Low mortgage interest rates have kept buyers in the market despite the extreme winter weather in January, a typically slow month for the Illinois housing market.
According to the Illinois Association of Realtors latest report, total home sales (which include single-family and condominiums) were down over 8% in January 2007 to 8,584 homes sold, compared to 9,206 homes sold in January 2006.
The median Illinois home price in the month remained unchanged from a year earlier, standing at $200,000.
“The current economy provides a strong base for the housing market to recover this year with growth in GDP, employment and income, and [home loan rates] that are low by historical standards,” said Robert Zoretich, president of the Illinois Association of Realtors. “As the year goes on, home sales should steadily improve. Realtors anticipate that the housing market will continue in this transitional phase during the remaining winter months and pick up as spring approaches.”
The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 6.29% in January 2007, up 0.09 points from the 6.20 average rate during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in January it averaged 6.23%.
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), home sales totaled 5,950 in January 2007, down 10.6% from 6,652 home sales in the same month last year. The median home price for the Chicago housing market was $245,000, up 2.1% from $240,000 in January 2006.
“According to economists with the National Association of Realtors, we experienced the worst of the housing sales recession at the end of 2006 but we’re still in an atypical year from inventory levels carrying over to this year,” said Zoretich, broker-owner of Zoretich Realty Group in Chicago. “Fortunately, the housing market in Illinois is not as fragile to fluctuations in market conditions as other parts of the country.”
It’s true. There’s typically strong Illinois mortgage activity in this state. Reduced rates certainly don’t hurt that cause.
SOURCE: RIS Media
Posted by Jed Moss on Feb 28 2007 under Illinois
Plattsburgh, New York.
While much of the Northeast continues to experience a decline in demand for mortgage loans, this Upstate location saw its overall housing affordability rise in the last three months of 2006 - thanks in part to some steam being let out of the housing bubble.
The cooling of the New York housing market during the last six months of 2006 might have been the bane of real-estate agents, but it did have the silver lining of making Plattsburgh a more affordable place to live and work, according to data collected by local officials.
In the first three months of 2006, the City of Plattsburgh’s overall Cost of Living Index had risen above the national average for the first time in years, due in part to a spike in New York mortgage costs.
The area’s home prices, however, started to stabilize in the second half of the year, helping the city regain its sought-after status as a better-than-average affordable housing location.
According to data for the last three months of 2006, Plattsburgh’s overall Cost of Living Index, at 99.4, was only slightly lower than the national average of 100 and 2.1 percent lower than the first half of the year.
In terms of affordability, Plattsburgh ranked better than New York State counterparts Glens Falls (108.0), Ithaca (111.5) as well as nearby Burlington, Vt. (118.4). It came in just behind Syracuse (99.3).
Like much of the rest of New York state, Clinton County’s housing market stabilized in the last fourth of 2006, with a slowdown in home prices and what was described by the New York State Association of Realtors as a “return to balance between buyers and sellers.”
- Overall, sales of existing single-family homes in Clinton County increased by a modest 1.8 percent between 2004 and 2005 and by 4.2 percent between 2005 and 2006.
- November 2006 sales, however, were down sharply in Clinton County, more than 40 percent below the previous month and nearly 35 percent from the year before.
- The median price paid for single-family homes was just more than $123,000 in the third quarter of 2006, which was virtually unchanged from the third quarter of 2004.
These relatively stable figures contrasted with other counties in New York, which experienced big fluctuations in both the number of homes sold and the prices paid for them as home loan costs became increasingly unaffordable for many.
For example, the number of single-family homes sold between 2004 and 2006 increased by a whopping 127.9 percent in Kings County (New York City) and by similar amounts in Suffolk County (Long Island) while the average prices for those homes jumped by more than 21 percent during that same period.
SOURCE: Plattsburgh Press-Republican
Posted by Richard Barber on Feb 28 2007 under New York
A sharp rise in January home sales and modest price declines indicate that the Massachusetts housing market may be recovering from its worst slump in more than a decade, the Boston Globe reports.
The number of single-family homes sold rose almost 13 percent in January compared to a year earlier, the first increase in the last 10 months.
Sales were strongest on the South Shore of the Boston area and on Cape Cod. The median price of a single-family home fell to $340,000, 2.4 percent lower than a year ago, but virtually unchanged over the past four months.
