Housing Market Decreased 5 Points
June 21, 2010
The National Association of Home Builders/Wells Fargo reported the housing market index decreased five points in June to 17. Economists believed the reading would be 21. This drop was the largest seen in the market since November of 2008. Any reading that is below 50 shows a negative outlook.
The Mortgage Bankers Association reported their seasonally adjusted composite index of mortgage applications for the week that ended June 11 rose 17.7%. Refinancing applications rose 21.1% to the highest level seen this year. Purchase volume increased 7.3%, which is the first increase seen in the last six weeks.
In May, construction of apartments and new single-family houses decreased 10%, which is a seasonally adjusted yearly rate of 593,000 units. New building application permits decreased 5.9% to a yearly rate of 574,000 units.
The producer price index (tracks wholesale price inflation) saw a decrease of 0.3% in May, with a 0.1% increase in April. Core prices not including food and fuel increased 0.2% for the second month in a row. Wholesale prices are up 5.1% for the year.
In May, consumer prices fell a seasonally adjusted 0.2% after a 0.1% increase in March. This was the largest decline seen since December of 2008. When looking at the year-over-year basis, consumer prices at the core rate were up 0.9%, which is the smallest increase since January 1966. These figures do not include volatile food and energy prices.
Unemployment initial claims benefits increased by 12,000 to reach 472,000 for the week ending with June 12. Continuing claims for the week ending with May 5 increased by 88,000 to end at 4.57 million.
Economic reports upcoming include June 29 housing price index, July 1 pending home sales, and on July 2 factory orders.
History Of The Federal Housing Administration
June 11, 2010
In 1934, the Federal Housing Administration (FHA) was created by the National Housing Act for the primary purpose of insuring long-term residential mortgage loans and, thereby, promoting home ownership in the United States. Today, the FHA is the largest government insurer of mortgages in the world.
FHA loans have surged in popularity. In 2005, government-backed FHA loans represented about 2.8% of total loans originated. Today, the number is closer to 30%. Over the past couple of years, as credit standards tightened, FHA loans have become the loan of choice for many home buyers.
Contributing to the popularity of FHA loans is that the maximum loan amount limit has increased from $417,000 to as much as $729,750, depending on the county in which the home is located. Also, if you qualify for a loan, the loan-to-value (LTV) ratios are potentially higher than those for conventional mortgage loans. With FHA loans, a buyer can borrow up to 96.5% of the value of a home. The potential for a higher LTV also makes FHA loans an attractive option for homeowners wanting to refinance. And FHA loans come with fixed mortgage rates providing stable payments over the life of the loan. Also, FHA closing costs can be financed into the total amount of the mortgage.
Traditionally, FHA mortgages were used to assist first-time home buyers who may not have otherwise qualified for a loan. But FHA loans are no longer just for first-time home buyers. They are increasingly used by move-up buyers. The only restriction is that a purchaser may have only one FHA loan at a time.
Fannie Mae And Freddie Mac Use New Program
June 4, 2010
A new initiative that will encourage lending companies to submit appraisals and loan delivery information electronically has been started by federal regulators in charge of Fannie Mae and Freddie Mac. The new program will require both Fannie and Freddie to use the same data standards, data collection processes, and file formats.
This new standard will improve the consistency as well as the quality of information for not only appraisals but also other loan data. The will improve the power of collateral, borrower and loan data submitted to both companies.
The Uniform Mortgage Data Program is a long-term, joint effort to generate improved and consistent data standards and collection processes. Fannie and Freddie have worked with industry members in order to develop the uniform standards.
Edward J. De Marco the FHFA Acting Director stated, “FHFA directed the Enterprises to undertake the development of the standards to provide greater uniformity in the data they collect, and” …“This initiative is a major step toward meeting industry requests for uniformity in appraisal and loan data. Improvements in data quality will benefit all mortgage market participants and strengthen the housing finance system.”
