Quicken quietly offers 1% downpayment loans

 

NEW YORK – June 29, 2016 – Quicken Loans has been fairly hush about its latest offering of a super low downpayment mortgage, even as rival bank giants like Bank of America, Wells Fargo and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent downpayment mortgages.

The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured as part of Freddie Mac's Home Possible Advantage program, which requires a 3 percent downpayment.

However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans' vice president of capital markets, told HousingWire in an interview.

"We require 1 percent from a consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately," Banfield told HousingWire.

The 1 percent downpayment loans are available only for those purchasing a home, and they can only be used on a single-family home or condo – second home and investment properties or co-ops aren't included. They must have a FICO score of 680 or above and earn less than the median income for their county. Their debt-to-income ratio must be 45 percent or less.

"We want to try to help people and do it in a smart way," Banfield told HousingWire. "For us, it was really a question of, if you want to provide access to credit, how do you do it responsibly? How can you help people? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit? … We wanted to have a conventional option to get people into more homes."

Source: "Quicken Loans Now Offering 1% Down Mortgages," HousingWire (June 24, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

NAR: Pending homes sales at a 10-year high

NAR: Pending home sales at a 10-year high

 

WASHINGTON – May 26, 2016 – Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors® (NAR).

All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

The Pending Home Sales Index – a forward-looking indicator based on contract signings for homes that have not yet sold – hiked 5.1 percent higher to 116.3 in April from an upwardly revised 110.7 in March. Year-to-year, it's 4.6 percent above April 2015 (111.2).

After last month's gain, the index has now increased year-over-year for 20 consecutive months. Vast gains in the South and West propelled April's pending sales in April to its highest level since February 2006 (117.4), says Lawrence Yun, NAR chief economist.

"The ability to sign a contract on a home is slightly exceeding expectations this spring, even with the affordability stresses and inventory squeezes affecting buyers in a number of markets," Yun says. "The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market."

Mortgage rates have remained below 4 percent in 16 of the past 17 months, but Yun says it remains to be seen how long they will stay this low. Along with rent growth, rising gas prices – and the fading effects of last year's cheap oil on consumer prices – could edge up inflation and push rates higher. For now, Yun foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

"Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search," adds. Yun.

Following the housing market's best first quarter of existing-sales since 2007 (5.66 million) and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates and be around 5.41 million – a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

Pending sales in the Northeast climbed 1.2 percent to 98.2 in April, and are now 10.1 percent above a year ago. In the Midwest, the index declined slightly (0.6 percent) to 112.9 in April, but it's still 2.0 percent above April 2015.

Pending home sales in the South jumped 6.8 percent to an index of 133.9 in April – 5.1 percent higher than last April. The index in the West soared 11.4 percent in April to 106.2, and it's now 2.8 percent above a year ago.

© 2016 Florida Realtors®  

Related Topics: Home sa

Fla.’s housing market: New listings, median prices rise in March

 

NAR:

Existing-home sales spring ahead in March

ORLANDO, Fla. – April 20, 2016 – Florida's housing market reported higher median prices, more new listings and fewer all-cash closed sales in March, according to the latest housing data released by Florida Realtors®. Statewide closed sales eased last month amid tighter inventory: Single-family home sales totaled 23,758, remaining relatively the same (down 0.6 percent) from March 2015.

"Many Florida homeowners have been able to rebuild home equity due to strong price growth, but that can also pose a challenge for first-time buyers and move-up buyers," says 2016 Florida Realtors President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami."However, new listings rose in March, which is good news for potential buyers. New listings for existing single-family homes rose 5.6 percent compared to a year ago while new listings for townhouse-condo properties are up 2.6 percent."

Meanwhile, sellers received more of their original asking price at the closing table. Sellers of existing single-family homes in March received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).

The statewide median sales price for single-family existing homes last month was $209,500, up 10.3 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $155,000, up 3.3 percent over the year-ago figure.

