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Mortgage rates rise slightly | Cross River Real Estate

Multiple closely watched mortgage rates moved higher today. The average rates on 30-year fixed and 15-year fixed mortgages both rose. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also increased.

Rates for mortgages are constantly changing, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market for a mortgage, it may make sense to lock if you see a rate you like. Just make sure you shop around first.

30-year fixed mortgages

The average 30-year fixed-mortgage rate is 3.89 percent, up 4 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.99 percent.

At the current average rate, you’ll pay principal and interest of $471.10 for every $100,000 you borrow. That’s an increase of $2.29 over what you would have paid last week.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.10 percent, up 5 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $695 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARMs

The average rate on a 5/1 ARM is 3.16 percent, up 5 basis points over the last 7 days.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.16 percent would cost about $430 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

http://www.bankrate.com/financing/mortgages/mortgage-rates-for-monday-may-1/

Residential Construction Employment Solid | Cross River Real Estate

The count of unfilled jobs in the overall construction sector remained elevated in November, as residential construction employment continues to grow.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) came in at 184,000 in November. The cycle high was 225,000 set in July.

The open position rate (job openings as a percent of total employment) for November was 2.7%. On a smoothed twelve-month moving average basis, the open position rate for the construction sector increased to 2.8%, setting a cycle high and exceeding the peak twelve-month moving average rate established prior to the recession.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.

The construction sector hiring rate, as measured on a twelve-month moving average basis, remained steady at 4.9% in November. The twelve-month moving average for layoffs was also steady (2.6%), remaining in a range set last Fall. Quits rose to 2.4% in November, consistent with a tight labor market.

Monthly employment data for December 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builder and remodeler employment expanded, increasing by 9,800. The December gains continue the improvement in the Fall after a period of hiring weakness early in 2016. The 6-month moving average of jobs gains for residential construction has now increased to a healthier 11,450 per month.

Residential construction employment now stands at 2.653 million, broken down as 739,000 builders and 1.915 million residential specialty trade contractors.

Over the last 12 months home builders and remodelers have added 103,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 667,000 positions.

In December, the unemployment rate for construction workers stood at 6.8% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010, although it has leveled off in the 6% to 7% range since the middle of 2016

http://eyeonhousing.org/2017/01/residential-construction-employment-solid-in-december/

Time to Build a Single-Family Home | Cross River Real Estate

With the end of 2016 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In July, Na Zhao examined typical construction durations for various types of single-family homes and regions.

The 2015 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single family home is around 7 months, which usually includes almost a month from authorization to start and another 6 months to finish the construction. The timeline from authorization to completion, however, is not consistent across the nation, depending on the housing category, the geographic location, and metropolitan status.

Among all the single-family houses completed in 2015, houses built for sale took the shortest time, 6 months to completion after obtaining building permits, while houses built by owners required the longest time, almost a year. Homes built for rent took 9 months from permit to completion, and those built by hired contractors normally needed around 8 months. A large proportion of single family homes for sale and on owners’ land built by contractors began construction within the same month after obtaining building authorizations. However, homes built for rent and built by owners had a one-month lag between permits and construction start in 2015.

The average time from authorization to completion also varies across the nation. New England division had the longest time of 10 months, followed by the Middle Atlantic of 9.6 months, East South Central, East North Central, and Pacific of 8 months in 2014. These four divisions all had above average time from permit to completion. The shortest period, 6 months, happened in the Mountain division, which also had the shortest waiting period from permit to construction start.

permit_comp per_start

The metropolitan status indicates how long it takes to build a single-family home. Houses in metropolitan areas, on average, took nearly 7.5 months to completion, which was 2 months shorter than those in non-metropolitan areas. This pattern was quite consistent across the nation, except for the Middle Atlantic division where the average month to completion in metropolitan areas was longer than in non-metropolitan areas in 2015.

The SOC also collects sale information for houses built for sale, including the sale date when buyers sign the sale contracts or make a deposit. In 2015, the share of single-family sold while under construction was 66%, with 32% even sold before construction start and 12% sold during the same month of completion. The percent of single-family houses completed in 2015 stayed unsold at the first quarter of 2016 was only 6%.

http://eyeonhousing.org/2016/12/top-posts-of-2016-time-to-build-a-single-family-home-in-2015/

Americans Move Less and Impact the Economy Less | Cross River Real Estate

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The median tenure homeowners plan to stay in their homes soared with the housing recession in 2008 for good reasons. Millions of owners were underwater and millions more lacked the 20 percent equity need to sell their home. Many facing the need to move for job or space reasons found it easier to move and keep their old home to rent out. Thus was born the phenomenon of “accidental landlording”.

