Monthly Archives: May 2013

Mortgage Rates Climb to Highest Level in Year

Fixed-rate mortgages soared higher this week, reaching their highest averages in a year, Freddie Mac reports in its weekly mortgage market survey. 

The 30-year fixed-rate mortgage — the most popular choice among home buyers — has climbed nearly half a percentage point since the beginning of this month — from 3.35 percent to 3.81 percent this week.

"Fixed mortgage rates followed long-term government bond yields higher, following a growing market sentiment that the Federal Reserve may lessen its accommodative policy stance,” says Frank Nothaft, Freddie Mac’s chief economist. “Improving economic data may have encouraged those views.”

Despite the uptick, mortgage rates remain low by historical standards, Freddie Mac reports.

The mortgage giant reports the following national averages with mortgage rates for the week ending May 30:

  • 30-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.8 point, rising from last week’s 3.59 percent average. A year ago at this time, 30-year rates averaged 3.75 percent. 
  • 15-year fixed-rate mortgages: averaged 2.98 percent, with an average 0.7 point, rising from last week’s 2.77 percent average. Last year at this time, 15-year rates averaged 2.97 percent. 
  • 5-year adjustable-rate mortgages: averaged 2.66 percent, with an average 0.5 point, also up from last week’s average of 2.63 percent. Last year at this time, 5-year ARMs averaged 2.84 percent. 
  • 1-year ARMs: averaged 2.54 percent, with an average 0.5 point, dropping from last week’s 2.55 percent average. A year ago, 1-year ARMs averaged 2.75 percent. 

Source: Freddie Mac

Home Sellers Take the Power Seat

The housing recovery has “transformed the mind-set of many buyers and sellers who grew accustomed to the buyers’ market we saw for years,” says Rick Davidson, CEO of Century 21. "Buyer confidence is building back up and demand is strong… sellers are now in a more favorable position."

Eight-five percent of 365 home buyers recently surveyed by the real estate brokerage said they are willing to make compromises when buying a home in order to get a transaction complete. 

Tighter inventories of for-sale homes have prompted more buyers to get less picky and to realize that they'll face competing offers when trying to purchase a home. 

The Century 21 survey found that 42 percent of home buyers surveyed said they’ve submitted an offer on a home in the past six months but only 11 percent of their offers have been accepted. 

Home shoppers are realizing they may need to have to compromise more in order to get the house they want. For example, more than half of the buyers surveyed said they’d be flexible on the closing date, and 31 percent said they’d purchase a home “as-is.” Twenty-nine percent said they’d be willing to offer up more cash than they originally planned to in order to close on a deal. 

Home buyers also say they’re willing to budge on their wishlists. The items they’re most willing to give up: an in-ground pool, a finished basement, and an updated kitchen or walk-in closets, according to the survey. 

Source: “Sellers calling the shots on home deals,” CNNMoney (May 30, 2013)

More Buyers Willing to Make Higher Offers

Daily Real Estate News | Sat, May 25, 2013

Home buyers are saying they’re willing to pay more for a residential property due to concerns over low inventory. In the second quarter of 2013, 41 percent of buyers said they’re willing to offer more, up from 34 percent in the first quarter, according to a survey of more than 1,300 home buyers in 22 major markets by the real estate brokerage Redfin. 

The number of buyers who say they’re concerned about rising home prices has more than doubled in the past year, according to the survey. Seventy-nine percent of home buyers say they believe prices will increase in the next 12 months—with 23 percent of that group saying by “a lot.” 

“Home buyers are accepting the reality of a seller’s market and expressing a willingness to pay more,” according to the brokerage’s survey. 

Source: Redfin

Survey Finds Mortgage Credit Starting to Ease

Stringent mortgage standards have kept many potential home buyers on the sidelines the last few years. But 8 percent of banks say they’ve loosened up their mortgage standards in the last three months, according to the Federal Reserve’s latest Senior Loan Officer Survey. The survey shows that credit conditions have either held steady or loosened for eight of the past nine quarters. 

Banks also reported they may be more open to increasing their mortgage business soon. Twenty-seven percent of the banks surveyed say they plan to shore up their residential mortgage assets within the next year, according to the survey.

Nearly 40 percent of banks also reported they’ve seen a rise in mortgage demand in the last three months.

Ellie Mae recently reported that 60 percent of home purchase applications in March were approved—up from 55 percent year-over-year.

Still, despite progress, mortgage conditions remain tight and applicants must still meet high standards—such as 20 percent down payment or high credit score requirements. 

“Fear Fannie Mae and Freddie Mac will force lenders to take back risky mortgages continues to be the primary condition constraining lending,” RealtyTrac reports. “Other conditions that have lenders holding tight to mortgage purse strings include obtaining insurance, slow economic growth, concerns about securitization, and processing capacity.”

Source: “Mortgage Squeeze Loosens, Somewhat,” RealtyTimes (May 16, 2013)

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5 Fastest-Moving Housing Markets

The U.S. housing markets where homes are selling the fastest are mostly in the West, according to a new survey by ZipRealty. In fact, some western markets have seen a big rise in homes selling in seven days or less. 

ZipRealty identified the following five markets as the fastest selling markets:

Orange County, Calif.

Median days on the market (as of March 31): 15 — a 71 percent year-over-year drop from 52 days

Percentage of homes that sell in seven days or less: 29 percent

Median home-price increase year-over-year: 27 percent to $495,000

San Diego, Calif.

Median days on the market: 20 — a 59 percent year-over-year decrease from 49 days

Percentage of homes that sell in seven days or less: 25 percent

Median home-price increase year-over-year: 22 percent to $390,000

Sacramento, Calif.

Median days on the market: 12 — a 57 percent drop year-over-year from 28 days

Percentage of homes that sell in seven days or less: 30 percent

Median home-price increase year-over-year: 31 percent to $210,000

Los Angeles

Median days on the market: 15 — a 56 percent drop year-over-year from 52 days

Percentage of homes that sell in seven days or less: 29 percent

Median home-price increase year-over-year: 26 percent to $307,564

Las Vegas

Median days on the market: 12 — a 53 percent year-over-year drop from 28 days

Percentage of homes that sell in seven days or less: 30 percent

Median home-price increase year-over-year: 35 percent to $148,500

Source: ZipRealty

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