Author Archives: Paul Frommann

Mortgage Rates Drop to 3-Year Lows

Mortgage Rates Drop to 3-Year Lows

The 30-year fixed-rate mortgage averaged 3.57 percent in the most recent week, the lowest average in three years, Freddie Mac reports in its weekly mortgage market survey.

“Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8 percent since late March,” says Sean Becketti, Freddie Mac’s chief economist. “As a result, the 30-year mortgage rate fell 4 basis points to 3.57 percent, a new low for 2016 and the lowest mark in 3 years. Prospective home buyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 12:

  • 30-year fixed-rate mortgages: averaged 3.57 percent, with an average 0.5 point, dropping from last week’s 3.61 percent average. Last year at this time, 30-year rates averaged 3.85 percent.
  • 15-year fixed-rate mortgages: averaged 2.81 percent, with an average 0.5 point, falling from last week’s 2.86 percent average. A year ago, 15-year rates averaged 3.07 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.78 percent, with an average 0.5 point, a decrease from last week’s 2.80 percent average. Last year at this time, 5-year ARMs averaged 2.89 percent.

Source: Freddie Mac

From Daily Real Estate News

5 Ways to Trim Utility Costs This Summer

5 Ways to Trim Utility Costs This Summer

As temperatures warm up, utility bills can increase. HomeSelfe offers some of the following tips to help home owners save on utility bills this summer:

1. Apply a window film. If you don’t want to install drapes or blinds to cover your windows, consider a window film. Home owners will still be able to see out their windows while also blocking some of the heat. For installation, home owners often just need to measure the size of the window, cut the film, and then adhere it to the window.

2. Clean the air filters. Dirty air filters can cause utility bills to increase. “When filters get dirty, the heating and cooling system has to work harder and consumer more energy to do its job,” according to HomeSelfe. “With clean filters, the system can cool your home more efficiently and help you save on utility bills.”

3. Collect rainwater. Cut your water use and consider using rain barrels to start collecting rainwater. You can then use the trapped water for your garden. “Rain barrels, typically made of plastic or wood, sit at the end of your gutter downspout and collect the rainwater as it flows out,” HomeSelfe notes. “When the storm is over, you’ll have a good amount of water that you can recycle on your garden during drier times.”

4. Add mulch. Layer mulch throughout a garden to help slow evaporation. Water will stay on the ground longer and offer the plants more time to absorb it. You’ll be able to water less frequently.

5. Install a programmable thermostat. Set the temperature of your home for particular times throughout the day to help curb costs. Set your thermostat to turn off while you’re at work and cool down while you’re on your way home. Programmable thermostats can help reduce energy use by your air conditioner.

From Daily Real Estate News

5 Top Motivations for Selling

5 Top Motivations for Selling

Inventories of homes are tight nationwide. So what’s going to get home owners to finally sell? In a recent survey,® researchers found some of the top motivations to sell:

1. Want to be in a different neighborhood (40%)

2. Need a home with different features (28%)

3. Need a bigger home (22%)

4. Want location with better weather, views, or lifestyle (19%)

5. Need to lower cost of living (17%)

Different motivators are more pressing to various age groups.® research found that households between the ages of 35 and 44 tend to be driven by the desire to be in a different neighborhood and have a bigger home. On the other hand, households of those 65 and older are more motivated by retirement and tend to be looking for a home with different features or trying to improve their weather, views, or lifestyle.

However, “the biggest factors standing in the way of today’s sellers are time, making necessary improvements in their existing home in order to sell, and finding a replacement home to purchase,” says Jonathan Smoke,®’s chief economist.

From Daily Real Estate News

The Best Pet-Friendly Houseplants

The Best Pet-Friendly Houseplants

Chances are good that you have prospects and clients who have pets — ownership estimates for the U.S. range from 30 percent to more than 65 percent, depending on the source. Many pet owners are wary of houseplants, not knowing which can be toxic to their four-legged friends; pass along these tips on safe greenery to let your base know you’re thinking about the whole household. writer Kristin Wong researched a list of six low-maintenance houseplants that can brighten up a space without endangering household pets. Topping the list was the spider plant: They “need a fair amount of water, but they also need to dry out between watering,” Wong reports, and “do well in most light conditions and temperatures.” But, while nontoxic to pets, they can upset digestive systems and even cause catnip-like euphoria in cats, so keep them out of reach and take away any fallen or dangling fronds.

Those who have the room can try the areca palm, which can grow as tall as 7 feet. But, Wong explains, you can’t prune them back without risking damage, so make sure you pick a container the tree can grow into. These plants prefer bright indirect light and soil that dries out between waterings. Like spider plants, the areca palm improves indoor air quality, Wong says.

