Tuesday, May 31, 2011
5/31/11 - Pending home sales drop after two gains
WASHINGTON – May 27, 2011 – Pending home sales fell in April following increases in February and March, with unusual weather and economic softness adding to ongoing problems that are hobbling a recovery, according to the National Association of Realtors®.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, dropped 11.6 percent to 81.9 in April from a downwardly revised 92.6 in March. The index is 26.5 percent below a cyclical peak of 111.5 in April 2010 when buyers were rushing to beat the contract deadline for the homebuyer tax credit.
The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, says the dip in contracts may be due to temporary factors. “The pullback in contract signings is disappointing and implies a slower than expected market recovery in upcoming months,” he says. “The economy hit a soft patch in April from sharply rising oil prices, widespread severe weather with the heaviest precipitation in 20 years, and a sudden rise in unemployment claims.”
Yun notes the growth in retail sales slowed measurably in April, while sales at furniture and home furnishing stores declined sharply. “Nonetheless, the magnitude of the fall in pending home sales is larger than can be implied by broad economic factors, so we need to see if it’s just a one-month aberration.
“No doubt the continuing excessively tight mortgage underwriting process is making the housing market recovery unnecessarily slow,” he says. “Lenders and bank regulators need to be mindful of the historically low default rates among mortgage borrowers of the past two years. A robust economic and housing market recovery cannot occur as long as banks continue to hold onto huge cash reserves. We simply have to get back to sound, common-sense lending standards to provide mortgages to creditworthy borrowers who are buying homes well within their means. Bank balance sheets show rising cash reserves and declining loan balances – it’s time to loosen the purse strings.”
The PHSI in the Northeast rose 1.7 percent to 64.5 in April but is 33.4 percent below a year ago. In the Midwest the index fell 10.4 percent to 74.1 and is 30.2 percent below April 2010. Pending home sales in the South dropped 17.2 percent to an index of 91.3 in April and are 27.0 percent below a year ago. In the West the index declined 8.9 percent to 89.1 and is 16.9 percent below April 2010.
“Even with very favorable affordability conditions, job growth and a pent-up demand from abnormally low household formation during the past three years, the recovery will continue to be uneven and sluggish given the ongoing credit constraints,” Yun says.
© 2011 Florida Realtors®
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, dropped 11.6 percent to 81.9 in April from a downwardly revised 92.6 in March. The index is 26.5 percent below a cyclical peak of 111.5 in April 2010 when buyers were rushing to beat the contract deadline for the homebuyer tax credit.
The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, says the dip in contracts may be due to temporary factors. “The pullback in contract signings is disappointing and implies a slower than expected market recovery in upcoming months,” he says. “The economy hit a soft patch in April from sharply rising oil prices, widespread severe weather with the heaviest precipitation in 20 years, and a sudden rise in unemployment claims.”
Yun notes the growth in retail sales slowed measurably in April, while sales at furniture and home furnishing stores declined sharply. “Nonetheless, the magnitude of the fall in pending home sales is larger than can be implied by broad economic factors, so we need to see if it’s just a one-month aberration.
“No doubt the continuing excessively tight mortgage underwriting process is making the housing market recovery unnecessarily slow,” he says. “Lenders and bank regulators need to be mindful of the historically low default rates among mortgage borrowers of the past two years. A robust economic and housing market recovery cannot occur as long as banks continue to hold onto huge cash reserves. We simply have to get back to sound, common-sense lending standards to provide mortgages to creditworthy borrowers who are buying homes well within their means. Bank balance sheets show rising cash reserves and declining loan balances – it’s time to loosen the purse strings.”
The PHSI in the Northeast rose 1.7 percent to 64.5 in April but is 33.4 percent below a year ago. In the Midwest the index fell 10.4 percent to 74.1 and is 30.2 percent below April 2010. Pending home sales in the South dropped 17.2 percent to an index of 91.3 in April and are 27.0 percent below a year ago. In the West the index declined 8.9 percent to 89.1 and is 16.9 percent below April 2010.
“Even with very favorable affordability conditions, job growth and a pent-up demand from abnormally low household formation during the past three years, the recovery will continue to be uneven and sluggish given the ongoing credit constraints,” Yun says.
