VA Loan Closing Costs: An Added Benefit

Are you or someone you know considering a VA loan for a new home? Here’s some valuable information that can help you navigate the process more smoothly and save money at the closing table.

One of the significant advantages of VA loans is that they require no down payment for qualified VA borrowers. But that’s not all! When it comes to closing costs, there’s a distinct advantage for veterans as well. Here’s a breakdown of how it works:

Types of Closing Costs
VA borrowers are limited in terms of which closing costs they can pay for, and a handy acronym to remember these allowable costs is ACTORS:

A – Appraisal
C – Credit Report
T – Title Insurance
O – Origination Fee
R – Recording Fee
S – Survey

These are the charges most commonly found on VA mortgages and can be paid for by the veteran. However, there are other charges like attorney fees, underwriting fees, escrow, processing fees, document fees, and tax service fees that veterans are not allowed to pay.

Who Pays for Non-Allowed Costs?

The Seller Can: The seller of the property can agree to pay non-allowed closing costs as part of the sales contract, commonly known as a seller concession. This is typically limited to four percent of the home’s sales price.

The Lender Can: Lenders can offer a credit to the borrower by adjusting the interest rate. This can help offset some or all of the closing costs.

The Borrower Can: Instead of non-allowed fees, the lender may charge a one percent origination fee, which is an allowable charge for VA loans.

The Agent Can: In some cases, the real estate agent representing the buyer can contribute towards closing costs. This contribution comes from the commissions paid by the seller.

It’s important to note that VA loan closing costs differ from FHA or conventional loans, and understanding who is responsible for specific fees can be confusing. If you have any questions or need clarification, don’t hesitate to reach out to your loan officer. We’re here to help you make the best financial decisions for your home purchase journey!

Ready to take the next step? Give me a call today to get started on your path to homeownership with a VA loan. Your dream home is within reach!

If you have real estate questions or interested in buying or selling a home in Northeast Florida, please contact me at (904) 307-8998 or email williamvasana@kw.com. As a local area expert in Jacksonville Florida, I offer the highest level of professional services, luxury condo savvy, extensive residential experience, and intensive knowledge about Jacksonville neighborhoods and the overall market in the pre-construction and luxury development. I specialize in residential homes, condominiums, waterfront properties and new construction homes in Duval, St. Johns and Clay counties.

American Dream Down Payment Act Gains Momentum on Capitol Hill

The National Association of Realtors (NAR) is optimistic that the American Dream Down Payment Act will continue to gain momentum on Capitol Hill.

U.S. Rep. Cory Gardner, left, is sponsoring legislation with Sen. Doug Jones of Alabama to make it easier for people to save money to buy a home.

Legislation introduced by Senators Doug Jones (D-AL) and Cory Gardner (R-CO) is being recognized as a critical component of the national effort to address the barriers to first-time homeownership in America. The National Association of Realtors®, which previously submitted a letter in support of the legislation, expressed optimism that the American Dream Down Payment Act and other similar proposals to address housing affordability would continue gaining momentum on Capitol Hill.

“The resiliency of our residential real estate market has been one of the few bright spots of America’s economy during this pandemic, but numerous would-be homebuyers are finding it difficult or impossible to save the money needed for a down payment on a home,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “This is especially discouraging given record-low interest rates are making it easier for aspiring homeowners to afford monthly mortgage payments.

“Modeled on the very popular 529 education savings account concept, the American Dream Down Payment Act would allow savings for the down payment of a principal residence to grow tax-free, offering a responsible and commonsense approach to the multi-faceted problem of housing affordability in America.”

In its letter sent Monday to Senators Jones and Gardner, NAR relayed hope that these accounts could serve as a tangible resource to aspiring homeowners who have been unable to save sufficient funds for a down payment. According to the Urban Institute, two-thirds of renters have identified the inability to save for a down payment as an obstacle to homeownership.

“We appreciate your initiative in putting forth a reasonable proposal that should attract support from your colleagues as well as the growing population of those for whom down payment assistance would help open the door to their all-important first home purchase,” Malta wrote to the lawmakers.

As described by Senators Jones and Gardner, the American Dream Down Payment Act would:

• Let states establish American Dream Down Payment Accounts, which they would manage in the same way they manage 529 Plan accounts;
• Allow prospective homeowners to save as much as 20% of today’s home cost, indexed for inflation, to use for an eligible down payment and other housing costs;
• Facilitate long-term savings for a down payment and allow contributions from family and friends; and
• Allow homebuyers to use those savings and earnings tax-free at withdrawal for eligible expenses.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Source: NAR

U.S. existing home sales rise in December but down for 2014

U.S. home resales rose slightly in December but fell overall for the year, the first annual drop since 2010 and another sign that the housing market recovery remains uneven amid expectations of a pick-up in 2015.

The National Association of Realtors said existing home sales increased 2.4 percent to an annual rate of 5.04 million units last month. That was slightly below economists’ expectations for a 5.06-million-unit pace.

“The still-tight mortgage credit conditions and more challenging first-time homebuyer affordability that were revealed by the failure of home sales to continue recovering last year remain serious concerns as we head into 2015,” said Ted Wieseman, an economist at JPMorgan in New York.

First-time buyers made up 29 percent of transactions in December as well as for the year as a whole, well below the level needed to boost growth in the housing market.

For all of 2014, existing home sales fell 3.1 percent, the first annual drop in four years. The housing market has struggled to maintain momentum since stagnating in the second half of 2013 following a run-up in mortgage rates.

At December’s sales pace it would take 4.4 months to clear all available houses from the market, down from 5.1 months in November and the lowest since January 2013.

However, a decline in mortgage rates, an easing of lending standards and the resurgent health of the U.S. economy over the last few months has spurred optimism that sales could strengthen this year.

And the outlook for the economy remains upbeat. In a separate report the Conference Board said its Leading Economic Index rose 0.5 percent last month after a 0.4 percent increase in November.

December’s jump was driven by gains in most of the index’s components, suggesting the short-term outlook is getting brighter and the economy continues to build momentum, the Conference Board said.

Source: Reuter

Fannie Mae and Freddie Mac to Accept 3% Down Payment Mortgages

Fannie Mae and Freddie Mac are close to allowing consumers to buy a home with as little as a 3 percent down payment and still have the mortgages backed by the two agencies.

