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NAR Lowers Sales Forecast | Cross River Real Estate

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The National Association of Realtors has reduced its outlook for existing sales in 2016 from a 3 percent increase over 2015 (5.45 million sales) to an increase of only 1 to 2 percent (5.30 to 5.40 million sales).

The new forecast, three months before the opening of the home sales season, amends an early one made at NAR’s annual meeting in November.

“This year the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” said NAR Chief Economist Lawrence Yun in a video posted on the NAR site. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

With one month of data remaining for 20151, Yun expects total existing-homes sales to finish the year up 6.5 percent from 2014 at a pace of around 5.26 million –the highest since 2006, but roughly 25 percent below the prior peak set in 2005 (7.08 million).

Yun did not alter his November price forecast. The national median existing-home price for all of 2015 will be close to $221,200, up around 6 percent from 2015.  Yum calls for prices to soften to a 5 to 6 percent increase in sold prices.

 

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http://www.realestateeconomywatch.com/2016/01/nar-lowers-sales-forecast/

CoreLogic: Foreclosures fall to lowest level since 2007 | Cross River Real Estate

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The inventory of homes in foreclosure continued to decrease in November 2015, falling to the lowest level since November 2007, a new report from CoreLogic showed.

CoreLogic, a global property information, analytics and data-enabled services provider, released its November 2015 National Foreclosure Report on Tuesday.

The report shows that during the month of November foreclosure inventory declined by 21.8% and completed foreclosures declined by 18.8% compared with November 2014.

CoreLogic’s report also showed that the number of completed foreclosures nationwide fell year over year from 41,000 in November 2014 to 33,000 in November 2015.

Additionally, the number of completed foreclosures in November 2015 was down 71.6% from the peak of 117,657 in September 2010, CoreLogic’s report noted.

According to CoreLogic’s report, the foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure.

CoreLogic’s report noted that as of November 2015, the national foreclosure inventory was approximately 448,000, or 1.2%, of all homes with a mortgage compared with 573,000 homes, or 1.5%, in November 2014.

The November 2015 foreclosure inventory rate marks the lowest for any month since November 2007, CoreLogic’s report showed.

“After peaking at 3.6% in January 2011, the foreclosure rate currently stands at 1.2% – a remarkable improvement,” said Dr. Frank Nothaft, chief economist for CoreLogic. “While there are still pockets of areas with high foreclosure activity, 30 states have foreclosure rates below the national average which is evidence of the solid improvement.”

But it wasn’t just the number of homes in foreclosure that fell to an eight-year low.

CoreLogic also reports that the number of mortgages in serious delinquency, which CoreLogic defines as 90 days or more past due, including loans in foreclosure or REO, declined by 21.7% from November 2014 to November 2015, to 1.3 million mortgages, or 3.3%, in this category.

According to CoreLogic, the November 2015 serious delinquency rate is the lowest since Dec. 2007.

“Tight post-crash underwriting standards coupled with much improved economic and housing market fundamentals have combined to push new mortgage delinquencies to 15-year-lows,” said Anand Nallathambi, president and CEO of CoreLogic. “Although judicial states will likely continue to lag, given current trends, it is reasonable to expect a continued and significant drop in the rate of serious delinquencies and foreclosure starts in 2016.”

CoreLogic’s report also showed that:

  • On a month-over-month basis, completed foreclosures decreased by 10.9% to 33,000 in November 2015 from the 38,000 reported in October 2015.
  • The five states with the highest number of completed foreclosures for the 12 months ending in November 2015 were Florida (83,000), Michigan (51,000), Texas (29,000), California (24,000) and Georgia (24,000). These five states accounted for almost half of all completed foreclosures nationally.
  • Four states and the District of Columbia had the lowest number of completed foreclosures for the 12 months ending in November 2015: the District of Columbia (78), North Dakota (225), Wyoming (543), West Virginia (565) and Hawaii (686).
  • Four states and the District of Columbia had the highest foreclosure inventory rate in November 2015: New Jersey (4.4%), New York (3.5%), Hawaii (2.5%), Florida (2.4%) and the District of Columbia (2.4%).

