Daily Archives: March 30, 2015

Zillow Index Shows Access to Credit Halfway to Recovery | Cross River Real Estate

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Mortgage credit availability as measured by Zillow’s Mortgage Access Index  has risen steadily over the past two years to surpass a halfway point between the depths of 2011 and the peak of the boom in August 2004.

The new metric (ZMAI) combines seven sources of data: credit score data, debt to income ratios, PMI availability, quotes on Zillow’s mortgage platform, and other data to come up with a way to measure and track how difficult it is to qualify for a mortgage.

 

zmai

 

The index shows an abrupt and virtual evaporation of housing credit between 2008 and 2009. At the close of 2007, ZMAI stood at 97.8 points, but tumbled all the way to 28 points by the end of 2008. For the next four years, it showed no signs of credit conditions improving. It wasn’t until May 2013 when ZMAI again reached the 30-point threshold.

Other measures of credit access, like actual mortgage closing rates tracked by Ellie Mae, are not nearly as positive as the Zillow index.  Closing rates on purchase loans reached an annual average of 63.3 percent from 60.1 percent in 2013.  MBA’s mortgage credit availability index reached 118.6 in February.  It has risen 118.6 points since it was benchmarked at 100 in March 2012.

 

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http://www.realestateeconomywatch.com/2015/03/zillow-index-shows-access-to-credit-halfway-to-recovery/

Stronger Demand and Thin Inventories Push Prices up 7.5 Percent | Katonah Real Estate

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Persistently tight inventories—not a good sign as the spring season nears—coupled with an uptick in sales pushed prices up 7.5 percent in February

The median existing-home price2 for all housing types in February was $202,600. This marks the 36th consecutive month of year-over-year price gains and the largest since last February (8.8 percent), according to the National Association of Realtors.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.2 percent to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7 percent higher than a year ago and above year-over-year totals for the fifth consecutive month.

Total housing inventory at the end of February increased from January by 1.6 percent to 1.89 million existing homes available for sale, but remains 0.5 percent below a year ago (1.90 million). For the second straight month, unsold inventory is at a 4.6-month supply at the current sales pace.

Concerns are growing about the low inventory levels have persisted through the winter months.  Lawrence Yun, NAR chief economist, said, “Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” he said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”

“With all indications pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – affordability concerns could heighten as home prices and rents both continue to exceed wages,” adds Yun.

A NAR study released earlier this month found that the disparity between rent and income growth is widening in metro areas throughout the country and is making it harder for renters to become homeowners.

 

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http://www.realestateeconomywatch.com/2015/03/8633/

Bank of Mom and Dad Puts Kids in Houses | Bedford Real Estate

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New research by loanDepot LLC indicates the number of parents who expect to help their Millennial-age children purchase a home in the future will increase by 31 percent compared to the past five years, from 13 to 17 percent. Half (50%) of the parents who will help their children buy a home say they’ll contribute toward down payments, while 20 percent will cover closing costs and 20 percent will cosign the loan.

In the future, about two-thirds of parents (67%) say they they’ll use savings to help their children buy a home, compared to 72 percent in the past. The number of parents who plan to use cash from a refinance or take out a personal loan to help their children buy a home is expect to double. In the past, just 4 percent of parents refinanced their homes and 3 percent used personal loans. In the future, those numbers are expected to increase to 8 percent for parents who will refinance and 8 percent for parents who will take out a personal loan.

“Support from parents is playing a significant role in the housing recovery, and this new research indicates the trend will increase,” said Dave Norris, president and chief operations officer at loanDepot LLC. “First time home buyers comprise 28 percent of the today’s home buying market[1], an almost all-time low. Through the survey, 75 percent of Millennial-age home-buyers who received financial support from their parents said that assistance made it possible for them to buy a home. Without that financial support, it’s likely the pool of Millennial first-time home buyers would be even smaller than today.”

AGREE TO DISAGREE

The loanDepot research surfaced opposing views between parents and Millennial-aged buyers about whether or not the parent’s financial support was or will be a gift, loan, inheritance or something else altogether. While most parents (68%) view the financial support as a gift, only 29 percent of Millennial-aged children agreed. More Millennials (36%) view their parent’s financial support as a loan to be repaid than as a gift (29%).

 

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http://www.realestateeconomywatch.com/2015/03/bank-of-mom-and-dad-puts-kids-in-houses/