© 2011 Florida Realtors®
Friday, May 27, 2011
5/27/11 - Federal program offers up to $18,000 in mortgage help
TALLAHASSEE, Fla. – May 26, 2011 – More than 10,000 unemployed and underemployed Florida homeowners have applied for federal money to help pay their mortgages and keep the roof over their heads since a new program kicked off April 18.
Not all 10,000 will qualify. But even if they all did, the federal Hardest Hit Fund program could help another 30,000 struggling homeowners in Florida alone, said Cecka Rose Green, communications director for the Florida Housing Finance Corp.
Eligible applicants could receive up to $18,000 from funds available through two Florida Hardest Hit programs. Providing that full amount to 40,000 people accounts for $720 million of Florida’s nearly $1.1 billion allocation. More homeowners than that will receive assistance from the fund through the program’s five-year lifespan, Green said.
The Unemployment Mortgage Assistance Program could make the bulk of participants’ mortgage payments directly to their loan servicers – a total of $12,000 worth of house payments or six months’ worth, whichever comes first. The program ends then, or when the participant finds a job that pays well enough for them to make their house payments independently, Green said.
Although the program directly pays the participant’s mortgage holder, that doesn’t mean that person is off the financial hook, Green said. A participant will still have to make a minimum monthly contribution payment toward their mortgage of $70, she said.
“We want a homeowner in this program to get accustomed to making a mortgage payment again,” she said. Another part of Florida Hardest Hit, the Mortgage Loan Reinstatement Payment program, will pay up to $6,000 of the past-due amount on a program participant’s mortgage.
Green said in a pilot program in Lee County last year, only about 25 percent of the applicants were eligible. The high rate of rejections is due to several factors, said Carrie Davis, president of Wealth Watchers Inc., a Jacksonville nonprofit and a program administrator. Florida Hardest Hit only considers unemployment or underemployment caused by the recession as eligible hardships – not divorce, death, injury, disaster or illness, she said. But most rejections come from the fact that homeowners are finding out about the program too late: It’s not available to those behind in their mortgage payments by more than six months.
“It’s amazing to me how many unemployed homeowners are unaware of our program,” Davis said.
Homeowners can apply one of two ways. They can go to the program’s website and fill out the online forms, after which a program administrator will contact them to submit paperwork to determined their eligibility. Or they can apply through a program agency such as Wealth Watchers.
The difference is that those who apply in person are guaranteed administration by the local agency if they are eligible. If they apply through the website, an agency is assigned from anywhere in the state, she said.
Homeowners should be careful they have the correct information when they apply, Green said, because if a person is found ineligible, there is no second chance.
Mortgage holders also must agree to accept Hardest Hit Fund money for loan-holder payments; Green said 77 have. On Tuesday, GMAC Mortgage, a subsidiary of Ally Financial Inc., announced it has agreed to participate.
The total amount allocated for all states in the program, which President Barack Obama introduced last year, is $7.6 billion.
Copyright © 2011 The Florida Times-Union, Jacksonville, Kevin Turner. Distributed by McClatchy-Tribune Information Services.
Not all 10,000 will qualify. But even if they all did, the federal Hardest Hit Fund program could help another 30,000 struggling homeowners in Florida alone, said Cecka Rose Green, communications director for the Florida Housing Finance Corp.
Eligible applicants could receive up to $18,000 from funds available through two Florida Hardest Hit programs. Providing that full amount to 40,000 people accounts for $720 million of Florida’s nearly $1.1 billion allocation. More homeowners than that will receive assistance from the fund through the program’s five-year lifespan, Green said.
The Unemployment Mortgage Assistance Program could make the bulk of participants’ mortgage payments directly to their loan servicers – a total of $12,000 worth of house payments or six months’ worth, whichever comes first. The program ends then, or when the participant finds a job that pays well enough for them to make their house payments independently, Green said.
Although the program directly pays the participant’s mortgage holder, that doesn’t mean that person is off the financial hook, Green said. A participant will still have to make a minimum monthly contribution payment toward their mortgage of $70, she said.