“It’s been a long time since we’ve reported we had an increase in sales,” said Timothy Warren, CEO of Warren Group, a Boston real estate research and publishing firm that also tracks sales data. “I’d call it a hopeful sign.”
A warm and virtually snowless winter deserves some of the credit for the strong sales. But the most significant factor fueling the housing market this winter, agents and analysts said, may be the improving affordability of homes in one of the most expensive real estate markets in the country.
Larissa Duzhansky, a housing economist for the Lexington consulting firm Global Insight, said falling home prices “may be a sign of stabilization” because homes are becoming more affordable. Massachusetts experienced record price appreciation during the housing boom of 2002-2005.
“We had the overvaluation problem, which was one of the things that drove us into this correction in the first place. We’re less overvalued if home prices fall, and sales are beginning to go up,” Duzhansky said.
“Buyers really do want to buy but they’re afraid of making a mistake,” said the Tierneys’ agent, Gil Campos of Re/Max Real Estate Center in Foxborough, which closed 30 percent more sales last month than a year earlier. “The magic right now is, if your house is in really good condition and priced right, it will sell.”
Real estate agents statewide told of a flurry of recent activity that could reverse a trend of slow sales and shrinking commissions in 2006, when Massachusetts mortgage demand was tepid at best.
They reported their open houses are busier and buyers who window-shopped last year are now putting deadlines on finding a house. Some sale listings have even elicited multiple offers, they said.
Analysts were more cautious than agents and warned that a one-month sales increase - particularly in January, a traditionally light month - is hardly an assurance that the market is destined to rebound in 2007.
While home price declines have been good for buyers, it’s also unclear whether homeowners will see the value of the properties start to rise again this year, even as mortgage loan rates remain relatively stable.
“It’s quite possible the number of sales will be up for the whole year. My question is prices, whether they will be up for the whole year,” he said.
Beverly agent Linda O’Connor of Realpro Associates said buyers “are pawing over things like it’s Filene’s Basement.”
But they are buying. While sales in Essex County, which includes Beverly, fell by 4.34 percent in January as Massachusetts home loan activity slips, she saw “very strong pockets of activity,” especially for houses priced above $750,000.
“It’s almost as if there was a jump-start” in the high-end market, she said, though all price ranges are attracting more prospective buyers.
SOURCE: Boston Globe
So, Freddie Mac plans on stepping up efforts to restrict bad credit home loan qualifications? That’s understandable.
But it’s not a step that the other national home mortgage finance giant, Fannie Mae, feels is required. The companu will reduce its operating expenses to $2 billion a year as it wraps up its financial restatements, but sees little risk exposure to subprime loans the company said Tuesday.
“Our expectation that we will reduce in 2008 our normalized expenses” to approximately $2 billion per year relies on an end to Fannie Mae’s work on restatements, the company said in a filing with the U.S. Securities and Exchange Commission.
The company said it sees little exposure to subprime, bad credit home loans - made to borrowers with weaker payment histories - that have been troubling the mortgage market and expects little impact from new regulatory rules on so-called non-traditional mortgages.
Roughly 0.2 percent of the company’s single-family “mortgage credit book” consisted of subprime loans at the end of last year, the company stated in its 12B-25 form with the SEC.
At the end of last year, roughly 2 percent of that same book of business involved mortgage-related securities backed by subprime home mortgage loans issued by companies other than Fannie Mae or Freddie Mac, the company said.
“We believe our credit exposure to the subprime mortgage loans underlying the private-label mortgage-related securities in our portfolio is limited because we have focused our purchases on the highest-rated tranches of these securities to date,” thee company stated.
SOURCE: CNN Money
The Federal Home Loan Bank of Pittsburgh has allocated $24.2 million for affordable housing in 2007.
The donation includes $17.15 million for the Affordable Housing Program, $7.64 million for the First Front Door lower-income home ownership grants program - in order to everyone to have the chance to qualify for various mortgages - and $1 million for a pilot housing rehabilitation grants program.
With assets of $77.4 billion, FHLBank Pittsburgh, one of 12 government-sponsored enterprise created by Congress in 1932 to provide a steady stream of low-cost housing finance, serves 334 financial institution members across Delaware, Pennsylvania and the West Virginia housing markets.