The new framework will help to increase efficiency for lending companies while at the same time allow Fannie and Freddie to be better able to manage risk in a more effective manner. The data standards will give uniformity for appraisers, mortgage lenders, and services along with other information providers in their data submissions to both Fannie and Freddie. This data standards program will be launched in phases through a consistent platform and does provide stakeholder input.
Under the new standards, data submitted to Fannie Mae and Freddie Mac on loans sold to or guaranteed by either will include more complete and consistent data including “loan characteristics; borrower information; the property securing the loans; and, the identity of the parties creating the transaction.”
DeMarco explained, “Fannie Mae and Freddie Mac will continue their own proprietary reviews of appraisal and loan information, using their own unique business models and policies,”…”However, we asked the Enterprises (Fannie Mae & Freddie Mac) to work together to implement a common data protocol that will ultimately benefit borrowers, lenders and other market participants. Common data definitions, electronic data capture, and standardized data protocols will improve efficiency, lower costs and enhance risk monitoring. The uniform system includes protocols for incorporating new technologies and to meet new legal requirements
Existing Homes Sales Rise In April
May 31, 2010
In April, sales increased 7.6% on existing homes to an adjusted annual rate of 5.77 million up from 5.36 in March. Unsold homes on the market increased 11.5% to a figure of 4.01 million, which is an 8.4-month supply at the currently selling rate, which was up from an 8.1-month supply seen in March.
The city housing index (The Standard & Poor’s/Case-Shiller 20) did not change in March but saw a decrease in February of 0.1%.
In May, the consumer confidence index increased to 63.3 from a revised 57.7 seen in April. Economists expected a reading of 59. The index was at 100 in 1985 chosen as a benchmark “because it was neither a peak nor a trough in consumer confidence.”
In April, durable good orders which are expected to last three years or more increased 2.9% after a decrease in March of 1.2%. The rise is mainly due to a demand for commercial aircraft. Orders reported a fall of 1% not including volatile transportation related goods.
As reported by the Mortgage Bankers Association the seasonally adjusted index of mortgage applications for the week ending with May 21 increased 11.3%. Purchase volume fell 3.3% and refinancing applications rose 17%.
In April, new home sales increased to 14.85, which gave a seasonally adjusted annual rate of 504,000 units after a revised rate of 439,000 in March. Economists had predicted 425,000 units. This was the highest level seen since May 2008.
Unemployment benefits decreased by 14,000 to 460,000 for the week, which ended with May 22. Continuing claims for the week, which ended with May 15 decreased by 49,000 to 4.61 million.
Other reports upcoming include June 1 on construction spending, June 2 on pending home sales, and on June 3 for factory orders.
Mortgage Bankers Association Index Rose
March 8, 2010
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending February 26 rose 14.6% to approximately 629.9. Purchase volume increased 9% to 214.5. Refinancing applications jumped 17.2% to 3,054.3.
Consumer spending did indeed rise 0.5% to approximately $52.4 billion in January, slightly more than economists had anticipated. Personal income had increased 0.1% to right at $11,400,000,000 billion.
The Institute for Supply Management reported that the monthly index of manufacturing activity was 56.5 in February after reaching 58.4 during January. Nevertheless, it was the seventh straight month of expansion. A reading above 50 generally signals expansion.
The Commerce Department reported that total construction spending fell 0.6% in January after falling 1.2% during the month of December. Economists had expected a decrease of 0.7%.
The monthly index of non-manufacturing activity rose to 53 in February from 50.5 in the month of January. A reading above 50 usually signals expansion. Economists had anticipated a reading of 51. The reading was the highest since October 2007.
The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, fell 7.6% in January after a revised 0.8% increase in December.
The Labor Department reported productivity rose at an annual rate of 6.9% for our fourth quarter. Labor costs fell at an annual rate of 5.9%.
Factory orders rose approximately 1.7% in January, slightly below the 1.8% increase economists had anticipated. It was the fifth straight gain and follows a 1% increase in December.
The unemployment rate held at approximately 9.7% during February. Employers cut approximately 36,000 jobs in February, far fewer than expected. The four-week average for continuing jobless claims fell 134,000 to 4.500,000 million jobless claims.