“We want a homeowner in this program to get accustomed to making a mortgage payment again,” she said. Another part of Florida Hardest Hit, the Mortgage Loan Reinstatement Payment program, will pay up to $6,000 of the past-due amount on a program participant’s mortgage.
Green said in a pilot program in Lee County last year, only about 25 percent of the applicants were eligible. The high rate of rejections is due to several factors, said Carrie Davis, president of Wealth Watchers Inc., a Jacksonville nonprofit and a program administrator. Florida Hardest Hit only considers unemployment or underemployment caused by the recession as eligible hardships – not divorce, death, injury, disaster or illness, she said. But most rejections come from the fact that homeowners are finding out about the program too late: It’s not available to those behind in their mortgage payments by more than six months.
“It’s amazing to me how many unemployed homeowners are unaware of our program,” Davis said.
Homeowners can apply one of two ways. They can go to the program’s website and fill out the online forms, after which a program administrator will contact them to submit paperwork to determined their eligibility. Or they can apply through a program agency such as Wealth Watchers.
The difference is that those who apply in person are guaranteed administration by the local agency if they are eligible. If they apply through the website, an agency is assigned from anywhere in the state, she said.
Homeowners should be careful they have the correct information when they apply, Green said, because if a person is found ineligible, there is no second chance.
Mortgage holders also must agree to accept Hardest Hit Fund money for loan-holder payments; Green said 77 have. On Tuesday, GMAC Mortgage, a subsidiary of Ally Financial Inc., announced it has agreed to participate.
The total amount allocated for all states in the program, which President Barack Obama introduced last year, is $7.6 billion.
Copyright © 2011 The Florida Times-Union, Jacksonville, Kevin Turner. Distributed by McClatchy-Tribune Information Services.
Thursday, May 26, 2011
5/26/11 - GOP proposing increase in FHA downpayments
WASHINGTON – May 25, 2011 – A Republican-led proposal circulated Monday would boost the downpayment requirement for mortgages backed by the Federal Housing Administration, a move that some industry experts said would shut potential homebuyers out of the market.
Borrowers who take out FHA-insured mortgages are permitted to put down as little as 3.5 percent, making those loans an especially attractive choice for first-time homebuyers. But as defaults rose during the housing market’s worst days, FHA’s cash reserves dwindled, creating concerns that taxpayers may have to come to the agency’s rescue.
The Republican proposal would require most FHA borrowers to put down at least 5 percent. Those who support the idea say that forcing borrowers to have more equity in their homes would better protect homeowners against default and thus improve the agency’s finances. The issue will be discussed Wednesday at a House Financial Services subcommittee hearing led by Rep. Judy Biggert (R-Ill.).
The proposal has not been formally introduced in legislative form. And it’s unlikely to gain traction without bipartisan support, said Jaret Seiberg, an analyst at MF Global Inc. But if enacted, its immediate impact on the housing market would be negative, he said. Gathering the upfront cash is often the biggest hurdle for those buying their first homes.
Demanding more money down “would make it even harder for first-time buyers to enter the housing market regardless of their incomes or earning potential,” Seiberg wrote in a note to clients Monday.
Mark A. Calabria, director of financial regulation studies at the Cato Institute, said larger downpayments would no doubt have some drag on the housing market. “But it’s a modest drag because it’s a fairly small change,” said Calabria, who is scheduled to testify at Wednesday’s hearing. “It’s a smart and reasonable thing to do.”
A similar Republican proposal stalled in the House last year after the Obama administration vehemently opposed it, warning that such an increase would undermine the already fragile housing market by shrinking the agency’s loan volume.
At a hearing last year, FHA Commissioner David H. Stevens told House lawmakers that raising the minimum downpayment to 5 percent would lower the agency’s loan volume by 40 percent in the next fiscal year and shut out 300,000 first-time homebuyers.
Since then, the FHA has raised its downpayment to 10 percent for borrowers with the poorest credit. In a report to Congress, the administration said it would consider raising FHA’s downpayment requirement as part of a broader effort to curb the government’s role in housing finance. Separately, the administration teamed up with banking regulators to propose a rule that would enable only those who put down 20 percent to get the lowest interest rates, though that rule does not apply to FHA borrowers.