The housing economy has changed dramatically. Values have almost regained their peaks at the top of the housing boom, far above the levels of 2008. Yet owner tenure has not changed and repeat buyers’ expectations today are twice as long as actual tenure ten years ago. Are longer tenures now locked in stone?

One of the leading motivations to move—change in employment—is also changing. Workers stick with the same job longer today than they did 10, 20, and 30 years ago. U.S. workers had an average job tenure of 4.6 years in 2012, the last year for which figures are available—that’s up from 3.7 years in 2002 and 3.5 in 1983, according to the Bureau of Labor Statistics. The trend holds up within almost every age and gender category—so it cannot be explained away by women’s increased presence in the workplace, or people working past traditional retirement age.

First-time buyers now expect to live in their homes 15 years or longer

Another contributing factor could be the popularity of “aging in place” among the Boomer generation. More and more elderly are staying in their family homes rather than downsizing, or moving to retirement communities or rentals. According to AARP, 87 percent of adults age 65 plus want to stay in their current home and community as they age. Among people age 50 to 64, 71 percent of people want to age in place.

The Recession Changed Ownership Patterns

According to a new analysis by economists at the National Association of Realtors, in 1985, the median tenure for sellers remaining in their home was five years, the lowest in since NAR started tracking the data in the 30-year period. From 1987 to 2008, the median tenure for sellers was a steady six years throughout the course of about a 20-year period. The only exception was in 1997 when the median tenure jumped up one year to seven years for sellers.

As the U.S. housing market entered the recession, the median tenure for sellers began to rise—seven years in 2009, eight in 2010, and to nine years in 2011 where it has remained steady through 2015. The only exception is in 2014 when the median tenure for sellers reached an all-time high at 10 years, but came back down to nine last year. Thus market changes in the last decade have caused sellers to remain in their homes longer, increasing the median number of years in the home by 50 percent more than they did 20-30 years prior.

In 2006, first-time buyers reported that their median expected tenure was just six years and nine years for repeat buyers, the lowest since we started collecting the data for both buyer types. For repeat buyers, that bumped up to 10 years in 2007, 12 years in 2009, and then up to 15 years in 2010 where it has remained steady for the past six years. For first-time buyers, the median expected tenure in the home jumped to 10 years in 2008 where it has remained ever since.

It is no surprise that repeat buyers expect to remain in their home longer than first-time buyers. It is interesting, however, to see that first-time buyers in 2006 expected to sell in just six years. Fast forward a decade to 2015 and first-time buyers expect to sell in almost double the amount of time.

Economic Implications of Longer Tenure

Significantly longer ownership tenure means that homes will change hands less frequently, which hasmajor economic implications:

Volumes of transactions will fall for real estate brokers and lenders. The coming of age of the Millennial generation could theoretically offset the effects of longer tenure except that the first symptom of extended tenure could be the chronic shortage of inventories over the last two years that has plagued home sales and limited opportunities for Millennials to buy;

Demand for remodeling and renovation will increase as owners choose to fix up their current homes rather than sell them. Increased home repair will create new business for Home Depot and hardware stores.

http://www.realestateeconomywatch.com/2016/10/americans-move-less-and-impact-the-economy/

Why Foreclosures are Never-ending Credit Nightmares | Cross River Real Estate

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The popular belief that the seven million Americans who lost their homes to foreclosure during the Housing Crash are healed, whole and forgiven of their debts after seven years have passed is only partly true.

For foreclosures, Fannie Mae and Freddie Mac set a seven-year waiting period before defaulters can apply for a mortgage, measured from the completion date of the foreclosure action. With time foreclosures, bankruptcy filings and tax liens disappear from credit records but the impact of their misfortune lingers for years in the form of substandard credit ratings and scores.

A new study from the Urban institute, The Lasting Impact of Foreclosures and Negative Public Records, corrects the conventional wisdom by chronicling the painful punishment suffered by victims of the foreclosure floods and the Great Recession that began in earnest a decade ago and the impact not just upon individual families but on the economy as a whole.

The researchers found that It takes a long time for a consumer’s credit score to recover from the impact of a foreclosure—far longer than the seven years the foreclosure remains on the credit report.