Upcoming on the economic calendar are reports on wholesale trade on March 10, international trade on March 11 and retail sales on March 12
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FHA 90 Day Flipping Rule Waived
January 29, 2010
HUD has announced that the FHA 90 day rule on flipping will be waived for one year. HUD announced that waiving this rule would expand access to FHA mortgage insurance as well as cause quick resale of foreclosed properties across the nation. The temporary waiver of the 90-day flipping rule will begin on February 1, 2010 and will be waived for one full year until HUD extends or withdraws the waiver. This waiver should help assist in an effort to rid the Tulsa Real Estate Market of it’s Foreclosures.
Of course, with all good things they are still rules that apply. HUD has specific conditions that must be met in order for sale to occur.
These conditions are:
All transactions must be between a buyer and seller that have no identity of interest between one another or other parties involved in the sales transaction. The seller must be in possession of the title; all LLC’s, corporations, and trusts must be established in accordance with state and federal law; no flipping occurred by within the last 12 months, and the property must have been on the market openly such as through auction, MLS, or FSBO.
The waiver will not apply to the Home Equity Conversion Mortgage for purchase program but is limited to forward mortgages.
For those that are looking to use this waiver but the sales price of the property is twenty percent or greater above the sellers acquisition cost the lender has to meet specific conditions.
These conditions include repairs and rehabilitation must have occurred and be documented by a second appraisal showing an increase of twenty percent or more, if no repairs or work have been done, the appraiser must explain the increase; and an inspection of the property must be given to the buyer before the closing. The lender may charge the buyer for the cost of the inspection. The inspector does not have to be approved but of course cannot have an interest in the property and may not receive compensation except from the lender. The inspector cannot be involved with any of the repairs of the property.
With this new waiver in place, the ability to buy foreclosures should aid in riding the nation of the inventory, which may just help the housing market get back on track. To learn more or to find a home in foreclosure that you want to resell or flip, you should talk with a Tulsa Realtor.
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Tulsa Home Buyer Tax Credit
January 19, 2010
The Tax Credit Is Extended and Expanded
The federal Tulsa Home Buyer Tax Credit is approaching the April 30th 2010 deadline very quickly. This program is the only thing our current administration has truly done to actually stimulate the economy.
Failed Programs:
- This current administration is the one that has spent the $787,000,000,000. Yes that is $787 Billion with a B to stimulate the economy and they have no idea where it was spent nor exactly what the current balance is and to whom. Please don’t forget that the main intention of this was to keep the unemployment below 8% and now we are well above 10% and that number is very conservative if the truth was to be known.
- This is also the administration that has failed miserably at bailing out the banks by giving them billions with very little accountability or even basic rules that would truly stimulate loans to the people that actually need help and a lot of this bailout money did not even stay in the U.S…
- Another great example of an absolute travesty of a program, this current administration is trying and continually shoving down the Americans throat, is the current Health Care Bill. The back door deals that have been struck and outright bribery to get this so called “reform” through is a national disgrace and comes at a time that we can least afford it. At best the legislation will raise health cost, increase our taxes and reduce the overall quality of health care. Consider that fact that our postal system has been under the control of our government from day one and would close tomorrow without the continued subsidies by the government that it has had for years. Now we are expected to believe that the government can not manage getting a letter across the country efficiently but we can trust them to manage our health and the health of our families? If this bill was to pass this would be just another failed program that would absolutely bankrupt our country. The one thing everyone seems to be forgetting is do you want Washington dictating the level of healthcare you can and can’t have and when you can be treated. If you didn’t know better you would think that this administration was truly trying to destroy our country and the sad part is they are doing a fantastic job of that.
The Program That Worked – Time is Running Out
The government lost sight of what started this recession in the first place, the housing sector. They spent billions on ineffective and failed programs to stimulate the economy. The only effective program they have initiated to revive the economy is the Tax Credit but time is running out.