The administration declined to comment Monday on the most recent Republican proposal. But at least one banking industry consultant, Brian Chappelle, plans to tell lawmakers Wednesday that the proposal is unnecessary, especially now that FHA has raised the fees it charges borrowers by 60 percent since 2008 and dramatically improved the credit quality of its borrowers in recent years.
Copyright © 2011 washingtonpost.com, Dina ElBoghdady
Borrowers who take out FHA-insured mortgages are permitted to put down as little as 3.5 percent, making those loans an especially attractive choice for first-time homebuyers. But as defaults rose during the housing market’s worst days, FHA’s cash reserves dwindled, creating concerns that taxpayers may have to come to the agency’s rescue.
The Republican proposal would require most FHA borrowers to put down at least 5 percent. Those who support the idea say that forcing borrowers to have more equity in their homes would better protect homeowners against default and thus improve the agency’s finances. The issue will be discussed Wednesday at a House Financial Services subcommittee hearing led by Rep. Judy Biggert (R-Ill.).
The proposal has not been formally introduced in legislative form. And it’s unlikely to gain traction without bipartisan support, said Jaret Seiberg, an analyst at MF Global Inc. But if enacted, its immediate impact on the housing market would be negative, he said. Gathering the upfront cash is often the biggest hurdle for those buying their first homes.
Demanding more money down “would make it even harder for first-time buyers to enter the housing market regardless of their incomes or earning potential,” Seiberg wrote in a note to clients Monday.
Mark A. Calabria, director of financial regulation studies at the Cato Institute, said larger downpayments would no doubt have some drag on the housing market. “But it’s a modest drag because it’s a fairly small change,” said Calabria, who is scheduled to testify at Wednesday’s hearing. “It’s a smart and reasonable thing to do.”
A similar Republican proposal stalled in the House last year after the Obama administration vehemently opposed it, warning that such an increase would undermine the already fragile housing market by shrinking the agency’s loan volume.
At a hearing last year, FHA Commissioner David H. Stevens told House lawmakers that raising the minimum downpayment to 5 percent would lower the agency’s loan volume by 40 percent in the next fiscal year and shut out 300,000 first-time homebuyers.
Since then, the FHA has raised its downpayment to 10 percent for borrowers with the poorest credit. In a report to Congress, the administration said it would consider raising FHA’s downpayment requirement as part of a broader effort to curb the government’s role in housing finance. Separately, the administration teamed up with banking regulators to propose a rule that would enable only those who put down 20 percent to get the lowest interest rates, though that rule does not apply to FHA borrowers.
The administration declined to comment Monday on the most recent Republican proposal. But at least one banking industry consultant, Brian Chappelle, plans to tell lawmakers Wednesday that the proposal is unnecessary, especially now that FHA has raised the fees it charges borrowers by 60 percent since 2008 and dramatically improved the credit quality of its borrowers in recent years.
Copyright © 2011 washingtonpost.com, Dina ElBoghdady
Wednesday, May 25, 2011
5/24/11 - New-home sales up, but pace remains sluggish.
New-home sales up, but pace remains sluggish
WASHINGTON (AP) – May 24, 2011 – More Americans bought new homes for a second straight month in April, a hopeful sign. Still, sales remain far below the pace that would represent a healthy housing market.
New-home sales rose 7.3 percent last month to a seasonally adjusted annual rate of 323,000 homes, the Commerce Department said Tuesday. A normal housing market would mean a pace of about 700,000 new-home sales a month.
People have little incentive to buy new homes, in part because they’re comparatively expensive. The median price of a new home rose more than 2 percent from March to $217,900. New-home prices are more than 30 percent higher the median price of re-sales – twice the normal markup.
Last year, Americans bought the fewest number of homes on records going back 47 years.
Fewer new homes mean fewer jobs. Each new home creates an average of three jobs for a year and generates $90,000 in taxes, according to the National Association of Home Builders.
Many builders have been waiting for the glut of foreclosures and other distressed properties to be cleared before stepping up construction. But with a record 1.2 million foreclosures forecast this year, a recovery isn’t expected for years.
Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer.