From 2004 through 2015, 7.1 million borrowers experienced a foreclosure filing, and 34.4 million consumers acquired an adverse public record other than foreclosure. Altogether, 41.5 million people, or 16 percent of the 264 million US consumers with credit records, experienced a financial crisis that impacted their credit.

“We believe this extended impact at least partially explains the slow recovery after 2010, the study found,” wrote the authors, Wei Li, Laurie Goodman and Denise Bonsu.

More than 60 percent of consumers with these negative financial events still had VantageScore credit scores below 620 in 2015. More than 60 percent of them had delinquent debt in 2015, and only 8 percent of them were able to obtain new mortgages as of 2015. And, more than 70 percent of them were the age that preferred homeowning (between 29 and 59 years old) in 2015; this large group of potential borrowers with negative financial events profoundly affects the homeownership rate.

At least at the peak of crisis, when the spike in foreclosure filings jammed up judicial foreclosures, the long judicial foreclosure process might have prevented foreclosed-upon borrowers from moving on.

A large number of consumers will retain adverse events on their records for a considerable time, making it hard for many of them to borrow again. At the end of 2018, 22.8 million consumers—almost 9 percent of the adult consumer population—will still have a foreclosure or adverse public record.

Middle-aged consumers were hit hardest by these credit blemishes. Seventy-three percent of consumers (30 million) who experienced foreclosure or other adverse public records were between 29 and 59 years old in 2015, yet this age group accounts for only 53 percent of adult consumers. The middle-aged consumers hit hardest by these adverse credit events have had a profound impact on the homeownership rate because their age group has the strongest preference for homeownership.

http://www.realestateeconomywatch.com/2016/11/why-foreclosures-are-never-ending-credit-nightmares/

Key Building Materials Remain Stubbornly Expensive | Cross River Real Estate

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Inflation in prices received for building materials (prior to sales to consumers) was mixed in September according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. Although their monthly changes were relatively modest, the prices of OSB and ready-mix concrete have been trending upward for quite some time and remain at historically high levels.

OSB prices climbed 2.5% in September, continuing a 7-month trend that has the commodity at its highest price since June 2013. Since February, monthly increases have averaged 3.2%, pushing prices up by a cumulative, eye-popping 25%.

2016-10-ppi-osb-prices1

In addition, although the price of ready-mix concrete fell marginally in September, the long-term trend remains concerning. Monthly increases have averaged 0.3% over the last five years as the price of ready-mix concrete has steadily risen by roughly 20%. While gypsum prices picked up (+0.1%), the prices of softwood lumber and steel mill products fell by 1.4% and 0.5%, respectively.

2016-10-ppi-grmcsl

After holding steady in August, the economy-wide PPI rose 0.3% in September. Over three-quarters of the increase was the result of a 0.7% increase in prices for goods, while the rise in prices for services was a more modest 0.1%. Final demand prices for core goods (i.e. goods excluding food and energy) inched up 0.3%, and prices for core goods less trade services rose 1.5% over the 12 months ended in September. This represented the largest 12-month increase in two years.

http://eyeonhousing.org/2016/10/key-building-materials-remain-stubbornly-expensive/

New Home Sales in September – Continuing Gains, Continuing Headwinds | Cross River Real Estate

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The US Census Bureau and Department of Housing and Urban Development in a joint release reported that newly constructed single family homes sold at a seasonally adjusted annual pace of 593 thousand in September, up 3.1% from a downwardly revised August figure, and up 29.8% from September 2015. However, note the monthly data is volatile and September was the lowest point in 2015 and the second highest point in 2016. Year over year growth in the trend in sales was 9.4%. Downward revisions to the July and August figures in no way diminish the upward trend that continues with the September figures.

The inventory of new single family homes for sale was 235 thousand, essentially flat in recent months after modest gains earlier in the year. Prices for new homes rose 3.5% from August and 1.9% from last September. A flat inventory in an environment of rising sales has put upward pressure on prices but expanding inventory has been a challenge given shortages of developed lots and skilled labor (NAHB). Both sales and inventories remain depressed by historical standards but the level of inventory given the pace of sales is in line with historical norms as builders balance caution and available resources in their efforts to meet expanding demand.

blog-new-home-sales-2016_10

http://eyeonhousing.org/2016/10/new-home-sales-in-september-continuing-gains-continuing-headwinds/

Features and Colors of Kitchens in New Homes | Cross River Real Estate

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What are the features and colors included in kitchens of newly constructed homes? Data from Houzz, combined with information from the 2016 Builder Practices Survey, provides insight.

