- Mortgage Rate Tipping Point Depends on Other Factors
- Mortgage Rates Still Climbing
- Home Prices Close 2017 On a High Note
- Moody’s Is Wary of Appraisal Alternatives
- Outlook for Housing Finance Reform in 2018
- MBA Attacks Report on Mortgage Discrimination
- Where Millennial, Gen X, Boomer Buyers Are Buying
- More Buyers Make Sight-Unseen Offers
- Rising Interest Rates Could Impact Housing
- Construction Spending Flat In January
- Minority Homeownership Still Lags
- House Hunters Say Search Takes Three Months or More
- Builder CEO Is Optimistic Despite Headwinds
- Lenders Are Loosening Borrower Requirements — A Little
- Philadelphia Seeks to Limit Reverse Mortgage Foreclosures
- Celebs Show Off Homes in Magazines — Then Split?
Mortgage Rate Tipping Point Depends on Other Factors
Mortgage interest rates continue their gradual uptick. But what is the cutoff point, the interest rate at which buyers stop buying? Five percent? Six percent?
Carrington Mortgage Holdings Executive Vice President Rick Sharga told Fox Business the answer isn’t that simple.
Sharga points out that the average home buyer will pay about 30-dollars a month more, per 100-thousand dollars financed, every time the rates go up by half a point.
Mortgage Rates Still Climbing
While still historically low, mortgage interest rates continue their gradual upward climb, and recently hit a four-year high.
Freddie Mac chief economist Len Kiefer says, “Mortgage rates have followed U.S. Treasury’s higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve.” He says if increases in the 10-year Treasury stick, quote, “we will likely see mortgage rates continue to trend higher.”
Home Prices Close 2017 On a High Note
Home prices surged in December, to finish the year up 6-point-3 percent from 2016, according to the latest S&P CoreLogic Case-Shiller National Home Price Index.
But there are also indications that price gains could begin to moderate in 2018
David Blitzer, managing director at S&P Dow Jones Indices, says if the housing recovery is slowing — and he points out it’s too early to tell that — quote, “some moderation in price gains could be seen later this year.”
Moody’s Is Wary of Appraisal Alternatives
Is technology better at appraising homes than the traditional residential property appraisers?
A new report from Moody’s Investors Service cautions that the growing use of technological alternatives to traditional appraisals carries some risk.
The housing industry has been expanding the use of alternative methods, in light of a shrinking pool of professional appraisers. Most appraisers are now in their late 50s, and there aren’t a lot of trainees joining the profession.
The Moody’s report warns that appraisal alternatives — such as hybrid appraisals, broker price opinions, and automated valuation models — could weaken the credit quality of new residential mortgage backed securities.
Outlook for Housing Finance Reform in 2018
Will 2018 be the year Congress finally passes some kind of housing finance reform?
Fannie Mae and Freddie Mac, the government-sponsored enterprises — or GSEs — have been under government conservatorship since the housing crisis, and Congress has been under pressure to resolve their status.
Stuart Pratt is Global Head of Public Policy and Industry Relations with CoreLogic — he’s fairly optimistic, despite what he sees as “hyper-partisanship” on Capitol Hill…
Pratt says indications are that GSE reform could get done by mid-year.
MBA Attacks Report on Mortgage Discrimination
The Mortgage Bankers Association is firing back at a recent report claiming that some minorities are turned down for a home loan much more frequently than white borrowers are.
The Center for Investigative Reporting says in its report, “Kept Out,” that black and Latino loan applicants are routinely denied by banks for mortgages, at far higher rates than their white counterparts.
But the Mortgage Bankers Association says the report is, quote, “deeply flawed.”
In a statement the MBA says the Center’s analysis fails to consider credit factors such as credit history, debt-to-income ratio, and loan-to-value ratio. And MBA says the report excluded data on residential loans insured by the FHA.
Where Millennial, Gen X, Boomer Buyers Are Buying
There is a generation gap in America, and it has to do with where the generations are choosing to buy homes.
Millennials, Gen Xers, and Baby Boomers have different and distinct goals, desires, and preferences, according to research by REALTOR®.com.
In broad terms, they say, Millennials are flocking to tech centers and cultural hot spots. Gen Xers prefer places where they can score a big home without going broke. And Baby Boomers are filling the warmer, lower-cost Sun Belt metros.