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CoreLogic: Foreclosures fall to lowest level since 2007

QM Rule is a Yawner | Cross River Real Estate

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Despite months of turmoil and repeated complaints from lenders, Realtors, builders and other members of the housing lobby, the Consumer Finance Protection Bureau’s Qualified Mortgage Rule enacted in 2014 has not had any significant impact on risk taking and credit availability, according to a new study by the Federal Reserve.

Congress passed one of the most comprehensive financial reform laws in U.S. history, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. One key part of Dodd-Frank — the ability-to-repay (ATR) provision — discourages risky mortgage lending practices that proliferated during the housing boom. On January 10, 2014, the Consumer Financial Protection Bureau’s (CFPB) rules implementing the ATR provision went into effect. For the first time, Federal law required lenders to consider certain underwriting criteria and make a good-faith determination that borrowers will have the ability to repay their home loans. As the new ATR requirement represented a shift toward more prescriptive regulation in the residential mortgage market, it is important to understand how the rules are affecting risk taking and credit availability.

Federal Reserve economists Neil Bhutta and Daniel RingoIn used recently released loan level data collected under the Home Mortgage Disclosure Act (HMDA) to examine how the new rules may have affected mortgage lending activity in 2014. They examined broad lending patterns and found little indication that the new rules had a significant effect on lending in 2014. They conducted sharper tests around the date of enactment, and around lender-size and loan-pricing thresholds, where treatment of loans under the new rules varies. They found evidence that some market outcomes were affected by the new rules, but the estimated magnitudes of the responses are small.

The new ATR rules require lenders to consider and verify a number of different underwriting factors, such as a mortgage applicant’s assets or income, debt load, and credit history, and make a reasonable determination that a borrower will be able to pay back the loan. (Thus, these verification requirements prohibit so-called “no-doc” loans, where borrowers’ income and assets are not verified.) Borrowers may allege a violation of the ATR requirement within three years of the date of violation. They may also use a violation of the ATR requirement as a defense against foreclosure for the life of the loan. Lenders that are found to violate the ATR rules can be liable for monetary damages.

 

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http://www.realestateeconomywatch.com/2016/01/qm-rule-is-a-yawner/

Luxury Dips While Mid-tier Zips | Cross River Real Estate

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Call it poetic justice.  While median home prices continue their upward climb, in the third quarter luxury prices stumbled and fell for the first time in over three years.  Redfin reported prices of luxury homes fell 2.2% on a yearly basis, while prices for the rest of the market rose 3.8 percent in the same period.  (Luxury homes are defined by Redfin as the priciest 5% of all homes.)

The Institute of Luxury Home Marketing (ILHM)  reported a similar dip in July and August in its weekly market report.  But prices picked up in the fall to reach $390 a square foot, only to fall with the advent of Thanksgiving and the holiday season.  Currently ILHM reports the median luxury price to be $1,406,319 and the market definitely favors buyers over sellers. Properties in its survey have been on the market for an average of 156 days, (ILHM’s survey tracks homes listed for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county.)

Though Redfin compared luxury price trends to market medians, Nela Richardson, Redfin’s chief economist, recognized how different the luxury is from the rest of real estate.

“High-end buyers are usually not weighed down by rates, mortgages or competition from other buyers, but they do look for deals,” she said in a news release. “It’s a bellwether of slowing price growth for the rest of the market.”

2015-12-08_15-23-20Redfin reported a dramatic divergence and luxury price trends from the rest of the market in the third quarter.

It’s also the most difficult segment of the market to track due the tendency for as many as a third of all sellers in high cost areas to market through pocket listings that keep their homes off the MLSs and the preponderance of 12 nondisclosure states that limit the disclosure of sales prices.

Redfin said luxury home prices fell at the sharpest rate in Scottsdale, Ariz. and Boca Raton, Fla. Both saw 15% declines on a yearly basis. Fort Lauderdale, Fla., reported a 14% decline. Redfin speculated that the declines in Boca Raton and Fort Lauderdale were due to a wave of luxury condos hitting the market at the same time. Washington, D.C.; Denver; Delray Beach, Fla.; and Bend, Ore., all saw double-digit increases in luxury home prices in the same third quarter.

