Home Builders Feeling Better About Market Conditions

Home builder confidence for the new, single-family home market posted its seventh consecutive month gain, reaching its highest level since May of 2006, according to the November index by the National Association of Home Builders and Wells Fargo.

"Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country," says NAHB Chair Barry Rutenberg. "In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today's favorable prices and interest rates."

The monthly index gauges builder perceptions of current single-family home sales, expectations for the next six months with sales, and buyer traffic.

"While our confidence gauge has yet to breach the 50 mark — at which point an equal number of builders view sales conditions as good versus poor — we have certainly made substantial progress since this time last year, when the HMI stood at 19," says NAHB Chief Economist David Crowe. "At this point, difficult appraisals and tight lending conditions for builders and buyers remain limiting factors for the burgeoning housing recovery, along with shortages of buildable lots that have begun popping up in certain markets."

Home Builders Feeling Better About Market Conditions

Mortgage Rates Fall into Record-Breaking Territory

Daily Real Estate News | Friday, November 16, 2012 

 

Fixed-rate mortgages dropped to new all-time lows this week, pushing homebuyer affordability even higher for those who can qualify.

“Fixed mortgage rates eased this week to record lows on indicators of higher consumer confidence and wholesale prices,” Frank Nothaft, Freddie Mac’s chief economist says.


The following are the national averages with mortgage rates reported by Freddie Mac for the week ending Nov. 15:

• 30-year fixed-rate mortgages: averaged a new low of 3.34 percent, with an average 0.7 point. The previous record low was 3.36 percent, set the week of Oct. 4. A year ago, 30-year rates averaged 4 percent. 
• 15-year fixed-rate mortgages: averaged a new low of 2.65 percent, with an average 0.7 point. Its previous record low was 2.66 percent, set during the week ending Oct. 18. A year ago, 15-year rates averaged 3.31 percent.
• 5-year adjustable-rate mortgages: averaged 2.74 percent, with an average 0.6 point, rising slightly from last week’s 2.73 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent. 
• 1-year ARMs: averaged 2.55 percent, with an average 0.3 point, dropping from last week’s 2.59 percent average. A year ago, 1-year ARMs averaged 2.98 percent.

Mortgage Rates Fall into Record-Breaking Territory

California housing market to continue improvement; lack of inventory to hamper sales
 

LOS ANGELES (Oct. 2) – California’s housing market will continue to recover in 2013, as home sales are forecast to increase for the third consecutive year and the median price to rise for the second straight year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 California Housing Market Forecast,” released today. 

The C.A.R. forecast sees sales gaining 1.3 percent next year to reach 530,000 units, up from the projected 2012 sales figure of 523,300 homes sold.  Sales in 2012 will be up 5.1 percent from the 497,900 existing, single-family homes sold in 2011.

“The market has improved moderately over the past year, and we expect that to continue into 2013,” said C.A.R. President LeFrancis Arnold.  “Sales would be even higher if inventory were less constrained in REO-dominated markets, particularly in the Central Valley and Inland Empire, where there is an extreme shortage of available homes.  Sales will be stronger in higher-priced areas, where there are more equity properties and a somewhat greater availability of homes for sale.”

“Housing affordability has never been stronger – with record-low interest rates and favorable home prices, combining to create a once-in-a-generation opportunity to buy a home in California,” said Arnold.

C.A.R.’s forecast projected growth in the U.S. Gross Domestic Product of 2.3 percent in 2013, after a gain of 2 percent in 2012.  With job growth of 1.6 percent in California, the state’s unemployment rate should decrease to 9.9 percent in 2013 from 11.7 percent in 2011 and 10.7 percent in 2012.
The average for 30-year fixed mortgage interest rates will edge up to 4 percent after six consecutive years of declines, but will still remain historically low.

The statewide median home price is forecast to increase a moderate 5.7 percent to $335,000 in 2013.  Following a decrease in 2011, the California median home price will climb a projected 10.9 percent in 2012 to $317,000.

“The housing market momentum which began earlier this year will continue into 2013,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes.”

“The actions of underwater homeowners will play an important role in housing inventory next year, with rising home prices inducing some to stay put and others to list and move forward,” she said.
“The wildcards for 2013 include federal, monetary and housing policies, state and local government finances, housing supply, and the actions of underwater homeowners – not to mention the strength of the overall economic recovery,” Appleton-Young continued.