More details are expected to be announced in coming weeks, but the move from a 5 percent down payment could increase the ability of creditworthy but cash–strapped consumers to become homeowners and help a faltering housing market regain its traction. Both agencies at one point had accepted 3 percent down payments. Fannie Mae stopped accepting loans with 3 percent down payments last year, while Freddie Mac stopped accepting them in June 2011.

“Through these revised guidelines, we believe that the enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower down payment mortgages by taking into account compensating factors,” said Mel Watt, director of the Federal Housing Finance Agency, Fannie and Freddie’s overseer, during a speech Monday at the Mortgage Bankers Association’s annual convention in Las Vegas. “It is yet another much-needed piece to the broader access-to-credit puzzle.”

Watt also announced other policy initiatives to make lenders more comfortable with the federal government’s mortgage purchase guidelines in the hope it will loosen their purse strings.

“It’s a very big deal,” said Dan Gjeldum, a senior vice president at mortgage lender Guaranteed Rate. “It will dramatically reduce the expense for a first-time homebuyer. The easier it is to do business with the agency, the easier it’s going to be for consumers to work with mortgage companies.”

Fannie Mae and Freddie Mac do not originate mortgages directly to homebuyers. Instead, lenders sell mortgages that meet certain criteria to the two agencies, which in turn package them into securities and sell them to investors. The investments are guaranteed, which means that investors recoup losses if the homeowner defaults. Fannie and Freddie can force lenders to repurchase bad loans.

The upshot of those assurances is a more cautious lending environment that is leaving some would-be buyers on the sidelines.

Watt said Monday the FHFA was taking steps to clarify the circumstances under which Fannie and Freddie could force a lender to repurchase a loan, in an effort to reduce lender confusion. “I hope our actions provide sufficient certainty to enable your companies to reassess existing credit overlays and more aggressively make responsible loans available to creditworthy borrowers,” Watt said in prepared remarks distributed by the FHFA.

In its most recent report, the FHFA said the average FICO credit score of borrowers was 744 for Fannie Mae and 742 for Freddie Mac, lower than at the end of 2013. FICO scores range from 300 to 850.

Borrowers who put down less than 20 percent on a home purchase typically pay mortgage insurance that continues until their equity in the home reaches 20 percent. Reducing the down payment requirement to 3 percent from 5 percent will require a longer period of mortgage insurance and benefit mortgage insurance providers.

Homebuyers with lesser credit scores and smaller down payments traditionally flocked to mortgages backed by the Federal Housing Administration that required down payments of only 3.5 percent. However, to aid the agency’s finances, the upfront fees and monthly insurance premiums associated with those loans have increased, reducing demand for them and keeping more first-time buyers on the sidelines.

Watt’s announcement is the latest step in the federal government’s effort to continue a housing market recovery that has stagnated lately, confounding industry watchers. Last month, Fannie Mae shortened the waiting period that homeowners who have gone through a bankruptcy, a foreclosure or a short sale must wait before they can again purchase a home.

Addressing the convention earlier Monday, David Stevens, president and CEO of the mortgage bankers, noted that 2014 purchase loan originations are expected to be more than 10 percent below last year’s level.

Even billionaire Warren Buffett has recently weighed in on the market’s malaise, saying he didn’t understand why low interest rates and economic improvement weren’t fueling a housing market recovery. “You would think that people would be lining up now to get mortgages to buy a home,” he said at a conference this month.

At one point, there was speculation that the average interest rate on a 30-year, fixed-rate mortgage would hit 5 percent by year’s end, but analysts now think that threshold won’t be hit until halfway through 2015. Last week, the average fixed interest rate on a 30-year mortgage was 3.97 percent, the lowest it’s been since June 2013.

However, most consumers rarely see rates that low because Fannie Mae and Freddie Mac, as well as extra-cautious lenders, tack on credit overlays tied to consumers’ down payment amounts and credit scores.

“Mortgages are still tough to get,” said Pradeep Shukla, president of the Mainstreet Organization of Realtors. “Lenders are still extra cautious. On the whole, what is most important is consumer confidence and that is still lacking.”

Source: Chicago Tribune

Delinquent Homeowners Two Years Behind on Mortgage Payment Can Now Qualify For Loan Modification

Florida borrowers two or more years late on their mortgage payments could get another chance to save their homes following a change in loan modification rules by the Federal Housing Finance Agency.

Federal mortgage backers Fannie Mae and Freddie Mac announced the elimination of an eligibility cap that forbid loan modifications to people with delinquencies of 720 days or more.

The change was made to the “streamlined modification” program, which was created in 2013 and billed as a more automatic route to lower mortgage payments because no application or exchange of paperwork is required.

It’s estimated that nearly half of borrowers nationwide who are ineligible because of the 720-day cap, would otherwise be able to get a loan modification through the program, according to the Federal Housing Finance Agency.

Lenders must comply with the cap elimination by April 1, 2015, but are being encouraged to make the change immediately. Borrowers who were previously denied a streamlined modification because they were more than two years late on payments must be reevaluated, according to letters sent to lenders and mortgage servicers Oct. 1.

“We’ve had multiple clients receive approvals under this program,” said Paul Baltrun, director of corporate development for the Law Office of Paul A. Krasker in West Palm Beach. “It’s very little paperwork, mostly just phone conversations with the lender, and the turn time is quicker.”

The streamlined modification program was developed because of consistent complaints from borrowers that banks repeatedly lose loan modification paperwork in a bureaucratic process that can take years to complete. Banks have also said obtaining the correct employment and payment documents from borrowers can be a hurdle in completing a modification.

Under the program, lenders send contracts to borrowers with new payment amounts. The modification could include a fixed interest rate, an extension of the loan to 40 years, and possibly deferring a portion of the debt owed to the end of the loan so it’s not included in current payment calculations.

Also, borrowers are encouraged to apply for other loan modification plans, such as the Home Affordable Modification Program, which could offer a better deal.

If the borrower agrees and makes three on-time payments, the modification becomes permanent.

Baltrun said it’s hard to gauge how many people the change will affect. Although the worst of the foreclosure crisis is over, he said a significant number of homeowners are still looking for modifications because they have lost jobs, or have used up their savings trying to stay in their home.