With that being said the first-time homebuyer tax credit being extended and expanded to include move-up buyers, prospective Tulsa home purchasers now have an unprecedented opportunity right now. There has never been another time in our nation in which…
- Tulsa Home prices are down significantly as in most areas of the country over the past three to four years. Plus the glut of Tulsa foreclosures makes for a particularly excellent buying opportunity.
- Mortgage Rates are at historic lows. Never before could purchaser purchase homes at such affordable rates as we have seen in the past 12 months.
- The government is literally subsidizing the purchase with a credit up to $6,500 for move-up buyers and up to $8,000 for first-time buyers. This is a dollar-for-dollar tax credit in addition to the deduction of interest and taxes paid.
Put these facts together and this means housing is the most affordable it has been in a generation. Despite frigid temperatures and unbearable winter so far in Oklahoma, our Tulsa area Realtors are gearing up for an early spring.
This Tulsa area Home buyer opportunity is not without challenges, including tighter qualification standards and low appraisals. From low scores to valuation challenges, every deal seems to have obstacles and takes longer to close. If the bank owns the home, the time it takes to get a contract approved may be excruciating but can be fruitful.
This administration truly needs to concentrate its efforts on continuing this first time home buying program and others like it. As we know this administration has a track record of making poor decisions. If our administration, would design more programs like the first-time homebuyer tax credit, that really stimulates the economy and provides jobs then their ratings might actually start to climb and our country might actually recover.
Flat Mortgage Rates
October 12, 2009
Freddie Mac reported the results of the Primary Mortgage Market Survey, which showed that the 30-year fixed-rate mortgage averaged 5.03% with an average 0.7 point for the week ending October 29, 2009. This figure is up from last week when it averaged 5.00%. The same time period of 2008 had the figure at 6.46% for a 30-year fixed-rate mortgage.
The 15-year fixed-rate mortgage averaged 4.46% with an average 0.6 point, which is up from last week when it averaged 4.43%. A year ago at this time the 15-year fixed-rate mortgage averaged 6.19%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.42% with an average 0.6 point, which is up from 4.40%. A year ago, the 5-year adjustable-rate mortgage averaged 6.36%.
The one-year Treasury-indexed adjustable-rate mortgage averaged 4.57% with an average 0.6 point, which is up from 4.54%. At this time last year, the 1-year adjustable-rate mortgage averaged 5.38%.
Frank Nothaft, vice president and chief economist for Freddie Mac stated, “Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971,”… “As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year,” according to Freddie Mac’s survey.”
Economic data releases this week offered mixed signals as to the current state of the housing market. For example, total existing home sales jumped 9.4 percent to an annualized rate of 5.57 million homes in September, the strongest pace since July 2007, according to the National Association of Realtors®. However, new home sales unexpectedly fell 3.6 percent to 402,000 houses, the weakest since June of this year, based on figures from the Department of Commerce. Nonetheless, stronger housing demand has lowered the inventory of unsold existing homes in September to the lowest since January of this year and for new homes the lowest since November 1982, which should help stabilize falling house prices.”
All of these signs are good for the housing market. Consumers as well as REALTORS need to be on the lookout for more good news in the coming months.
To learn more contact a Tulsa Homes Expert by calling RE/MAX for more information at 877-738-8572.
Understanding Home Equity Loans
September 20, 2009
Home equity loans are loans that is against the equity you have in your home. Tulsa Home owners can use the money from this loan for any reason you want. It does not have a specified requirement. Interest rates a major consideration when applying for a home equity loan so let’s check out interest rates.
Why do you pay interest rates on home equity loans?
Interest rates are a fee that is charged for using the lending company’s money for a specific time period.
How do you know what the interest rates will be for home equity loans?
Interest rates are figured by dividing the amount of interest by the amount of money borrowed. An example would be: If the lending company charges $60 per year for you to borrow $1,000, the interest rate would be 6%. You will find interest rates posted at most lending companies.
What types of things determine what interest rates will be when you apply for home equity loans?
- Inflation affects interest rates. When inflation rises so does interest rates. This happens because lending companies will lose money that will be paid back to them in the future.
- How much credit people are seeking and how much is available.
