How much lower can home loan rates go in Hawaii?
The biggest banks in the state have gone lower still on their fixed-rate home mortgages - 5.625 percent - the Honolulu Board of Realtors reported Friday.
First Hawaiian Bank and Bank of Hawaii are joined at that level by Territorial Savings Bank and Wells Fargo Home Mortgage, a Mainland mortgage lender that does a lot of business in Hawaii.
Still at 5.75 percent are American Savings Bank, Central Pacific Bank, Finance Factors and Hawaii National Bank. This is still an historically low Hawaii mortgage rate level and in some cases makes up for price increases of recent years.
For 15-year notes, Territorial quoted 5.125 percent this week and the biggest local banks were at 5.25 percent.
Posted by Jed Moss on Mar 16 2007 under Hawaii
Sales of previously owned single-family homes on Maui last month surged to their highest level in more than a decade for February, though the condominium market was down significantly.
Median prices likewise were mixed, rising for condos to $560,000 but falling for single-family homes to $645,000, according to statistics compiled by the Realtors Association of Maui.
The changes in median Hawaii home prices and sales suggest that more single-family home buyers have become active as prices have subsided.
“Sales continue as sellers and buyers find common ground in a healthy market,” said Terry Tolman, chief executive of Maui’s real estate trade association.
Since November, median prices have been below $650,000 and sales have been higher, compared with the same month a year earlier. Prior to November, the median price ranged from above $650,000 to $780,000 for about 18 months, and sales were usually, but not always, lower.
Last month, the $645,000 median price for single-family homes was down from $669,500 a year earlier - this goes a long way in determining Hawaii mortgage activity in the region.
There were 110 single-family home sales last month, up 83 percent from 60 a year earlier and more than in any February since at least 1993.
Condo sales last month totaled 69, down 42 percent from 119 a year earlier. The $560,000 median condo price was up from $430,100 in the comparable period.
Tolman said good inventory — about 1,080 single-family homes and 1,339 condos — is giving prospective buyers plenty of options, while attractive mortgage interest rates continue to encourage sales.
The time it has been taking to sell homes has been little changed for condos, but is taking longer for single-family homes.
The median time it took to sell a condo was 143 days last month, one fewer day than a year earlier. For single-family homes, the median number of days on the market was 159, up from 130 a year earlier.
SOURCE: The Honolulu Advertiser
Posted by Jed Moss on Mar 15 2007 under Hawaii
The Honolulu Advertiser reports that the Oahu housing market held steady again last month, as median prices for existing homes rose slightly on increased sales of single-family homes and fewer sales of condominiums.
February’s single-family home median resale price was $614,500, up $1,000 or 0.2 percent from February 2006, according to data released yesterday by the Honolulu Board of Realtors.
No question about it, Hawaii mortgage loans aren’t cheap. The median price, which means half the homes sold for more and half for less, on the island has hovered between $600,000 and $615,000 since November.
The record was $668,300 in May.
“The market’s just steady,” said Harvey Shapiro, research economist for the Honolulu Board of Realtors.
Condos sold for a median price of $320,000, up $5,000 or 1.6 percent in the same comparable period. As for the condo market, prices have floated between $305,000 and $320,000 since August, following a record $329,000 in July.
February saw somewhat of a surge in sales for single-family homes, rising 9.7 percent to 272, compared with 248 a year earlier. Last month’s volume also was higher than January’s 263 sales and 266 sales in February 2005.
But Shapiro stopped short of calling the recent Honolulu housing market activity a rebound.
“It’s definitely a positive sign,” he said. “But we’ll just have to see what the future shows.”
There were 402 condo sales recorded last month, down 17.5 percent from 487 a year earlier. The number of sales for condos and single-family homes last year was lower in most months vs. 2005, while median prices mostly rose — a trend that doesn’t appear to have changed yet.
“The residential sales market continues the trend of slower sales but higher prices,” Shapiro said.
The inventory of unsold single-family homes on the Hawaii housing market continued to shrink, while the backlog of condos grew slightly.
There were 1,717 single-family homes on the market in February, 30 fewer than in January and down from the recent peak of 2,052 in November. As demand for mortgage loans wanes, inventory had been on the rise since summer but was as low as about 800 in early 2005 and early 2004.
