HOMES SALES HIT A FIVE-YEAR HIGH IN HOUSTON

Home sales hit a five-year high as Houston's real estate miracle becomes national news

By Ralph Bivins

09.18.12 | 11:54 am

August was the best month for Houston home sales in five years as low mortgage rates and a strong local economy combined to ignite the real estate market.
The inventory of homes for sale dwindled to its lowest level in 10 years as consumers picked off good deals financed with super-low mortgage rates, according to the Houston Association of Realtors, which has been keeping market statistics for decades.

"Houston is unique and it’s now national news that Houston is doing well.”

The Realtors association reported 6,600 single-family homes were sold in August, the highest monthly sales total since 7,058 homes were sold in August 2007. Houston’s recovery has been unwavering with 15 consecutive months of sales gains.
“It’s a groundswell of momentum that’s been building for some time,” said Robin Mueck, president and CEO of Heritage Texas Properties.
Pent-up demand to buy homes has been uncoiling as consumers have gained confidence in the Houston economy as national media, including the Wall Street Journal and Forbes have noted Houston’s surge, Mueck said. Houston economy has been one of the leaders in creating new jobs and energy companies are expanding here, creating even more demand.
Houston home buyers are believers in the rebound now, although the dark blights on the national economy — high national unemployment, weak stock market and the downgrade of the credit rating of the United States due to its debt — prevented them from moving ahead previously.
“You’ve had people riding the fence for a real long time. Even with the low mortgage rates, they didn’t buy a home because of the national picture,” Mueck said. “People in Houston, Texas now recognize where we are going.
"Houston is unique and it’s now national news that Houston is doing well.”

The median price of a single-family home sold in August was $165,000, a 3.8 percent increase over August of last year.

The 6,600 homes sold in August represented a 20-percent gain over the 5,500 sold in August of last year, the Realtors association said.
The inventory of homes for sale dipped to 40,504 listings, down 17 percent from the 48,752 homes listed for sale last August. At the current sales pace, it would take 4.9 months to sell off the existing inventory of homes for sale — the lowest inventory since April of 2002.
The median price of a single-family home sold in August was $165,000, a 3.8 percent increase over August of last year.
Home sales trend downward in the fall and the market slows significantly at the end of the year. Pending sales recorded already with the Realtor association indicate that September and possibly October will continue to be healthy, although not on a par with the August surge.
“August rounds out an extremely prosperous summer for the Houston real estate market,” said Wayne Stroman, HAR chairman and CEO of Stroman Realty.#realestateallaround

WELLS FARGO DOWNPAYMENT ASSISTANCE

Bank Giant Offers Downpayment Assistance to Buyers

Daily Real Estate News | Thursday, September 06, 2012

Wells Fargo, in collaboration with several nonprofit organizations, has launched a downpayment-assistance program for home buyers in several housing markets that were hard-hit during the foreclosure crisis. Qualified buyers may be eligible for $15,000 through grants in down payment assistance under the program. Program participants would not have to repay the money either, as long as the buyers stay within the home for at least five years.
The program, known as the NeighborhoodLift or CityLift program, also offers financial education to help buyers prepare for home ownership and sponsors programs to showcase houses for sale throughout the local area.
Wells Fargo has targeted cities such as Atlanta, Houston, Jacksonville, Las Vegas, Los Angeles, Miami, Minneapolis/St. Paul, Orlando, Phoenix, Tampa, and Philadelphia for the downpayment-assistance program.
The banking giant has earmarked $9 million this year for downpayment-assistance programs and for home-buyer support programs.#realestateallaround

New Short Sale Guidelines

New Short Sale Guidelines for GSEs Will Make Process Easier

08/21/2012 By: Esther Cho 

Starting November 1, 2012, Fannie Mae and Freddie Mac will implement new short sale guidelines to make the approval process easier for eligible borrowers.

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said
FHFA Acting Director Edward J. DeMarco in a statement. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”
The changes are part of the FHFA’s Servicing Alignment Initiative and will require a streamlined approach with documents, leading to a reduction in documentation requirements. For example, borrowers who are 90 days or more delinquent and have a credit score lower than 620 will no longer be required to provide documentation for their hardship.
The GSEs will also waive their right to pursue deficiency judgments. Borrowers with sufficient income or assets can make cash contributions or sign promissory notes instead.