New-home sales rose 7.3 percent last month to a seasonally adjusted annual rate of 323,000 homes, the Commerce Department said Tuesday. A normal housing market would mean a pace of about 700,000 new-home sales a month.
People have little incentive to buy new homes, in part because they’re comparatively expensive. The median price of a new home rose more than 2 percent from March to $217,900. New-home prices are more than 30 percent higher the median price of re-sales – twice the normal markup.
Last year, Americans bought the fewest number of homes on records going back 47 years.
Fewer new homes mean fewer jobs. Each new home creates an average of three jobs for a year and generates $90,000 in taxes, according to the National Association of Home Builders.
Many builders have been waiting for the glut of foreclosures and other distressed properties to be cleared before stepping up construction. But with a record 1.2 million foreclosures forecast this year, a recovery isn’t expected for years.
Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer.Tuesday, May 24, 2011
5/24/11 Lenders now own 872,000 homes
WASHINGTON – May 24, 2011 – U.S. banks and money lenders now own 872,000 homes, a number that could more than double in the coming years, real estate research firm RealtyTrac said.
The current number of properties owned by banks and lenders is nearly double what they owned in 2007, before the housing market began to collapse, The New York Times reported Monday.
Lenders frequently sell homes at a substantial discount and economists expect it will take three years for lenders to sell the properties they have taken over.
That means for the next three years at least, the sale of so-called distressed homes will continue to slow a recovery in the housing market.
“It remains a heavy weight on the banking system. Housing prices are falling, and they are going to fall some more,” said Mark Zandi, chief economist of Moody’s Analytics.
Moody’s has predicted home values could drop an average of 5 percent by the end of 2011 before making a slight comeback in 2012.
A separate real estate research firm, Trepp, said lenders could lose $40 billion by selling homes at discounted prices.
Lenders are also aware that while they sell homes at discount prices, “We are contributing to the downward spiral in market values,” said Eric Will, who manages distressed home sales at the Federal Home Loan Mortgage Corp.
“We want to make sure we are helping stabilize communities,” Will said.
Copyright © 2011 United Press International
The current number of properties owned by banks and lenders is nearly double what they owned in 2007, before the housing market began to collapse, The New York Times reported Monday.
Lenders frequently sell homes at a substantial discount and economists expect it will take three years for lenders to sell the properties they have taken over.
That means for the next three years at least, the sale of so-called distressed homes will continue to slow a recovery in the housing market.
“It remains a heavy weight on the banking system. Housing prices are falling, and they are going to fall some more,” said Mark Zandi, chief economist of Moody’s Analytics.
Moody’s has predicted home values could drop an average of 5 percent by the end of 2011 before making a slight comeback in 2012.
A separate real estate research firm, Trepp, said lenders could lose $40 billion by selling homes at discounted prices.
Lenders are also aware that while they sell homes at discount prices, “We are contributing to the downward spiral in market values,” said Eric Will, who manages distressed home sales at the Federal Home Loan Mortgage Corp.
“We want to make sure we are helping stabilize communities,” Will said.
Copyright © 2011 United Press International
Monday, May 23, 2011
Appeals court reverses Countrywide suit dismissal
LOS ANGELES – May 23, 2011 – An appeals court has overturned the dismissal of a class-action lawsuit brought by investors against mortgage giant Countrywide Financial Corp.
The move by a panel of the California 2nd District Court of Appeal reverses the decision by a Superior Court judge in Los Angeles last year. That court threw out the complaint on grounds that a state court had no jurisdiction to hear the case, citing the U.S. Securities Act.
In the ruling issued Wednesday, the appeals court disagreed, concluding such a complaint could be heard in state court.
The decision allows the case to proceed.
The investors claim Countrywide had false or misleading statements in documentation for the mortgage-backed securities that they bought from the lender between 2005 and 2007.
Bank of America acquired Countrywide in July 2008.
The move by a panel of the California 2nd District Court of Appeal reverses the decision by a Superior Court judge in Los Angeles last year. That court threw out the complaint on grounds that a state court had no jurisdiction to hear the case, citing the U.S. Securities Act.
In the ruling issued Wednesday, the appeals court disagreed, concluding such a complaint could be heard in state court.