Condo inventory in February was 2,294, six more than January but lower than the peak of 2,750 in September. The recent low was around 900 last May.
Berton Hamamoto, president of Property Profiles Inc. and the Board of Realtors, said more sellers are taking their homes off the market, while fewer people may be putting homes on the market.
“The ones who had to sell already sold. It’s coming back to a balance between supply and demand,” he said.
It took a median of 70 days to sell single-family homes last month, up from 42 days a year earlier and 60 days in January. The median number of days homes spent on the market hasn’t been as high as 70 since 1999.
Condos spent a median 59 days on market before selling, up from 31 a year ago and 55 in January.
Isi Nau, a special education teacher and part-time mortgage broker, said he believes the market has settled after the immense run-up in prices over the past five years and yearlong slowing of sales.
Nau said that as housing affordability slipped, sellers who feared there was a bubble about to burst inflated supply in a panic while buyers held out for prices to fall. So far, neither has come to pass.
“The bubble hype has already begun to wear off. I believe that by mid-2007 we will see real estate here in Hawaii pick up again.”
Other brokers and some local economists anticipate that median prices this year should achieve a low single-digit percentage rise or decline on fewer sales.
SOURCE: Honolulu Advertiser
Posted by Richard Barber on Mar 07 2007 under Hawaii
Hawaii mortgage payments are eating up an increasingly bigger share of household budgets across Oahu.
Families have been spending more than half of their monthly salaries on home loans, as housing costs reach their highest level since the early 1990s, according to the Honolulu Board of Realtors.
Bankers say families typically should spend 25 percent to 30 percent of their gross income on home payments. But many Honolulu homeowners easily exceed that amount as they scramble to cover their mortgages.
More sacrifices
That has meant doing everything from foregoing vacations to pulling children out of private schools to even paring down contributions to 401(k) accounts.
“People are doing what it takes to stay in their homes,” said Russell Miyashiro, president of the Mortgage Bankers Association of Hawaii. “It entails a lot of sacrifice.”
At Bank of Hawaii, the state’s largest local home loan producer, the average mortgage amount in 2006 rose 23 percent to $458,000, from $372,000 in 2005.
That means the typical monthly payment on principal and interest jumped to $2,841 from $2,190, an increase of almost 30 percent in that 12-month period.
To enable more people to buy, lenders have rolled out a host of innovative mortgage products, such as interest-only loans and loans that back-load payments on interest and principal.
Such creative mortgage financing has allowed just about any buyer with good credit to buy houses with price tags that used to appeal mainly to the wealthy.
As a result, half of the single-family households in the Oahu housing market were spending at least 52.6 percent of their gross income on home payments in 2006. That is the highest percentage since the late 1990s, when payments peaked at 59 percent of income, said Harvey Shapiro, research economist for the Honolulu Board of Realtors.
By comparison, half of the homeowners on Oahu were spending at least 30.1 percent of their monthly income on mortgages in 2001, Shapiro said. Driving the upward trend is the rising median price of an existing single-family home.
Last year, the median Hawaii home price rose about 7 percent to $630,000, from $590,000 in 2005, Shapiro said.
Stretching budgets
The rising housing prices have some families stretching their budgets.
“If you need to work three jobs to keep up with housing costs, you can find three jobs in this economy,” said Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawaii. “But my concern is that we could see an increase in defaults this year.”
SOURCE: Hawaii Business Journal
Posted by Jed Moss on Mar 05 2007 under Hawaii
Hawaii mortgage rates have fallen below six percent recently - but this development is yet to open doors for lower-income buyers.
On the other end of the spectrum, however, million-dollar homes in Honolulu are selling better than the overall housing market and seem less affected by current market slowdowns.
A quarterly analysis of the market from Prudential Locations finds that the number of days on market for homes priced above $1 million rose 27 percent in 2006. For the overall Honolulu housing market the time rose 68 percent.
“The market for million-dollar homes is smaller than the overall market,” said Vice President of Sales Scott Higashi, “and buyers and sellers in that market are typically less price-sensitive.”
The Prudential Locations report Wednesday said the months of remaining inventory at current sales rates grew 83 percent last year, but for million-dollar homes it grew only 14 percent. There’s logic in these figures: higher-end borrowers needn’t worry about Hawaii mortgage approval. If they need a mortgage at all, that is.