March marked 52 months in a row that statewide median sales prices for both single-family homes and for townhouse-condo properties rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2016 was $212,300, up 4.3 percent from the previous year the national median existing condo price was $198,900.In California, the statewide median sales price for single-family existing homes in February was $446,460; in Massachusetts, it was $309,000; in Maryland, it was $235,206; and in New York, it was $235,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 10,076 last month, down 7.1 percent compared to March 2015. However, the closed sales data reflected fewer short sales and cash-only sales in March: Short sales for townhouse-condo properties declined 39.3 percent while short sales for single-family homes dropped 33.2 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.

"Overall, statewide inventory levels essentially held steady in March; however, beneath the surface, we can see that active listings in the most affordable price tiers are continuing to decline," says Florida Realtors Chief Economist Brad O'Connor. "These declines are being offset by the growth in the upper price tiers, particularly in the luxury market. The active inventory of homes listed for over $1 million, for instance, was up 18.3 percent year-over-year among single family homes and 38.6 percent among condos and townhouses."

Inventory was at a 4.5-months' supply in March for single-family homes and at a 6.3-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.69 percent in March 2016, down from the 3.77 percent average recorded during the same month a year earlier.

To see the full statewide housing activity reports, go to at Florida Realtors Media Center and look under Latest Releases, or download the March data report PDFs under Market Data. Realtors also have access to local market stats (password protected) on Florida Realtors' website.

Florida tops list of most-desirable states

 

NEW YORK – Dec. 18, 2015 – For the first time since 2001, Florida – the nation's 27th state – is back on top as Americans' most desired state to live.
When asked where they would most like to live (excluding their current state), Florida landed at the top of the list. Overall, sunshine and waterfront acreage were consistent themes among the most popular states, with California (2) and Hawaii (3) rounding out the top three. However, non-beach states Colorado (4) and New York (5) closed out the top five states.
This year's top five were, for the most part, also top-five honorees the last time this question was asked in 2013, Harris reports. The sole exception is New York, which edged into the top-five after a sixth place showing. Texas, meanwhile, dropped out of the top five to No. 6.
The remaining 9 states on the "top 15" list include diverse geographies, though most do fall within a few general categories:
The coasts are well represented: Along with Florida, the Carolinas – North (7) and South (12) – and Georgia cover most of the southeastern United States beachfront. Meanwhile, Oregon (9) and Washington (14) make for full west coast coverage (when combined with California). Perhaps for some it's not the coast but the warmth, which takes precedence, as landlocked-but-sunny states Arizona (8) and Tennessee (10) also make the list.
Many states have both admirers and detractors, according to Harris.
California may be 2nd on the list of states Americans would like to live in, but it also tops the list of states where Americans would least like to dwell. New York and Alaska may both be top 15 performers when Americans say where they would like to live, but they also round out the top three states where Americans would not want to live (2 and 3, respectively). Mississippi (4) and Texas (5) complete the top 5 for the dubious list, with Alabama (6), Florida (7), Illinois (8), Michigan (9) and the District of Columbia (10) completing the top 10.
Favorite and least favorite cities
Americans continue their love/hate relationship with New York City, which has topped The Harris Poll's list of cities where Americans most want to live for well over a decade – but it also tops the list of cities they'd least like to live.
California and Florida are well represented among the top 10 most desired cities, with San Diego, Los Angeles and San Francisco nabbing the 2nd, 4th and 6th spots for the Golden State, while Miami and Orlando bring the 5th and 10th spots home to the Sunshine State.
Denver, CO (3) fills in the lone gap in the top five, while Honolulu, HI (7); Atlanta, GA (8) and Seattle, WA (9) fill out the rest of the top 10.
The top three cities Americans would least want to live in have remained the same since this question was first asked in 2010 with New York, followed by Detroit (2) and Los Angeles (3). Chicago repeats in 4th place, while Dallas, Texas (5) rounds out the top five. Miami (6); San Francisco (7); Houston (8); Washington, D.C. (9) and Las Vegas (10) complete this less desirable top 10 list.
The Harris Poll surveyed 2,232 U.S. adults online between Nov. 11 and 16, 2015.
© 2015 Florida Realtors®