“I think it will help a small number of people in specific circumstances,” said Baltrun, who believes removing the cap is a good change. “Why would someone who is 721 days late be declined when someone who is 719 days late is approved?

Other eligibility requirements for the streamlined modification include homeowners must be at least 90 days late on their mortgage and can’t have more than 20 percent equity in their home.

About 3 percent of Florida homeowners with mortgages were 90 days late or more on payments during the second quarter of this year, according to the Mortgage Bankers Association. Nearly 10 percent were either 90 days delinquent, or in foreclosure.

While that’s still the second highest foreclosure and serious delinquency rate in the nation behind New Jersey, it’s an improvement from where Florida was at the end of 2011 when 18 percent of mortgages were in the same position.

Streamlining modifications is increasingly important in Florida where foreclosure courts are moving cases more quickly through the system. That means less time for negotiating with the bank before a final foreclosure judgment is issued.

“You can’t even keep people in their homes very long anymore,” said Deerfield Beach-based attorney Bonnie Lynn Canty, who defends foreclosures. “Used to be four years out before you were looking at a (foreclosure) sale date. Now, it’s at the most two years.”

Source: Palm Beach Post, Bloomberg BusinessWeek

Florida offers $350M aid to underwater home borrowers

Thousands of Florida homeowners who owe far more on mortgages than their houses are worth could get a break of up to $50,000 if they qualify under a new state program.

The Florida Housing Finance Corp. announced that homeowners in Florida who meet eligibility requirements will be able to apply online for money to reduce mortgage principal beginning 9/25/13 under the $350 million plan. The program is restricted to homeowners whose mortgages are 125 percent or more than the current market value of their house, which is considered to be severely underwater on a mortgage.

The program, formally known as the Florida Hardest Hit Principal Reduction Program, also envisions that most affected mortgages will be refinanced or recast, reducing monthly payments.

“For those who qualify, this new program can help to reduce their principal balance, which can result in a lower monthly payment and put more money in their pockets,” said Steve Auger, Florida Housing’s executive director.

The online application process will begin at 9 a.m. on 9/25/13 at http://www.principalreductionflhhf.org. The unpaid balance of the mortgage cannot exceed $350,000.

Initially, the program will be restricted to 25,000 applications on a first-come, first-served basis but could be expanded, Auger said. The money is just a portion of the $1 billion Florida has received under a federal program aimed at states where housing suffered the most during the economic recession.

At least 200,000 underwater homeowners in Florida could probably qualify for the program, said David Westcott, director of home ownership programs at Florida Housing. Out of the 25,000 initial applications, Westcott said he expects about 10,000 homeowners will actually qualify for the money.

“You have to be severely underwater,” he said.

Among the other rules to qualify:

• Homeowners must be Florida residents and legal U.S. residents and must occupy the house as a primary residence.

• Total household income for everyone 18 and older living in the home cannot exceed 140 percent of the area’s median income.

• Mortgage payments must be current, and a payment cannot have been 60 or more days late in the past 24 months.

• The mortgage had to originate prior to Jan. 1, 2010.

The money will be provided in what’s called a forgivable loan. That means, depending on the type of loan, it will either be forgiven in 20 percent increments over a five-year period or forgiven in total at the end of five years.

If the house is sold before the five years are up, Westcott said the homeowner would be required to repay the remaining, unforgiven amount of the loan if there’s enough money from the sale to do so.

The housing agency has come under some criticism from U.S. Sen. Bill Nelson, D-Fla., and others who say it has been slow to get money to homeowners who need it and has been poorly managed. A federal audit was begun earlier this year at Nelson’s request, although agency officials have said their management has been favorably reviewed by the U.S. Treasury Department and state regulators.

Source: The Associated Press

Florida’s Housing Market Continues Positive Trend in August 2013

Florida’s housing market continued its positive trend in August with increased closed sales, higher median prices, more pending sales and a stable supply of homes for sale.

“Both sales and prices demonstrate that Florida’s housing market is growing and continuing to gain strength,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “The growth in jobs and other positive signs are putting buyers at ease with how the economy is progressing. At the same time, prices are encouraging sellers to get off the fence and helping to ease inventory pressures.

“August is the 20th month in a row that we’ve seen the statewide single-family home median sales price increase year-over-year.”

Statewide closed sales of existing single-family homes totaled 20,933 in August, up 12.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts signed but not yet completed or closed – for existing single-family homes rose 17.2 percent over the previous August. The statewide median sales price for single-family existing homes last month was $175,000, up 18.6 percent from the previous year.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in July 2013 was $214,000, up 13.5 percent from the previous year. In California, the statewide median sales price for single-family existing homes in July was $433,760; in Massachusetts, it was $350,000; in Maryland, it was $286,758; and in New York, it was $241,947.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at townhouse-condos, a total of 9,491 units sold statewide last month, up 6.3 percent from August 2012. Meanwhile, pending sales for townhouse-condos last month increased 11.6 percent year-to-year. The statewide median price for townhouse-condo properties was $130,000, up 25.2 percent over the previous year. NAR reported that the national median existing condo price in July 2013 was $209,600.

The inventory for single-family homes stood at a 5.1-months’ supply in August; inventory for townhouse-condos was at a 5.2-months’ supply, according to Florida Realtors.

“The most striking feature of this month’s data relates to new listings and inventory,” says Florida Realtors Chief Economist Dr. John Tuccillo. “Each month in 2013 has seen a rise year-over-year in new listings for both single family homes and townhouses and condos, with the exception of March for condo/townhomes. Balancing out the growth in closed sales, the increase in new listings has contributed to steady inventory. Single-family-home inventory is now at 5.1 months for August 2013, after holding steady at a 5-months supply in May through July. Condo/townhome inventory remains at a 5.2 months supply for the third month in a row.

“Combined with a relative decline in cash sales, this suggests that the pressure on inventories that has plagued the Florida market may be easing.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.46 percent in August 2013, up from the 3.60 percent average recorded during the same month a year earlier.

Source: Florida Realtors

Quick Home Sales Have Benefits and Pitfalls

Like many house hunters, Joe and Kerry Mutschelknaus had been scouring the area for a new home for several months without much luck.

