As Housingwire.com reports, Freddie Mac shows the 30-year FRM averaging 3.79% – the lowest rate ever recorded. This is down from the prior week’s record average of 3.83%. The 30-year FRM averaged 4.61% in May 2011.
As for those who are looking to refinance, the 15-year FRM averaged 3.04%, and continues to drop. The average rate for a 15-year FRM in May 2011 was 3.80%.
2011 was a fantastic year for vacation home sales. This means plenty for real estate in Newport, RI where some 70% of homes in the Newport area are rentals. “The combined share of investment and vacation homes sales last year reached its highest level since 2005,” quoted the National Association of REALTORS.
Lawrence Yun, chief economist for NAR noted that as prices sink to affordable levels, investors with cash to burn are coming out of the woodwork to pick up properties in this buyers market.
According to Housing Wire.com, investment sales made up almost 30% of 2011 transactions. About half of the investment homes were distressed homes. Median down payment was 27%, reported NAR’s 2012 Investment and Vacation Home Buyers Survey.
In a breaking news report by Housing Wire , it has been announced that the FHA has made the decision to raise Mortgage insurance premiums from 1% to 1.75% in April, as part of the FHA’s attempt to fix the emergency fund.
The hope is to raise the Mutual Mortgage Insurance Fund by $1 billion.
Since interest rates started rising last month, this is another reason for buyers to jump at the chance to buy now. According to the national Association of REALTORS, pending home sales rose to their highest level in 21 months in January. Low housing prices are a key factor in sales.
Would-be home buyers who have maintained good credit through the financial crisis, are having a hard time qualifying under the new strict credit requirements, according to HousingWire.com.
Fannie Mae’s third-quarter financial filing in 2011 showed an average credit score for mortgages of 761, with a contract failure rate of 33%.
Last quarter, the Standard & Poor’s/Case-Shiller home price index showed home prices back where they were in 2003, due to buyers having difficulty obtaining a mortgage, the ongoing European debt, and a glut of distressed properties. Both Moody’s and Bank of America Merrill Lynch forecast home prices to drop another 20% in 2012.
Happy almost Friday Newport County! Sellers of real estate will be happy to learn that the private sector job market is showing signs of growth for the 24th consecutive month in a row, helping the possibility of more sales. For full article click here.
The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule through the end of 2012. This will allow buyers of Newport County real estate to continue to use FHA-insured financing to purchase HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012. Click here to view waiver.
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December 2011 Market Update One of the key drivers of homes sales, the employment rate, is beginning to show promising signs of a turnaround. The four-week average for jobless claims, as of November 19, was 394,250, a drop of 3,250 from the previous four weeks, and at the lowest levels since April. Consumer confidence also rose 15 points in the last month, and is now at its highest point since July of this year. Eric Green, Chief Market Economist at TD Securities Inc. said, “The trend remains very constructive. Jobless claims are back below 400,000, which seems to be the pivot point in terms of a strengthening labor market as opposed to a weakening one.” In addition to improving employment conditions, home affordability also improved as interest rates fell further, opening the door for more first-time home buyers who accounted for 34% of the sales in October, an increase from 32% last month and last year. The western United States saw the greatest increase in home sales, which were up 4.4% month to month and up over 15% from last year. A strengthening job market, along with encouraging signs from the housing sector, including a 10% jump in pending sales for October, are strong economic forces. While mortgage lending still remains a challenge, these forces may send a signal to banks to relax lending regulations and allow for a more rapid recovery. Home Sales in millions
Existing homes sales improved 1.4% in October, or to an annual pace of 4.97 million, a 13.5% increase from October of last year. Even more dramatic, was the jump in pending home sales, which surged in October by 10.4% from September, and were up 9.2% from October 2010. This jump in pending sales could lead to a strong fourth quarter as signs continue to point to a pent-up demand brought on by current lending conditions of mortgage providers. .
Home Price in thousands
The national median home price in the U.S. saw a small decline in October to $162,500, from $165,800 in September. This number can be affected by the sale of distressed properties, which typically sell at discounted prices. Distressed properties accounted for 28% of homes sales in October. Yet despite a drop in the median price from last September, the Federal Housing Finance Authority reported that seasonally adjusted prices rose 0.2% in the third quarter from the second quarter in 2011, which could be an early sign of appreciating home prices.
Inventory- Month’s Supply in months
By the end of October, the total number of homes on the market had fallen 2.2% to 3.33 million homes, which represents 8 months of inventory at the current sales pace. Since a record high of 4.58 million homes in July 2008, the inventory of homes for sale has been steadily declining. When homes sell faster than they come on the market, the market comes from its current favor toward buyers into balance or in favor of sellers. This can trigger an appreciation in home prices and lead the way to a stronger recovery.
Source: National Association of RealtorsInterest Rates Mortgage rates continue to push lower, dropping to 3.98% from 4.23% in October of 2010, offering historic affordability to today’s home buyers. While mortgage lending conditions continue to be a challenge, more and more people are seeing the advantage of buying a home sooner rather than later. Lawrence Yun, NAR chief economist, said, “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this indicates more buyers are taking advantage of the excellent affordability conditions.”
This Month’s Video
Topics For Home Owners, Buyers & Sellers When first-time home buyers decide they are ready to buy, it is important for them to begin the process by carefully assessing their values, wants, and needs—both for the short and long term. This is a critical step since consultation sessions normally start with the buyers’ values. Afterward, buyers can explore their wants and needs and, once defined, determine actual criteria. A recent study shows how important the following home-buying factors were to buyers:
By having the home-buying criteria in mind before walking into a consultation, buyers are off to a better start when meeting with their real estate agent. The consultation allows buyers to fill in any missing gaps within their values, wants, and needs. |
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Brought to you by KW Research. For additional graphs andThe opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate. |
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