the third-highest monthly measure of unfilled jobs in construction during the post-recession period. Quits surged in the construction sector for the month, along with a moderate increase in hiring, which may reflect some worker churn among employers.

The good news on the employment front has helped consumer confidence. The January 2015 University of Michigan Index of Consumer Sentiment soared to its highest level since January 2004. The Conference Board Consumer Confidence Index also increased sharply, reaching its highest level since August 2007.

With respect to the broadest measure of the economy, the advance estimate from the Bureau of Economic Analysis indicates that Gross Domestic Product (GDP) increased at a 2.6% annual rate. This was below expectations, which were generally around 3%.

 

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http://eyeonhousing.org/2015/02/eye-on-the-economy-jobs-gains-will-support-housing-demand/

Consumer Lending (And Risk) Grows | Cross River Real Estate

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A recent release from the Federal Reserve Board indicates that consumer credit outstanding grew by a seasonally adjusted annual rate of 6.9% over the year of 2014, accelerating from the 6.0% growth rate recorded in 2013. At the end of 2014, there was $3.3 trillion in consumer credit outstanding.

The expansion in consumer credit outstanding over the year largely reflected an increase in non-revolving credit outstanding. Non-revolving credit is mostly composed of auto loans and student loans. According to the release, non-revolving credit rose by a seasonally adjusted rate of 8.2%, $183.6 billion, accounting for 86% of the total growth in consumer credit outstanding for the year. The increase in non-revolving credit outstanding in 2014 marks the 5th consecutive year of growth since the 0.6% decline in 2009. Over this 5-year period, growth in non-revolving credit has averaged 8.2% per year.

Revolving credit, largely composed of credit cards, also contributed to the annual growth of consumer credit outstanding in 2014. Over the year, revolving credit outstanding grew by a seasonally adjusted annual rate of 3.5%, $30.3 billion, accounting for 14% of the total growth in consumer credit outstanding. Despite its smaller contribution to growth in overall consumer credit outstanding, revolving credit outstanding continues to show signs of recovering. Since declining by 7.6% in 2010, revolving credit outstanding has experienced annual gains in the subsequent 4 years. Moreover, each year of growth in revolving credit has exceeded the increase in the prior year. The 3.5% growth rate in revolving credit recorded over 2014 is the highest rate of growth since the 7.6% increase in 2007.

 

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http://eyeonhousing.org/2015/02/consumer-lending-and-risk-grows/

Refis and purchases see big declines | #Katonah Real Estate

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A week after rising 1.3% and about four weeks after a 49% jump, mortgage applications decreased 9% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Feb. 6, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7% compared with the previous week. The Refinance Index decreased 10% from the previous week.

The seasonally adjusted Purchase Index decreased 7% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 1% higher than the same week one year ago.

The refinance share of mortgage activity decreased to 69% of total applications from 71% the previous week. The adjustable-rate mortgage share of activity increased to 5.7% of total applications.

The FHA share of total applications increased to 14.1% this week from 13.1% last week. The VA share of total applications decreased to 8.3% this week from 8.5% last week. The USDA share of total applications increased to 0.7% from 0.6% last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.84%, the highest level since Jan. 9, 2015, from 3.79%, with points increasing to 0.31 from 0.29 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.90% from 3.82%, with points decreasing to 0.19 from 0.22 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.72% from 3.69%, with points increasing to 0.13 from 0.07 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

 

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http://www.housingwire.com/articles/32896-mortgage-applications-drop-a-hefty-9-after-strong-january-gains

New Loan Options Spell Opportunity for Home Buyers | Bedford Hills Real Estate

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As the country moves into year five of the re-regulated mortgage era, loan guidelines continue to become more flexible. If you’re buyingor refinancing a home, the following recent developments in expended loan options could affect you. In all cases, each lender’s guidelines will vary, so consult your loan officer to see if any of these fit your profile.