The decision allows the case to proceed.
The investors claim Countrywide had false or misleading statements in documentation for the mortgage-backed securities that they bought from the lender between 2005 and 2007.
Bank of America acquired Countrywide in July 2008.
5/23/11 - Fixed mortgage rates touch new low for 2011
NEW YORK – May 20, 2011 – Fixed mortgage rates fell this week to the lowest point of the year, offering incentive for homeowners to save money by refinancing their loans.
Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.61 percent. That’s down from 4.63 percent and the lowest level since mid-December.
The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.80 percent from 3.82 percent. That marked the lowest point since late November.
Rates track the yield on the 10-year Treasury note, which fell to the lowest level of the year this week.
Low rates haven’t been enough to jumpstart the weak housing market. Fewer people bought previously occupied homes in April, the National Association of Realtors said Thursday. Sales fell to a seasonally adjusted annual rate of 5.05 million units, far below the 6 million homes a year that economists consider a healthy market.
However, the number of borrowers looking to refinance is now at the highest level since the second week of December, according to the Mortgage Bankers Association. Refinance activity has increased 33 percent over the last five weeks, mirroring the steady decline in rates.
Despite the gains, refinancing is only at half the level it reached in the fall of last year when mortgage rates fell to record lows. The rate on the 30-year home loan hit a four-decade low of 4.17 percent in November. The 15-year mortgage rate reached 3.57 percent that same month, the lowest level on records dating back to 1991.
“We’re not seeing a (refinancing) boom by any means,” said Pava Leyrer, president of Heritage National Mortgage in Michigan.
She said many borrowers refinanced when rates were lower last year. Others don’t have enough equity in their homes because values have fallen too much or their credit isn’t polished enough for them to qualify.
And those who may shave off a percentage point or more from their mortgage rate face higher closing costs this year because of a recent fee increase for appraisals, title insurance and other costs. That could offset any savings from an interest rate reduction.
“If it’s purely a rate decision, the difference needs to be one and a half percentage points,” said Ritch Workman, co-owner of Workman Mortgage in Melbourne, Fla.
Workman has noticed an uptick in applications for purchase mortgages. Would-be buyers are taking advantage of the combination of low rates and declining home prices.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage rose to 3.48 percent from 3.41 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan also increased to 3.15 percent from 3.11 percent, the lowest level for the rate in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.61 percent. That’s down from 4.63 percent and the lowest level since mid-December.
The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.80 percent from 3.82 percent. That marked the lowest point since late November.
Rates track the yield on the 10-year Treasury note, which fell to the lowest level of the year this week.
Low rates haven’t been enough to jumpstart the weak housing market. Fewer people bought previously occupied homes in April, the National Association of Realtors said Thursday. Sales fell to a seasonally adjusted annual rate of 5.05 million units, far below the 6 million homes a year that economists consider a healthy market.
However, the number of borrowers looking to refinance is now at the highest level since the second week of December, according to the Mortgage Bankers Association. Refinance activity has increased 33 percent over the last five weeks, mirroring the steady decline in rates.
Despite the gains, refinancing is only at half the level it reached in the fall of last year when mortgage rates fell to record lows. The rate on the 30-year home loan hit a four-decade low of 4.17 percent in November. The 15-year mortgage rate reached 3.57 percent that same month, the lowest level on records dating back to 1991.
“We’re not seeing a (refinancing) boom by any means,” said Pava Leyrer, president of Heritage National Mortgage in Michigan.
She said many borrowers refinanced when rates were lower last year. Others don’t have enough equity in their homes because values have fallen too much or their credit isn’t polished enough for them to qualify.
And those who may shave off a percentage point or more from their mortgage rate face higher closing costs this year because of a recent fee increase for appraisals, title insurance and other costs. That could offset any savings from an interest rate reduction.
“If it’s purely a rate decision, the difference needs to be one and a half percentage points,” said Ritch Workman, co-owner of Workman Mortgage in Melbourne, Fla.
Workman has noticed an uptick in applications for purchase mortgages. Would-be buyers are taking advantage of the combination of low rates and declining home prices.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage rose to 3.48 percent from 3.41 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan also increased to 3.15 percent from 3.11 percent, the lowest level for the rate in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Friday, May 20, 2011
4/20/11 Tampa Bay homes sales surge to level not seen in five years!
