Fixed Rate Mortgages Below 4% Again

Fixed rate mortgages fell back near yearly lows again this week, lowering borrowing costs for home buyers and refinancers. The 30-year fixed-rate mortgage averaged 3.99 percent this week, Freddie Mac reports in its weekly mortgage market survey.

“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later,” Frank Nothaft, Freddie Mac’s chief economist, said in the video commentary embedded here.                                mortgages

Freddie Mac reported the following national averages with mortgage rates for the week ending Nov. 20:

  • 30-year fixed-rate mortgages averaged 3.99 percent, with an average 0.5 point, dropping from last week’s 4.01 percent average. The 30-year fixed-rate mortgage dipped to 3.97 percent in mid-October, its lowest average so far this year.
  • 15-year fixed-rate mortgages averaged 3.17 percent, with an average 0.5 point, decreasing from last week’s 3.2 percent average. A year ago, 15-year rates averaged 3.27 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.01 percent, with an average 0.5 point, falling slightly from last week’s 3.02 percent average. A year ago, 5-year ARMs averaged 2.95 percent.
  • 1-year ARMs averaged 2.44 percent, with an average 0.4 point, inching up slightly from last week’s 2.43 percent average. Last year at this time, 1-year ARMs averaged 2.61 percent.

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Source: Freddie Mac

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Technology Makes Smarter Home Buyers

Seventy-six percent of house hunters say technology has made them smarter home buyers, and 69 percent say it’s made them more confident in and satisfied with their decisions, according to a new poll of more than 1,000 buyers commissioned by Discover Home Loans. Nearly half home buyers say technology helped them save money, and 92 percent say it helped them save time.                                   home buyers

Online resources are becoming more important to home shoppers, with nine out of 10 buyers saying they turn to online resources during the home-buying process. The survey showed the top three ways buyers use online tools to find homes: to scan real estate listings (83%), use maps to explore neighborhoods (72%), and use e-mail, apps, and websites to submit documents to lenders (71%).

“Home Buyers are clearly looking to play a larger role in the home-buying process and turning to the latest technologies to find the information they need,” says T.J. Freeborn, senior manager of customer experience at Discover Home Loans. “Technology is a great resource for buyers because it gives them access to online property listings, as well as allows them to preview homes and find reviews on real estate agents and mortgage lenders. It’s truly changing the home-buying process, and the result is a more confident, informed buyer.”

Despite buyers’ increased usage of technology, 83 percent of survey home buyer respondents say they work with real estate agents to purchase a home. But 74 percent say they think it’s important that their agent is tech savvy.

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Source: Discover Financial Services

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7 Smartest Cities in America

Which cities have the highest number of educated people in their workforce? recently ranked America’s smartest cities, scoring 380 metro areas. The criteria they used in the rankings include the growth rate in the number of residents with at least a bachelor’s degree (from 2000 to 2013); percentage point increase in the share of the population that is college-educated over that time span; and the share of educated people in the population in 2013.                      smartest cities

  1. Boston-Cambridge-Newton, Mass.-N.H.
    Share of population that is college-educated (2013): 44.8%
    Percentage increase in college-educated since 2000: 32.2%
  2. Pittsburgh
    Share of population that is college-educated: 32.2%
    Percentage increase in college-educated since 2000: 37.3%
  3. San Jose-Sunnyvale-Santa Clara, Calif.
    Share of population that is college-educated: 46.7%
    Percentage increase in college-educated since 2000: 32.9%
  4. Grand Rapids-Wyoming, Mich.
    Share of population that is college-educated: 30.6%
    Percentage increase in college-educated since 2000: 92.7%
  5. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
    Share of population that is college-educated: 48.7%
    Percentage increase in college-educated since 2000: 44.9%
  6. Baltimore-Columbia-Towson, Md.
    Share of population that is college-educated: 36.8%
    Percentage increase in college-educated since 2000: 40.8%
  7. Raleigh, N.C.
    Share of population that is college-educated: 43.7%
    Percentage increase in college-educated since 2000: 78.7%

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Source: America’ Smartest Cities 11/17/2014

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Real Estate Predictions For 2015

Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for November: Real Estate Predictions for 2105.    real estate predictions

“The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better,” says Frank Nothaft, Freddie Mac’s chief economist. “Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015. And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity.”