2015-12-08_15-37-42ILHM reported prices dipped in the summer but rebounded before Labor Day, and now are down again with the advent of the holidays.

 

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http://www.realestateeconomywatch.com/2015/12/luxury-dips-while-mid-tier-zips/

Mortgage rates average 3.95% | Cross River Real Estate

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Freddie today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the average 30-year fixed mortgage rate declining slightly leading up to the Thanksgiving holiday. The average 30-year fixed rate mortgage hasn’t risen above 4 percent since the week of July 23rd of this year, which is helping homebuyer affordability in the face of rising house prices due to low levels of inventory in many markets.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending November 25, 2015, down from last week when it averaged 3.97 percent. A year ago at this time, the 30-year FRM averaged 3.97 percent.
  • 15-year FRM this week averaged 3.18 percent with an average 0.6 point, unchanged from last week. A year ago at this time, the 15-year FRM averaged 3.17 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.01 percent this week with an average 0.5 point, up from last week when it averaged 2.98 percent. A year ago, the 5-year ARM averaged 3.01 percent.
  • 1-year Treasury-indexed ARM averaged 2.59 percent this week with an average 0.3 point, down from 2.64 percent last week. At this time last year, the 1-year ARM averaged 2.44 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM. Additionally, the regional breakouts will not be provided for the 30-year and 15-year fixed rate mortgages, and the 5/1 Hybrid ARM.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“In a quiet week leading up to the Thanksgiving holiday, the 30-year mortgage rate dipped 2 basis points to 3.95 percent. Economic releases over the last week contained no major surprises, and none are expected in the next few days. The year is winding down, and the only remaining market dates of note are December 4 — the last employment report of the year — and December 15-16, the long-awaited FOMC meeting.”

Gen Xers more likely than Millennials or Boomers to buy a home | Cross River Real Estate

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MCLEAN, VA–(Marketwired – Nov 18, 2015) – Freddie Mac

  • Gen Xers more likely than Millennials or Boomers to buy a home
  • Millennials more likely to save for short- and long-term goals
  • Renters offset rent hikes by spending less on essentials and are considering getting a roommate

Renters indicate they still feel challenged with their finances and 66 percent are carrying debt each month, according to a recent Freddie Mac (OTCQB: FMCC) survey. Yet, the majority of renters (56 percent) are optimistic about managing their debt. Renters are also saving money for numerous priorities and a down payment on a home is not at the top of their list. In addition, Gen Xers are more likely than Millennials or Boomers to buy a home in the next three years.

For the Freddie Mac quarterly online survey, conducted in October on its behalf by Harris Poll, renters currently saving for all listed goals place a higher priority on saving money for an emergency/unexpected expense (59 percent), retirement (51 percent) and children’s education (50 percent) than a down payment on a home (39 percent) or a vacation (26 percent). They also indicate that they are behind in saving for those things.

Looking across generations, Millennial renters are more likely to be saving for short- and long-term goals than Boomer and Gen X renters. For example, Millennial renters are more likely to be saving for a major purchase (92 percent) and a vacation (94 percent), when compared to Boomers (82 percent and 81 percent respectively) and Gen Xers (77 percent and 75 percent respectively).

“We know rents are rising faster than incomes and now we have data to show that many renters don’t have enough to pay all their debts each month, which is forcing them to make tradeoffs, such as cutting spending on other items,” said David Brickman, Freddie Mac executive vice president of Multifamily. “Despite this, some renters feel optimistic about managing their debt.”

Brickman added, “Growth in the renter segment will most likely occur through multifamily properties as more than half of those currently renting single-family properties are planning to become homeowners in the near future. The data shows single-family renters are increasingly more dissatisfied than multifamily renters.”