Appleton-Young will present an expanded forecast Wednesday afternoon during CALIFORNIA REALTOR® EXPO 2012 (http://expo.car.org), running from Oct. 2-4 at the Anaheim Convention Center in Anaheim, Calif.  The trade show attracts nearly 6,500 attendees and is the largest state real estate trade show in the nation.

Also, don’t miss “Housing Market Trends: What’s Next for Real Estate,” during CALIFORNIA REALTOR® EXPO 2012.  C.A.R.’s Chief Economist Leslie Appleton-Young and C.A.R. Senior Economist Selma Hepp will moderate a panel of renowned experts as they discuss future market trends and front- and center issues facing the market and REALTORS® next year.  The panel is scheduled to be held Thursday, Oct. 4, from 2 p.m. – 3:30 p.m. at the Anaheim Convention Center.

2013 CALIFORNIA HOUSING FORECAST

	2008	2009	2010	2011	2012f	2013f
SFH Resales (000s)	441.8	546.9	492.3	497.9	523.3	530.0
% Change	27.3%	23.8%	-10.0%	1.1%	5.1%	1.3%
Median Price ($000s)	$348.5	$275.0	$305.0	$286.0	$317.0	$335.0
% Change	-37.8%	-21.1%	10.9%	-6.2%	10.9%	5.7%
30-Yr FRM	6.0%	5.1%	4.7%	4.5%	3.8%	4.0%
1-Yr ARM	5.2%	4.7%	3.5%	3.0%	2.8%	2.8%

f = forecast

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Two-Thirds of Buyers OK With Haunted Houses

Daily Real Estate News | Wednesday, October 31, 2012 

 

Does the carefully staged furniture in your new listing move around between showings? Do strange thumps and moans come from nowhere? Good news: Today's buyers seem to be OK with that.
Financial news site The Street reports that only 35 percent of the 1,910 people responding to a REALTOR.com poll said they would avoid a haunted house.

There's a catch for the remaining 65 percent, though: ABout half of the people who said they'd consider buying wanted a discount of between 1 percent and 30 percent. Another 36 percent said they'd expect an even higher discount.

The poll found a number of spooky deal breakers: 65 percent would pass on a house that had strange voices, 64 percent would dodge a house with levitating objects, 59 percent would skip a house with visible ghosts, and 52 percent would rather avoid a house with unexplained noises, such as footsteps or slamming doors.

"It's really interesting that so many people would be into purchasing a home even if it was rumored to be haunted," The Street quotes REALTOR.com's Lexie Puckett. "Essentially, more people were open to the idea than not."

Florida-based practitioner Eric Martell says it's tough to pinpoint "what kind of damage a spirit does to a house's value. I don't think any appraiser on the planet can answer that and say, 'Well, I always discount [haunted houses] by 10%.'"

Source: "Haunted House? 65% Might Still Buy," The Street (10/31/2012)

Two-Thirds of Buyers OK With Haunted Houses

VA Guarantees 20 Million Loans and Counting

Daily Real Estate News | Tuesday, October 30, 2012 

 

The Department of Veterans Affairs announced it has reached a major milestone: It has guaranteed 20 million home loans since launching its loan program in 1944.

“The 20 millionth VA home loan is a major milestone and is a testament to VA’s commitment to support and enhance the lives of Veterans, Service members, their families and survivors,” says Allison A. Hickey, VA’s undersecretary for Benefits. “As a result of their service and sacrifice, as a group, they prove to be disciplined, reliable, and honorable—traits that are ideal for this kind of national investment.”

VA loans, which tend to boast low financing costs for home ownership, are available for eligible veterans, servicemembers, and surviving spouses.

The VA program has continued to grow, particularly in the last five years, due to its low interest rates. Loans for purchases have jumped 71 percent and loans for refinancings are up 20 times in that period.
The Department of Veterans Affairs boasts the lowest foreclosure rate for the past 17 quarters. It also has had the lowest delinquency rate for the past 14 quarters on its loans, according to the Mortgage Bankers Association.

Source: The Department of Veterans Affairs

VA Guarantees 20 Million Loans and Counting

25 Quick, Cheap and Easy Home Sale Tips

If you want to get a home sold quickly and inexpensively, you should review these sales and design tips.....

