Home Owner Info
Homeowners’ monthly mortgage down about 40%
WASHINGTON – Nov. 14, 2011 – Improving housing affordability mixed with low mortgage rates means that homeowners are paying a lot less for their monthly mortgage payment than they did just a few years ago. In fact, they’re paying nearly 40 percent less on their monthly mortgage payment than homeowners paid in 2006.
According to Fiserv, the monthly mortgage payment for a median-priced single-family home today is $700 – a drop of close to 40 percent from 2006, when it was $1,140.
“Housing affordability has improved dramatically because of declines in both prices and mortgage interest rates,” David Stiff, chief economist at Fiserv, said in a statement. “Nationally, purchase mortgage payments now account for only 13 percent of monthly median family income, the lowest percentage on record (since 1971), and compared to 23 percent in the first quarter of 2006.”
Source: “Monthly Mortgage Payment Almost 40% Cheaper Than 2006,” HousingWire (Nov. 9, 2011) and Fiserv
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Renters spend 5% more than homeowners
Check the facts!!!
NEW YORK – Oct. 27, 2011 –
Rising rents are forcing renters to outspend homeowners on housing costs, according to a new study.
Since 2005, homeowners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. In that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.
In the last 26 years, homeowners have increased the amount they spend on household expenses by 12 percent while renters have increased it by 22 percent, according to the study.
Earlier this month, Capital Economics economists noted that for the first time in 30 years the median monthly mortgage payment is about the same – or less – than the median rental payment.
Yet, with the bleak job market, homeownership rates continue to fall in many parts of the country, particularly among younger generations. CoreLogic found in its report that the homeownership rate for the 25-to-34 age group dropped from 51.6 percent in 1980 to 42 percent in 2010. For the 35-to-44 age group, homeownership rates fell from 71.2 percent to 62.3 percent over that period.
Source: “Renters Outspend Owners on Housing,” RISMedia (Oct. 25, 2011) and Capital Economics
© Copyright 2011 INFORMATION, INC. Bethesda, MD
Growth picture enjoys uptick
Positive Article
WASHINGTON – Oct. 25, 2011 – Economists have significantly raised their estimates of third-quarter economic growth ahead of the government’s official report Thursday, easing near-term fears of another recession.
A consensus of economists surveyed by Bloomberg News estimates the economy grew at a still-modest 2.5 percent annual pace last quarter, up from their 1.8 percent projection less than two weeks ago. The brighter picture follows better-than-expected data on retail sales, manufacturing, jobs and business investment.
“We should take some comfort that the economy isn’t hurtling into recession,” says Capital Economics’ Paul Ashworth. Ashworth estimates third-quarter growth was 3.2 percent.
That’s not robust, but it beats the anemic expansion of less than 1 percent the first half of 2011. Amid last summer’s debt battle in Congress, the downgrade of the U.S. credit rating and financial turmoil in Europe, many analysts thought the U.S. was on the verge of another downturn.
Since Oct. 3, 10-year Treasury yields have risen nearly half a percentage point, indicating growth prospects are prompting a shift of money to higher-risk assets, says market strategist Anthony Valeri of LPL Financial.
Many experts say the third-quarter upturn was due to temporary factors, particularly the end of supply disruptions after the Japanese earthquake, and the decline in oil prices. The Commerce Department said last week that retail sales jumped 1.1 percent in September, partly because of a 3.6 percent rise in auto sales as Japanese bottlenecks eased.
Meanwhile, manufacturing grew at a 4.3 percent annualized rate in the third quarter. And business investment in equipment and software has rebounded. Both measures were buoyed by the unclogging of Japanese supply channels and lower oil prices.
Many economists say growth will slow to a sluggish 2 percent rate over the next year. Unemployment, at 9.1 percent, is high and consumer confidence is shaken.
Yet a recession appears less likely. New jobless claims have been falling since summer. “You would be seeing claims shooting up” if a downturn were imminent, says chief economist James O’Sullivan of MF Global.
