Mortgage applications rise 2.8% after weeks of low interest rates Refinance share continues to grow hitting 56%

stairs up

Mortgage applications increased 2.8% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 22, 2014.  

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 2% compared with the previous week. 

 “Buyers made a late summer push, in this season that never reached its full potential. More homeowners also refinance last week, taking advantage of these historically low rates that won’t be around forever,” said Quicken Loans vice president Bill Banfield. “Nearly a million more homeowners can still benefit of the HARP program, but their opportunity will be fleeting when rates start rising.”

The Refinance Index increased 3% from the previous week.  The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 11%  lower than the same week one year ago.

The refinance share of mortgage activity increased to 56% of total applications, the highest level since March 2014, from 55% the previous week.  The adjustable-rate mortgage share of activity remained unchanged at 8.0% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28% from 4.29%, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80%  loan-to-value ratio loans.  The effective rate remained unchanged from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.22% from 4.18%, with points increasing to 0.28 from 0.23 (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 decreased to 3.98%, the lowest since June 2013, from 3.99%, with points increasing to 0.13 from 0.03 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.47% from 3.44%, with points increasing to 0.34 from 0.30 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week.

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San Diego home appreciation leads U.S.

Homes are lined up near Carmel Valley.

 

San Diego County’s housing market led the nation in price appreciation in February, as the region moved out of its annual holiday homebuying lull.

The S&P/Case-Shiller Home Price Index showed Tuesday that from January to February, prices on the index rose 1 percent, highest on the 20-city measure. Prices declined over the month in 13 of the cities included on the closely-watched index.

“There’s a fundamental housing shortage in San Diego County, it’s that simple,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “We have a strong housing market in San Diego as a result of a shortage. We have demand and a robust economy compared to a lot of other communities.”

The index, which lags two months, measures repeat sales of single-family homes. From February 2013 to February 2014, San Diego home values are up 19.9 percent, trailing only San Francisco and Las Vegas in annual appreciation.

Still, Goldman said he sees the local market continuing to slow, perhaps down to its historical 3 to 3.5 percent annual appreciation level.

The slowing seems to have started. For instance, the index rose from 163.28 in January 2013 to 194.07 in October, hovering around that total the rest of the year. In February 2014, it reached 196.97, highest since it was 197.45 in January 2008, but on the decline in the Great Recession.

Goldman said now that values of recovered, the market is adjusting to a new normal.

“We’re starting to see shifts in different consumption habits of homebuyer,” he said. “We’re seeing a lower desire to jump into the housing market, we’re seeing slower household formation, people are living at home longer, people are pooling resources instead of running out and jumping into that house. People are much more careful about their home-buying decision.”

David Blitzer, chairman of the index committee at S&P Dow Jones, also said despite price gains in much of the country, the market is slowing. That’s exemplified by fewer sales, housing starts, and the fact that home prices haven’t made it back to their 2005 levels. Blitzer also notes that mortgage rates have remained steady since they jumped last May, hitting affordability amid concerns over consumer confidence and tighter qualification standards.

“Five years into the recovery from the recession, the economy will need to look to gains in consumer spending and business investment more than housing,” Blitzer said in a statement. “Long overdue activity in residential construction would be welcome, but is certainly not assured.”

The average rate for 30-year-fixed mortgage in February was 4.3 percent, up from 3.53 percent in February 2013, Freddie Mac reports.

DataQuick, another real estate tracker, reported in February that San Diego County’s median home sale price was $410,000. It rose to $427,000 in March.

Las Vegas had the highest year-over-year gain on the index, at 23.1 percent, while San Francisco was second with 22.7 percent appreciation. Both were about flat from January to February. In Cleveland, where prices declined 1.6 percent from January to February, annual appreciation was 3 percent, slowest on the 20-city index. 

 

Second-Home Mortgages on the Rise; Buyers Take Advantage of Prices

Author: Krista Franks Brock April 9, 2014 0 

Second-Home Mortgages on the Rise; Buyers Take Advantage of Prices
The second-home mortgage market makes up only a small percentage of total mortgages, but the share of second mortgages has been on the rise since 2009, according to a recent report from Fannie Mae.

Since 1998, second-home mortgages have averaged about 4.76 percent of the total purchase market, but the share is rising, according to Fannie Mae.

While the purchase market increased four-fold from 1998 through the bubble years, the second-home mortgage market multiplied by 15 over the same years.

The second-home mortgage market did decline significantly during the housing downturn, but today, it’s alive and well.

In fact, while some buyers may be put off by price volatility in some states, second-home buyers are ready to take advantage of bargain prices.

Florida, California, and Arizona—all hard-hit by the housing crisis—have made up 34 percent of second-home mortgages since 1998, according to Fannie Mae. While prices declined at least 40 percent in each of these states during the downturn, second-home buyers are not deterred.