97-percent conforming loans for first-time buyers

In December, Fannie Mae and Freddie Mac rolled out 3-percent down programs targeted at first-time buyers. The loans require mortgage insurance and are capped at $417,000. But with a 3-percent down payment, that translates into a purchase price as high as $429,897.

Both Fannie and Freddie guides say the loans can be obtained with a credit score as low as 620, but each lender can layer its own guidelines on top of Fannie/Freddie guides, so you’ll need to ask your lender for its credit and other requirements.

90-percent jumbo loan with no mortgage insurance

For higher-earning home buyers who need to borrow more than the $417,000 conforming loan cap, an increasing number of jumbo lenders are adding the ability to lend 90 percent of a home’s value with loan amounts up to $1 million — and as high as $1.25 million for exceptional borrowers.

This translates into purchase price ranges of $1,111,111 to $1,388,888 with just 10 percent down and no mortgage insurance, which is a huge cost savings on larger loans. Borrowers typically must have a debt-to-income ratio of 35 percent or less, credit scores of 720 or greater, and at least 12 months cash reserves after the close. These programs are now available with most jumbo lenders.

Re-amortizing jumbo loans

Some large banks who keep their jumbo loans — instead of selling the loans after they close — have begun offering a re-amortization feature on jumbo loans over $417,000. Re-amortization means that your payment will decrease as you pay your loan down.

Depending on the lender, a loan balance pay-down from $5,000 to $20,000 will trigger a payment recalculation. This feature enables higher earners to lower their monthly budget as they chip away at their loan balance using extra income like bonuses or stock compensation. Previously, the only way to lower your payment as you paid your loan down was to use an interest-only loan, but those loans carry higher rates.

 

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http://www.zillow.com/blog/new-loan-options-spell-opportunity-169602/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ZillowBlog+%28Zillow+Blog%29

Sale on Kennedy Estate | Bedford Real Estate

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Auctioneers are selling off a bit of Kennedy history this week in the form of Jacqueline Kennedy’s correspondence and other memorabilia surrounding a Virginia estate where the family spent just three weekends before JFK was assassinated.

“You have done the most fantastic job and everyone agrees that house is really a dream. One could not wish for anything more perfect — if only we could live in it all year long! And Jack loves it,” the First Lady gushed in one hand-written letter to the couple that acted as her building agents.

Jaqueline Kennedy

Jackie saw the estate, which she named Wexford House, as an equestrian retreat to rival her husband and his family’s beloved Hyannis Port, MA compound.

Wexford House has been on the market for more than a year, with a price drop from $11 million in late 2013 to $7.95 million, according to listing agent Patricia Burns of Middleburg Real Estate.

“The house was finished in ’63, and they were there for three weekends, the last of which was the weekend before they went to Dallas,” Burns explains. “What’s very special to me about it is that it’s still almost in original condition.”

The stucco home measures 5,050 square feet and has 4 bedrooms, 4 bathrooms and an abundance of riding trails. Originally situated on 39 acres, the property today has 167 acres amid rolling hills backed by the Blue Ridge Mountains.

There are his and her dressing rooms, multiple fireplaces and built-in cabinets and bookcases. Outside are a pool, tennis court and horse stables with water and electricity, as well as two separate living areas. The detached garage has a bathroom and second-floor studio, and the property includes an underground bomb shelter.

Jacqueline Kennedy’s paper trail reveals the home was paid for by her father-in-law, Joe Kennedy Sr., and that it cost just over $127,000, which was quite a bit more than the $40,000 she’d agreed to. In the book “Last Hundred Days,” author Thurston Clarke says John Kennedy was strongly opposed to building the home but agreed to it because his wife wanted it so much.

The estate has other presidential connections, too. Wexford House was leased by Ronald and Nancy Reagan during the fall 1980 presidential campaign. Reagan rehearsed there for debates with President Jimmy Carter.

 

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http://www.zillow.com/blog/sale-on-kennedy-estate-virginia-169645/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ZillowBlog+%28Zillow+Blog%29