More Buyers Make Sight-Unseen Offers
It’s a sign of how competitive many markets are — a new survey by Redfin finds that 35-percent of those who bought a home in November or December made an offer on the home without first seeing it in person.
That’s twice as many buyers who bought sight-unseen in June 2016.
Los Angeles had the biggest share of such buyers — Redfin says 57-percent of buyers in L.A. reported making an offer on a home they hadn’t seen in person:
Millennials are the most likely to make an offer on a home without visiting it first, Redfin says.
Rising Interest Rates Could Impact Housing
How will rising interest rates impact home affordability?
Fannie Mae chief economist Doug Duncan tells CNBC there likely will be some impact.
Duncan also notes that the new Fed chairman, Jay Powell, seems to be achieving a smooth transition from Janet Yellen’s tenure as chair.
While the Fed’s actions on interest rates don’t directly move mortgage rates, they often influence the direction mortgage rates take.
Construction Spending Flat In January
Overall construction spending in January was unchanged from December — but spending on the construction of single-family homes rose 6-tenths of one percent.
The Commerce Department reports that construction spending for all of 2017 rose, but at the slowest pace in six years. Home builders continue to face steep challenges in finding enough skilled workers, and enough land to build homes on.
Minority Homeownership Still Lags
The U.S. homeownership rate rose to 64.2% in the fourth quarter of 2017.
But minorities are struggling to keep up with white homeowners, according to a report from the Urban Institute.
Researchers found that in all 100 cities with the largest black populations, there are stark disparities between the homeownership rates of black families and white families.
Alanna McCargo, vice president of the Housing Finance Policy Center at the Urban Institute, says, quote, “Lenders and REALTORS® need to be paying attention to this. There’s a lot of opportunity to close a huge gap. There’s no reason the gaps should be this wide.”
House Hunters Say Search Takes Three Months or More
If you’re just starting your search for a new home, you’ll want to be patient.
A new survey by the National Association of Home Builders reveals that six out of ten people who intend to buy a home in the next 12 months say they have been searching for three months or longer.
Why is it taking so long?
Forty-two percent of those surveyed say they can’t find a home at a price they can afford. Thirty-six percent day they can’t find a home with the features they want, and 34-percent can’t find a home in the neighborhood they prefer.
Builder CEO Is Optimistic Despite Headwinds
There are still many challenges facing the nation’s home builders, including a shortage of skilled labor and available land.
But one industry leader remains optimistic. Sheryl Palmer is Chairman and CEO of national homebuilder Taylor Morrison. She tells Bloomberg News that it’s going to take some time for the homebuilding industry to meet the pent-up demand…
Palmer says there are more tailwinds right now, than there are headwinds, facing the home building industry.
Lenders Are Loosening Borrower Requirements — A Little
It’s becoming a little easier for prospective home buyers to get a mortgage.
The Washington Post reports that in the past year or two, lenders have tweaked their guidelines, making it easier for some people to qualify for a loan. Their moves have been prompted, the Post says, by pushback against overly-tight credit after the housing crisis, a smaller number of first-time buyers, and worry about affordability.
As lending practices loosen just a bit, we’re seeing wider availability of low-down-payment loans, an easing of the debt-to-income ratio requirements, and more consumer-friendly rules on how student loan payments are calculated.
Philadelphia Seeks to Limit Reverse Mortgage Foreclosures
The city of Philadelphia is considering legislation to prevent the spread of reverse mortgage foreclosures.
Supporters say the proposal would close loopholes in the current law.
Reverse mortgage borrowers are required to stay current on their property taxes. But some lenders in Philadelphia have been paying off past due tax balances of homeowners, even if the owners are in a payment plan, then foreclosing.
The proposed change in the law would make it clear that a reverse mortgage borrower who is in a payment agreement for real estate taxes cannot be considered “delinquent.”
Celebs Show Off Homes in Magazines — Then Split?
It’s fun to check out the celebrity homes featured in design magazines like Architectural Digest. But are those glossy spreads actually a selling tactic used by celebrity couples about to break up?
Slate contributor Ruth Graham claims she wasn’t surprised by the recent news of Jennifer Aniston’s separation from Justin Theroux — their Bel Air home was featured in the February issue of Architectural Digest.
Graham writes, quote, “Here’s my hunch: Celebrities show off their homes in design magazines when they’re thinking about selling them, because a splashy feature boosts a property’s profile.”