So when they found a five-bedroom colonial-style home in Loudoun Valley Estates in Ashburn, they didn’t waste any time: They made an offer the day after it went on the market. As soon as that contract was negotiated, they listed their house in Arlington County, selling it the next day.

The Mutschelknauses’ purchase offer was contingent on the sale, so they had an incentive to accept a buyer’s offer quickly.

“We received a full-price offer for our home, so even though we were a little nervous that we might be leaving money on the table, we were confident that we were getting the upper end of what we could expect,” says Joe Mutschelknaus. “Even if we had gotten a higher price, we weren’t sure if it would appraise for that amount.”

You’ve heard of flash mobs and Flash Player: Now there are “flash sales” — a term the real estate brokerage Redfin coined to refer to homes that sell in a day or less.

When too few homes are available for sale and the homes are selling quickly, buyers and their agents are forced to move fast when a home comes on the market. Thus, some agents are pre-marketing their sellers’ homes to ramp up the possibility of a deal the day a home is entered into the multiple listing service.

The quick sale has advantages for buyers and sellers who want to get ahead of the competition and avoid dragging out the process. But some experts cite some pitfalls: In going for the early offers, sellers might miss out on some potentially higher bids later. And buyers in those quick deals often waive inspections, potentially harming themselves later when they wind up spending thousands of dollars to correct problems that could have been identified early and fixed by the seller.

“Flash sales are clearly an outgrowth of the imbalance of supply and demand in attractive areas,” says John L. Heithaus, chief marketing officer of MRIS, the Rockville-based multiple listing service for the Washington region. “Flash sales don’t do buyers any good, because rationality goes out the window when competition kicks in. Sellers in a flash sale are likely to wonder if they could have gotten a better price for their home.”

According to data firm RealEstate Business Intelligence (RBI), a subsidiary of MRIS, 350 homes sold in March within two days, up from 237 in March 2012. Also last month, 174 homes were sold with zero days on the market, up from 134 in March 2012.

Inventory is at near-historic lows. From March 2012 to March 2013, the number of listings, according to RBI, fell 40.12 percent.

Although data — including days on the market — can provide some information about fast home sales, statistics can’t tell you what’s happening behind the scenes.

“In some cases, buyers or their Realtors have advance notice that a home is coming on the market,” says Sitrin. “Buyers want to get into a house before it’s listed and to avoid the competitive market at all costs.”

Tonya Nelson, a realty agent at Redfin in Falls Church, who worked with the Mutschelknauses to sell their Arlington home, says sellers benefit from a flash sale because they don’t have to keep showing their property.

“Buyers are usually making good offers that appeal to sellers,” says Nelson. “In Joe and Kerry’s case, they not only got the full asking price, but they were also able to rent back the home so they had some extra time before they have to move.”

Other agents are more skeptical of the benefit of flash sales for sellers.

“When sellers accept an offer before their home is listed or on the first day, they haven’t tested the market,” says Robyn Burdett, an associate broker and vice president of Re/Max Allegiance in Fairfax City. “They didn’t allow the market to determine their price and terms but took what looked to be a good offer.”

Surprisingly, not all sellers are motivated solely by price, says Sitrin.

“Some homeowners would rather not have the hassle of people coming into their home, or they don’t want to fix it up and would rather sell ‘as is,’ ” says Sitrin. “If your mortgage is paid off, you bought your house for $40,000 decades ago and now it’s selling for $800,000, then you’re more concerned about selling your home and don’t care if you got $20,000 less for it than you could have. It’s different for a seller who’s moving up, because that seller needs every penny and should keep it on the market for at least a few days.”

Burdett says that some sellers have a valid reason for selling their home before it officially goes on the market, such as difficulty showing the house because of pets, young children or elderly parents.

Tom and Anna Kate Murphy worked with Burdett to sell their home in Burke, a single-family house that sold in one day for $525,000.

“The house went on the market on a Friday, and we got an offer on it that day,” says Anna Kate Murphy. “We had an open house scheduled for Sunday, but we decided to accept the first offer we received because it was a full-price offer, and we didn’t want to wait. Another home like ours had been listed at $485,000, and buyers got into a bidding war, but we felt like our house was priced competitively but not too high.”

Burdett says that other sellers she has worked with received an offer within two hours of going on the market but chose to wait two days to accept the first of the five offers they received.

Gretchen Koitz, principal of the Koitz Group with Keller Williams Capital Properties in Bethesda, says that although three to five days on the market is typical in our market today, homes listed as sold after zero days on the market are becoming more common.

“Zero days reflects the fact that agents are reaching out to other agents who do business in a certain neighborhood or building to find listings before they go on the market,” says Koitz. “It’s totally up to the homeowner whether to sell without exposing their property to such a hot market. On the other hand, the purchaser will usually make it worthwhile to accept a prelisting offer by offering a great price and eliminating contingencies.”

Koitz says that some sellers think a quick sale is worth the possibility of a lower price if they can avoid being “nickeled and dimed on everything by the buyers.”

Heithaus suggests that sellers get back-up offers by listing their home on MRIS as “under contract with a kick-out contingency” in case the offer they accepted falls through.

Burdett says she belongs to the Top Agent Network, a networking group of Realtors who are among the top 10 percent in their area in sales volume. The network sends out prelisting information to members so they know what’s coming on the market.

“Some Realtors call and ask, ‘What does my buyer have to do to get this house today?’ ” says Burdett. “The best way is an all-cash offer with no contingencies, including waiving an appraisal.”

Still, house hunters who enter these quick deals should go in with their eyes wide open, experts say.

“Buyers who remove contingencies are setting themselves up for potential problems,” says Heithaus. “They have to remediate any issues with the house themselves if they don’t make the sale contingent on a home inspection.”

Koitz says buyers must do their research and buy only when they are comfortable with the price.

“It’s the same rules as always for buyers, but it’s more important than ever to follow them,” she says.

Sitrin says that the downside for buyers is that they feel pressured to move fast.

“I tell buyers to take as long as you need to find the home you want, but once you find it, you should rush to make an offer,” says Sitrin.