The New-Home Market Leads the Charge

Keeping you updated on the market! For the week of June 22, 2015

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MARKET RECAP The New-Home Market Leads the Charge Many commentators were disappointed in the headline number, but they shouldn't have been. The headline states that housing starts posted at 1.036 million on an annualized rate for May. The consensus was looking for starts to post in the 1.1-million neighborhood. If we compare May with April, we see an 11.1% drop-off in starts. The numbers appear disappointing, until you dig a little deeper. April, which was already a strong month for starts, was revised up to 1.165 million. That's a 22.1% month-over-month increase when compared to March. Seeing starts throttle back in May after such a strong showing is no reason to sulk. Indeed, it should be expected. To expect continual double-digit monthly increases is to expect the impossible. The trend in permits is another reason to embrace the future. Permits were up a very stout 11.8% to 1.275 million potential starts. Permits are a leading indicator, and this leading indicator posted its best number since August 2007. Given the bullish outlook on new-home construction, no one should be surprised that homebuilders are feeling upbeat these days. The NAHB Home Builder Index spiked five points to 59 in June. This is the highest reading since September 2014. To be sure, sentiment can change and markets can turn. But for the past year, home builders have become increasingly upbeat. Sales and construction activity has generally supported rising optimism. We don't expect that to change over the remainder of 2015. Of course, the percentage of new-home sales is relatively small compared to existing-home sales. Our bread is mostly buttered on existing-home sales. On that front, sales have trended higher in recent months. Still, they've had a tough time hanging about the important five-million mark on an annualized rate. The good news is that it appears more likely that sales will hover above five million. A recent report from CoreLogic shows that another 254,000 residential properties regained positive equity in the first quarter. This trend of rising positive equity ensures more supply will come to market, which will lead to a rising sales trend. What's more, the Federal Reserve appears willing to maintain an accommodating stance. We've said repeatedly since the beginning of the year that a Fed interest-rate hike was unlikely for June. In the latest Fed meeting, officials showed no inclination to raise the federal funds rates. What's more, it remains unlikely the fed funds rate will be raised before fall. The Fed is still looking for labor-market improvement (mostly wage growth) and more consumer-price inflation. And when the Fed does move to raise the fed fund rates, it will likely do so in very small increments. That said, let's not take this as a guarantee of low mortgage-lending rates. The market can and has overridden Fed desires. The Fed might not move to raise interest rates; this doesn't mean the market won't.

 

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Existing Home Sales (May)	Mon., June 22, 10:00 am, ET	5.23 Million (Annualized)	Important. Data on equity and housing formations point to rising sales.
New Home Sales (May)	Tues., June 23, 10:00 am, ET	525,000 (Annualized)	Important. Trends in starts and builder optimism will lead to rising sales.
Mortgage Applications	Wed., June 24, 7:00 am, ET	None	Important. Purchase activity should hold the higher levels established in recent months.
Personal Income (May)	Thurs., June 25, 8:30 am, ET	0.4% (Increase)	Important. Wage growth is accelerating and portends strength in home sales.

 

Should We Start Worrying About Bubbles? With home prices exceeding pre-bubble highs in many markets, more people are asking: Should we be concerned about another market bubble? There are no guarantees, but this market looks significantly less frothy than it did in early 2008. For one, mortgage-debt levels remain reasonable. Bank of America reports that mortgage debt as a percentage of real estate owned was at an all-time high of 63% just before the market-bubble burst. Today, it's down at 44%, which is a normalized and sustainable percentage. A more obscure indicator also points to a bubble-free market. When markets get bubbly, they induce a tsunami of new participants. Using California as a proxy for the whole, CalculatedRiskBlog.com data show that the number of real estate agents peaked at the end of 2007. Today, the number of salesperson licenses is off 33.5% of the peak. The number is at March 2004 levels. In other words, people aren't blindly rushing into a perceived gold rush. That's a sign of market health. In short, we don't see a market distorted by bubbles. To the contrary, we see a clearly sustainable market.

Article Courtesy of Patti Wilson, American Momentum Bank.