Larger spaces can enjoy the ease and presence of the bamboo palm, which can grow as high as 12 feet and as wide as 3 to 5 feet. They do well in containers in bright or indirect sunlight and only need to be watered when the soil feels dry to the touch.

Remind cat owners to top the dirt in their containers with a safe gravel, to keep the cats from using the containers for other purposes.

Wong recommended a few other low-maintenance plants that owners can relax with. To see the full list, including additional comments and experiences from pet owners,

From Daily Real Estate News

Existing-Home Sales Up, Despite Challenges

Existing-Home Sales Up, Despite Challenges

Existing-home sales continue to be on the upswing, despite ongoing inventory shortages and escalating home prices, the National Association of REALTORS® reported Friday. Sales increases in the Midwest and Northeast regions helped to offset declines in the South and West last month.

Regional Snapshot

The following is a closer look at how existing-home sales performed across the country in April:

  • Northeast: existing-home sales rose 2.8 percent to an annual rate of 740,000, and are 17.5 percent above a year ago. Median price: $263,600 — 4.1 percent higher than a year ago.
  • Midwest: Existing-home sales jumped 12.1 percent to an annual rate of 1.39 million in April, and are 12.1 percent higher than a year ago. Median price: $184,200, up 7.7 percent from April 2015.
  • South: existing-home sales dropped 2.7 percent to an annual rate of 2.19 million in April, but remain 4.3 percent above April 2015. Median price: $202,800, up 6.5 percent from a year ago.
  • West: existing-home sales fell 1.7 percent to an annual rate of 1.13 million in April, and are 3.4 percent lower than a year ago. Median price: $335,000, which is 6.5 percent above a year ago.

Source: National Association of Realtors

Existing-home sales increased 1.7 percent in April to a seasonally adjusted annual rate of 5.45 million. Sales are now up 6 percent compared to a year ago.

The uptick in sales last month nationwide was primarily driven by a sizable jump in the Midwest, “where home prices are most affordable,” says Lawrence Yun, NAR’s chief economist.

“Sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” Yun says. “Except for in the West – where supply shortages and stark price growth are hampering buyers the most – sales are meaningfully higher than a year ago in much of the country.”

5 Stats to Gauge the Market

Here are some additional highlights from April’s housing report:

1. Home prices: The median existing-home price for all housing types in April was $232,500, a 6.3 percent increase from a year ago ($218,700).

2. Days on the market: Properties, on average, stayed on the market for 39 days in April (down from 47 days in March). That is the shortest time since June 2015, when homes were staying on the market an average of just 34 days. Forty-five percent of homes sold last month were on the market for less than a month. Short sales were on the market the longest at a median of 120 days in April, while foreclosures sold in 51 days, and non-distressed homes took 37 days.

3. All-cash sales: All-cash sales comprised 24 percent of transactions in April, unchanged from a year ago. Individual investors make up the bulk of all-cash purchases. Investors purchased 13 percent of homes in April, which matches the lowest share since October 2015.

4. Distressed sales: Foreclosures and short sales dropped for the second consecutive month to 7 percent in April, down from 10 percent a year ago. Five percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold, on average, at a discount of 17 percent below market value in April, while short sales were discounted 10 percent.

5. Inventory levels: Total housing inventory at the end of April rose 9.2 percent to 2.14 million existing homes available for sale. Still, that is 3.6 percent lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace.

“The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there’s growing concern a number of buyers will be unable to find homes at affordable prices if wages don’t rise and price growth doesn’t slow,” Yun says.

From Daily Real Estate News

Average Time to Close: 44 Days

Average Time to Close: 44 Days

For the second consecutive month, the average time to close all loans stayed at 44 days, suggesting that new mortgage rules that took effect last fall are having less of an impact on delaying loans, according to Ellie Mae’s latest Origination Insight Report.

Here’s a breakdown of averages from the report:

  • The average time to close a purchase remained at 45 days in April.
  • The average time to refinance rose to 44 days in April (up from 41 days in March).
  • The average time to close FHA loans rose to 45 days (up from 44 days in March).
  • The average time to close VA loans stayed steady at 48 days.

The closing rates for all loans dropped to 69 percent in April, retreating from the high of 71 percent in March, according to Ellie Mae’s report. More specifically, purchase closing rates dropped to 73 percent in April, down from 75 percent in March.

Credit scores remain high among applicants. Sixty-eight percent of purchases and 69 percent of refinances had FICO credit scores of 700 or above. Thirty-one percent of purchases had a FICO score between 600 to 699.