Ways to Offset a Rent Hike

The many ways in which renters are making adjustments due to rent increases include:

  • 51 percent are spending less on essentials, the same as last quarter.
  • 52 percent put off plans to purchase a home, compared to 44 percent in June.
  • 35 percent are contemplating getting a roommate, up from 29 percent in June.
  • 26 percent say they need to move into a smaller rental property, compared to 20 percent in June.

The Future Homebuyer

When broken out by generations, 58 percent of Gen X renters expect to purchase a home in the next three years, compared to 42 percent of Millennials and 33 percent of Baby Boomers.

Overall, almost half (48 percent) of renters in single-family properties are dissatisfied with renting, and are more likely to purchase a home in the next three years than multifamily renters (57 percent vs. 28 percent).

Satisfaction with Rental Experience

The satisfaction rates from the March, October and June surveys this year are virtually unchanged, with a third of renters being very satisfied with their rental experience and almost a third (30 percent) indicating they are moderately satisfied. In the October survey,

  • 70 percent of satisfied renters are likely to continue renting for the next three years, up slightly from 68 percent in the previous quarter.
  • 30 percent of satisfied renters indicate they are more likely to buy a home, compared to 32 percent in the previous quarter.

In addition, the top favorable factors for renting remain about the same and are freedom from home maintenance (79 percent), more flexibility over where you live (74 percent) and protection against declines in home prices (68 percent).

Additional details about the survey, including charts, are on the Freddie Mac website.

Here’s what the typical #homebuyer and #seller look like | Cross River Real Estate

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This is the third year in a row that the share of first-time buyers declined, staying at the lowest point in nearly three decades, according to an annual survey released by the National Association of Realtors.

Instead of first-time buyers, the overall strengthening pace of home sales over the past year was driven more by repeat buyers with dual incomes.

In this year’s survey, the share of first-time buyers declined to 32%å (33% a year ago), which is the second-lowest share since the survey’s inception (1981) and the lowest since 1987 (30%). Historically, the long-term average shows that nearly 40% of primary purchases are from first-time homebuyers.

Lawrence Yun, NAR chief economist, said the housing recovery’s missing link continues to be the absence of first-time buyers.

“There are several reasons why there should be more first-time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college-educated, and the fact that renting is becoming more unaffordable in many areas,” said Yun.

He attributed the drop in first-time buyers to several reasons.

“Unfortunately, there are just as many high hurdles slowing first-time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there’s scarce inventory for new and existing-homes in their price range, and it’s still too difficult for some to get a mortgage,” Yun said.

This infographic shows what the typical homebuyer and home seller look like.

Click to enlarge

NAR

(Source: National Association of Realtors)

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[Infographic] HereÕ what the typical homebuyer and seller look like

The Consumer Financial Protection Bureau Takes Actions Against #Collection #Agencies | Cross River Real Estate