A Funny Thing Happened to Mortgage Rates

Keeping you updated on the market! For the week of June 8, 2015

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MARKET RECAP A Funny Thing Happened to Mortgage Rates Depending on the survey you review, mortgages remain at year-to-date highs or hit new year-to-date highs over the past week. Freddie Mac's survey shows rates were mostly unchanged from the previous week, with the 30-year fixed-rate mortgage averaging 3.87%. Bankrate.com, in contrast, has the 30-year loan hitting a new high. Its survey shows the 30-year loan averaged 4.03%. Interestingly, we are seeing something of a convergence with the 15-year fixed-rate mortgage and the five-year adjustable-rate mortgage. Bankrate.com's survey shows the 15-year loan averaging 3.26% and the five-year ARM averaging 3.18%. This makes sense when you consider any interest-rate moves by the Federal Reserve will hit the short-end of the yield curve first. But credit-market participants aren't waiting for the Fed. They've taken matters into their own hands. Interest rates across the board are up perceptibly over the past month. The 10-year U.S. Treasury note was recently yielding 2.37%, its highest yield since November. (The 10-year note is a reliable proxy for the direction of mortgage rates.) This seems counter-intuitive when you consider recent news on economic growth. Indeed, the final revision of gross domestic product (GDP) for the first quarter shows the economy actually contracted 0.7%. What's more, GDP growth isn't expected to have picked up much pace in the second quarter. Most estimates we've seen have GDP growing at less than 1% (on an annualized rate) for the second quarter. A sluggish economy surely gives the Fed reason to pause on raising interest rates. Some outside the United States would also like to see the Fed hold off on any rate increase. The International Monetary Fund (IMF) recommends the Fed hold off until the first half of 2016. Not that the IMF necessarily matters. Fed Chair Janet Yellen said she still expects to increase interest rates this year, but only if the economy meets her forecasts. We remain skeptical that it will. This is why we thought a June rate increase – forecast by many at the beginning of the year – was unlikely to occur. We wouldn't be surprised if the Fed made no move on interest rates until 2016 (as the IMF would like). Why, then, are interest rates in general and mortgage rates in particular rising? Markets are anticipatory animals. What's occurring in the moment doesn't influence decisions today. What the future is expected to bring is what gets people to act. Investors appear to be anticipating a pick up in inflation. Recent data show that consumer prices rose in the European Union economies. This was the first sign of European consumer-price inflation in six months. The news has prompted many investors to sell bonds worldwide. (Financial markets are intertwined. What happens in Germany now influences what happens here.) With that said, we see mortgage rates taking a breather. The 30-year fixed-rate mortgage bobbing about 4% seems reasonable to us. We base our outlook on current expectations for GDP growth, U.S. consumer-price inflation, and the unlikelihood the Fed will do anything with the federal funds rate until the end of summer. Then again, you never know for sure. As we frequently mention, the risk is in the waiting.

 

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Mortgage Applications	Wed., June 10, 7:00 am, ET	None	Important. Moderating lending rates should lead to an uptick in mortgage activity.
Retail Sales (May)	Thurs., June 11, 8:30 am, ET	1.0% (Increase)	Moderately Important. Retail sales remain weak across the board, which is indicative of sluggish economic growth.
Import Prices (May)	Thurs., June 11, 8:30 am, ET	0.0%	Moderately Important. Imports continue to support a non-inflationary pricing environment.
Producer Price Index (May)	Fri., June 12, 8:30 am, ET	0.25% (Increase)	Moderately Important. Producer-level inflation remains dormant and will have no impact on interest rates.

 

Don't Fear Higher Mortgage Rates   Rising rates has taken some steam out of mortgage activity. Refinance activity dropped 12% last week. Purchase activity was down 3%. Activity is down over the past few weeks. (The good news is that mortgage credit availability continues to trend higher.) Borrowers are obviously put off by higher rates, but they'll adjust in short enough time. Expectations are key. If borrowers believe that lower rates are unlikely, they'll act today on today's rates. They'll also act if they believe rates are likely to rise. The problem is that many borrowers get anchored to the recent past. They saw 3.75% on the 30-year loan a few weeks ago. That means many think they'll 3.75% again. We might, but at this point we don't think so. Besides, 4% is still a very good rate. Ten years ago, the 30-year fixed-rate loan was being quoted over 6%. What's more, rising rates are frequently indicative of an improving economy. After all, the Fed said it won't move on raising rates until the data support it. Supporting data would include strong economic growth.