Source: The Washington Post

U.S. Home Prices Jump the Most Since May 2006

Home prices are rising at the fastest pace since May 2006, making it difficult for the first-time buyer to close a deal.

U.S. home prices rose from a year ago in all 20 cities that the Standard & Poor’s/Case-Shiller index tracks.

NBC’s Diana Olick reports: http://www.nbcnews.com/video/nightly-news/51340582#51340582

The Northeast Florida real estate market continues to improve, with smaller inventory levels and strong demand pushing prices up. Sales were up 19.2 percent from the same period last year and median sales price was up 16.4 percent from previous year.

Another change is buyers are shifting demand from distressed properties to conventional homes, the Northeast Florida Association of Realtors (NEFAR) reports.

Here are some of the key stats:

• Median sales price was up 16.4 percent year-over-year to $139,650
• Closed sales were up 19.2 percent to 4,541
• Inventory of homes for sales was 7,825, down 31.9 percent
• Pending sales were up 37.7 percent, to 6,240

Read the full report from NEFAR.

Florida’s Residential Real Estate Recovery on Strong Footing

Closed sales, pending sales and median prices all rose in Florida in 2012, while the inventory of homes for sale shrank compared with 2011, Florida Realtors reported.

“Throughout 2012, we’ve seen increasingly strong signs that the state’s housing market is in solid recovery,” 2013 Florida Realtors President Dean Asher said in a news release.

Asher, broker and owner of Don Asher & Associates in Orlando, said several factors are spurring the recovery forward, including strong job creation and low interest rates on mortgages.

“These positive fundamentals in the housing sector continue to attract potential homeowners and investors; however, they’re facing a limited inventory of available for-sale homes in many areas,” he said.

Statewide closed sales of existing single-family homes totaled 204,414 in 2012, up 8.5 percent from 2011, according to data from Florida Realtors’ industry data and analysis department in partnership with local Realtor boards and associations.

In the fourth quarter, closed sales of single-family existing homes totaled 52,624, up 21.2 percent from the same time a year ago. Closed sales typically occur 30 to 90 days after sales contracts are written.

Pending sales, contracts that are signed but not closed, for existing single-family homes rose 17.6 percent in 2012 from 2011’s figure. The statewide median sale price for single-family existing homes in 2012 was $145,000, up 9 percent from the previous year.

Looking at the fourth quarter of 2012, the statewide single-family, existing-home median price was $150,000, up 11.1 percent from the same quarter a year ago.

According to the National Association of Realtors, the preliminary national median sale price for existing single-family homes for all of 2012 was $176,600, up 6.3 percent from 2011, which was the strongest annual price gain since 2005.

In California, the statewide median sale price for single-family existing homes for 2012 was a preliminary $319,340; in Massachusetts it was $298,000; in New York it was $215,000; and in Illinois it was $139,000.

The median is the midpoint, with half the homes selling for more and half for less. Housing industry analysts note that sales of foreclosures and other distressed properties distort the median price down because they generally sell at a discount relative to traditional homes, according to the release.

Looking at Florida’s year-to-year comparison for sales of townhouses and condos, a total of 101,876 units sold statewide in 2012, up 2 percent from 2011. Pending sales for townhouses and condos for the year increased 6.2 percent from 2011.

The statewide median sale price for townhouse and condo properties in 2012 was $106,000, up 17.8 percent over the previous year. In the fourth quarter, closed sales of townhouses and condos totaled 24,743, up 14.3 percent from the same time a year ago. Pending sales of townhomes and condos rose 21.6 percent over the same quarter a year ago.

The statewide median price for townhomes and condos in the fourth quarter was $111,900, up 24.3 percent year-to-year.

The inventory for single-family homes stood at a 5.5-months’ supply for the fourth quarter and inventory for townhouses and condos was at a six-months’ supply for the same period, according to Florida Realtors.

“To an extent, we have seen these numbers before in monthly reports, but it’s often good to step back and look at the statistics from a more aggregated level,” Florida Realtors Chief Economist Dr. John Tuccillo said. “They clearly show the robustness of Florida’s housing recovery in sales and the beginnings of what we see as a sustained growth in prices. Of particular interest is the growth in cash sales. This is indicative of the growing interest of investors and foreign buyers in Florida real estate, but also points to the difficulties presented by the current financing climate that households wishing to buy face.”

The interest rate for a 30-year, fixed-rate mortgage averaged 3.66 percent for 2012, down from the previous year’s average of 4.45 percent, according to Freddie Mac.

Source: South Florida Business Journal

U.S. Home Prices Rose Last Year By Most in 6.5 Years

U.S. home prices jumped by the most in 6 1/2 years in December, spurred by a low supply of available homes and rising demand.

Home prices rose 8.3 percent in December compared with a year earlier, according to a report Tuesday from CoreLogic, a real estate data provider. That is the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.

Home prices also increased 0.4 percent in December from the previous month. That’s a healthy increase given that sales usually slow over the winter months.

Steady increases in prices are helping fuel the housing recovery. They’re encouraging some people to sell homes and enticing would-be buyers to purchase homes before prices rise further.

Higher prices can also make homeowners feel wealthier. That can encourage more consumer spending.

Most economists expect prices to keep rising this year. Sales of previously occupied homes reached their highest level in five years in 2012 and will likely keep growing. Homebuilders, encouraged by rising interest from customers, broke ground on the most new homes and apartments in four years last year.

Ultra-low mortgage rates and steady job gains have fueled more demand for houses and apartments. More people are moving out into their own homes after doubling up with friends and relatives in the recession.

At the same time, the number of previously occupied homes for sale has fallen to the lowest level in 11 years.

“All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery,” said Anand Nallathambi, CEO of CoreLogic.

The states with the biggest price gains were Arizona, Nevada, Idaho, California and Hawaii. The four states where prices fell were Delaware, Illinois, New Jersey and Pennsylvania.

The housing recovery is also boosting job creation. Construction companies have added 98,000 jobs in the past four months, the best hiring spree since the bubble burst in 2006. Economists forecast even more could be added this year.

Housing has been a leading driver of past recoveries. But the bursting of the housing bubble pushed a flood of foreclosed homes on the market at low prices. That made it hard for builders to compete.

And a collapse in home prices left millions of homeowners owing more on their mortgages than their houses were worth. That made it difficult to sell.