The second-home buyer weathered the financial crisis and ongoing recovery differently than the average homebuyer. For starters, a typical second-home buyer is older and more affluent than the average primary-home buyer.

Second-home buyers are also more likely to pay in cash, and when they do take out a mortgage loan, they offer larger down payments. Sixty percent of primary-home buyers’ loans have loan-to-value ratios greater than 80 percent, while just 30 percent of second-home buyers fall into this category.

Additionally, while the housing market has been slowly recovering, financial assets have shown stronger growth, helping more affluent Americans strengthen their economic status even further.

Through 2060, Fannie Mae expects the population of adults ages 45 through 64 to grow at a slower pace than that of the overall adult population in the United States. However, “assuming that Americans continue to follow similar investment patterns as they age and that aspirations of second home ownership do not wane, second homes should still occupy a significant place in the residential real estate market,” according to Fannie Mae.

The GSEs are currently major players in the second home mortgage market, originating about 60 percent of second home mortgages in 2013. The GSEs stepped up their share of this segment of the market during the crisis years when private label securities stepped back, but the GSEs have been shedding market share over the past few years.

Has the Housing Market Reached Bubble Status Again?

Author: Tory Barringer March 31, 2014 0
 
Has the Housing Market Reached Bubble Status Again?

 

With year-over-year price increases continuing on a double-digit course despite recent slowdowns, the ever-present question has once again come to the fore for market commentators and analysts: Has the housing market reached bubble status once again?

The answer—at least, according to Trulia chief economist Jed Kolko—is both yes and no.

In the company’s latest quarterly Bubble Watch report, Kolko estimates national home prices are still around 5 percent undervalued when examining long-term fundamentals like historical prices, incomes, and rents. While ongoing improvements in prices have brought the market close to a tipping point, he notes that it’s far cry from the 39 percent overvaluation in the first quarter of 2006.

“Even though recent double-digit price gains look unsustainable, current national price levels are not cause for alarm,” Kolko said in a blog post. “Sharp price gains, like we’ve had in 2012 and 2013, are not the sign of a bubble unless price levels look high relative to fundamentals.”

Furthermore, “the slowdown in price gains make[s] it less likely that we’re heading for another bubble,” he added.

While the national market is still undervalued, conditions vary widely at the local level. According to Trulia, out of the 100 largest metro markets, home prices are overvalued in 19, including eight of the 11 largest California metros. The greatest danger is along the state’s southern coast, in markets like Orange County, Los Angeles, and Riverside-San Bernardino—which make up three of the five most overvalued markets in the country. (The two remaining slots go to Honolulu and Austin.)

While the number of overvalued housing markets is on the rise, Kolko again says historical perspective is needed: “In 2014 Q1, prices were overvalued in 19 of the 100 largest metros, which is the highest number since 2009 Q4; furthermore, prices were overvalued by more than 10 percent in 4 large metros, which is the highest number since 2008 Q4.

However, at the height of the bubble, all 100 were overvalued, and 91 were overvalued by more than 10 percent.”

Banks Complete Consumer Relief Obligations

Author: Colin Robins March 18, 2014 0
 
Banks Complete Consumer Relief Obligations

Joseph A. Smith, Jr., monitor of the National Mortgage Settlement, filed final crediting reports with the U.S. District Court for the District of Columbia on Bank of America, Chase, Citibank, and Wells Fargo.

The reports confirmed that the banks have satisfied their consumer relief and refinancing obligations under the settlement, nearly a full year ahead of schedule.

In a press release, Smith commented, “My reports mark the end of the consumer relief portion of the Settlement. Because of the way this landmark agreement was designed, an unprecedented amount of relief has been provided to consumers quickly and efficiently.”

He continued, “Furthermore, I believe the rigorous testing process should justify public confidence that the banks have fulfilled their relief commitments and that the Settlement has played a part in helping keep struggling borrowers in their homes.”

Remunerations were called for after the banks engaged in widespread signing of foreclosure-related documents outside the presence of a notary public, and without confirmation whether the facts they contained were correct—both illegal actions.

The practice earned the futuristic-sounding sobriquet “robo-signing,” and necessitated 49 state attorneys general and the federal government to correct actions against wronged homeowners, eventually settling with the banks for an initial estimated figure of $25 billion.

Oklahoma was the lone holdout.

Smith noted that among the banks, 37 percent of total credit relief was in the form of first lien principal forgiveness, while second lien principal forgiveness made up 15 percent. Refinancing made up 17 percent of total credited relief, and other relief (including short sales and deeds in lieu of foreclosure) accounted for 31 percent of relief.

Shaun Donovan, secretary of Housing and Urban Development (HUD), commented on a conference call with the media on Tuesday that over 600,000 consumers received on average more than $79,000 in relief.