Some say growth could beat estimates. Excluding autos, retail sales rose 0.6 percent last month. Consumer stock prices, often a leading job indicator, are at a record premium relative to stocks overall, says economist James Paulsen of Wells Capital Management.
But Bernard Baumohl of the Economic Outlook Group notes consumers have been borrowing more and saving less to finance their increased spending – which he says can’t continue.
© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Paul Davidson
Housing expected to improve over last year
WASHINGTON – July 19, 2011 –
The U.S. housing market, aided by a recovering rental sector, is unlikely to experience a “double-dip” setback, Freddie Mac said Monday.In its U.S. Economic and Housing Market Outlook for July, the Federal Home Loan Mortgage Corp. said housing likely will follow the performance of the overall economy for the rest of 2011. Additionally, home sales are projected to be above last year’s numbers by 3- to 5 percent.
The report also indicated that despite record levels of homebuyer affordability and historically low mortgage rates, households were concerned about their financial futures and were holding off making major purchases, notably homes.
The rental housing market showed the clearest signs of a turnaround with the apartment property price index showing a 15.2 percent gain over the year through the first quarter of 2011.
“Following June’s labor market report, households are naturally concerned about their financial futures, which is being reflected in the housing market,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive [gross domestic product] forecasts for the United States.”
Copyright © 2011 United Press International Inc.
Housing shortage likely coming, report says
(not many would have thought this)
CAMBRIDGE, Mass. – June 13, 2011 – Within the next decade, 16 million new housing units will be needed to meet population growth and shifting demands, according to Harvard University’s Joint Center for Housing Studies in its latest annual “State of the Nation’s Housing” report.
That means household growth, which has dropped drastically in recent years, will need to greatly reverse its trend to meet the forecasted spike in demand. From 2007-2010, household growth averaged about 500,000 per year – less than half the 1.2 million annual pace averaged prior from 2000-2007.
To absorb the current rate of foreclosed and distressed homes plaguing most markets, a more normal rate of household formation is critical, according to the report. However, household growth partially has stalled as young adults have delayed homeownership and immigration has slowed.
As such, in recent years, builders have drastically cut production of new homes.
“With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets,” the report notes. “Over the longer term, the number of younger households is set to rise sharply, supporting growth in the population that fuels growth in both new renters and first-time buyers. The path of the economy and evolution of the mortgage market will determine when and if this increased demand materializes.”
The report predicts a need for greater housing units for several reasons. For example, the report projects demand for 1 million new homes a year is needed to meet population growth in the coming decade. The report also predicts a surge in smaller homes, estimating that 3.8 million baby boomers will be looking to downsize their homes within the next decade. Also immigration growth, the need to replace existing homes, and demand for second homes will contribute to rising demand for housing units, the report notes. Therefore, researchers conclude at least 16 million new housing units will be needed over the next decade.
To download the report, visit Harvard University’s Joint Center for Housing Studies website.
Source: “Harvard: Real Estate Recovery Hinges on Return of Demand,” Inman News (June 6, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Foreclosures put workers’ security clearances at risk
ORLANDO, Fla. – June 7, 2011 – Foreclosure means more than losing a house and ruining a credit rating for a select group of Central Florida property owners who rely on federal security clearances for their livelihood.
“Losing your security clearance is like losing your most marketable aspect for employment,” said real estate broker Travis John, a local distressed-property specialist who already this year has worked with about a half-dozen sellers facing the loss of their security clearances if their banks foreclose on their properties.
Bank takeovers have particularly harsh consequences for employees of Lockheed Martin Corp., NASA and other federal contractors and agencies in Central Florida. Depending on how a foreclosure is handled, it can cost a wage earner his or her security clearance – and job. And it usually takes years for such people to obtain a new clearance so they can work again.
“There is a very good reason for them to be concerned,” said Virginia lawyer David P. Price, who specializes in security-clearance cases after serving 25 years in the U.S. Navy Judge Advocate General’s Corps.
Price said he has seen the number of financial-related security-clearance problems double in recent years. Though no reports have closely tracked security problems tied to mortgage defaults, federal officials have noted an increase in revocations and denials of security clearances for financial reasons, such as foreclosure.