One major barrier that is also being addressed is the issue with second lien holders. To prevent second lien holders from stalling the short sale process, the GSEs will offer up to $6,000.
The new guidelines will also enable servicers to approve a short sale for borrowers who are not in default but face certain hardships including the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer.
In addition, all servicers will have the authority to approve and complete short sales that follow the requirements without first going to the GSEs for approval.
Provisions were also created for military personnel with Permanent Change of Station (PCS) orders. Servicemembers who are required to relocate will automatically be eligible for for short sales even if they are current. They also won’t be obligated to contribute funds to pay for the remaining deficiency.
“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, SVP, National Servicing Organization, Fannie Mae. “We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us.”
Tracy Mooney, SVP of Single-Family Servicing and REO at Freddie Mac, said, “These changes will make it clear that Freddie Mac servicers have the authority to approve short sales for more borrowers facing the most frequently seen hardships. These changes will further empower the industry to minimize foreclosures and help Freddie Mac in its mission to minimize credit losses and fortify a national housing recovery.”
Fannie Mae will send the announcement for the new changes to servicers Wednesday. Freddie Mac sent their announcement Tuesday.
In April, the GSEs also announced they were setting requirements to have a decision on a short sale offer made within 30-60 days.#realestateallaround

Shadow Inventory Unlikely to Bring Down Prices

Freddie Mac: Shadow Inventory Unlikely to Bring Down Prices

08/10/2012 By: Tory Barringer 

Freddie Mac isn’t afraid of shadows.
The GSE released its U.S. Economic and Housing Market Outlook for August on Wednesday, examining recent trends in home price indices and speculating on the impact of shadow inventory on home prices.

The Freddie Mac Home Price Index (HPI) for the country showed a 4.8 percent gain in the second quarter, the largest quarterly pickup in eight years. Year-over-year, the national index posted a 1 percent increase, the largest annual appreciation since November 2006.
Other HPI metrics also suggest a strengthening market, with CoreLogic’s index rising 2.5 percent year-over-year for June and FHFA’s HPI posting year-over-year gains through May.
In addition, the recovery was broad-based. From June 2011 to June 2012, 34 states (and the District of Columbia) posted gains in home prices. This was the largest number of states reporting annual appreciation since April 2007.

Freddie Mac speculated that even if national HPIs dip in the usually weaker autumn and winter months, the second-quarter HPI gains will likely overshadow any expected declines.
While prices have shown positive growth in many states through this year, concerns about shadow inventory-the stock of single-family loans that are seriously delinquent— have some experts worried about prices taking another tumble.
Freddie Mac asserted that although delinquency rates may be higher than they were before the recession, the “shadow” over the housing market is not as long as some may think.
“While the shadow inventory persists, there is an important difference in today’s market compared with those of recent years, and that’s the substantially reduced amount of excess vacant housing,” said Frank Nothaft, VP and chief economist for Freddie Mac.
Vacancy data from the Census Bureau showed that vacancies in U.S. homes for rent or for sale continued to decline in the second quarter. Rental vacancy rates have fallen to 8.6 percent, the lowest rate since the second quarter of 2002. For-sale vacancy rates have dropped to 2.1 percent, the lowest since the second quarter of 2006.
Additionally, the for-rent market now appears to be in relative balance, with rental stock close to overall rental demand. This results in normal vacancy levels.
The continuing drop in excess vacant stock is important because it means that in most markets, REO homes on the for-sale market don’t have to compete with an oversized vacant inventory.
“The housing recovery may finally be coming out from the shadows,” Nothaft said. #realestateallaround

Record Low Mortgage Rates

Record Low Mortgage Rates Helping To Stir The Housing Market

MCLEAN, Va., July 19, 2012  /PRNewswire/ -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey^®(PMMS^®), showing the average 30-year and 15-year fixed-rate mortgage hitting new all-time record lows along with the 5-year ARM. The average 30-year fixed has been below 4.00 percent all but one week in 2012. The average 15-year fixed-rate mortgage has been below 3.00 percent for 8 consecutive weeks. Freddie Mac's Chief Economist highlights how these record low mortgage rates are fueling housing demand in its July U.S. Economic and Housing Market Outlook.
News Facts

• 30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point for the week ending July 19, 2012, down from last week when it averaged 3.56 percent. Last year at this time, the 30-year FRM averaged 4.52 percent. 
• 15-year FRM this week averaged 2.83 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent. 
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week, with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.27 percent.
• 1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.97 percent.  

