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Editor's note: This article is based on data compiled by Zillow, using the Zillow Home Value Index.
Metro areas off the beaten path, like Oklahoma's Tulsa and Oklahoma City, bucked national trends to win a place on a top list of markets with the greatest year-over-year median home-value increases from October 2010 to October 2011, based on data compiled by Zillow. None of the top 20 U.S. metro areas by population size cracked this list.
The Tulsa metro area topped the chart at a 6.2 percent median home value increase to $101,000 -- the lowest value among the nine markets -- in that one-year timespan, followed by Oklahoma City's metro area at a 3.1 percent bump.
Metropolitan Pittsburgh, at No. 22 in U.S. metro population size with 2.35 million people in 2010, according to U.S. Census data, was the most populated metro area in this list, coming in at No. 8, with a slight median home-value increase of 0.4 percent, and, interestingly, the only metro area on the list to experience a population dip from 2000 to 2010.
Metro areas in this list averaged a 1.6 percent median home-value increase over the one-year timeframe, with five of the nine markets showing median home values hovering around $100,000. Honolulu, Boulder, Fort Collins and Madison stretched the upper end of the spectrum, with median home values of $474,200, $304,000, $217,300, and $192,400, respectively.
NEW YORK (CNNMoney) -- Flippers, the real estate investors who buy homes on the cheap and quickly resell them at a profit, just got a reprieve from the Federal Housing Administration.
In an effort to help stabilize housing prices and unload some of the foreclosures that are flooding low-income communities, the mortgage insurer extended a waiver of its anti-flipping regulations through 2012.The waiver, which was initially issued in 2010 and set to expire this month, suspends regulations that prohibit the agency from insuring mortgages used to purchase homes that are bought and resold in less than 90 days.
"This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight," said Acting Federal Housing Administration Commissioner Carol Galante.
Low-income neighborhoods are particularly plagued by foreclosed homes that lower property values and act as magnets for crime and other social ills. Real estate flippers often rehab these damaged homes before reselling them, improving conditions for neighborhoods.
In Freddie Mac's results of its Primary Mortgage Market Survey® the average fixed mortgage rates starting the year at or near their all-time lows. The 30-year fixed averaged 3.91 percent matching its all-time record low amid recent data showing signs of improvement in the housing market and manufacturing industry. This marks the fifth consecutive week the 30-year fixed has averaged below 4.00 percent.
According to Frank Nothaft, vice president and chief economist, Freddie Mac:
"Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement. Pending existing home sales in November jumped 7.3 percent, nearly five times greater than the market consensus forecast, to its strongest pace since April 2010. In addition, construction spending rose 1.2 percent in November, supported by the residential sector which exhibited its fourth consecutive monthly increase. Similarly, manufacturing expanded in December at the fastest pace in six months."
Published: January 6, 2012
When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.
"This year's Remodeling Cost vs. Value Report shows the value of putting your home's best façade forward, so to speak," said National Association of REALTORS® President Moe Veissi. "Inexpensive exterior replacement projects are not only crucial to a home's regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal."
HouseLogic.com, NAR's consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.
Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.
The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project - upscale vinyl - rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.
The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.
Mortgage debt is up. Defaults, which had been on the decline, were also on the rise in November. This latest report comes from Standard & Poor’s/Experian indices.
The default rate had dropped to 2.08 percent this October from 3.06 at the same time last year. Second mortgage defaults were also down, dropping to 1.29 percent from 1.8 percent a year earlier.
Yet, defaults were up for the month of November for five major metro markets that are tracked.
Los Angeles led the pack at a November increase to 2.53 percent from 2.15 the month earlier.
The Miami market saw a default rise to 4.47 from 4.16 percent in October.
"These are two markets where we have seen some recent weakness in other housing statistics," said David Blitzer, managing director and chairman of the index committee for S&P Indices. "Again, while there may be some cause for concern if this upward trend continues. Other recent housing statistics point to the same relative weakness, so these statistics align with the overall current picture of the economy." The year over year decline in mortgage defaults currently stands at around 34%.
"Nationally, consumers continue to gradually improve their financial condition," said Blitzer. "Debt-service ratios, the proportion of disposable income that goes to paying debt, continues to decline."
With these improved financial conditions, consumers are returning to the market. Existing-home sales rose in November according to the National Association of Realtors. These sales rose 4.0 percent from October. Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market. "Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 - a genuine sustained sales recovery appears to be developing," he said. "We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans."
Sales could be higher if not for contract cancellations that still plague the market. Cancellations are the result of changes in employment status, failed home inspections, decline mortgage applications, and appraisals coming in below contract prices.