Debt is one of more than a dozen potential pitfalls for someone with security clearances, along with problems such as criminal arrests and drug or alcohol use. They can prevent a prospective employee from gaining clearance, jeopardize the clearance of an existing employee or stand in the way of an employee seeking a higher-level clearance.
Personal finances come into play largely because of concerns that a contractor or employee could turn to selling confidential information to generate cash for unpaid bills, Price said.
Most employees with security clearances are required to report mortgage defaults and other financial and legal issues to their company’s or agency’s security officer. If they don’t volunteer the information relatively quickly, Price said, it can come back to haunt them during periodic reviews of their finances.
“If you fall behind on the house today, you don’t necessarily have to report today, but take action as soon as possible to mitigate any concerns the government may have,” he said.
Struggling homeowners are better able to keep their clearances if they can document that their mortgage was a sensible loan that didn’t overextend them at the time. They also need to demonstrate that they have taken reasonable and responsible steps to terminate the financial obligation – such as arranging a “short sale” of the property – and that they won’t be burdened with substantial debt once the process plays out.
“There are lending institutions that will write off debt on foreclosures, but the short sale is the better way to go,” Price said, though he cautioned that a short sale – selling a house for less than is owed on the loan – can take a long time, increasing the chances of a foreclosure.
John, the local broker, said his clients with security clearance have been able to sell their homes in short sales and walk away with little or no outstanding debt.
One of them, a 24-year Air Force veteran who spoke only on the condition of anonymity for fear of further damaging her clearance, said she and her husband live in Maryland but bought a vacant subdivision lot in Polk County several years ago with the intention of retiring there.
“It wasn’t necessarily that we couldn’t pay for it,” she said. The problem was that the developer gave them a deadline to start building a home, and by the time that date approached, the property had lost much of its value. Meanwhile, the couple’s Maryland house was “underwater,” meaning it was worth less than the mortgage on it.
“Basically, my livelihood was at stake, and I was looking at not taking care of my family and not making it to retirement,” said the woman, who has experience processing security clearances.
The couple worked with John to list the property as a short sale and continued making payments until they had a purchase offer. Expecting a sale, they stopped making payments, and their lender initiated foreclosure proceedings. At that point, the Air Force veteran said, she confided to John what was at stake if the bank took the property.
The land recently sold in a short sale, and the woman kept her clearance.
“I needed to take steps to prevent what could have happened,” she said during an interview last week. “I knew that nothing good could have come of it.”
According to a General Accounting Office report filed earlier this year, federal security officials have seen an increase in financial problems among workers with clearances, particularly problems with mortgages and foreclosures, though they did not report specific figures.
In Las Vegas, another U.S. metro area hard-hit by foreclosures, one survey found 740 airmen underwater with their mortgages. Two-hundred sixty-three reported they were unable to sell their homes, and 30 were in some stage of foreclosure.
The U.S. Defense Department’s Office of Hearings and Appeals is one of the few government agencies that report security-clearance revocations and denials. From January 2006 through June 2010, it reported considering about 70 security-clearance appeals involving foreclosures and other distress sales. Clearances were revoked or denied in 62 of those cases, according to one Washington lawyer.
Once a clearance is denied, the employee will lose his or her job, Price said, and must begin searching for a prospective employer that will sponsor that person for another security review.
“When your clearance is denied or revoked, it literally can be two years before you’re able to get clearance,” Price said – and that is under the best of circumstances.
Copyright © 2011, The Orlando Sentinel, Fla., Mary Shanklin; Knight Ridder/Tribune Business News. Distributed by McClatchy-Tribune Information Services.
New Online: Free HAMP Calculator
The Treasury Department is offering a free online calculator that helps borrowers estimate whether or not they qualify for the Home Affordable Modification Program ( HAMP).
The calculator is available at checkmynpv.com.
In the two years since its launch, HAMP has helped more than 270,000 borrowers receive permanent loan modification, thus lowering their monthly mortgage payments. That number falls far short, however, of the millions of homeowners at risk of foreclosure — which is bad for homeowners and bad for the housing market. The current glut of foreclosures — stalled by paperwork delays — poised to hit the market is already far more than can absorbed by first-time homebuyers, according to the research firm Campbell Surveys.