Tampa Bay homes sales surge to level not seen in five years!
By Mark Puente, Times Staff Writer
Bay area may have finally hit bottom, an economist says.
Tampa Bay's existing home sales skyrocketed in March to levels not seen in nearly five years.
Maybe even better news for homeowners is that average sale prices also rose last month in several area counties.
Sales of previously occupied homes in Pasco,
The sales increase and price jumps raise hope that the housing market is healing from the wounds left by a faltering economy and a deluge of
The St. Petersburg Times analyzed figures from the Greater Tampa Association of Realtors and the Pinellas Realtor Organization prior to statewide and national numbers being released today.
No single factor drove sales and prices in March - it was more of a mix of reasons, according to economists and real estate experts.
"It's good news," said Mark Vitner, a senior economist with Wells Fargo. "It's a further indicator that the worst may be over. The bay area economy is modestly improving."
Vitner credited the surge to low prices and interest rates, an improving economy and investors searching for bargains. He stressed the housing market is a long way from fully recovering and that some homeowners may still have a hard time selling at the current prices.
Vitner closely tracks Florida's economy and expected the market to hit bottom this summer. His outlook may change given the recent housing news.
"We're either at or very close to the bottom of the market," he said. "It would be crazy to wait for the last nickel to fall."
The combined March sales in Pinellas, Hillsborough and Pasco counties even eclipsed the sales in June 2010, when an $8,000 federal tax credit created a surge in sales, only to be followed by months of sluggish activity.
The last month with combined sales higher than March was June 2006, when 4,417 homes sold.
Total sales in the three counties are even up more than 14 percent compared to March 2010. The bulk of the increased sales occurred in homes priced less than $200,000.
The average sales price jumped from $149,500 to $165,700 in Pinellas from February to March and $135,376 to $140,360 in Hillsborough and from $106,000 to $132,000 in Pasco.
March is traditionally the start of the spring buying season. But real estate agents said an influx of cheap homes and severe weather in Northern and Midwestern states has helped drive bay area sales.
Northerners have watched Florida prices spiral downward and are escaping the never-ending snow by buying second homes in the Sunshine State.
"People realize that prices aren't going to drop forever," said Nick Fraser, owner of Remax All Star in Madeira Beach. "People are ready to make a move. Consumer confidence is a lot higher."
Another possible reason for more sales is that buyers are over the fear of buying foreclosed homes, said University of Central Florida economist Sean Snaith.
But he cautioned that several months of rising sales and prices would better measure the housing market. But a dual increase, in the same month is good, he said.
"It sure beats a month's decrease," Snaith said. "Any increase is welcome. That's very good news."
Another positive sign tucked in the sales figures: The housing inventory is at or near a six-month supply, meaning it would take about six months to sell all the inventory that is currently on the market. The lower the supply the more robust the market. It peaked in Hillsborough at 25 months in January 2008 and at 18 months in Pinellas in March 2007.
In a typical market, many homeowners buy houses and then trade up when they need more space, amenities or want to live in a better neighborhood.
If that practice continues in the current market, the recent sale of so many lower-priced homes will eventually trigger the sales of higher-priced homes, experts said.
The region's lower prices are also drawing attention from bargain-seekers who want either to rent homes out or fix them up and resell as prices start rising again.
Andrew Duncan, leader of the Duncan Duo & Associates at Keller Williams Realty in Tampa, said many buyers are entering into bidding wars on homes priced lower than $200,000.
"It's pretty phenomenal," he said about the sales. "It's moving in the right direction toward a healthy and balanced real estate market."
First-time home buyers, he said, are also fueling higher sales.
"It's cheaper to buy the same house that you're currently renting," he said. "That's a sign that the worst has passed."
Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.
Tampa Bay homes sales last month
4,296 homes sold in Hillsborough, Pasco and Pinellas counties in March, up from 3,258 in February
32% increase in homes sold in the three counties, March over February
14% increase in homes sold in the three counties this March compared to March 2010
$26,000 increase in the average sales prices of homes in Pasco.