Now, six years after the bubble burst, those barriers are fading. Some economists forecast that housing could add a point or more to economic growth this year.

Source: The Associated Press

June Home Price Index rises 2.5%

CoreLogic released its June Home Price Index (HPI) report today.

According to the HPI, home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011. On a month-over-month basis, home prices increased by 1.3 percent in June 2012 compared to May 2012.

It’s the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

CoreLogic also backs distressed sales – short sales and real estate owned (REO) transactions – out of the data. If excluding distressed sales from the analysis, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012 – the fifth consecutive month-over-month increase.

Forecast

The CoreLogic Pending HPI indicates that in its next release covering July, home prices will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011.

When excluding distressed sales, July house prices are poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

“Home prices are responding positively to reductions in both visible and shadow inventory over the past year,” says Mark Fleming, chief economist for CoreLogic.

“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” adds Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

June 2012 highlights

• Including distressed sales, the five states with the highest appreciation were: Arizona (+13.8 percent), Idaho (10.4 percent), South Dakota (+10.1 percent), Utah (+8.3 percent) and Wyoming (+7.7 percent).

• Including distressed sales, the five states with the greatest depreciation were: Alabama (-4.8 percent), Connecticut (-4.0 percent), Illinois (-3.4 percent), Georgia (-2.9 percent) and Delaware (-2.8 percent).

• Excluding distressed sales, the five states with the highest appreciation were: South Dakota (+10.2 percent), Utah (+9.1 percent), Montana (+8.7 percent), Arizona (+8.7 percent) and Wyoming (+6.9 percent).

• Excluding distressed sales, the five states with the greatest depreciation were: Delaware (-3.6 percent), Alabama (-3.1 percent), Connecticut (-2.1 percent), New Jersey (-0.9 percent) and Kentucky (-0.4 percent).

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to June 2012) was -28.8 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -21.3 percent.

• The five states with the largest peak-to-current declines including distressed transactions are Nevada (-57.1 percent), Florida (-45.3 percent), Arizona (-44.1 percent), California (-39.2 percent) and Michigan (-39.0 percent).

• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 27 are showing year-over-year declines in June, five fewer than in May.

Source: Florida Realtors

5 Home Buying Tips in Current Housing Market

With signs of a housing turnaround getting stronger, housing experts say buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for your home buyer clients:

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (May 1, 2012)

70% Of Renters Think Owning Makes More Sense

Fannie Mae’s latest quarterly National Housing Survey focuses on the homeownership aspirations of Americans. Despite the recent housing crisis, most Americans continue to believe that homeownership is better than renting. Here are some of the Survey findings:

• Across all education levels, Americans say owning makes more sense than renting.
• Nearly two-thirds of current renters say that they will buy a house at some point in the future.
• Non-financial factors, such as safety and quality of local schools, continue to be the top reasons for buying a home across all income groups.
• African-Americans and Hispanics are more likely to cite various benefits to homeownership, such as buying a home as a way to build wealth, as a symbol of success and civic benefits.
• Renters are more likely than mortgage borrowers to think it would be difficult for them to get a home, and say financial reasons are the major reason they have not bought a home.
• African-Americans and Hispanics are more likely to indicate that getting a mortgage is difficult, regardless of income level. They are also more likely to cite bad economic times and the complexity of the mortgage process as major reasons not to buy a home.
• Groups with lower levels of education are more likely to say it would be difficult for them to get a mortgage than groups with higher levels of education.
• Hispanics are less confident than other groups about receiving information they need to choose the right mortgage.
• Groups with higher levels of education and higher incomes are more likely to think buying a home is a safe investment.

Source: Fannie Mae

Housing Affordability Index Rose to Record Level in Past Two Decades

Nationwide housing affordability, as measured by the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), rose to the highest percentage recorded in the 20-year history of the index during the fourth quarter of 2011. However, prospective homebuyers continued to have trouble qualifying for a mortgage thanks to tighter credit standards and a soft economy.

HOI data released last week indicates that 75.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200, the highest percentage recorded in the 20-year history of the index.

“While today’s report indicates that homeownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting homebuyers and builders remain significant obstacles to many potential homes sales, even with interest rates at historically low levels,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.

In Youngstown-Warren-Boardman, Ohio, Pa. – the most affordable major housing market in the country during the fourth quarter – 95.1 percent of all homes sold during the quarter were affordable to households earning the area’s median family income of $54,900.

Also ranking at the top of the most affordable major housing markets, in descending order were Lakeland-Winter Haven, Fla.; Modesto, Calif.; Harrisburg-Carlisle, Pa.; and Toledo, Ohio.

Among smaller housing markets, the most affordable was Kokomo, Ind., where 99.2 percent of homes sold during the fourth quarter of 2011 were affordable to families earning the median income of $59,100. Other smaller housing markets at the top of the index included Fairbanks, Alaska; Cumberland, Md.-W.Va.; Lima, Ohio; and Rockford, Ill.

In New York-White Plain-Wayne, N.Y.-N.J. – the least affordable major housing market during 2011’s fourth quarter – 29.0 percent of all homes sold were affordable to those earning the area’s median income of $67,400. It’s the 15th consecutive quarter in which the New York metropolitan division held the position.

Other major metro areas at the bottom of the affordability index included Honolulu; San Francisco-San Mateo-Redwood City, Calif.; Santa Ana-Anaheim-Irvine, Calif.; and Los Angeles-Long Beach-Glendale, Calif., respectively.

Ocean City, N.J., where 47.5 percent of the homes were affordable to families earning the median income of $70,100, was the least affordable of the smaller metro housing markets in the country during the fourth quarter. Other small metro areas ranking near the bottom included Laredo, Texas; San Luis Obispo-Paso Robles, Calif.; Santa Cruz-Watsonville, Calif.; and Brownsville-Harlingen, Texas.

Source: National Association of Home Builders

National Existing Home Sales Up Again in January, Inventory Down

National existing-home sales rose in January, marking three gains in the past four months, according to the National Association of Realtors (NAR). In addition, the high inventory of homes continued to improve.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.

Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months shows buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”

Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.