FHLBank’s 2007A AHP funding round is now open and applications from project developers are being taken until March 29.
The 2007B funding round will open in August and close on September 27. Since 1990, the AHP has distributed approximately $125 million in grants for the construction or rehabilitation of more than 22,000 rental and owner-occupied affordable housing units.
The First Front Door program (formerly the Home Buyer Equity Fund) has been available to lower-income first-time home buyers since 1997. The program provides $3 in grant money for every $1 contributed by qualifying home buyers to help meet down payment and closing costs. The program takes applications on a rolling basis through participating FHLBank financial institution members in local communities. The $7.64 million applied to First Front Door in 2007 includes about $1.6 million carried over from 2006.
The number of applications filed to take out a home loan from a major U.S. bank rose by 3.2 percent on a seasonally adjusted, week-to-week basis, the Mortgage Bankers Association reported Wednesday.
Application volumes in the week ended Feb. 23 were up 8.8 percent compared with the same week a year ago.
U.S. mortgage applications have now risen every other week for the past six weeks, coinciding with a period of intense scrutiny of conditions in the nation’s housing market.
The number of home purchase loan applications rose 5.2 percent last week, the first week-to-week increase in four weeks. Purchase applications were flat compared with the same week a year ago, the MBA’s data showed.
At the same time, mortgage refinance applications also rose, up 1.2 percent from the week ending February 16 and up about 23 percent compared with last year. Refinancings accounted for 43.2 percent of loan applications, the lowest share seen since September.
U.S. banks have tightened their lending standards amid increased bad credit mortgage scrutiny. It’s possible that mortgage approvals could be flat or falling even with an increase in applications coming in the door.
Meanwhile, mortgage rates as tracked by the MBA were mixed last week.
The average rate for 30-year fixed-rate loans dropped to 6.16 percent from the prior week’s 6.19 percent, marking the lowest rate in seven weeks. The average rate for 15-year fixed-rate mortgages fell to 5.84 percent, the lowest in nine weeks, from 5.88 percent.
The rate for one-year adjustable-rate mortgages averaged 5.92 percent, up from 5.81 percent, in moving to the highest level seen in 17 weeks.
SOURCE: MarketWatch
The Florida housing market continued its decline in January, as the Jacksonville area was hit as hard as the rest of the state.
Sales of existing single-family homes fell 17 percent in the Jacksonville housing market, while the median price dropped 5 percent to $185,000. The numbers, from the Florida Association of Realtors, did not include data from the Amelia Island-Nassau County Association of Realtors.
The drop in sales was not as severe as the 27 percent drop across the state, but the median price decline was steeper than the state’s 2 percent drop to $239,300. While this is bad news for sellers, it does open up the door to those seeking Florida mortgage loans. You can find a great deal today.
One of the few bright spots was a livelier market in existing Florida condominiums. While sales of condos fell 30 percent across the state, sales in Northeast Florida rose 10 percent.
However, the median price fell 13 percent to $147,600. The statewide median price of condos dropped 1 percent to $209,000. This follows the same line of reasoning as houses, therefore: home loan borrowers are in the unique position of negotiating for lower prices.
Take advantage of it today.
Posted by Jed Moss on Feb 28 2007 under Florida
We’ve talked at great length about the surge in bad credit home loan lending over the past five years and the problems coming home to roost now.
But Ed Jurenas, president of the Maine Association of Mortgage Brokers, is taking issue with the recent media coverage in the state insinuating that mortgage brokers are the prime perpetrators of abusive lending practices in Maine. This is not the case, he urges.
The predominance of predatory lending in Maine, he says, has been conducted by out-of-state, non-bank telemarketers - not mortgage brokers.
Lawsuits against Household and Beneficial Finance entered into by various states resulted in the return of $1.6 million to Maine consumers in 2003.
A settlement of $295 million in 2006, again with Maine participating, was garnered from Ameriquest, the nation’s largest direct subprime, or bad credit mortgage lender.
Both of these companies are based outside of our state and have no ties to any Maine mortgage brokers. Yet, a Portland Press Herald editorial cited “predatory mortgage brokers” as the source of predatory lending in Maine.
Is this to say that no Maine mortgage broker has ever participated in abusive practices? Not likely. However, the exceptions hardly prove the rule.