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Encore Capital Group and Portfolio Recovery Associates (PRA) are two of the country’s largest debt buyers, a market that serves a crucial role in the proper functioning of consumer credit markets. Recently, the Consumer Financial Protection Bureau (CFPB) has taken legal action against Encore and PRA for their illegal debt collection activities. In their process, Encore & PRA demanded payments and filed lawsuits on debts without reviewing the proper documentation to ensure they were collecting the accurate amount from the correct consumer.
In their legal actions, the CFPB is ordering Encore to refund up to $42 million to consumers, cease collection efforts on $125 million in debts, and pay a penalty of $10 million. Meanwhile, they are ordering PRA to refund $19 million to consumers, stop its collection of $3 million in debts, and pay a penalty of $8 million. In addition to these actions, the CFPB is hoping their orders will contribute towards reforming and improving the procedures taken in the debt collection field.
Typically, debt buyers purchase delinquent accounts for only a fraction of what the overall debt total would be; however, they still have the option to collect the full amount claimed by the original lender. In the investigation, Encore and PRA were found to have purchased over $200 billion in defaulted consumer debts on credit cards, phone bills, and other accounts. The issue here is that the debts bought were inaccurate or could not legally be enforced; something both debt buyers knew or should have known.
In the investigation, it was found that both companies knowingly and intentionally entered into these agreements after being notified of debts being faulty, seeing the contractual disclaimers, or being aware of consumer disputes. Both companies went on to make these purchases without obtaining important and accurate documentation, or even checking to ensure the debts were accurate and enforceable. Encore and PRA even bought debts that intentionally imposed significant limitations on access to account-level documents that would have helped verify the debts.
Even after the initial purchase, Encore and PRA used unlawful tactics and made misrepresentations in order to pressure consumers to pay their debts. PRA’s tactics included falsely informing consumers their accounts were reviewed by an attorney, falsely stating that there would be a pending litigation, and coaxing consumers into agreeing to receive auto-dialed calls to their cell phones. Meanwhile, Encore notified some consumers that debts were legally enforceable, when they were in fact too old to legally enforce. Both companies also collected debts by entering into lawsuits against consumers across different states, knowing they would win the majority by default if consumers were unable to defend themselves.
Due to the unlawful actions taken by both companies, in addition to them being the largest debt buyers in the country, Encore and PRA will have to lead the reform in practices taken in the debt buying field. These changes would include taking proper measurements to ensure debt being bought is accurate and enforceable, proper research and investigation is taken, and that any lawsuits filed must contain specific documents and information that is both accessible and shows the debt is accurate.
These actions taken by the Consumer Financial Protection Bureau are in hopes of ensuring there are legitimate and fair practices being taken in the debt buying marketplace, so as to keep consumers from being misled by companies like Encore Capital Group and Portfolio Recovery Associates. Does this mean there will be no illegal activity on the part of collection agencies moving forward?  Very unlikely…
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Mortgage rates drop to 3.76% | Cross River Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates following Treasury yields lower following a more than disappointing September jobs report. This continues to keep average rates below four percent for the 11thconsecutive week, including the 15-year fixed falling below 3 percent once again for the first time since April of this year.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.76 percent with an average 0.6 point for the week ending October 8, 2015, down from last week when it averaged 3.85 percent. A year ago at this time, the 30-year FRM averaged 4.19 percent.
  • 15-year FRM this week averaged 2.99 percent with an average 0.6 point, down from last week when it averaged 3.07 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.88 percent this week with an average 0.4 point, down from 2.91 percent last week. A year ago, the 5-year ARM averaged 3.06 percent.
  • 1-year Treasury-indexed ARM averaged 2.55 percent this week with an average 0.2 point, up from 2.53 percent last week. At this time last year, the 1-year ARM averaged 2.42 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“Calling the September jobs report disappointing is an understatement. The sputtering U.S. economy added only 142,000 jobs. To make matters worse, there were downward revisions to the prior two months. Hourly wages were flat, and the labor force participation rate fell to 62.4 percent, the lowest rate since 1977. In response, Treasury yields dipped below 2 percent triggering a 9 basis point tumble in the 30-year mortgage rate to 3.76 percent.”

Mortgage rates average 3.85% | Cross River Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMM®), showing average fixed mortgage rates largely unchanged despite ongoing global growth concerns putting downward pressure on Treasury yields.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.85 percent with an average 0.6 point for the week ending October 1, 2015, down from last week when it averaged 3.86 percent. A year ago at this time, the 30-year FRM averaged 4.19 percent.
  • 15-year FRM this week averaged 3.07 percent with an average 0.7 point, down from last week when it averaged 3.08 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent this week with an average 0.4 point, unchanged from last week. A year ago, the 5-year ARM averaged 3.06 percent.
  • 1-year Treasury-indexed ARM averaged 2.53 percent this week with an average 0.2 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.42 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“In contrast to the volatility in equity markets, the 10-year Treasury rate — a key driver of mortgage rates — varied just a little more than 10 basis points over the last week. As a result, the 30-year mortgage rate remained virtually unchanged, dropping 1 basis point to 3.85 percent. This marks the tenth consecutive week of a sub-4-percent mortgage rate. Despite persistently low mortgage rates, the pending home sales index dropped 1.4 percent in August, suggesting possible tempering in existing home sales in September.”