“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”

Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said buying power is enticing more potential homebuyers. “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.92 percent in January, down from 3.96 percent in December; the rate was 4.76 percent in January 2011; recordkeeping began in 1971.

The national median existing-home price for all housing types was $154,700 in January, down 2.0 percent from January 2011. Distressed homes – foreclosures and short sales that sell at deep discounts – accounted for 35 percent of January sales (22 percent were foreclosures and 13 percent were short sales), up from 32 percent in December; they were 37 percent in January 2011.

“Home buyers over the past three years have had some of the lowest default rates in history,” Yun said. “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”

All-cash sales were unchanged at 31 percent in January; they were 32 percent in January 2011. Investors account for the bulk of cash transactions.

Investors purchased 23 percent of homes in January, up from 21 percent in December; they were also 23 percent in January 2011. First-time buyers rose to 33 percent of transactions in January from 31 percent in December; they were 29 percent in January 2011.

Forty-seven percent of NAR members report that contracts settled on time in January; 21 percent had delays, and 33 percent experienced contract failures. Contract cancellations are unchanged from December but were only 9 percent in January 2011. Most contract failings are caused by lenders that decline mortgage applications and failures in loan underwriting appraisals that come in below the negotiated price.

Single-family home sales rose 3.8 percent to a seasonally adjusted annual rate of 4.05 million in January from 3.90 million in December, and are 2.3 percent above the 3.96 million-unit pace a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from January 2011.

Existing condominium and co-op sales increased 8.3 percent to a seasonally adjusted annual rate of 520,000 in January from 480,000 in December, but are 10.3 percent lower than the 580,000-unit level in January 2011. The median existing condo price was $156,600 in January, up 2.0 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. The median price in the Northeast was $225,700, which is 4.2 percent below January 2011.

Existing-home sales in the Midwest increased 1.0 percent in December to a level of 980,000 and are 3.2 percent higher than January 2011. The median price in the Midwest was $122,000, down 3.9 percent from a year ago.

In the South, existing-home sales rose 3.5 percent to an annual level of 1.76 million in January, unchanged from a year ago. The median price in the South was $134,800, which is 0.3 percent below January 2011.

Existing-home sales in the West jumped 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. The median price in the West was $187,100, down 1.8 percent from a year ago.

Source: National Association of Realtor

Florida Housing Market Upbeat in January 2012

Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January, according to the latest housing data released by Florida Realtors®.

“We’re seeing positive signs of a strengthening recovery in Florida’s housing market,” says 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “In both the statewide single-family and condo-townhome markets, pending sales are higher and the statewide median sales price rose – up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes. Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.”

The median is the midpoint; half the homes sold for more, half for less. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to housing industry analysts.

The national median sales price for existing single-family homes in December 2011 was $165,100, which is 2.5 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in December was $285,920; in Maryland, it was $222,934.

Florida statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.

Looking at Florida’s year-to-year comparison for sales of condos/townhomes, a total of 5,963 units sold statewide last month, down 22.6 percent from those sold in January 2011. According to NAR, the national median existing condo price in December 2011 was $160,000.

“Even though closed sales are down from a year ago, there are two really bright spots in Florida’s housing market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “One is a significant increase in pending sales. In fact, pending sales have been up every month since May. The barrier that stands between pending sales and closings is the difficulty consumers are experiencing in obtaining financing.

“The second positive is inventories, which are now at a point close to a balanced market,” Tuccillo said. The months supply of inventory stands at 6.4 for both the single-family homes market and the condos/townhomes market.

The interest rate for a 30-year fixed-rate mortgage averaged 3.92 percent in January 2012, down from the 4.76 percent average during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the report under Market Data at: http://media.floridarealtors.org/market-data.

The January 2012 Florida Realtors home sales release marks a new statewide housing market reporting partnership between Florida Realtors Industry Data and Analysis department and a new vendor partner, 10K Research and Marketing. Housing sales data from the state’s 63 local Realtor organizations is collected and organized with the goal of providing unique, localized market reports to the local Realtor boards and associations within Florida Realtors, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets.

At the same time, Florida Realtors is providing comprehensive statewide housing market statistics – but this new data series only includes statewide numbers. Beginning with this January 2012 housing data report, Florida Realtors is no longer reporting any market data for Realtor members’ sales in the state’s metropolitan statistical areas, as had previously been reported in partnership with the University of Florida’s Bergstrom Center for Real Estate Studies.

Source: Florida Realtors

Housing Inventory Down 22% Nationwide; Median Home Price Up 5%

There were fewer homes listed for sale at the end of 2011 than in any of the previous four years, a positive sign for the housing sector.

Housing inventory slid to 1.89 million homes in December – down 6 percent from the previous month and 22.3 percent from the prior year, according to Realtor.com.

In the 145 markets tracked by Realtor.com, only Springfield, Ill., registered a year-over-year increase. Inventories plunged 49.7 percent in Miami, 49.1 percent in Phoenix, and 46.6 percent in Bakersfield, Calif.

Meanwhile, the national median price edged up 5 percent year-over-year.

Asking prices – the amount sellers include on a Realtor.com listing – climbed 32.5 percent in Miami, 21.7 percent in Naples, 21.5 percent in Fort Myers-Cape Coral, and 19.4 percent in Punta Gorda, according to Realtor.com.

However, asking prices were down 11 percent in Detroit, 10 percent in Chicago, 7.6 percent in Las Vegas, and 7 percent in Sacramento.

Source: Wall Street Journal

State of the Union: Obama’s Housing Proposal

President Barack Obama proposed a new program during his State of the Union address on 1/24/12 to allow homeowners with privately held mortgages to refinance at lower interest rates.

The program would cover both loans issued by government-controlled mortgage giants Fannie Mae and Freddie Mac and private mortgage lenders. Congress would have to approve it, a difficult hurdle.

“There’s never been a better time to build, especially since the construction industry was one of the hardest-hit when the housing bubble burst,” Obama said. “Of course, construction workers weren’t the only ones hurt. So were millions of innocent Americans who’ve seen their home values decline. And while government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.”

The housing bubble was at the center of the recession, prompting widespread foreclosures and leaving millions of homeowners with houses valued at less than their mortgages.

Under the plan, any homeowner current on his or her mortgage could take advantage of historically low lending rates. Mortgage rates have been below 4 percent for months.