- The rate that other institutions charge each other for their short-term loans. (Federal funds rate).
Are interest rates different for different types of home equity loans?
Yes, the higher the credit risks of the loan, the higher the interest rate. Loans that are determined to be high risks are ones that the lending company believes will probably not be repaid.
By checking with different lending companies, you will find that interest rates are not the same for each company. As an example:
The interest rate for a 30 year fixed mortgage in:
- San Diego, California varies from 5.386% to 6.27%
- Bloomington, Indiana varies from 5.391% to 6.071%
The interest rate for a 10 year fixed mortgage in:
- Daytona Beach, Florida varies from 4.557% to 6.105%
- Memphis, Tennessee varies from 4.557% to 5.026%
Therefore, interest rates can be a big factor when you are looking for a home equity loan. This may not be a big difference but when you are talking about several thousand dollars, it does become an important deciding factor. Interest rates vary from state to state and from lending companies to lending companies. They can also very according to the length of the loan and the amount of money borrowed.
Many people are now applying online for all types of home equity loans. This can be very convenient for many of us. There are also many companies online today that can give you the current mortgage rates for home equity loans for the city and state that you live in. Without even leaving home you will be able to check the current rates and find lending companies in your area that have the lowest mortgage rates available.
Do not apply for your home equity loans with a company just because their mortgage rates are lower than the last one you checked out. Be sure you check every option in every loan package to insure that you are in fact getting the best type of loan with the options that you need.
If you decide to apply online for a home equity loans; check to be sure that the website is secure. You never want to give out personal information online unless the website has a secure server in which to submit your personal information. You can tell if the page that submits the information is using a secure protocol by checking the URL, if the URL looks like https:// then it is secure and all information submitted will be encrypted and will not be able to be read until it reaches its destination.
Before submitting information for a home equity loans, be sure that the lending company is a real company. If they are, in fact, legitimate they will have their physical address and telephone number posted in clear viewing somewhere on their website. You do not want to give out personal information concerning your bank account if you cannot be sure the company receiving the information is legit.
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Fannie Mae & Freddie Mac’s Appraisal Rules
August 26, 2009
Congress is taking a break until after Labor Day, but things are boiling over the Fannie Mae and Freddie Mac’s appraisal rules. The rules of course are very controversial or we would not be talking about Capital Hill.
If it were up to Bipartisan legislation, the Home Valuation Code of Conduct would be put on a shelf and left for 18 months and this idea is actually getting new sponsors, which is not at 54.
The National Association of Realtors is pushing for the Home Valuation Code of Conduct bill in the key congressional representatives’ home district during the recess. The National Association of Realtors is very critical of the Home Valuation Code of Conduct rules with their side stating the rules “produce deal-killing lowball appraisals, encourage the use of low-paid appraisers unfamiliar with local conditions, and have raised the cost of valuations for consumers.”
Along with the National Association of Realtors, appraisers, mortgage brokers, and home builders are also against the rules. The Home Valuation Code of Conduct took effect on May 1.
David Stevens the FHA commissioner recently presented the first public comment from HUD, which was, the FHA account for close to 1/3 of mortgage market volume and does not have any plans to adopt the Home Valuation Code of Conduct. He went on to explain that FHA has its own guidelines and standards that cover appraisers and appraisals. A few weeks later, Stevens did comment that some of the core principles of the guideline were good.
Stevens stated, “We do like the HVCC’s separation of influence in ordering the appraisal from those who financially benefit from the outcome.” He did say that FHA will not use the Home Valuation Code of Conduct but may incorporate some of the principles.
The goal of FHA as stated by Stevens “is to get changes into the marketplace in the near future.” This is a hint that FHA may soon be presently new guidelines on home valuations, which will of course affect realty agents, appraisers, consumers, and lending companies. No details of any of the changes are available at this time.
Labor Day is fast approaching and Capital Hill will be a buzz before long. The bill only has 54 supporters and with all the discord among the politicians, REALTORS, home owners, and lending companies, I doubt if we will see any changes yet, as they will more than likely more on to more pressing issues such as health care.