Regionally, the largest rise was seen in the Northeast, where existing sales rose 9.8 percent. This is 7.7 percent above year ago levels.
The Midwest saw a 4.3 percent rise, gaining double-digits of 15.7 percent over last year.
The West rose 3.6 percent in November and the South was up 2.4 percent.
Keeping pace with the good news of existing-home sale rises, the latest U.S. Commerce Department reports that the production of new single-family homes was up 9.3 percent in November.
"While we still have a long way to go back to normal, the latest numbers are one more indication that housing is slowly turning the corner," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "In scattered markets across the country, buyers who have long sat on the sidelines are starting to take advantage of today’s very attractive prices and interest rates, while others are making the move to a new apartment. This nascent trend would be stronger if not for the very restrictive lending environment that continues for both building and buying new homes."
Published: December 26, 2011
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The National Association of Realtors on Wednesday will issue revised estimates for existing-home sales going back five years, saying the formula it had been using to adjust the sales data it collects from multiple listing services had drifted out of whack and was overestimating sales.
The benchmark revisions to existing-home sales data will show fewer homes changed hands than NAR had previously reported, the trade group said. But the revisions will show little change in previously reported trends in home sales, and no change in median home price, NAR said.
Also, because NAR is making a comparable downward adjustment to unsold inventory, the group said the revisions won't change the months' supply of homes for sale -- a critical measure of the balance between supply and demand. Many housing analysts consider a six-month supply of homes for sale to be a healthy balance between supply and demand.
In February, mortgage and property data aggregator CoreLogic estimated that NAR was overestimating existing-home sales by 15 to 20 percent. CoreLogic estimated that unsold inventory on the market in November 2010 represented 16 months of supply, compared with NAR's estimate of 9.5 months.
In announcing the pending revisions, NAR acknowledged that its national statistics on home sales are important to economists, policymakers and others seeking macro-level data. Rebenchmarking will also be done at the state level, NAR said.
But the group said homebuyers and sellers are most concerned with local market data, which is not affected by the rebenchmarking.
(In an unrelated incident, in July, the Illinois Association of Realtors said a software glitch had caused it to overestimate the median prices of home sales in the Chicago market in reports going back to November 2010.)
NAR adjusts the statistics it collects from local multiple listing services to account for sales that take place outside of the MLSs it has data from.
The group blamed an "up-drift" in the model going back to 2007 to growth in MLS coverage areas, geographic population shifts, a decline in for-sale-by-owner transactions, some new-home sales trickling into MLS data, and some individual sales being recorded in more than one MLS.
In a guest column published by Housing Wire, NAR Chief Economist Lawrence Yun said the "biggest reason for the revision is a decline in for-sale-by-owners, with more sellers turning to real estate agents to market their homes when the market softened. In essence, Realtors began to capture a greater market share."
NAR said it began its normal process for benchmarking sales at the beginning of 2011 "in consultation with outside housing market experts."
Data for the new benchmark was presented to and discussed with representatives of the Federal Reserve Board, the Department of Housing and Urban Development, Freddie Mac, Fannie Mae, Mortgage Bankers Association, National Association of Home Builders, CoreLogic, and individual economists, the group said.
A Reverse Mortgage is similar to a conventional mortgage because it is a lien against the property and the title remains in the name of the borrower. As with the conventional mortgage, the borrower is responsible for maintaining the property and paying the property taxes and insurance and association dues if applicable.
The costs are also similar to the conventional loan including an appraisal, title insurance, settlement fees, origination fee, and recording fees. Additional costs with the HUD Home Equity Conversion Mortgage (HECM) reverse mortgage are the FHA Mortgage Insurance Premium (MIP) and a monthly service fee. Note that on a conventional loan the servicing fee is included in the interest rate, whereas it is a separate fee with the reverse mortgage. If one is doing a "forward" FHA loan, they too will have the FHA Mortgage Insurance Premium.
To determine the loan amount on a conventional loan, the lender looks at the home value, credit worthiness, income, assets, and other potential risks that may be associated with loan repayment. The reverse mortgage is different because there are no income or credit score qualifications. The age of the borrower(s), the home value, and the expected interest rate are used for determining the loan amount.
With the conventional mortgage one receives a lump sum and has to make monthly payments. With the reverse mortgage one receive cash without making monthly or immediate repayment. Funds can be received in a lump sum, monthly payments, line of credit, or a combination of these.
A loan term or when the loan is to be paid in full with a conventional mortgage is usually set, i.e. 15 or 30 years. A reverse mortgage is to be paid in full when the loan is no longer the primary residence of the borrower(s) or on the 150th birthday of the youngest borrower.
