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Monthly Archives: March 2014

What to Expect from Here on Out

One of our prognostications for 2014 was that there would be a considerable slowdown in home-price appreciation in more markets.  Our rationale is predicated on the fact that double-digit annual price gains are simply unsustainable in perpetuity.

Perhaps our prognostication is coming to fruition.

Case-Shiller: Home prices down for third straight month

According the latest S&P/ Case-Shiller survey of home prices, the cost of a home declined 0.08 percent in January 2014 for third straight month. This is the largest consecutive streak of declines since March 2012. Of the 20 major housing markets that were included in the survey, 12 saw a price drop.

In a separate report, the Federal Housing Finance Agency said prices actually rose 0.5 percent in January. It is important to note, however, that the agency’s analysis is based on mortgages sold or backed by Fannie Mae and Freddie Mac. Broader sales outside of these programs were not included.

The Fed Giveth; Will It Taketh Away?

More than 200 years ago, Mayer Rothschild, founder of the Rothschild banking dynasty, uttered one of the more profound observations on finance and power. “Permit me to issue and control the money of a nation,” said Rothschild, “and I care not who makes its laws.”

Rothschild recognized that money matters, and it matters a lot. Money is, after all, 50% of every transaction. The importance of how much money is in an economy and the interest to be charged on that money cannot be understated.

Investors slowing down on widespread purchases

In some markets it has been difficult for would-be buyers to find an affordable home because institutional investors snap up much of the available inventory. During the height of the foreclosure crisis, these companies bought as many properties as they could in order to sell them at a higher price later. The situation may be improving for families looking for a new home, however.

According to a new CoStar Group report, institutional investors are moving away from their large-scale purchases of single-family homes. Many are instead narrowing their focus to a few strategic markets.

San Francisco increases down payment assistance for first-time buyers

One of the biggest obstacles on the path to home ownership is finding the money for a down payment. While many would-be buyers would have no problem making monthly mortgage payments, it’s not uncommon for someone to have difficulties obtaining the funds for a five- or six-figure down payment.

San Francisco is one of the nation’s most expensive housing markets. Even some of the city’s higher-earning residents have difficulties finding an affordable home. For this reason, San Francisco recently doubled the amount it’s willing to loan first-time buyers to be put toward a down payment from $100,000 to $200,000.

The top 10 markets with the greatest equity increases

Many people buy homes because they are a safe, long-term investment. Selling a house can provide a sizable amount of income and support retirees who may not have saved enough during their working years. With the volatile housing market that the nation has been dealing with over the past several years, many homeowners and potential buyers have been questioning if a home purchase is really a wise investment anymore.

There may be no need to have such fears, according to the National Association of Realtors’ (NAR) fourth quarter 2013 Local Market Reports. The organization's analysis found that the majority of homeowners who made a purchase during the market’s 2006 peak are seeing positive equity return in their homes.

Zillow: Millions of renters say they’re ready to buy

According to a new study conducted by Zillow, 10 percent of U.S. renters say that they want to buy a home in the next 12 months. The online real estate database surveyed renters from the nation’s 20 largest housing markets and found that a sizable number are optimistic about their prospects.

If all the renters who say they want to buy a home in the next year actually finalize the transaction, it would result in 4.2 million first-time homebuyer sales. That’s more than double the number of what occurred in 2013. According to the National Association of Realtors (NAR), the percentage of first-time home purchases is at its lowest point on record, accounting for just 26 percent of sales in January 2014, down from the long-term average of 40 percent.

How the Unexpected Leads to the Expected

Lending rates were up this past week, though not discerningly so.

When we parse the national averages, we see the 30-year fixed-rate mortgage was up five basis points to 4.5%, according to Bankrate.comFreddie Mac's data show a slightly frothier gain, with the 30-year loan up nine basis points to 4.37%.

Consumer protection bureau investigates 'zombie' foreclosures

Imagine going through the very draining process of foreclosure only to find out years later that you still own the home that you thought you lost and now owe thousands of dollars in mortgage debts and unpaid property taxes. This situation, unfortunately, is the case for many borrowers who are caught up in so-called “zombie” foreclosures.

This situation results when banks initiate the foreclosure process, only to decide later not to pursue it. The borrower, who by this time has moved out of the house, is never informed and assumes that they are no longer on the hook for the property.

NAR study finds generational differences over housing preferences

Older and younger home buyers seem to have differing views about the housing market, according to the National Association of Realtors’ (NAR) 2014 Home Buyer and Seller Generational Trends Study.

In the survey of more than 8,700 Americans currently in the process of buying or selling a home, researchers found that Millennial buyers - those under the age of 34 - were more likely to see a house as an investment than their Baby Boomer parents. Older buyers, on the other hand, tend to perceive their houses as an extension of their lifestyles and interests.