7 out of every 10 dollars of credit for consumer relief, such as refinancings and principal reductions, came in a form that kept borrowers in their homes, Donovan said on the call.

Donovan added, “This settlement delivered on what we promised.”

The tone of the call between Donovan and Iowa attorney general Tom Miller was mostly laudatory towards the banks, praising them for quick action as well as payments that exceeded initial estimates.

Miller noted that $20 billion in credits and over $50 billion in total homeowner benefits were “well in excess of what we predicted or expected.”

$5.1 billion dollars was required for first lien principal reductions in the initial settlement, but the final figure from bank’s totaled almost $7.6 billion—nearly 50 percent more than what was required.

Miller fired back at detractors of the settlement who cautioned that principal reductions would create a “moral hazard,” encouraging borrowers to default on their loans to avoid payment.

“Many people in the industry … were saying that if there was any principal reduction there would be all this moral hazard, other people would stop paying—that the whole market would be seriously harmed. Well, we’ve had substantial principal reduction, 7.6 billion dollars’ worth, and none of this has happened. None of the problems, none of the concerns, none of the catastrophes that were predicted happened, as we predicted,” Miller said.

He noted that principal reductions were “a tool in the toolkit for dealing with homeowners in default.”

Miller continued, “We knew that there was no single solution, no magic bullet, to turn around the housing market. We knew there had to be pieces, and we thought that this would be one of the pieces, and clearly it has been. This is one of the reason’s the housing market now has turned in the right direction.”

San Diego County Water Authority Turf Replacement Program

San Diego County Water Authority

Turf Replacement Program

 

Now accepting applications for incentives!

Welcome to the San Diego County Water Authority’s WaterSmart Turf Replacement Program. We created this website to help our valued customers replace water-thirsty lawns with beautiful WaterSmart landscapes that are in harmony with our region.

Using water efficiently is a way of life in San Diego County and an important responsibility that comes with living in the beautiful Mediterranean climate that we enjoy. Working together, we can help ensure a reliable water supply while keeping the region prosperous and naturally beautiful for generations to come.

WaterSmart Landscapes provide a number of important benefits.
They include:

Saving Water

WaterSmart landscapes can use about 70% less water than traditional landscaping.

Beautifying Landscapes

WaterSmart landscapes can transform regular yards into neighborhood showpieces.

Reducing Maintenance

State-of-the-art irrigation systems and plants appropriate for the local climate can trim the amount of time spent on yard maintenance.

Minimizing Runoff

WaterSmart landscapes reduce the amount of polluted water that flows into creeks and ultimately ends up in the ocean.

Conserving Energy

WaterSmart landscapes demand less water be treated and transported across the state, saving huge amounts of energy.

 

Additional Funding:

Visit SoCal Water$mart to find out if you qualify for additional funding.

Acknowledgements

This program is made possible by financial support from:

  • The Bureau of Reclamation through a Water Conservation Field Services Grant
  • The California Department of Water Resources’ Integrated Regional Water Management Program financed under the California Water Security, Clean Drinking Water, Coastal and Beach Protection Fund of 2002

The Water Authority is particularly grateful to the Long Beach Water Department for special assistance developing content and other material for the website.

Here is the link to find out more information: http://turfreplacement.watersmartsd.org/ 

Auction.com and NAHREP Partner to Advance Homeownership

Author: Colin Robins February 19, 2014 0
 
Auction.com and NAHREP Partner to Advance Homeownership

Auction.com and the National Association of Hispanic Real Estate Professionals (NAHREP) are joining forces to advance sustainable Hispanic homeownership.

Hispanic homebuyers are the largest segment of new homebuyers nationwide.

“As a national leader in the sale of homes in all stages of the foreclosure process, Auction.com has an extensive portfolio of properties that greatly expands buyers’ purchasing power. We want agents and buyers in Hispanic communities to be aware of these opportunities and have a level of comfort with the auction process,” said Auction.com CEO and co-founder, Jeff Frieden.

The partnership will support educational campaigns that target residential brokers and buyers. Additionally, NAHREP will offer advice on accessing opportunities available through Auction.com, and serve as a referral service that connects buyers and agents to homes available on Auction.com.

“Access to affordable housing stock is a primary barrier to Hispanic homeownership and the presence of large institutional investors in key markets has made the issue more challenging. As Auction.com continues to reinvent the way real estate is transacted, it’s key that Hispanic agents and buyers understand the process and know how to participate,” said NAHREP CEO, Gary Acosta. “This partnership will help NAHREP support potential Hispanic homebuyers by educating them on the thousands of ownership opportunities exclusively available through Auction.com.”

The partnership agreement between Auction.com and NAHREP also includes extensive joint marketing plans.

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