Skip to content

Lending Cafe Bookmark and Share

Monthly Archives: October 2013

Fewer jobs added to economy in October

According to the latest data from ADP Payroll Services, the U.S. economy added roughly 130,000 jobs last month, well below the 150,000 figure most analysts had anticipated. This comes on the heels of a revision to the analytics group's estimates for September, which saw the number of jobs added sink from 166,000 to 145,000.

According to the report, goods-producing employment went up in October to 24,000 compared to September's 16,000 figure, while construction payrolls added 14,000 jobs, manufacturing industry payrolls increased by 5,000 and 107,000 service industry jobs were included - well below the 130,000 procured the month before.

HARP 2.0 reaches another 68,000 Americans in August

According to data from the federal government, another 68,000 homeowners were able to restructure their mortgage offerings under the terms of President Barack Obama's Home Affordable Refinance Program (HARP 2.0) in August. These numbers indicate that for the second year in a row, the initiative will close out 2013 with more than 1 million borrowers helped, making monthly loan payments more manageable and preventing mass foreclosure.

When HARP 2.0 was first enacted, it was designed to help underwater borrowers who had seen their property values plummet as a result of the Great Recession. Across the country, thousands of residents found themselves owing more on their mortgages than their houses were worth - a strain that was weakening an already damaged national economy.

Mortgage market veers away from refinance

The dynamics of the housing market have shifted markedly compared to just 12 months ago, as mortgage refinance activity has waned of late in favor of an uptick in demand for purchase loans. An October 23 report released by the Mortgage Bankers Association (MBA), an industry group that tracks more than three-quarters of the total home loan market, showed that a slight dip in refinancing over the past week offset modest gains in new mortgage applications.

The MBA's seasonally adjusted index indicated that total application volume fell 0.6 percent over the period after rising 0.3 percent the week before. Refinances alone dropped by roughly 1.3 percent, while new loan applications remained robust, inching up 0.7 percent.

Luxury properties leading housing market recovery

As we've recently reported, the latest National Association of Realtors (NAR) monthly sales report for September showed that even though the number of closings on existing homes dropped over the period, the average market price continued trending upward. Upon further investigation, it seems that different areas of the United States are seeing much faster value appreciation than others, indicating the national economic recovery is bouncing back at an uneven pace.

However, compared to year-ago values, the largest sales increases across the board have been on the most expensive properties. Homes that cost between $750,000 and $1 million have seen sales rise by 42 percent since September 2012, accounting for 2.1 percent of total sales volume in September 2013 compared to 1.8 percent a year ago.

Property values increase across the country

Home values continue to trend upward across the country as the economy regains steady footing following the Great Recession. According to the National Housing Trend Report for September from realtor.com, more than 20 percent of the 146 markets that the survey monitors saw average price gains of 12 percent or more.

There were a few select metropolitan areas where asking prices rose at a significantly faster pace than the national average. What is so promising about these findings is that they are indicating fast recovery in parts of the country that were hardest hit by the recent economic downturn.

Forbes unveils 10 most expensive zip codes

With interest rates on jumbo loan agreements nearing record lows over the past few months, more and more buyers have been interested in purchasing properties with price tags well above the conforming loan limit of $417,000 - or $625,000 in more expensive locales. These conditions have led to a major uptick in the total value of properties in cities and towns across the country, with homes on both coasts exceeding property values seen before the crash of the housing market back in 2008.

Forbes recently compiled a list of the most expensive zip codes coast to coast, and the results showed that major technological hubs are seeing the highest increases in residential home value.

Government emerges from 16-day shutdown

For more than two weeks, members of Congress have been in a heated battle over how to address the government's budget and approach the debt ceiling. As a result, the federal government and all agencies it finances entered a 16-day shutdown while a divided House squabbled over partisan issues, leaving much of the country disillusioned in the process.

Lawmakers debated well into the night on October 16, nearly approaching midnight, before an overwhelmingly Democrat-backed bill was voted on and approved. Under the new terms, Congress will be given some breathing room to discuss how the government can avoid the first-ever default on its debts.

Market could switch to favoring buyers

For much of the past year, the housing market has been characterized as favoring sellers, with home values on the rise and garnering significant returns on investment for homeowners who list their properties. However, many industry analysts are anticipating that the real estate scene may soon switch to favoring buyers.

Industry analytics group Redfin polled realtors across the nation to gauge where they see the market going in the coming months. Roughly 72 percent of those polled said now is a great time to sell a home, which is down from the 86 percent figure recorded the previous quarter. This marks the first reading in over a year that indicated a drop in seller favorability.

NAR president pleads congress for debt ceiling raise

With the nation in its second week of a government shut down, more and more analysts are trying to anticipate what the perils of a prolonged federal closure would mean for the national economy on the long term. While the country has made strides in certain sectors, such as the housing market, Congress' looming actions regarding the debt ceiling and the upcoming deadline to a national default could cause the upward momentum of the national real estate scene to reverse.

On Wednesday, October 10, National Association of Realtors (NAR) President Gary Thomas spoke before the Senate Committee on Banking, Housing and Urban Affairs, pleading members of Congress to take actions against a default by raising the country's debt ceiling.

Rate of foreclosure sinks in 2013 across the country

According to a recent report from CoreLogic, a real estate analytics group, the incidence of foreclosure is down markedly in the year ending August 2013 from the same period 12 months earlier. Over the span, the number of homes that were foreclosed upon sank 34 percent as homeowners were able to take advantage of refinance programs and improved property values to catch up on underwater mortgages or even sell their home without taking a loss.

However, the data also shows that foreclosure is still a lingering problem across the nation and is more prevalent now than it has been historically. Nearly half of all foreclosures come from five states that have had the most trouble recovering from the Great Recession. Even in these regions, though, the numbers show that filings are steadily grinding to a halt.