The 2016 Builder Practices Survey (BPS) is a national survey of homebuilders, conducted by Home Innovation Research Labs, that captures valuable information on the product features included in new residential construction, both single-family and multifamily.

It is a robust survey of 1,381 respondents who built single-family detached units and 199 respondents who built multifamily or single-family attached units (i.e. townhomes). Results are available on national and regional levels.

Analyzing the BPS can uncover interesting trends in the construction of new kitchens, such as countertop material type, cabinet type, and appliances.

Although the BPS covers a broad range of topics, it does not touch upon the color themes of kitchens in new construction. Houzz, an online platform dedicated to home remodeling and design, conducted an online survey on this very topic. Its survey asked recent buyers of newly constructed homes about the colors themes in their kitchens. The survey is national in scope and had 203 respondents.

Combining data from the BPS with the Houzz survey can provide powerful information on what today’s new kitchens look like. The following provides a snapshot of the 2015 product features and color themes included in kitchens of newly constructed single-family homes:

Countertops & Backsplashes
Figure 1 displays the type of countertop material installed in new kitchens. Granite countertops are overwhelmingly the most popular with 64 percent of new homes having this material type. It is no surprise that only 14 percent of new homes have laminate countertops. Based on NAHB’s Consumer Preference Surveyreport, laminate countertops are the least desired kitchen feature and are likely only installed when affordability is a major concern. Besides these material types, 9 percent each of new homes have engineered stone and solid-surface countertops.

Figure 1: Countertop Material Type (1)
figure1v3

The Houzz survey provides insight on countertop color. Figure 2 displays the countertop color of those who have granite countertops, the most popular countertop material. Three color choices stand out: 30 percent of respondents have multi-colored countertops, 26 percent have white, and 18 percent have black. Twenty-six percent reported some other color, or were not sure about their countertop color.

Figure 2: Countertop Material Color (2)

In addition to countertop material color, buyers also noted the color of their backsplashes (Figure 3). Twenty-six percent of respondents reported having white backsplashes, 13 percent reported beige, 12 percent reported multi-colored, and 6 percent reported gray. Forty-three percent reported some other color, or were not sure of their backsplash color.

Figure 3: Backsplash Color (3)

Cabinetry
Figure 4 displays the types of cabinets installed in new homes. Wood-based cabinets are the most common, but there is variation in the panel type of wood cabinets. Sixty percent of new homes have raised panel wood cabinets, compared to 25 percent that have flat panel wood cabinets. Only 5 percent of new homes have laminate cabinets, and the remaining 10 percent consists of various other types, such as glass cabinets.

Figure 4: Cabinet Type (4)

Figure 5 displays the cabinet colors reported by respondents in the Houzz survey. The most popular color is white (34 percent), followed by wood – medium tone (20 percent), gray (9 percent), wood – dark tone (7 percent), and multi-colored (6 percent).

Figure 5: Cabinet Color (5)

Appliances
Figure 6 displays the percentage of new homes that have each appliance listed. Cooktops and ranges are almost always provided in new kitchens with 97 percent of new homes having these features. Features that are also commonly installed include dishwashers (92 percent), microwave ovens and garbage disposals (both 84 percent); and refrigerators and freezer (65 percent).

Items less frequently installed in new homes include clothes dryers and washers (36 and 34 percent, respectively), wall ovens (18 percent), hot water recirculation piping (17 percent), water softeners and central vacuum systems (both 13 percent); hot water dispensers and standby generators (both 8 percent); trash compactors (4 percent), and elevators (2 percent).

Figure 6: Percentage of New Homes that Include Appliance (6)

Figure 7 displays the colors of appliances installed in new kitchens. Most respondents reported that “stainless steel” is the color theme of their appliances, 6 percent reported black, and 4 percent reported white.