 

August 2012 | By Barbara Ballinger

 

Even with rising values and reduced inventory in certain markets, selling a home remains challenging. Buyers expect not just a shiny new stainless sink but pruned hedges, freshly painted walls, glistening hardwood floors, and more. Making everything look great can cost a pretty penny, and many sellers won’t be able to afford all the suggestions you might make.
You can help them prioritize based on the condition of what’s needed most, what buyers in the area typically request, what competing houses offer, and — of course — cost. Here’s a list of 25 affordable, easy-to-make changes from top design and real-estate pros:

1. Add power outlets with USB ports in rooms that lack them, especially in the kitchen, bathrooms, and bedrooms where they’re most needed. “Younger, more tech-savvy couples and individuals love them,” says Tyler Drew, broker and property investor with Anubis Properties Inc. in Los Angeles.
2. Eliminate acoustic popcorn-style ceilings since they look dated and tacky.
3. Remove exposed posts and half walls. Today’s buyers want more space, and partial walls and posts gobble up room. The only walls that should remain are those that offer privacy or conceal electrical wires or plumbing stacks.
4. Update wiring for the Internet and flat-screen TVs. You don’t have to run CAT-5 through walls, which can be costly and require opening and closing and repainting walls. Instead, find a place to put a wireless router, Drew says.
5. Clean carpets and wood floors since they’re often the first part of a room that buyers check out; you don’t need to replace them unless they’re in terrible shape. A good carpet steam cleaning or wood floor waxing can be relatively inexpensive, sometimes less than $200.
6. Expand a small kitchen to make it work better and look larger. Two quick fixes: Change the backsplash by adding mirrors, stainless steel, or paint, which will introduce light and views; and add an island, which requires only 30” between counters and the island to pass through comfortably. If there’s not enough room for an island, bring in a rolling cart with pull-out shelves underneath and a wood top, says Libby Langdon, an interior designer, author, and expert with Liebherr Refrigeration..
7. Clear out and clean a garage, a big selling feature.Power wash the floor or paint it if it’s in bad shape, remove dated cabinets, and remove all junk that’s been stored there, so prospects can see how much space they would have for their stuff.
8. Change out corroded or dented door knobs and levers. The replacements don’t have to be expensive but they should look new and clean, Chicago architect Allan J. Grant suggests.
9. Pay attention to landscaping, which can add 7 to 15 percent to a home’s value, according to HabitatDesign.com principals Jessy Berg and Bonnie Gemmell. Focus on mowing grass, removing crab grass, and eliminating dead plants and tree branches. “I’d rather have dirt and the potential to paint a picture for the buyers’ mind than a backyard full of dead plants,” Drew says. But if you have extra funds, consider Sacramento, Calif.-based landscape designer Michael Glassman’s ideas: Add lots of seasonal color through blooming annuals and perennial plants and remove problems like too much noise from traffic or neighbors by installing an inexpensive fountain with trickling water.
10. Paint exterior windows, doors, gutters, downspouts, and trim, then go inside and paint the home’s trim, doorways, and walls that are in need of freshening. Don’t worry about the colors but consider those that veer toward quiet and comfort such as Benjamin Moore’s Yosemite Sand, Edgecomb Gray, or Carrington Beige. “Gray is a hot interior color now,” says Manchester, Vt.-based designer Amy Thebault. Painting rooms other, lighter colors such as white, yellow, and beige help to bounce and reflect sunlight and use more natural and less artificial light, according to Chris Ring, vice president at ProTect Painters, a professional painting source. But in cooler months, Ring says, dark colors such as deep brown and blue absorb sunlight, thereby reducing heating costs. And don’t forget ceilings, which can be a “fifth wall.” You can improve them with paint or old-style metal or faux-metal tiles, says Beverley Kruskol, a general contractor and owner of MY Pacific Building Inc. in Los Angeles.
11. Remove outdated wallpaper, replacing it with paint and preferably a neutral color, says Shelley Beckes, ASID, CID, a designer with Beckes Interior Design in Los Angeles.
12. Remove, store, or discard excessive accessories on tabletops and walls and in cabinets. “Less is more, and you want the house to be seen by prospective buyers without the distraction of too many personal items,” Grant says. Some suggest following the rule of three: Leave out only three things on any surface.
13. Get the house inspected before it’s listed to know its condition and identify any structural issues that could derail sales. Many problems can’t be detected by an untrained eye, including those in a basement, crawl space, or attic, says BillJacques, president-elect of the American Society of Home Inspectors. “There might be roof damage or a plumbing leak. Many inspectors take photos and provide a detailed report,” he says. “And if home owners have repairs made, they should be handled by a qualified licensed contractor, so the home owner can get problems corrected.”
14. Outfit closets for extra storage to make rooms look larger and less cluttered, but don’t redo all closets and elaborately. Top contenders for redos are an entry closet for a good first impression, kitchen pantries where storage is key, and a linen closet to keep sheets, towels, and other stuff neat, says Ginny Snook Scott, chief design officer at California Closets Co. “The costs needn’t be excessive. A linen closet can be fitted with baskets and cubbies for between $500 and $600, an entry closet for between $400 and $700, each dependent on closet size and features,” she says.
15. Tighten a home’s “envelope” to improve energy efficiency and savings. Put money and effort into well-insulated double-paned windows, sealed furnace ducts, energy-efficient appliances, the newest programmable thermostats, LED and compact fluorescent lights, and a smart irrigation box on a sprinkler to cut water usage, says Kate Latham, energy consultant with WattzON, a service based in Mountain View, Calif., which analyzes home energy use to pare costs. “After a few months, sellers can show buyers how costs have dropped. They also should put together a green manual to show which features they added,” she explains.
16. Improve a home’s healthfulness by using paints and adhesives with low or no VOCs. Point out these changes to prospective buyers in another list or manual, Latham says.
17. Use what you have, and arrange each room in a conversational way if possible. Don’t set all furnishings in a family room so they face a TV, since most potential buyers like the idea of an open-room milieu for socializing.
18. Remove and replaced faded draperies, fabrics, and rugs, or leave windows and floors bare to avoid showing lack of attention, Thebault says. Slipcovers, which can cover worn furniture can also provide an affordable decorative feature, changed for each season, says Hugh Rovit, CEO of Sure Fit, a manufacturer and distributor of ready-made slipcovers and other accessories. The company’s slipcovers range from $49.99 to $149.99, based on fabric and treatment.
19. Replace old, dated, or worn bedding. Before any showing, fluff up pillows and covers, and make all beds neatly. Affordable choices can be found at stores like Target and Web sites like Overstock.com.
20. Toss out old magazines. “You don’t want a People magazine from a year ago; it looks like nobody lives in the house or cares,” Thebault says.
21. Check smells regularly. Besides getting rid of bad odors from pets and mildew, introduce nice fresh fragrances, but don’t go heavy on scents from candles. A light lavender or citrus spray is smart and inoffensive. Open windows before showings to bring in fresh air.
22. Make rooms lighter and larger for showings with good lighting. Thebault prefers warm, cool colors rather than fluorescents. Additionally, 60-watt bulbs are a good choice, even though they’re not as energy-efficient.
23. Go with plants rather than flowers indoors since they last longer, but either choice can add vivacity to a room.
24. Pay attention to your bathrooms. Specifically, make sure you have freshly laundered towels, new soap in soap dishes, spotless mirrors, and no mildew in view.
25. Be sure your house is priced competitively with the current market and homes in your area. In most regions, it’s still the No. 1 “fix” to sell quickly. Go a bit under the market price, and you may even bring forth multiple offers that are higher than expected, says Jill Epstein, a REALTOR® with Nourmand & Associates in the Los Angeles area.