Freddie Mac economists have made the following projections in housing for the new year:

  1. Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.
  2. Home prices: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. “Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers,” according to Freddie economists. “Historically speaking, that’s moving from ‘very high’ levels of affordability to ‘high’ levels of affordability.”
  3. Housing starts: Homebuilding is expected to ramp up in the new year, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.
  4. Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.
  5. Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.

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Source: Freddie Mac

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Holiday Listings Sell More Quickly?

Home owners may be doubtful that the months of November and December will bring about a holiday listing home sale. After all, aren’t potential buyers sidetracked with the holidays and likelier to postpone their house hunt due to bad weather and shorter days?

But sometimes the “off-peak” time to sell can actually be the perfect moment for sellers. Several studies show that, on average, homes listed in November and December are more likely to sell, sell more quickly, and more closely approach the asking price, according to an article at                      holiday listings

A 2011 study conducted by found that 60 percent of real estate professionals advise their sellers to list a home during the holidays because they believe it’s an opportune time to sell. Nearly 80 percent of the real estate professionals surveyed said that more serious buyers emerge during the holidays, and 61 percent say less competition from other properties makes it an ideal time to sell. Holiday listings should be considered.

Thanksgiving is particularly good, the article notes. Buyers may have held out through the busy summer months hoping to find a better deal, but now they may be searching with increased urgency. Some buyers may be motivated to close before the end of the year for tax purposes. They can purchase a home late in the year to deduct home purchase costs on their taxes, such as points, interest, and property taxes. Also, certain sellers who sold their homes during the summer season may be facing a capital gains tax. They may be highly motivated to buy in November to avoid paying capital gains tax (since closing on the purchase of another house is required within 180 days).

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Source: 11/14/2014

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Down Payment Registry for a Wedding Gift?

A new wedding gift marketing campaign from a Central Pennsylvania home builder is reaching out to engaged renters and showing them how they can start married life as first-time home owners.                              wedding gift

Keystone Custom Home’s campaign is urging engaged couples to sign up for a Wells Fargo Bank wedding gift registry called the New Home Bridal Registry to help save for a down payment on a home. Family and friends can make deposits into the account as a wedding gift, but they must keep a record of who gave what amount, in order to follow tax rules. The couple can then use the money in the account to buy a home. They’re not obligated to purchase a Keystone home either. However, they are obligated to use Wells Fargo as their mortgage lender.

The builder is promoting the campaign—“Say ‘I Do’ to Your New Home”—on Pinterest with a contest that urges followers to build a board named #SayIDoKCHContest by Nov. 14 for a chance to win a $250 Bed, Bath and Beyond gift card. Participants on Pinterest can also view images of the builder’s model homes and floorplans as well as learn more about the “‘I Do’ to Your New Home” campaign through the builder’s own board, “Happy

Ever Starts Here.”

“Most people getting married are just starting out and most don’t own a home,” Janette Hawkins and Carol Morgan, executives managing the marketing campaign through mRELEVANCE, told BUILDER online. “A lot of young couples are just coming out, or are a few years out, of college. Keystone wants to help them realize the dream of home ownership rather than renting. There are so many programs available to buyers including low down payments and, of course, historically low interest rates right now. It makes sense for most couples to look at the option of owning.”

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Source: Builder Online 11/10/2014

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Remodeling Activity Falls As Rents Rise

Markets where rents are rising rapidly are seeing less home-improvement activity, translating to rental properties that aren’t being upgraded or properly maintained, suggests a new study.           rents

In many ZIP codes where rents have climbed by some of the highest amounts, home remodeling and other home-improvement activity are at their lowest, according to a new study by BuildZoom, which analyzed housing-cost and building-permit data.

The study found that from 2011 to 2013, a 10 percent increase in rents in a ZIP code was accompanied by an average 9.7 percent decrease in the number of homes undergoing permitted improvement, says Issi Romem, chief economist for BuildZoom.