A small fee on large banks would pay for the program, senior administration officials said.

Administration officials offered few details but estimated savings at $3,000 a year for average borrowers. It’s likely that millions of homeowners would be eligible, but they would have to seek out refinancing options under the program with their lender. Other government programs allow lenders to seek out potential applicants.

Further details of the program will likely be released in legislation in the next few days, officials said.

The new program would expand the Obama administration’s Home Affordable Refinance Program, which allows borrowers with Fannie and Freddie-backed loans to refinance at lower rates. Few people have signed up for that program. Many “underwater” borrowers – those who owe more than their homes are worth – couldn’t qualify.

About 1 in 4 Americans with a mortgage – about 11 million – are underwater, according to CoreLogic, a real estate data firm. Roughly 1 million homeowners have refinanced through the refinancing program. Government officials had estimated it would help 4 million to 5 million homeowners.

About half of all U.S. mortgages – about 30 million home loans – are owned by non-government lenders.

A task force on mortgage misdeeds

President Obama also announced the creation of a task force aimed at investigating the shoddy mortgage-lending practices that contributed to the financial collapse of 2008 and the housing crisis that continues to weigh on the economy.

Obama said he has asked Attorney General Eric H. Holder Jr. to create a special unit of state attorneys general and federal prosecutors to probe deeper into questionable lending practices and the way in which risky loans were packaged and sold to investors.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his State of the Union speech.

The creation of the task force comes as the administration and a coalition of state attorneys general are pushing to finalize a long-awaited multibillion-dollar settlement with the nation’s largest banks over their flawed and fraudulent foreclosure practices.

The deal has drawn criticism from liberal and consumer groups as well as attorneys general from New York, Delaware and other states, who have insisted that more extensive investigations are warranted and that any settlement should not grant banks too broad a liability from future legal action.

Source: The Associated Press

Jacksonville Ranks Among the Top 15 Best Performing Metros in 2011

I have read several market reports and articles and they all indicate that the housing market is stabilizing and many experts predict Florida real estate will lead the U.S. in price growth. Take Jacksonville for an example. Jacksonville ranks among the Top 15 best performing metros in 2011. Clear Capital, a California-based research firm, predicts that Florida’s four largest metro markets will see some of the nation’s highest rates of price appreciation in 2012.

Below is an excerpt from Real Estate Economy Watch:

Home prices this year cease their decline and gain a slight 0.2 percent across all markets as more and more individual markets stabilize in the months to come.

However, though national prices will be flat, some 40 percent of the top 50 markets it tracks will stabilize in 2012, forecast Clear Capital, a premium provider of data and solutions for real estate asset valuation and risk assessment for large financial services companies.

Clear Capital reported a 2.1 percent year-over-year decrease in 2011 that was bolstered by a stabilizing of prices in the latter half of the year and decreasing REO saturation.

“Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. “With national prices down a little more than two percent for the year and sitting at their lowest point since 2001, our projections show that the current balance the market has found will continue through 2012.

“However, individual markets reacting to their local economic drivers exhibit a wide range of performance levels,” added Dr. Villacorta.

“Although the national numbers suggest markets are flat, when looking at individual metro markets it turns out only 24 percent of them showed signs of stabilization in 2011, while the others are still moving more dramatically higher or lower. What’s most interesting is that the lower segments of appreciating markets are driving much of the current price growth. In places like Florida, which have historically been hard hit, we are now seeing considerable activity in lower-end properties as demand continues to heat up.”

U.S. prices declined -0.4 percent in December on a quarter-over-quarter basis, showing the markets giving back some of the gains of the summer buying season. This is the first cooling off after six monthly reports showing minimal quarterly gains. In fact, the most recent six months of the year (June – December) saw national home prices flat at -0.1 percent.

While these national quarterly numbers for December fell slightly, half of the major markets covered saw quarterly gains. Dayton, OH checked in at the top of highest quarterly performers with a gain of 5.0%. On the downside, Atlanta, GA showed consistent weakness as December’s lowest performing major market with a loss of -8.4 percent quarter-over-quarter.

In addition to the relatively flat home price performance, national REO saturation rates at the end of 2011 reached a new yearly low at 24.8 percent. REO saturation was volatile early in 2011, and showed consistent declines and stability toward the latter half of the year.

On the national level, 2012 is expected to play out much like the last half of 2011, with a very subtle price change. A minimal decline in the beginning of the year is expected to turn into a meager gain by year’s end. At a more granular level, half of the 50 major metro markets are expected to post gains for the year, and individual metros will experience the full gamut of price movement, from double-digit growth to double-digit drops.

Double digit volatility can be seen with the two strongest markets, including Orlando with a healthy price increase of 11.7 percent, and Bakersfield close behind with a projected 11.1 percent increase. The deepest drops come from Atlanta with an expected drop of -14.4 percent, and Los Angeles with a predicted drop of -10.3 percent.

Florida markets are expected to extend their impressive 2011 performances into 2012. Miami and Tampa are projected to be among the five highest performing metros with 8.8 percent and 7.4 percent growth, respectively, and Jacksonville is forecasted to gain 4.3 percent, placing it at a respectable eighth among the top metro markets. The exceptional growth in these markets can be a result of several factors, including being hit especially hard in the downturn. While fighting back, they remain significantly off their highs of 2006. Other factors in play in these markets include large increases in the values of their lower priced homes (near double-digits for all markets) when compared to higher priced segments of the market, and a high percentage of all cash transactions (51.8 percent) when compared to other metros. This indicates a high degree of investor activity as they look for bargains in the region, driving up demand.

Although the range of movement for U.S. prices stabilized through 2011, prices have settled at the lowest level since early 2001. The forecast for 2012 shows home prices starting with a dip in the first quarter, improving in the spring and summer buying season, and continuing to climb to 0.2 percent overall growth for 2012. Individual markets reacting to their local economic conditions continued to exhibit a wide range of performance levels in 2011, with only 12 of the top 50 metro markets (24 percent), returning year-over-year price movement that can be considered stable – price swings of less than 2.5 percentage points. This will continue into 2012, with only 40 percent being considered stable. 

Source: Clear Capital and Real Estate Economy Watch