25 Quick, Cheap and Easy Home Sale Tips

Nondelinquent Borrowers Soon to Be Eligible for Short Sales

Daily Real Estate News | Wednesday, October 24, 2012 

 

Mortgage giants Fannie Mae and Freddie Mac have issued new rules, which will take effect Nov. 1, that will allow short sales for underwater borrowers who have never missed a mortgage payment. Previously, Fannie and Freddie allowed only home owners who had missed payments to qualify for a short sale.

Eligible borrowers under the new rules will need to show a hardship to qualify for a short sale, however. Hardships may include unemployment or a death of a spouse.

Inman News points out one potential flaw to the new rule, however: The nondelinquent home owners who undergo a short sale will likely take just as big a hit to their credit score than if they had missed loan payments and gone into a foreclosure.

“Under current national credit reporting practices, those nondelinquent borrowers are likely to be treated the same for credit scoring purposes as severely delinquent owners who go to foreclosure after months of nonpayment, or who simply toss back the house keys and walk away in strategic defaults,” writes Ken Harney for Inman News.

Credit agencies use no special coding to indicate that a short sale was without delinquency. Therefore, home owners could see their credit scores drop 150 points or more after the short sale.

However, officials at the Federal Housing Finance Agency, which oversees Fannie and Freddie, told Inman News they are “in discussions with the credit industry” to explore ways to fix the credit score problem for those who haven’t missed a payment but undergo a short sale.