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
"With little signs of inflation and the Federal Reserve's "Operation Twist" keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market. For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes.  In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."
Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter:@FreddieMac
#realestateallaround

HOUSING MARKET IMPROVEMENTS

Steady Mortgage Rates Contribute to Housing Market Improvements

by Ed Ferrara

It was good news this past week for housing when data for pending home sales showed an unexpected jump in May.

According to the National Association of Realtors, pending homes sales, which represents the number of contracts signed, increased 5.9% to 101.1 from 95.5 in April. Construction Spending also rose 0.9% in May, according to the Commerce Department, which was the biggest gain since December. While some area markets are stabilizing, S&P/Case-Shiller Index of Property Values showed that the decline in home prices during the month of April was at the lowest since November, 2010. Home prices are still down even as the housing market sees some improvement.
FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates have remained steady with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee for well qualified borrowers. As these mortgage rates continue at historic lows, home affordability is still high which is helping those who wish to purchase a home. It is necessary to have good credit and qualifications for conforming mortgage approval and many consumers have taken the time to clean up their credit so that they could take advantage of this opportunity.
Even with a low 5% down payment, obtaining a conforming mortgage with private mortgage insurance is possible and available. With mortgage rates this low, it is a really good time to obtain a mortgage refinance, and now existing borrowers who have mortgages that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009, have HARP 2.0 available for those underwater mortgages. In many instances, HARP will not require an appraisal or other detailed information since it has been expanded to include unlimited loan to values.
Although HARP guidelines do differ from lender to lender due to overlays, many borrowers have been receiving successful approvals. There are still millions of borrowers who are eligible for HARP which is available until the end of 2013. Seeking a HARP refinance with an online inquiry can bring more success since it opens the door to a variety of lenders who are willing to assist.
The FHA Streamline Refinance is now another popular mortgage product for borrowers who have existing FHA mortgages that were endorsed prior to June 1, 2009. With no cash out, there is no need for an appraisal or other documentation and verifications. The biggest perk for this program is the extremely low upfront mortgage insurance premium at .01% which gives all eligible borrowers the opportunity to refinance to lower FHA mortgage rates. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%.
FHA mortgages for home buyers are still available with different programs to fill a variety of needs. The FHA rehab mortgage is now a favorite especially when purchasing foreclosures or short sales. Borrowers who use the FHA rehab mortgage are able to complete the home improvements and repairs without the need of a second loan. Even though FHA closing costs are high because of the upfront mortgage insurance premium and other FHA fees, FHA still offers one of the lowest down payment requirements and flexible credit qualifying, which is not found with other mortgages. Since any FHA approved and participating lender can handle FHA loans, including the FHA streamline refinance, seeking information online has become very popular and successful for many borrowers.
Jumbo 30 year fixed mortgage rates dropped .125% this week and are currently at 4.125%. Jumbo 15 year fixed mortgage rates are at 3.125% and jumbo 5/1 adjustable mortgage rates are at 2.250%. Excellent credit is required in order to receive these lowest jumbo mortgage rates with 0.7 to 1% origination fee. The jumbo mortgage market is still somewhat tight right now, but is starting to see some improvements. Private mortgage insurance companies, such as Radian, are beginning to expand their involvement with jumbo mortgages which will help make these loans more readily available for suitable borrowers. Since jumbo mortgages are private loans that are held within a lender's portfolio, they are usually stricter, although high end borrowers usually have the means to meet the guidelines.
This past week, even though stocks took back some of their losses, MBS prices were able to hold on which kept mortgage rates steady. MBS prices affect mortgage rates which move in the opposite direction. Consumer sentiment was reported as weaker than expected, but personal income matched predictions.
The Conference Board's Sentiment Index fell to 62 as consumers express increased concern over jobs and income, although the Commerce Department reported that the economy grew at a 1.9% annual pace for the first quarter. Core PCE inflation came in lower than expected rising at a 1.8% annual rate. While Durable Orders for May increased 1.1%, ISM Manufacturing was weaker for May. Jobless claims were 386,000 and close to expectations. The Euro zone continues to be a major global issue as Euro leaders have now turned to the European Central Bank for help to keep markets calm.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee. #realestateallaround
Published: July 4, 2012

Home Values See Highest Monthly Increase Since 2006

Zillow: Home Values See Highest Monthly Increase Since 2006

05/25/2012 By: Tory Barringer

Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.

According to the April Zillow Real Estate Market Reports, national home values rose 0.7 percent in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.

Zillow also reported that rents rose from March to April, increasing by 1.6 percent, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78 percent experienced a rise in rents.
The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7 percent.
“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”
Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March. #realestateallaround