Skip to content

Lending Cafe Bookmark and Share

Monthly Archives: August 2014

Home flips flop in recent quarter data

Real estate is an unstable market right now with the economy having been on a rollercoaster of ups and downs since the start of the recession in 2008. Even through everything, though, many veteran homeowners have still tried to snatch up cheap housing in order to renovate and resell to make a profit.

According to recent data from RealtyTrac’s U.S. Home Flipping Report, the market for house flipping has fallen into a two-year low in the past quarter. The report indicates that approximately 31,000 homes were flipped in the second quarter of this year (April through July), which accounts for about 4.6 percent of the U.S. single-family home sales. In the first quarter of the year, that number was at 5.9 percent, so there has been a marked decrease.

Existing-home sales increases in July

With the release of the spring season housing data from the National Association of Realtors (NAR), it became evident that the current housing market is well on its way to recovery. One interesting aspect of the data was in regards to the sales of existing homes, which appears to have increased throughout the month of July.

Existing-home sales, which are categorized as completed transactions that can include townhomes, condominiums, co-ops and single-family homes, increased by 2.4 percent. This brought the seasonally adjusted annual rate to 5.15 million homes in July, compared to 5.03 in June. These numbers are consistent with the growth over the past four months, but it still falls short for the record high of 5.38 last July.

Rookie homebuyers still struggle in this market

For first time buyers, the struggle to afford even the cheapest of housing in the U.S. has been all too real. Between low wages, competition from veteran homeowners and investors and increasing student debt, most young professionals simply cannot fathom financing that type of investment. Now, the prospect is exceedingly difficult as sellers are expecting more cash upfront even on moderately priced properties.

According to Bloomberg BusinessWeek, the necessity for a bigger down payment is the result of tight credit limitations that are making it difficult for rookie homebuyers, even with interest rates at historical lows and home prices also low compared to this time last year.

Home prices lead to changes in affordability

According to a recent report from the National Association of Home Builders (NAHB), the affordability of housing on a national scale is decreasing.

Based on reports from the second quarter of 2014, several major markets saw a decrease in affordability due to an increase in home cost. The report, which was put out by the NAHB in conjunction with Wells Fargo Housing Opportunity Index (HOI) showed that 62.6 percent of homes sold between April and June of this year were affordable, based on the median income for U.S. families.

Lower refinancing applications bring down latest weekly mortgage projections

Last week, we reported that refinance activity on fixed-rate mortgages had jumped a marked 3.8 percent during the period ending August 1 - a significant leap considering the lackluster demand within the national housing market of late. However, according to the latest report from the Mortgage Bankers Association (MBA), an industry group that monitors roughly 75 percent of all home loan activity nationwide, the refinance market has now lost all gained ground, with applications dropping 4.0 percent during the week ending August 8.

Purchase applications, however, only dropped roughly 1.0 percent over the same time frame, indicating that buyer activity remains relatively healthy. This isn't surprising given the fact that the latest average interest on 30-year fixed-rate mortgages continues to hover around 4.35 percent, according to the most recent MBA data. These are among the lowest rates seen by buyers in more than a year.

2 factors to consider when selecting home insurance

Once you have your home purchased, or at least picked out, the next step is finding the right homeowners insurance that will work for the area that you live in. When it comes to insurance, many people like to be hands-off and hire a third-party handler because they don’t want to deal with paperwork and figuring out what plan works for them. But the fact of the matter is that you are better off if you know and maintain your own policy, especially when it comes to selecting and updating your policy, as neglecting to do this can lead to lack of coverage.

Here are some of the most common shortfalls of average homeowners insurance:

Ten cities that lead in home sales

The most recent National Housing Trend Report ranked the nation's major cities based on their rising housing trends and found that there were ten metros that rose above the rest.

These metropolises boasted strong price appreciation, inventory increase and rising home sales that outnumber the averages recorded in the national housing market.

Buyers struggle with rising closing costs

It appears to be more and more of a sellers' market in the housing industry these days. With mortgage rates still relatively low, the average home price has risen compared to last year. Now, data shows that those costs have been coupled with an increase in closing costs for most buyers.

Newly released data from Bankrate.com shows a six percent increase in mortgage closing costs compared to this time last year. This was the second year that these rises were felt in the housing market. In 2013 there was also a six percent rise.