Source: “Damage to Credit Scores Could Trip Up New Fannie, Freddie Short Sale Program,” Inman News (Oct. 23, 2012)

Read More
Making a Difference, One Short Sale at a Time

Homes Are Selling Faster

Daily Real Estate News | Monday, October 22, 2012 

 

Inventories of for-sale homes aren’t the only thing that is dropping. The amount of time homes are staying on the market is growing shorter as well—down 11 percent in the last year—according to the latest Realtor.com data.

Homes were listed on average 95 days, according to September housing data. That is down from 107 days a year earlier.

Homes are selling the fastest in Oakland, Calif., in which the median age of the inventory averages 21 days, which is 57 percent below what it was a year ago. Denver, Colo. boasts a median age of inventory of only 38 days, followed by fast-selling markets of Stockton-Lodi, Calif., with 43 days, and San Francisco with 44 days.

As the median age of the inventory is falling, inventories of for-sale homes continue to hover at record lows too, dropping 18 percent last month compared to a year ago.

“There’s a recovery,” Curt Beardsley, vice president of Realtor.com, told BusinessWeek. “Our market times are low and there’s actually a compression of inventory.”

Home buyer demand is increasing, with housing affordability still high and ultra low mortgage rates that have pushed home buyers’ purchasing power higher. The rise in demand has caused asking prices to also rise. Last month, the median asking price was $191,500, which is up 0.8 percent compared to a year earlier, Realtor.com reports.

Source: "Listings of Homes for Sale Drop as U.S. Housing Recovers," BusinessWeek (Oct. 15, 2012) and REALTOR® Magazine Daily News

Homes Are Selling Faster

Housing Recovery Picks Up, But Challenges Await

Housing Recovery Picks Up, But Challenges Await

New-Home Market Surges

Daily Real Estate News | Thursday, October 18, 2012 

 

Construction on new homes in September rose to its fastest pace in more than four years, the Commerce Department reported Wednesday.

Housing starts surged 15 percent in September over August levels, led by a 25.1 percent rise in the multifamily market. Single-family housing starts increased 11 percent in September, reaching their highest level since August 2008. Building permits, a gauge of future construction, climbed 11.6 percent in September.

"One of the big headwinds for the economy has been the weak housing market, and this indicates that headwind has dissipated," Gary Thayer, an economic strategist at Wells Fargo Advisors in St. Louis, Mo., told Reuters.

The recovery taking shape in the new-home market is expected to help provide a much-needed lift to the overall economy.

"Things are lining up for housing," says John Canally, an economist at LPL Financial in Boston. "It's another step in the right direction, but you still have a long, long way to get back to 'normal' in housing."

While housing starts are showing a strong lift, economists note that the rate is still about 60 percent below what it was in January 2006, when it peaked.

Source: “Housing Starts Jump to Fastest Pace in 4 Years,” Reuters (Oct. 17, 2012)

New-Home Market Surges

Loan Applications for Home Purchases Soar

Daily Real Estate News | Thursday, October 11, 2012

Mortgage applications for purchases rose to their highest levels since June last week, as mortgage rates hovered at record lows, the Mortgage Bankers Association reports.

Loan requests for home purchases, viewed as a leading indicator of future home sales, increased 2.4 percent for the week ending Oct. 5.

However, the overall index — which includes applications for refinancings and home purchases — was down slightly for the week, falling 1.2 percent last week, MBA reported. Applications for refinancings make up the biggest bulk of the index.

Taken alone, applications for refinancings dropped 2 percent last week, but still remain at a three-year high in volume, says Mike Fratantoni, MBA’s vice president of research and economics.
Source: “Mortgage Applications Fell Last Week: MBA,” Reuters (Oct. 10, 2012)

Loan Applications for Home Purchases Soar

Housing Scorecard: Home Equity on the Rise

Housing Scorecard: Home Equity on the Rise

Daily Real Estate News | Monday, October 08, 2012

Rising home values are helping more home owners to find equity in their homes, according to the September Housing Scorecard from the Obama administration.
Home equity is at its highest level since the third quarter of 2008 and has risen by $860 billion since the end of 2011, according to the report. The rise in equity has helped lift 1.3 million families from being underwater, or owing more on their mortgage than their home is currently worth.
The number of home owners underwater on their mortgages has dropped 11 percent since the end of last year—from 12.1 million to 10.8 million.
With rising equity and home sales, the housing market shows continued signs of strengthening, according to the September Housing Scorecard from the Obama administration. In August, existing-home sales reached their highest level in more than two years.
“Our housing market is showing important signs of recovery—with home owner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” says Erika Poethig, acting assistant secretary at the U.S. Department of Housing and Urban Development, which releases the Housing Scorecard each month jointly with the U.S. Department of Treasury.
View the complete Housing Scorecard for September.