Additional highlights from the report:

  • The average 30-year rate for all loans dropped from 4.12 in March to 4.10 in April.
  • Debt-to-Income remained steady at 25/38 and Loan-to-Value stayed at 80.

From Daily Real Estate News

What Has Home Sellers Spooked?

What Has Home Sellers Spooked?

Inventory continues to be tight in many markets. So what has potential home sellers pulling back when buyer demand is reportedly so high? A recent article at CNBC suggests seller anxiety may be at the root.

“Trade-up buyers seem to be losing their mojo heading into the heart of the spring selling season,” Redfin Chief Economist Nela Richardson told CNBC. “Repeat buyers tend to list early because they are most often also looking for another home to buy in the near future. A slowdown in new listings reflects a lack of confidence on the part of the home owner that they can find a desirable home to purchase.”

The tight supply has, meanwhile, been pushing home prices higher. The median existing-home price for all housing types in April was $232,500, a 6.3 percent increase from a year ago ($218,700), the National Association of Realtors.

“Low mortgage rates, job growth and other drivers have stoked [buyer] demand, but the supply of homes for sale — especially in the low-to-middle price ranges — hasn’t kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory,” says Andrew LePage, research analyst with CoreLogic.

The tight conditions are causing more competition among buyers for the limited number of homes that are for sale. Nearly 78 percent of offers written by Redfin real estate professionals in Seattle involved a bidding war, the agency reports. In Denver and Portland, the bidding war share rose to 67 and 69 percent respectively.

From Daily Real Estate News

The Buyers Are Coming

Mortgage rates may have inched up slightly but that didn’t seem to deter home buyers from shopping for a loan last week. Mortgage application volume rose 2.3 percent week-over-week on a seasonally adjusted basis, driven by an uptick in home purchase applications, the Mortgage Bankers Association reports. Mortgage applications are nearly 24 percent higher than they were a year ago.

After a short dip, mortgage applications for home purchases reversed course last week and rose 5 percent. Purchase applications are 17 percent higher than a year ago.

“Purchase applications got back on track last week, resuming the level of activity observed throughout most of April and May,” says Lynn Fisher, MBA vice president of research and economics. MBA also reported that the average loan size for purchase applications rose to a survey high last week, reaching $307,700.

Meanwhile, applications for refinancings mostly held flat last week, budging just 0.4 percent during the week. MBA reports the average on a 30-year fixed-rate mortgage rose to 3.85 percent last week, up from 3.82 percent the prior week.

From Daily Real Estate News

New-Home Sales Surge to Post-Recession High

New-Home Sales Surge to Post-Recession High

Sales of new single-family homes climbed 16.6 percent in April, reaching the highest sales pace since January 2008, the Commerce Department reported this week. Newly built, single-family homes rose to a seasonally adjusted annual rate of 619,000 units in April.

“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season,” says Ed Brady, chairman of the National Association of Home Builders.

The median sales price of new homes sold in April was $321,100. New-home sales saw the biggest jump last month in the Northeast, where sales of new homes surged 52.8 percent month-over-month. New-home sales jumped 18.8 percent in the West and by 15.8 percent in the South. The Midwest was the only major region to post a decrease in new-home sales in April, with sales falling 4.8 percent compared to the month prior.

Housing analysts expect new home sales to continue to climb in 2016. “Rising home sales combined with tight inventory will translate into increased housing production as we move onward in 2016, especially as job creation continues and mortgage rates remain low,” says NAHB Chief Economist Robert Dietz.

From Daily Real Estate News

Builders: Lot Shortages at Record Highs

Builders: Lot Shortages at Record Highs

Shortages of buildable lots reached a new record low in May, according to a survey of homebuilders within the National Association of Home Builders/Wells Fargo Housing Market Index. Sixty-four percent of builders reported that the supply of lots in their markets was “low” or “very low,” marking the highest percentage of reported shortage since NAHB began collecting such data in 1997.

The lot shortage may be part of the reason why new homes are being built at a rate of under 1.2 million a year. In 2005, when only 53 percent of builders reported a shortage of lots, total housing starts were more than 2 million.

Builders are facing more severe lot shortages in some regions of the country, notably out west. Builders working in the western United States face the highest percentage of shortages at 69 percent reporting “low” or “very low” lot supply. The Northeast was close behind at 68 percent. In the Midwest, 62 percent of builders report a lot shortage problem, while 64 percent in the South had these complaints.

From Daily Real Estate News | Tuesday, May 24, 2016