Pending Home Sales Up in Nearly All Regions

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Pending home sales mostly increased across the country 148jpduring the month of July, with all regions except for the Midwest experiencing contract signing gains.

The National Association of REALTORS®’ Pending Home Sales Index, which is based on pending sales of existing homes, hit 105.9 in July, up from 102.5 in June. This marks the third consecutive month that the index is above 100, a score that is considered to be the average level of contract activity.

Regionally, the Northeast saw the biggest gains in pending home sales, with a 6.2 percent jump from 83 in June to 89.2 in July. The South experienced a 4.2 percent increase to an index of 119, while the West’s index rose 4 percent to 99.5 in July.

The Midwest – the only region that did not post gains in pending home sales last month – experienced a slight decline, falling 0.4 percent to 99.5.

The overall increase in pending home sales can be contributed to favorable housing conditions, according to NAR Chief Economist Lawrence Yun.

Yun cited lower interest rates, moderate price growth, and an increase in housing inventory as reasons for the PHSI’s climb.

“The increase in the number of new and existing homes for sale is creating less competition,” Yun said, “and is giving prospective buyers more time to review their options before submitting an offer.”

The improvement of the job market is also helping family finances and giving more people confidence to enter the housing market, Yun said.

Despite the increase in the PHSI, housing sales in 2014 are still below 2013 levels. Yun said he expects existing-home sales to be down 2.1 percent this year, falling from 5.09 million sales of existing homes in 2013 to approximately 4.98 million sales in 2014.

Source: NAR

7 Budget-Friendly Retiree Havens

Where can you retire comfortably and still live on, say, $30,000 a year? AARP The Magazine recently compiled a list of the best places for retirees throughout the country, factoring in taxes, housing costs, and dining and entertainment options for retirees on strict budgets.

The following cities topped the AARP list for 2014:

  1. Daytona/Deltona/Ormond Beach, Fla.
    Median home price: $108,900
    Median mortgage payment: $416
    Median property tax: $1,161
  2. Pocatello, Idaho
    Median home price: $127,500
    Median mortgage payment: $487
    Median property tax: $1,179
  3. Bangor, Maine
    Median home price: $110,400
    Median mortgage payment: $421
    Median property tax: $1,303
  4. Greenville, S.C.
    Median home price: $127,600
    Median mortgage payment: $487
    Median property tax: $753
  5. Grand Rapids, Mich.
    Median home price: $114,200
    Median mortgage payment: $436
    Median property tax: $1,830
  6. South Bend, Ind.
    Median home price: $82,500
    Median mortgage payment: $315
    Median property tax: $846
  7. Erie, Penn. 
    Median home price: $106,600
    Median mortgage payment: $407
    Median property tax: $1,899

Source: “10 Budget Cities Where You Can Retire in Comfort,” The Wall Street Journal 

NAR: Housing Market Is Stabilizing

Contracts to buy new homes leveled off in November, ticking up slightly by 0.2 percent, the National Association of REALTORS® reports. Pending home sales — which reflect contracts and not closings — were 1.6 percent below year-ago levels.

“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” says Lawrence Yun, NAR’s chief economist. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.”

Pending home sales in November posted the largest gains in the South and West, rising 2.3 percent and 1.8 percent month-over-month, respectively. The increases helped to offset declines in pending home sales in the Northeast (down by 2.7 percent in November) and the Midwest (down by 3.1 percent).

Total existing-home sales are expected to end the year with nearly a 10 percent gain over 2012. However, Yun says that existing-home sales will likely remain at around 5.1 million in 2014. A rise to 5.3 million in existing-home sales is expected for 2015.

Existing-home prices for 2013 are expected to be about 12 percent higher than year-ago levels, averaging $197,300. NAR predicts that home prices will grow modestly in 2014 at a pace of 5 to 5.5 percent, and values will increase another 4 percent in 2015.

— By Melissa Dittmann Tracey

New Mortgage Qualifying Rules – Consumer Beware!

In response to the mortgage crisis and recent recession, the Dodd-Frank Act was passed to initiate an overhaul of the United States financial regulatory system.  One of the main goals of the act was to create stricter requirements to qualify for a home loan. A new mortgage qualifying rule issued by the Consumer Finance Protection Bureau (CFPB) has taken effect on January 10, 2014. Some aspects of the new rule are vague,  however, there will be compliance and enforcement of the new rules.

The rulings have to do with Ability to Repay (ATR) and Qualified Mortgage (QM). For a mortgage to be “qualified” there are limits on the type of loan, fees and borrower characteristics. To be qualified, the lender must first determine that buyer has the ability to repay based on a variety of factors including: credit and credit history, income/assets, employment status, monthly housing payment, debts and debt to income ratio. All debts, including alimony payments and child-support payments will be considered in qualifying.

Once qualified, the loan will have to pass a few more tests. The loan cannot be amortized more than 30 years. Points and fees cannot go in excess of 3% of the loan amount. These loans will have no negative amortization nor interest only payments.

As a result of the new qualifying rules, there will be a reduction in applicants who qualify for loans from a government source. These borrowers will then be forced to rely on private capital to fund the loan. The consequence will be higher rates for a higher risk borrower. Suddenly, the borrower now will qualify for less of a purchase price.

If you are considering buying a home this year, the sooner the better as rates are likely to climb later this year as implementation begins to enforce these rules. With stricter qualifying guidelines and increased rates this could mean that if you qualify for a $200,000 house now, you may only qualify for a $160,000 house later this year.

For your best buying choices, NOW is the time to buy. Call/text me for a consultation to review your home buying options. 614-565-8161 or Teresa@TeresaButler.com

Wells Fargo Settles Pick-a-Payment Charges

Wells Fargo announced Wednesday that it had agreed to pay $24 million to end an investigation by eight states probing whether the company used deceptive tactics to sell “pick-a-payment” adjustable-rate mortgages without telling consumers the risks.

The $24 million will be used to help states assist customers who took out such loans. Wells Fargo also agreed to offer more than $770 million in its own loan assistance to borrowers.

The company signed agreements with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington State.

Wells Fargo admitted no wrongdoing.

Source: The Associated Press, Alan Zibel (10/06/2010)

Fed Chair: Government May Buy More Debt

Federal Reserve Chair Ben Bernanke hinted Monday that the Fed is likely to buy more government debt, a move that could further drive down rates on mortgages, corporate financing, and other loans.

“I do think the additional purchases, although we don’t have the precise numbers for how big the effects are, I do think they have the ability to ease financial conditions,” Bernanke said at a meeting with college students after his presentation at the Rhode Island Public Expenditure Council.

Bernanke also defended the TARP program, saying that the downturn would have been much worse without it.

Source: Reuters News (10/4/2010)

Regulators to Banks: Review Foreclosures

Improper foreclosure procedures are throwing another curve ball at the troubled mortgage industry.

Regulators from the Office of the Comptroller of the Currency have told seven major banks to review their foreclosure procedures after Bank of America and Wells Fargo joined JPMorgan and GMAC (now known as Ally Financial) in freezing their foreclosure processes.

Banks that regulators contacted include HSBC, Citigroup Inc., PNC Financial Services Group Inc., and U.S. Bankcorp (USB).

Simultaneously, title insurer Old Republic National said Friday it would stop insuring the sales of homes foreclosed by JPMorgan Chase & Co. or GMAC Mortgage until questions about documentation are cleared. An inability to get title insurance could bring home sales to a halt.


Source: The Wall Street Journal (10/01/2010) and Reuters News (10/03/2010)

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