Source: “Obama Administration Releases September Housing Scorecard,” RISMedia (Oct. 7, 2012)

Street Names Make a Difference on Asking Prices?

Street Names Make a Difference on Asking Prices?

The street name of a neighborhood can affect the asking price on a home, at least according to a new survey by Trulia.
Trulia analyzed the median asking price per square foot among various types of address suffixes, like “Lane” and “Park.”
Street addresses with the words “Boulevard,” “Place,” and “Road” were found to have higher average asking prices than homes with addresses ending in “Avenue,” “Drive,” or “Street,” according to the Trulia study.
For example, homes that were located on streets with the word “Boulevard” in the address sold on average about $117 per square foot compared to properties located on addresses with “Lane,” which would sell on average for $101 per square feet, or “Street,” which sold for about $86 per square foot.
Homes that had “Boulevard” in the address had the highest asking prices of all the street-names Trulia studied.
Source: “Is it Better to Live on Park Boulevard or Park Lane?” HousingWire (Sept. 26, 2012)

Credit Scores Can Differ From What Lenders Use

 Daily Real Estate News | Wednesday, September 26, 2012 

 

When reviewing their credit reports, one in five consumers are likely to receive a different credit score from what a creditor will use to price a loan, according to the Consumer Financial Protection Bureau. The discrepancy has the agency concerned.
Lenders use credit scores to help determine the interest rate they’ll charge customers—with higher credit scores often receiving the best rates.
“Many consumers incorrectly believe that the scores they purchase are the same ones used by lenders," according to a CFPB report. As such, a "substantial minority" of consumers are at risk of overpaying for credit or in applying for loans that they’re ineligible for.
Even the slightest variation in credit scores can make a big difference and has the potential to hamper a person’s chances for qualifying for certain kinds of home loans, according to the CFPB.
The CFPB sites FICO scores, which are widely used by lenders, as having different credit scoring models for lenders and consumers that can vary. VantageScore also has different types of credit scores, CFPB says.
CFPB is evaluating the accuracy that credit reporting firms provide to consumers.  It encourages consumers that when they review their credit reports to focus not on credit scores but to check the accuracy of the payment history on the reports because the firms use that to calculate scores. Consumers should take steps to correct any errors they find on the payment history of their reports because it can help improve their scores, CFPB notes.
Source: “Regulator Sees Flaws in Credit-Score Information,” The Wall Street Journal (Sept. 25, 2012)
Source:Realtor Magazine

For Sale: 3BR/2BA Single Family House in Durham, CA, $234,900

For Sale: 3BR/2BA Single Family House in Durham, CA, $234,900

Top 4 Most Common Pricing Mistakes

Determining the Cost and Benefit of a Home Renovation Project

By Erin Devine, DIY Home & Floor Blog
Often, home owners want to update the kitchen with granite countertops, install new flooring or renovate the basement to make their homes more appealing to buyers. Before you begin planning your renovations, however, come up with a blueprint for how much value these will add to your new home.
Here are some tips on what to consider when calculating the costs and benefits of performing a home renovation project:
1. Calculate the costs of your renovation project.
Estimating how much you will spend on installing hardwood flooring or purchasing new appliances is fairly easy to do. However, calculating cost can become difficult if you don’t consider the full scope of the project. Before committing to a renovation, consider the size of your home, the amount of materials needed, and the length of the project. Only after you’ve calculated the total cost can you assess whether renovating is a savvy investment.
2. If needed, ask for professional assistance.
Refusing to hire a professional contractor is another mistake that many home owners make. While it’s possible to successfully complete simple projects on your own, more complex projects like remodeling a basement should be left to a reputable contractor. If you’re anticipating a large renovation project, you need to start pricing the cost of labor through local contractors. If you can’t afford to have a contractor renovate your home, try doing some of the simpler renovations on your own while saving up for the larger projects.
3. Determine how much value the renovations will add to your home.
Only after you determine the cost of the renovation should you estimate how much added value it will bring to your home. If you’re spending thousands of dollars to upgrade your home with features like hardwood flooring and granite countertops, you need to be able to justify the investment.
Select which renovation projects offer a greater return. For example, hardwood flooring usually offers a greater return on investment than granite countertops. According to HGTV, kitchen remodels will help you recoup between 60 and 120 percent of your investment depending on what you renovate, while a bathroom addition can recoup 80 to 130 percent.
But home owners are encouraged to meet with an appraiser or a real estate agent if they really want to know how much they stand to recoup and for help in calculating just how much that renovation project will add to their home’s current value.