It still takes longer to sell a home as the price tag rises: homes priced below $1 million were on the market for just a few weeks - at the $2 million level the sales time is measured in months.
The overall Oahu housing market for existing single-family homes saw a median price of $620,000 in 2006, up 6.8 percent, which Prudential Locations described as “a respectable price gain, although a smaller appreciation rate than in recent years.”
East Honolulu median prices fell 5 percent, but every other region of Oahu saw gains. The East Honolulu area stretches from Waialae to Kuliouou and includes several luxury ridges and beachfront neighborhoods. It’s a popular area for home purchase loan borrowers.
But the report said there was wide variance from community to community, with prices soaring on Hawaii Loa Ridge, while sales volume grew in moderately priced neighborhoods within this area.
Posted by Jed Moss on Mar 01 2007 under Hawaii
According to Freddie Mac, mortgage rates should hold steady for most of 2007.
In the case of Hawaii mortgage seekers, this would be great news.
After alll, the 6 percent mortgage rate held in Hawaii for only about a week. Already, local lenders have cut their rates an eighth or even a quarter below that level.
After months at lower rates, most mortgage lenders in Hawaii were back to quoting 6 percent for a 30-year fixed-rate home loan.
But then the three key lenders that resisted temptation to hike to 6 percent by holding at 5.875 percent - Central Pacific Home Loans, Territorial Savings Bank and Wells Fargo Home Mortgage - were joined this rate by American Savings Bank and Countrywide Home Loans.
First Hawaiian Bank, Bank of Hawaii and Finance Factors cut their home loan rates more, joining Territorial Savings Bank at 5.75 percent. Hawaii National Bank, which had been at 6.125 percent, cut to 6 percent.
For 15-year notes, Territorial cut back down to 5.25 percent, while First Hawaiian Bank, Bank of Hawaii, American Savings Bank, Central Pacific Bank, Finance Factors and Hawaii National Bank all cut their rates back down to 5.5 percent.
With home prices in Hawaii low, and now mortgage rates also reasonable, this is an ideal time to shop for a house in the state.
Posted by Jed Moss on Feb 09 2007 under Hawaii
By now, it’s almost old news that soaring home prices in Florida, California, Hawaii and the Northeast have locked millions of residents out of the local housing market, including well-paid middle-class workers.
But now comes a new international survey of affordable housing that drives home, so to speak, just how unaffordable homes in places such as Palm Beach County, Fla., really are, reports the Palm Beach Post.
A new international survey by Demographia examined 159 housing markets in the United States, the United Kingdom, Canada, Ireland, Australia and New Zealand.
Of all those countries, Palm Beach County has the 14th-least-affordable housing market in relation to local median income - creating a whole host of problems for even well-paid people such as health care workers to find housing - the survey says.
Palm Beach County officials have documented that the ratio of median home prices to median income in the county is 7-1. Federal guidelines say the ratio of home price to income should be no more than 3-1 to avoid being “cost-burdened.”
The local housing council’s survey in 2006 showed that 90 percent of Palm Beach County workers could not afford to buy the median-priced home, which was about $393,000 at the time. Demographia used third-quarter 2006 housing prices and income.
With sky-high Florida mortgage costs more than most families can bear, Palm Beach County home prices were 7.6 times the area median income.
The survey says that markets with at least a 5.1-1 ratio of home prices to median income are severely unaffordable. With ratings over that threshold, buyers just can’t get themselves into position qualify for home loans.
The least affordable markets, not surprisingly, were in California and Hawaii. With California mortgage loan costs regularly reaching half a million for median-priced homes, Los Angeles was No. 1 on the unaffordable list with a median multiple of 11.4, while San Diego was No. 2 at 10.5.
The fast-growing Honolulu housing market was torrid enough to rank Hawaii’s capital city at No. 3 with a median multiple of 10.1.
The Miami-West Palm Beach area had the least affordable housing in relation to income of all metro areas in Florida, according to the survey. Sarasota also joined the undesirable list, coming in at No. 23 at 6.6.
On the other end of the spectrum, Fort Wayne, Ind., was the most affordable housing market among all the markets surveyed, domestic and international, with a median multiple of 2. Housing in Fort Wayne costs twice the median income - well below the federal guidelines established for housing costs.