Pinellas and Hillsborough counties jumped nearly 32 percent, from 3,258 in February to 4,296 in March.foreclosures.Maybe even better news for homeowners is that average sale prices also rose last month in several area counties.
Sales of previously occupied homes in Pasco,
The sales increase and price jumps raise hope that the housing market is healing from the wounds left by a faltering economy and a deluge of
The St. Petersburg Times analyzed figures from the Greater Tampa Association of Realtors and the Pinellas Realtor Organization prior to statewide and national numbers being released today.
No single factor drove sales and prices in March - it was more of a mix of reasons, according to economists and real estate experts.
"It's good news," said Mark Vitner, a senior economist with Wells Fargo. "It's a further indicator that the worst may be over. The bay area economy is modestly improving."
Vitner credited the surge to low prices and interest rates, an improving economy and investors searching for bargains. He stressed the housing market is a long way from fully recovering and that some homeowners may still have a hard time selling at the current prices.
Vitner closely tracks Florida's economy and expected the market to hit bottom this summer. His outlook may change given the recent housing news.
"We're either at or very close to the bottom of the market," he said. "It would be crazy to wait for the last nickel to fall."
The combined March sales in Pinellas, Hillsborough and Pasco counties even eclipsed the sales in June 2010, when an $8,000 federal tax credit created a surge in sales, only to be followed by months of sluggish activity.
The last month with combined sales higher than March was June 2006, when 4,417 homes sold.
Total sales in the three counties are even up more than 14 percent compared to March 2010. The bulk of the increased sales occurred in homes priced less than $200,000.
The average sales price jumped from $149,500 to $165,700 in Pinellas from February to March and $135,376 to $140,360 in Hillsborough and from $106,000 to $132,000 in Pasco.
March is traditionally the start of the spring buying season. But real estate agents said an influx of cheap homes and severe weather in Northern and Midwestern states has helped drive bay area sales.
Northerners have watched Florida prices spiral downward and are escaping the never-ending snow by buying second homes in the Sunshine State.
"People realize that prices aren't going to drop forever," said Nick Fraser, owner of Remax All Star in Madeira Beach. "People are ready to make a move. Consumer confidence is a lot higher."
Another possible reason for more sales is that buyers are over the fear of buying foreclosed homes, said University of Central Florida economist Sean Snaith.
But he cautioned that several months of rising sales and prices would better measure the housing market. But a dual increase, in the same month is good, he said.
"It sure beats a month's decrease," Snaith said. "Any increase is welcome. That's very good news."
Another positive sign tucked in the sales figures: The housing inventory is at or near a six-month supply, meaning it would take about six months to sell all the inventory that is currently on the market. The lower the supply the more robust the market. It peaked in Hillsborough at 25 months in January 2008 and at 18 months in Pinellas in March 2007.
In a typical market, many homeowners buy houses and then trade up when they need more space, amenities or want to live in a better neighborhood.
If that practice continues in the current market, the recent sale of so many lower-priced homes will eventually trigger the sales of higher-priced homes, experts said.
The region's lower prices are also drawing attention from bargain-seekers who want either to rent homes out or fix them up and resell as prices start rising again.
Andrew Duncan, leader of the Duncan Duo & Associates at Keller Williams Realty in Tampa, said many buyers are entering into bidding wars on homes priced lower than $200,000.
"It's pretty phenomenal," he said about the sales. "It's moving in the right direction toward a healthy and balanced real estate market."
First-time home buyers, he said, are also fueling higher sales.
"It's cheaper to buy the same house that you're currently renting," he said. "That's a sign that the worst has passed."
Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.
Tampa Bay homes sales last month
| County | March sales | Feb. sales | % change |
| Pasco | 681 | 535 | +26.5 |
| Pinellas | 1,432 | 1,081 | +32.5 |
| Hillsborough | 2,183 | 1,642 | +33 |
4,296 homes sold in Hillsborough, Pasco and Pinellas counties in March, up from 3,258 in February
32% increase in homes sold in the three counties, March over February
14% increase in homes sold in the three counties this March compared to March 2010
$26,000 increase in the average sales prices of homes in Pasco.
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