Source: Realtor Magazine Blog

Mortgage Rates Fall Back to Record Lows

Daily Real Estate News | Friday, September 21, 2012

Fixed-rate mortgages are back at all-time record lows or hovering near them, Freddie Mac reports in its weekly mortgage market survey. For those who can qualify for a loan, the ultra-low mortgage rates are pushing housing affordability higher.
"Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell, bringing average fixed mortgage rates to their all-time record lows, which should aid in the ongoing housing recovery,” says Frank Nothaft, Freddie Mac’s chief economist.
Here’s a closer look at the national averages with mortgage rates for the week ending Sept. 20:

• 30-year fixed-rate mortgages: averaged 3.49 percent, with an average 0.6 point, matching its all-time low. A year ago at this time, 30-year rates averaged 4.09 percent. 
• 15-year fixed-rate mortgages: averaged 2.77 percent, with an average 0.6 point, setting a new record low this week. Last year at this time, 15-year rates averaged 3.29 percent. 
• 5-year adjustable-rate mortgages: averaged 2.76 percent, with an average 0.6 point, rising from last week’s 2.72 percent average. Last year at this time, 5-year ARMs averaged 3.02 percent. 
• 1-year ARMs: averaged 2.61 percent this week, with an average 0.4 point, holding the same as last week. A year ago, 1-year ARMs averaged 2.82 percent. 

Source: Freddie Mac

Source: Realtor Magazine

HOMEOWNERSHIP 45 PERCENT CHEAPER THAN RENTING NATIONALLY, REPORTS TRULIA

Trulia Research Reveals How Mortgage Rates, Tax Deductions and Time Horizon Affect Rent vs. Buy Decision in New York, Los Angeles, Boston and Atlanta, Among Other Metros

SAN FRANCISCO, September 13, 2012 – Trulia today released its Summer 2012 Rent vs. Buy Report, which provides the inside scoop on whether buying a home is more affordable than renting in America’s 100 largest metropolitan areas. Looking at homes for sale and for rent on Trulia between June 1, 2012 and August 31, 2012, this study compares the average cost of renting and owning for all homes on the market in a metro area, factoring in all cost components including transaction costs, taxes and opportunity costs.

Homeownership Affordability Highest in Detroit, Lowest in Honolulu and San Francisco
With a 3.5 percent mortgage, itemized deductions at the 25 percent federal tax bracket, and a seven-year time horizon, homeownership is cheaper than renting in all of the 100 largest U.S. metros by a wide margin. However, relative affordability depends largely on location. Buying a home is 24 percent cheaper than renting in Honolulu, 28 percent cheaper in San Francisco, and 31 percent cheaper in New York, but is 70 percent cheaper in Detroit. However, the actual dollar amount reveals that despite a low 28 percent difference in buying versus renting in San Francisco, the monthly dollar savings is big ($899) because rents and prices are so high in this region.

Top 5 Metros Where Homeownership Affordability Highest
U.S. Metro	Monthly cost of homeownership ($)	Monthly cost of renting ($)	Difference ($)	Difference (%)
Detroit, MI	$349	$1,149	-$800	-70%
Gary, IN	$616	$1,649	-$1,033	-63%
Oklahoma City, OK	$590	$1,576	-$987	-63%
Lakeland-Winter Haven, FL	$495	$1,276	-$781	-61%
Toledo, OH	$476	$1,222	-$746	-61%

Top 5 Metros Where Homeownership Affordability Lowest
U.S. Metro	Monthly cost of homeownership ($)	Monthly cost of renting ($)	Difference ($)	Difference (%)
Honolulu, HI	$1,519	$2,007	-$488	-24%
San Francisco, CA	$2,327	$3,226	-$899	-28%
New York, NY-NJ	$1,857	$2,687	-$831	-31%
San Jose, CA	$1,819	$2,646	-$827	-31%
Los Angeles, CA	$1,379	$2,020	-$641	-32%

Note: Cost of homeownership assumes that the home is sold after 7 years and includes closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters insurance. Monthly costs are based on net present value of costs averaged over 7 years, and based on the average across all properties listed in the metro area, including those for sale and those for rent, in summer 2012.