Article Courtesy of Patti Wilson, American Momentum Bank.

All Signs Point to a Strong Summer.

Keeping you updated on the market! For the week of June 1, 2015

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MARKET RECAP All Signs Point to a Strong Summer Though a holiday-shortened week, it was a solid week nonetheless. Home prices continue to march to higher ground. The S&P/Case-Shiller Home Price Index posted a very solid and slightly higher-than-expected 1.0 % gain in March. Higher prices were seen in all 20 of the markets Case-Shiller follows. Year over year, the Case-Shiller index is up 5%. New home sales also continue to move higher. Sales were up 6.8% to 517,000 units on an annualized rate in April. Supply rose slightly in the month, to 205,000 new homes, but supply relative to sales fell to 4.8 months from 5.1 month. The upside of low supply is that it will encourage builders to bring more homes to markets. We've seen this in recent months in the increase in starts. Rising prices will also encourage more building. The median price of a new home was up 4.1% to $297,300 for April. Year over year, the median price is up a strong 8.3%. The good news on new home sales was a welcomed balance to the disappointing news on existing home sales last week. That said, we expect existing home sales to gain traction through the summer months. The news on pending home sales supports our optimism. Up four-consecutive months, pending home sales jumped a much higher-than-expected 3.4% in April following an upward revised 1.2% gain in March. Pending home sales are up 14% year over year, and are far ahead of final sales of existing homes, which are up only 6.1%. The Pending Sales Index – at 112.4 – is as high as it has been since May 2006. We should see existing homes trend higher over the next few months. Mortgage rates also continued to move higher, but only by a couple basis points. That said, depending on what part of the country you reside, the highest rates of the year were prevalent this past week. The good news is that mortgage rates appear to have plateaued, and are showing little inclination to move higher.

 

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Personal Income (April)	Mon., June 1, 8:30 am, ET	0.3% (Increase)	Important. Income growth remains anemic and is hurting the starter-home housing market.
Construction Spending (April)	Mon., June 1, 10:00 am ET	0.8% (Increase)	Important. Residential construction continues to drive overall construction spending. This bodes well for the housing outlook.
Mortgage Applications	Wed., June 3, 7:00 am, ET	None	Important. Purchase activity continues to point to sales growth in coming months.
Employment Situation (May)	Fri., June 5, 8:30 am, ET	Unemployment Rate: 5.4% Payrolls: 218,000 (Increase)	Very Important. Low wage growth will push any interest-rate increases further into the future.

 

Is It Time for Prices to Take a Respite? Following price trends has never been easier. A few years ago, there was only one source – Case-Shiller. Today, there are numerous sources you can tap to get an idea of what home prices are doing in your neck of the woods. Trulia, CoreLogic, and Zillow are to name just a few. To be sure, rising prices can be a good thing for homeowners. Once someone becomes a homeowner, he or she generally owns an asset that appreciates over time (with proper maintenance, of course). The homeowner’s net worth increases with home equity. The homeowner can tap the equity for money to invest elsewhere or for current consumption. It's a virtuous circle. That said, you need to get into a home before you can enjoy the benefits of home-ownership. That's becoming a problem in many markets, particularly for first-time buyers. Prices in many markets have exceeded pre-bubble highs. Wage growth, on the other hand, still lags. This obviously makes it difficult for first-time buyers. A healthy housing market needs a continual influx of first-time buyers. Unfortunately, they are in short supply these days. At this point, we'd like to see further moderation in home-price appreciation. In addition, we'd like to see further price moderation coupled with more construction in the starter market. The coupling of these two objectives would help ensure the housing market remains healthy for years to come. Article courtesy of Patti Wilson, American Momentum Bank.