Romem speculates that with rents rising, particularly in high-dollar places like San Francisco, landlords likely are facing fewer vacancy periods, which may leave them less time to make home improvements. Also, “when eager renters are lining up at the door, landlords have less incentive to renovate,” Romem says. “If one can make top dollar renting a place out as-is — why not?”

On the flip side, home remodeling and home improvement activity tended to rise more in ZIP codes with greater increases in home values as opposed to rents, Romem found.

“From 2004 to 2013, we estimate that, on average, a 10 percent increase in home values was associated with a 4.3 percent increase in the number of homes undergoing improvement,” he says.

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Source: HousingWire 11/12/2014


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Home Owners Want Smart Home Technology

Home owners are showing a bigger appetite for smart home technology. Nearly half of consumers — 46 percent — say it’s important their current home or the next home they purchase have smart home technology, according to a survey conducted by ERA Real Estate and HGTV of nearly 2,500 consumers who recently participated in an HGTV national focus group on smart home technology.

Home owners and buyers say they see the value in smart home technology for comfort, safety, and cost savings, and 51 percent surveyed say they would consider installing smart home technology in their home to make their home more marketable to future home buyers.

The younger segment of the millennial generation is the most likely age group to spend money on smart home technology — 10 times more likely than the percentage of generation X members who say they’d consider adding smart home technology to their homes, the survey reported.

“While still a growing trend, smart home enhancements have the potential to increase savings, safety, and resale value,” says Charlie Young, president and CEO of ERA Real Estate. “As we have seen through this survey and our one-on-one interactions with buyers and sellers, a smart home is one that is well positioned for the future and aligns with a growing reliance on mobile technology.”

Indeed, 70 percent of millennials say it’s important that smart home technology integrate with their smartphone.

While smart home technology has often been thought to be driven by mainly security, survey researchers did not find security as the main motivation for adding smart home technology. Instead, home owners say they’re using or wanting smart home technology mainly because of the money-saving potential, such as through automated climate control, energy management, remote home monitoring, and lighting control systems. What’s more, consumers of all generations said they’d automate their thermostats before their lighting or security systems, and one in 10 Americans say they’d automate their TV over their lighting or security systems.

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Source: ERA Real Estate

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Entry Level Buyers Squeezed Out Of Mortgage Financing

Demand for condo units is rising in urban areas nationwide, but mortgage financing continues to squeeze out entry-level buyers, the Los Angeles Times reports.

List prices for condos in major markets are rising faster than prices for single-family detached homes in many areas. Condos are surging in popularity as boomers look to downsize and other owners seek to live closer to urban workplaces and cities.   mortgage financing

Lawrence Yun, chief economist for the National Association of REALTORS®, estimates that condos have surged from about 8 percent of the market share to between 11 percent and 12 percent recently. In some markets, the share is greater: In Miami, for example, condos accounted for nearly 45 percent of home sales in September, and in Los Angeles, they accounted for about 27 percent, according to CoreLogic’s DataQuick.

But financial barriers — particularly for Millennial and first-time buyers — may be keeping the condo surge from heightening more. The Times reports that the Federal Housing Administration continues to severely restrict the availability of its low-down-payment mortgages in several condo projects. The FHA will insure mortgages in less than 7 percent of the nation’s estimated 150,000-plus condominium developments, according to the Times.

In particular, the agency has stopped approving so-called “spot loans” in condo projects where condo associations have not applied for and received special certification. Several condo HOA boards have called the certification burdensome and say that the process often ends in rejection.

FHA tightened its mortgage financing of condo projects after being faced with significant foreclosures during the housing crisis.

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Source: Los Angeles Times 11/09/2014

However, the agency may be considering a change: The Times reports that FHA is drafting a major condo proposal for 2015, which could potentially bring back mortgage financing to more buyers and existing unit owners.

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Veterans Day

On the 11th hour of the 11th day of the 11th month of 1918, an armistice, or temporary cessation of hostilities, was declared between the Allied nations and Germany in the First World War, then known as “the Great War.” Commemorated as Armistice Day beginning the following year, November 11th became a legal federal holiday in the United States in 1938. In the aftermath of World War II and the Korean War, Armistice Day became Veterans Day, a holiday dedicated to American veterans of all wars.


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