That is why HAMP is so important. Every homeowner who modifies a loan and stays in a distressed property adds one less property to an already flooded market.
Fla.’s existing home, condo sales up
POSITIVE ARTICLE
ORLANDO, Fla. – April 20, 2011 – Florida’s existing home and existing condo sales rose in March, according to the latest housing data released by Florida Realtors®. Existing home sales increased 12 percent last month with a total of 18,522 homes sold statewide compared to 16,540 homes sold in March 2010, according to Florida Realtors. Statewide sales of existing condos last month rose 24 percent compared to the year-ago sales figure.
Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home and existing condo sales in March; 17 MSAs also had higher condo sales. It’s the fourth consecutive month that Florida Realtors has reported higher year-over-year existing home and existing condo sales statewide.
“A variety of housing opportunities is available at attractive prices across the state, while mortgage interest rates remain historically low,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Favorable conditions like these spark the interest of buyers – who should consult a local Realtor to find out more about their local markets.”
Florida’s median sales price for existing homes last month was $126,300; a year ago, it was $136,000 for a 7 percent decrease. Analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in February 2011 was $157,000, down 4.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $271,320 in February; in Massachusetts, it was $270,000; in New York, it was $245,000; and in Maryland, it was $208,258.
According to NAR’s latest industry outlook, a strengthening economy will continue to bolster the housing market’s slow recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by unnecessarily tight credit,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 9,703 units sold statewide last month compared to 7,830 units in March 2010 for an increase of 24 percent. The statewide existing condo median sales price last month was $84,300; in March 2010 it was $94,800 for an 11 percent decrease. The national median existing condo sales price was $150,400 in February 2011, according to NAR.
The interest rate for a 30-year fixed-rate mortgage averaged 4.84 percent in March, down slightly from the 4.97 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
Comeback Cities of 2011
WASHINGTON – April 12, 2011 – Kiplinger.com names two Florida cities – Jacksonville and Orlando – to its list of 11 comeback cities in 2011. According to the website, 2011 will see a “dramatic turnaround – new investment by businesses, growth in the number of jobs and a reblooming of hope” in the noted cities.
The website did not list the cities in any particular order.
Orlando
Kiplinger predicts that Orlando employment will increase by 3 percent this year. It points to an improvement in tourism for the vacation destination, but also points to the growth of a “life science cluster of medical care and research.”
Jacksonville
Kiplinger expects job growth of 2.8 percent this year. It points to increased demand from financial service firms, hotels, health care, restaurants and warehousing.
Other cities in the top 11 for a turnaround include:
• Charlotte, N.C.
• Chattanooga, Tenn.
• Flint, Mich.
• Las Vegas
• Nashville, Tenn.
• Phoenix
• Portland, Ore.
• San Jose, Calif.
© 2011 Florida Realtors®
Metrostudy: Housing shortage on the horizon?
**INTERESTING ARTICLE**
WASHINGTON – April 1, 2011 – Mike Castleman, founder and CEO of Metrostudy, which tracks real-time data of the country’s inventory of new homes, says a housing shortage is looming that will soon create a huge surge in demand for new homes. As such, now is the time to buy, he says.
In the 41 cities Metrostudy covers, 78,000 houses are either vacant and for sale, or under construction – that is less than a quarter of the new homes that fell in that category during the housing boom in 2006 and way below the level of a decade ago.
“If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”
The historic drop in new construction mixed with the decline in housing prices is laying the foundation for a dramatic recovery in residential real estate, Castleman told CNN. Castleman expects homeowners soon will start returning, which will drive up prices in many markets later this year.
While demand remains low for new construction, he expects that to change. He foresees the recovery following a similar path as previous ones: A severe housing shortage will drive a big increase in demand.
“We’ll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved,” he predicts. “Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house.” But they’ll want the house so bad that they’ll “bid the prices up.”
Source: “Real estate: It’s time to buy again,” CNN (March 28, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688