Why Mortgage Rates, Tax Brackets and Time Horizon Matter in Rent vs. Buy Decision
For prospective homeowners who are unable to secure the best mortgage rates, fail to itemize their tax deductions or plan to stay in their next home fewer than seven years, the cost of homeownership relative to renting will be greater. The chart below illustrates how each of these factors can change the cost considerations in favor of renting or buying. In the New York metro area, a 4.5 percent mortgage rate, not itemizing one’s tax deductions and staying in a home for 5 years, will make homeownership 3 percent more expensive than renting, instead of being 31 percent cheaper. Meanwhile, homeownership remains 40 percent cheaper than renting in Atlanta, even with the higher mortgage rate, not itemizing and shorter time horizon.  

                                                                                                                                                                                                                                                        

How Mortgage Rates, Taxes, and Time Horizon Affect Renting vs. Buying
SCENARIO	New York	Los Angeles	Boston	Atlanta
3.5% mortgage, 25% tax bracket, stay 7 years (baseline)	-31%	-32%	-41%	-57%
4.5% mortgage rate*	-23%	-24%	-34%	-53%
Not itemizing tax deductions*	-18%	-21%	-30%	-50%
Stay 5 years*	-21%	-22%	-32%	-52%
4.5% mortgage, not itemizing, AND 5 years	3%	-1%	-12%	-40%

*For these scenarios, the factors not mentioned are the same as the baseline.

PRE-APPROVED QUOTES

• “Homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin,” said Jed Kolko, Trulia’s Chief Economist. “Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows. Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes.”

• ”If buying a home is cheaper than renting in every major metro and makes financial sense in most situations, then why aren’t more people buying? The reason is because many people can’t take advantage of today’s affordability,” said Jed Kolko, Trulia’s Chief Economist. “It takes years to save enough for a down payment, and it takes a high credit score to even qualify for a mortgage, let alone to get the best rate. In the recession, many people found it harder to save – and harder to keep up their credit scores.”

MULTIMEDIA

• To view an interactive map illustration how mortgage rates, tax brackets and timing horizon can impact the rent vs. buy decision, click here.
• To view a full list of the rent vs. buy cost considerations for the 100 largest metros, click here.

METHODOLOGY
Trulia looks at homes for sale and for rent and calculates the average rent and sale price across all listed properties in a metro area. Then, Trulia factors in the total costs of homeownership (e.g., closing costs, maintenance, insurance, taxes, etc) and total cost of renting (e.g., renter’s insurance and security deposit). It assumes that a prospective homebuyer can get a low mortgage rate of 3.5 percent, itemize their federal tax deductions and are in the 25 percent tax bracket, and will stay in their home for seven years. To account for the opportunity costs, Trulia calculates the net present value of the payment streams for renting and owning. Click here to read the full methodology.

Source: Trulia News Room Press Release

Homebuilder Confidence Bounces Back to 2006 Levels

Daily Real Estate News | Wednesday, September 19, 2012

Homebuilders haven’t been this confident about sales, the outlook of future sales, and buyer traffic since June 2006, which is right before the housing crisis took hold, a new index shows.
For September, the National Association of Home Builders/Wells Fargo builder sentiment index, which measures builders’ outlook on current sales, future sales, and buyer demand, reached its highest level in six years. Plus, homebuilders expect the housing recovery to strengthen within the next six months.
Homebuilders say they’ve experienced some of the best sales levels than they have in six years, and buyer traffic has returned to May 2006 levels, the index shows.
"We think things have turned around and this recovery is sustainable," Patrick Newport, an economist with IHS Global Insight, told the Associated Press.
The index has been edging higher since last October, coinciding with reports that show sales and home prices inching up too.
Source: “Index of US Homebuilder Confidence Improves; Builders Anticipate Sales Strengthening into '13,” Associated Press (Sept. 18, 2012)

http://realtormag.realtor.org/daily-news/2012/09/19/homebuilder-confidence-bounces-back-2006-levels?om_rid=AADa9A&om_mid=_BQWe$FB8uKNz9O&om_ntype=RMODaily

Builder Confidence Soars to 5-Year High

Builder Confidence Soars to 5-Year High

Inventories Hover at Historic Lows

Inventories Hover at Historic Lows

Survey: Gen Y Aspires to Homeownership

Survey: Gen Y Aspires to Homeownership