Figure 7: Appliance Colors (7)

figure7v2

The combination of data from the BPS and the Houzz survey provides a sense of what new kitchens look like. New kitchens tend to have granite countertops, raised panel wood cabinets, and come with a standard set of appliances, such as cooktops & ranges, microwaves, dishwashers and garbage disposals. New kitchens also have white, multi-colored, or wood-based color themes, and are complemented by “stainless steel” appliances.

http://eyeonhousing.org/2016/10/features-and-colors-of-kitchens-in-new-homes/

Home prices increasing annually | Cross River Real Estate

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Home prices continued their increasing trends continued to increase in July, but at a slower rate than before, according to the most recent report by S&P CoreLogic Case-Shiller Indices released by S&P Dow Jones Indices and CoreLogic.

“The S&P CoreLogic Case-Shiller National Index is within 0.6% of the record high set in July 2006,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee. “Seven of the 20 cities have already set new record highs.”

“The 10-year, 20-year, and National indices have been rising at about 5% per year over the last 24 months,” Blitzer said. “Eight of the cities are seeing prices up 6% or more in the last year. Given that the overall inflation is a bit below 2%, the pace is probably not sustainable over the long term.”

Annually, the National Home Price index showed a gain of 5.1% in July. This is up slightly from June’s 5% annual gain. The 10-City Composite increased by 4.2% annually and the 20-City Composite increased by 5%. Each of these is down from June’s 4.3% and 5.1% for the respective composites.

Click to Enlarge

(Source: S&P Dow Jones Indices, CoreLogic)

“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5% annual rate,” Blitzer said. “The statement issued last week by the Fed after its policy meeting confirms the central bank’s view that the economy will see further gains.”

While the Federal Open Market Committee did not raise rates at their last meeting, Janet Yellen, Federal Reserve System chair of the Board of Governors, explained, “Our decision does not reflect a lack of confidence in the economy.”

She explained the Fed preferred to take a more cautious approach to see if current growth would continue.

“Most analysts now expect the Fed to raise interest rates in December,” Blitzer said. “After such Fed action, mortgage rates would still be at historically low levels and would not be a major negative for house prices.”

Out of the 20 cities, Portland, Seattle and Denver reported the highest annual gains over the last six months. In July, Portland increased 12.4%, Seattle increased 11.2% and Denver increased 9.4%.

After seasonal price adjustment, the National Index increased by 0.4% monthly but the 10-City Composite decreased 0.1%. The 20-City Composite remained unchanged.

‘Zombie’ foreclosures decline across the country | Cross River Real Estate

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As the foreclosure crisis recedes, some unwanted consequences continue to haunt neighborhoods around the country.

“Zombie” foreclosures — those properties that are currently in the foreclosure process but vacant — fell again in the third quarter, according to Attom Data Solutions. Zombies made up 4.7% of all foreclosures, down 9% from a year ago.

Among the top ten states for zombies, there have been some big declines: zombies are down 28% in Florida, 26% in California, and 14% in Illinois compared to a year ago. But they’re up 6% in New York and 3% in Massachusetts.

Still, as the housing market stays hot, lenders seem to be moving more quickly to take possession of properties where homeowners are having trouble. The number of vacant bank-owned properties jumped 67% in the third quarter compared to a year ago, to 46,604, Attom said.

The states with the biggest number of properties in foreclosure are also the states with the most zombies. They are mostly states that require foreclosures to go through a court process, including New York, New Jersey, Florida, Illinois, and Indiana.

Judicial foreclosures can be a blessing, because they provide protections to homeowners, and a curse, because they take so long to complete. The lengthy and complicated process increases the likelihood that a foreclosure will become a zombie — but the hot housing market increases incentives for struggling homeowners to fight to hold on to their properties.

http://www.marketwatch.com/story/zombie-foreclosures-decline-across-the-country-except-in-some-states-where-theyve-built-strongholds-2016-09-08

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Category Archives: Cross River NY

Mortgage rates rise slightly | Cross River Real Estate

30-year fixed mortgages

15-year fixed mortgages

5/1 ARMs

Residential Construction Employment Solid | Cross River Real Estate

Time to Build a Single-Family Home | Cross River Real Estate

Americans Move Less and Impact the Economy Less | Cross River Real Estate

First-time buyers now expect to live in their homes 15 years or longer

Why Foreclosures are Never-ending Credit Nightmares | Cross River Real Estate

Key Building Materials Remain Stubbornly Expensive | Cross River Real Estate

New Home Sales in September – Continuing Gains, Continuing Headwinds | Cross River Real Estate

Features and Colors of Kitchens in New Homes | Cross River Real Estate

Home prices increasing annually | Cross River Real Estate

‘Zombie’ foreclosures decline across the country | Cross River Real Estate