The ranks of U.S. mortgage brokers have grown dramatically in the past 20 years. Today, over half of all residential mortgages annually originated in the nation are from home mortgage brokers, because they generally offer a greater number of mortgage products and services than are available at local banks.
Maine’s mortgage brokers comprise a statewide community of over 150 small businesses comprising an effective, competitive delivery channel for residential and commercial mortgage products.
Their efforts are in no small way a contributing factor to Maine having one of the highest rates of home ownership in the nation.
These organizations have long backed efforts to curb abusive lending practices through both federal legislation and consumer education, and continue to do so with current legislative initiatives before Congress.
The problem of predatory lending must be attacked with precision. Predators need to be driven from the mortgage industry, but what is done to protect some consumers should not prevent other home loan borrowers from full and ready access to credit.
Legislation that disproportionately affects one delivery channel (home mortgage brokers), and not others (retail banks, credit unions and non-bank lenders) in effect creates an slanted playing field with the unintended consequence of limiting consumer access to credit.
It is unfair to both mortgage brokers and to the homeowners they serve that any mischaracterization should arise from the predatory lending debate.
In particular, the unintended consequences of legislation should not make getting a Maine mortgage even more expensive for the consumer.
SOURCE: MaineToday.com
Government-backed mortgage finance company Freddie Mac will no longer buy subprime (or bad credit mortgages) that have a very “high likelihood” of payment shock and foreclosure, the company announced Tuesday.
This news follows yesterday’s announcement by Fannie Mae that it’s holdings have contracted in the month of January as the nation’s lending environment continues to shift - sometimes radically.
According to Freddie Mac’s chief executive, the company’s responsibility is to promote home ownership and the current methodology isn’t sufficient.
“Freddie Mac has a public mission to promote home ownership and some of these [mortgage] products that fueled the five-year housing boom aren’t going to work going forward,” Richard Syron, Freddie Mac’s CEO, said on CNBC television.
Freddie Mac will invest only in home loans that assume a borrower can make the highest possible mortgage payments and will introduce new products to help troubled mortgage borrowers.
The nation’s foreclosure rate continues to rise as more borrowers of bad credit home loan products start to experience problems making payments.
The company will limit the use of low-documentation or no doc loans to “help ensure that future borrowers have the income necessary to afford their homes,” the company said in a statement.
Freddie Mac is “developing new, more consumer-friendly subprime lending products that we will be taking into our portfolio… (and) hopefully rescue some of these people,” Syron said.
SOURCE: Reuters
The Chicago Tribune reports that the delinquency rate on residential real estate loans climbed last quarter to the highest level in four years.
The share of home mortgage loans on which payments were at least 30 days overdue rose to 2.11 percent, the highest since the fourth quarter of 2002, from 1.72 percent the previous three months, according to data posted on the Federal Reserve’s website today.
The data aren’t adjusted for seasonal patterns.
The deterioration in credit quality comes in a period of sustained gains in employment and incomes, a sign that weaker underwriting standards, not economic stress, may be to blame.
Federal Reserve policy makers this year have repeatedly said that many of the mortgage losses were concentrated in subprime (or bad credit mortgage) loans, traditionally designed for lower-income borrowers.
“The issue here is whether this is a story confined to a small portion of the housing sector or if this is something that becomes a broader macroeconomic story,” said Brian Sack, a former Fed economist who is now a vice president at Macroeconomic Advisers LLC in Washington.
“Some households are in trouble.”
The increase in bad credit home loan delinquencies caused at least 20 mortgage lenders to go bust, scale back or sell themselves in the past five months.
The risk of owning bad credit mortgage loans jumped to a record for an eighth day today, according to investors and financial experts.
Subprime home loans are given to people with poor or limited credit records or high debt burdens and typically have rates at least 2-3 percent above safer prime rate loans.
These bad credit home loans made up about a fifth of all mortgages last year, according to the Washington-based Mortgage Bankers Association.
In other parts of the housing market, there is evidence supporting Fed officials’ views that the mortgage and housing industries are stable.
The National Association of Realtors said today that sales of previously existing homes rose more than forecast in January to the highest in seven months, giving home to many in the industry who hope that a home loan rebound looms in the not-too-distant future.
SOURCE: Chicago Tribune