But who wants to live in Fort Wayne, right?
If housing costs don’t come back down to earth in many U.S. markets, you might see Indiana mortgage activity spike. Florida and California are in danger of losing their economic backbone in the next decade if working class professionals cannot afford housing.
The Honolulu housing market stayed healthy in 2006 by sustaining a strong level of price appreciation, experts say.
Prices continued to grow in all condo areas and all but one family home region, MSN Money said Monday in its wrap-up report on the year.
Average prices rose 6.8 percent for single family homes and 14.8 percent for condominiums with a decline in sales volume. Hawaii mortgage demand remained steady throughout the state capital.
The median time a home took to sell was 62 days - more than previously, but still fewer days on market than other Mainland markets and far fewer than during the 1990s in Hawaii.
Average months of inventory available at a given time has actually declined in recent months to about 6 months supply.
“A positive indicator of market strength,” Prudential Locations said.
The number of sales was about the same as in 2002, which at the time was a record, though the intervening three years saw even more sales. Most sales closed in the Hawaii housing market were in the $500,000-700,000 ranges.
The biggest percentage increases in home prices in 2006 came in areas that are of more interest to local home buyers than to Mainlanders in search of second homes or retirement homes.
Buoyed by the relatively low cost of home mortgage loans, area median prices grew by 7 percent in Kaimuki, 8 percent in Mililani, 9 percent in Ewa, and 10 percent in the Pearlridge-Aiea area.
Posted by Richard Barber on Feb 06 2007 under Hawaii
Hawaii’s banking commissioner is pushing once again for legislation that would allow the state to tighten the rules for mortgage brokers, who now number more than 5,000.
Nick Griffin, commissioner of the state Division of Financial Institutions, will give testimony today to the House Committee on Consumer Protection and Commerce on legislation that would enhance Hawaii mortgage regulations as the apply to mortgage brokers and solicitors.
A similar effort failed last year after the 400-member Hawaii Association of Mortgage Brokers asked state lawmakers to delay action on the bill for at least a year.
Among other things, the legislation would require a mortgage broker to be tested and would hold them responsible for the conduct of their solicitors and loan originators.
Regulators see the change as helping to better protect borrowers in the Hawaii housing market from potentially abusive practices in the industry, which is one of the state’s fastest growing.
“We’re running at the same things again - prelicensing and background checks to make sure people in the industry qualify and past muster,” Griffin said.
New home loan guidelines are being pushed by the federal government and by many individual states. In addition, many such as Hawaii are trying to tighten the reins on brokers and lenders.
A surge in bad credit home loan lending - in which borrowers with suspect credit are issued loans at low introductory rates, for perhaps more than they can afford - has raised red flags over the past 12 months.
The number of homes sold in the Maui housing market last year fell 17 percent from the number sold in 2005, while condominium sales dropped 41 percent, the Realtors Association of Maui reported.
Home prices in Hawaii continued to increase, though, with condos posting a 31 percent boost in median price for 2006. The median price of single-family homes rose just slightly last year when compared to the year before.
The year finished on a strong note for sales of single-family homes, with December figures showing the first increase in the number of sales in 16 months. Other than mortgage loan activity on this front, however, demand was slow.
There were 128 houses sold on Maui last month, a 33 percent increase over December 2005, when 86 homes sold. It was the highest number of sales since August 2005, when 129 homes sold.
Condo sales in December, however, plummeted 54 percent to 72 units sold, down from 158 units sold during the same month last year.
Prices told an opposite story for December.
The December median price for single-family homes fell 12 percent to $632,500, from the December 2005 price of $722,500.
The median price of a condo, on the other hand, rose nearly 15 percent to $472,500 in December, up from $402,500 during the same month in 2005. It’s no wonder, therefore, that fewer buyers used home mortgages on these types of residences.
Year-end figures show that the median price of a condo is up 31 percent, to $505,000, from $385,000 in 2005. The single-family home median price rose just 2 percent, to $693,000, up from $679,000 in 2005.
There were 1,088 single family homes sold in 2006, compared to 1,316 sold in 2005, the board said. For condos, the 1,210 sold last year was 41 percent fewer than the 2,050 sold in 2005.
Posted by Jed Moss on Jan 09 2007 under Hawaii