As with a conventional mortgage, when the loan is due and payable, the house does not become the property of the lender. The borrower or estate handles the repayment of the loan. When the home is sold with either mortgage the loan is paid off and the remaining equity is the borrower's or their heirs.
The reverse mortgage is a non-recourse loan which means the loan is paid back based on the fair market value (generally from the sale of the home) with no personal liability to the borrower or the estate as long as they are not retaining ownership.
For seniors 62 and older, the reverse mortgage is generally more advantageous than a conventional loan.
Commercial real estate loans were the principal cause of the five bank failures reported in November according to Trepp's November 2011 U.S. Bank Failure Report. These loans comprised 80.8 percent of the $160 million in non-performing loans that caused the bank failures in Georgia, Louisiana, Iowa, Nebraska, and Utah. The majority of the commercial real estate loans (64.4 percent of the total) were land and construction loans, the remaining 16.5 percent were commercial mortgages.
Delinquent residential real estate loans were the secondary cause of distress, representing 10.1 percent of the portfolios at the failed banks; of the remainder 5.4 percent were commercial and industrial loans and other loans comprised 3.7 percent.
In what Trepp called a pattern, the five failures in November followed eleven in October. This year there has been a spike in failures in the month immediately following the end of a quarter and then a drop in the two subsequent months. Thus far in 2011 90 banks have been closed by regulators, an average of 7.5 per month, a pace indicating a total of 100 for the year. Trepp said it expects the bank closures to extend into 2012 and possibly beyond although this will largely depend on the economy in general and real estate in particular.
The estimated costs to resolve the failed banks (loss severity) fell to 17.5 percent of failed bank assets, down from 22 percent in October. Loss-sharing was featured in only one of the five failures during the month.
Trepp noted that the banks that failed in November had been on its watchlist for a considerable amount of time - a median of 12 months - and all had featured the highest Fail Risk Scores issued by Trepp, a ten. After the November failures there are 227 banks with high Failure Risk Scores remaining on the Trepp Watchlist although smaller banks now predominate.
Trepp predicts that there will be a high number of failures in Georgia, Florida, Illinois, Minnesota, North Carolina, and Tennessee in upcoming months.
Mortgage applications volume dropped 10 percent on a seasonally adjusted basis during the week ended November 11 according to results of the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. The non-seasonally adjusted decrease in MBA's Market Composite Index was 19.6 percent during the week which was impacted to some extent by the Veterans Day holiday.
The Refinance Index was down 12.2 percent from the week ended November 4 and the seasonally adjusted Purchase Index lost 2.3 percent. The unadjusted Purchase Index was down 14.8 percent from the previous week and 9.5 percent from the same week in 2010.
The four-week moving average for all three indices increased with the Market Index up 1.02 percent, the seasonally adjusted Purchase Index up 2.53 percent and the Refinance Index up 0.61 percent.
Applications for refinancing represented 77.3 percent of all applications compared to 78.6 percent the previous week while the adjustable-rate mortgage (ARM) share increased to 6.1 percent from 5.8 percent. During the week 28.8 percent of applications for refinancing were for fixed rate 15-year loans, the second largest share for those loans since the survey was re-benchmarked at the beginning of the year. Applications for 30-year fixed rate mortgages (FRM) made up 50.6 percent of applications for refinancing and ARMS 6.0 percent. Applications for home purchases were overwhelmingly (85.5 percent) for 30-year FRM with 6.9 percent seeking 15-year FRMs and 5.9 percent ARMS, a low for the year.
Purchase Index vs 30 Yr Fixed
Refinance Index vs 30 Yr Fixed
Interest rates were mixed. The rate for a 30-year FRM with a conforming loan balance - under $417,500 - increased to 4.23 percent with 0.52 point from 4.22 percent with 0.41 point. Points include origination fees. The effective rate of 30-year conforming FRMs increased. The rate for jumbo 30-year FRM (loans with a balance above $417,500) decreased from 4.57 percent to 4.56 percent and points decreased from 0.47 to 0.46. The effective rate also decreased.
Thirty-year FRMS backed by FHA had an average contract interest rate of 4.03 percent, up one basis point from the previous week. Points increased (from 0.49 to 0.59) as did the effective rate.
Rates for 15-year FRM were unchanged at 3.54 percent with points up from 0.45 to 0.47 and 5/1 ARM mortgage rates were also unchanged at 3.01 percent with points increasing from 0.47 to 0.49. The effective rate of both loan types increased.
All rates quoted are for loans with an 80 percent loan-to-value ratio and are derived from an MBA survey covering 75 percent of U.S. retail mortgage applications. Respondents include mortgage bankers, commercial banks, and thrifts. The index is based on activity during the week of March 16, 1990.
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