Archives for June 2011

Low-end housing market experiencing rapid decline

Low end homes are experiencing worse sales compared to those on the high end.A recent CNBC report, citing data compiled by Capital Economics, discussed a significant downward trend for the country's real estate market.While home prices and transactions have struggled, with totals fluctuating during the last several quarters, the low end of the market appears to be worse off compared to the high end.”Since their 2007 peak, prices in the low tier have so far fallen by 45 percent compared with declines of 35 percent and 25 percent in the middle and high tiers respectively,” Capital Economics states in its report.The struggles experienced by this sector as a result of tighter mortgage regulations used by lenders. Now, consumers that would normally be acquiring low-end properties are being turned away by banks. Many lenders are now requiring a 20 percent down payment, which might very well be pushing many borrowers out of the market.The article relays that many of the borrowers who lost their properties in New York were on the low end of the market. Nationwide, this has become a trend as well.For regions with improving job sectors, however, such as Houston, real estate transactions could experience gains, as more consumers have jobs and are able to meet these tough lending standards.Courtesy of 2M Realty News?

Unemployment claims jump by 9,000

Jobless claims increased by 9,000 recently.According to the Labor Department's recent data, the number of jobless claims increased significantly during the last week.Overall, 9,000 more unemployment claims were made during the week ending June 18, pushing the total to a seasonally adjusted 429,000. This figure was well above the forecast of many economists, who had predicted an average of 415,000 for the week.As a result, Bloomberg recently recorded a drop in its Consumer Comfort Index, which fell from minus 44 to minus 44.9 during the week.This national trend has been noticed in several major metropolitan areas as well, such as Houston.A recent report from the Texas Workforce Commission revealed a higher jobless rate in the region during May, as it increased to 8.2 percent. The higher level of unemployment is interesting for Houston, as it has been one of the most successful nationwide in terms of job creation.The national housing sector, much like the Houston real estate market, could continue to suffer if unemployment rates stay high and fewer potential homebuyers come to market.Courtesy of 2M Realty News?

Texas Governor signs bill eliminating real estate transfer fees

A new bill was signed into law restricting private transfer fees for real estate.Recently, Texas Governor Rick Perry signed a bill into law that forbids private transfer fees on real estate.These fees are typically written into deed restrictions and kick back 1 percent of a home's selling price to the property's developer any time the deed is exchanged among the home's owners during the next 99 years.Texas' House and Senate both overwhelmingly approved the bill, which Perry then signed into legislation. With the bill's passing, Texas is now among 36 other states that have banned or restricted the fees during the last several years.According to a report, these fees are not common throughout Texas, however, they have seen an increase lately, as developers look for new ways to generate income during the recession.With more sales taking place in the Houston real estate market, these developers could have stood to earn a reasonable income from the transactions. Houston's job sector has experienced significant increases, leading to greater home sales. However, with the bill's passing, the additional income will be abolished for the developers.Courtesy of 2M Realty News?

Strategic defaults show slight increase during first quarter

National strategic defaults were up during the first quarter of 2011.According to a report from credit bureau Experian, the number of strategic defaults increased slightly during the first quarter of 2011 after experiencing significant reduction recently.Overall, 17 percent of all home loan defaults during the first quarter of 2011 were strategic defaults, up one percentage point from the previous quarter. Experts had hoped the economy was returning to health, as the percentage during the last quarter of 2010 was well below the peak reached in the fourth quarter of 2008 at 20 percent.”It's important for lenders to understand findings such as why about 90 percent of strategic defaulters are continuing to stay current on their other obligations – even a year after they've gone delinquent on their mortgage,” said Charles Chung, Experian's president of decision analytics. “Knowing more about these behaviors helps lenders personalize strategies for consumers who have defaulted on their loans.”Experian discovered that homeowners with fewer than $50,000 remaining on their mortgage were much less likely to walk away from their home loans, while those owing more than $1 million were five times as likely to do so.Areas with improving job sectors are most likely to avoid strategic defaults, as more homeowners are able to make their monthly payment. Thus, the Houston real estate market might avoid spikes in these defaults, for instance.Courtesy of 2M Realty News?

Inventory of foreclosed homes decreases during April

The national shadow inventory was down during April.Recent data compiled by CoreLogic revealed a reduction in the country's pre-sale foreclosed inventory during April.According to the report, 1.8 million homes entered the foreclosure process during the month – down 18 percent from its peak – as fewer mortgages became delinquent and an increasing number of distressed properties were sold.If the current sales trends continue, the “shadow inventory” will run out in roughly five months, the report states. This inventory is often viewed as a barometer for the national real estate market's health, as foreclosures can lead to reduce home prices and weakened confidence among potential homebuyers.”It's showing there are improvements in some segments of the market,” Sam Khater, CoreLogic's chief economist, told Reuters. “It doesn't mean housing distress is over, but it does show that the pipeline of distress is beginning to ease.”Foreclosures are affecting the Houston real estate market less each month, according to a recent report from the Houston Association of Realtors. During May, 19.8 percent of all home sales involved distressed properties, down from 22 percent in April and 23.5 percent in March.Courtesy of 2M Realty News?

Mortgage rates remain unchanged for second straight week

Interest rates remained the same for 30-year FRMs.According to the most recent data released by Freddie Mac, the interest rate for 30-year fixed mortgages remained unchanged for the second-consecutive week – a sign that the downward trend for home loans could be over.Overall, the 30-year mortgage rate stayed at 4.50 percent, which is down from 4.69 percent a year ago. The rate for 15-year FRMs settled at 3.69 percent, down from 3.67 percent last week and 4.13 percent last year.”Mortgage rates were virtually unchanged this week amid further indications of a soft housing market,” Frank Nothaft, Freddie Mac's chief economist and vice president, stated. “Although new construction on single-family homes ticked up in May from April, it was still below the overall pace set in 2010. Moreover, existing home sales fell 3.8 percent in May to the fewest since November 2010.”The Treasury-indexed hybrid adjustable-rate mortgages went in different directions, however, as the average for five-year ARMs declined, while one-year ARMs increased.While mortgage rates still remain low, more consumers might now begin taking advantage of them before an increase takes place. For regions with improving job sectors, such as Houston, real estate sales could increase significantly soon.Courtesy of 2M Realty News?

National home prices improve slightly during April

Home prices fell during April nationwide.According to recent data released by the Federal Housing Finance Agency, home prices showed slight improvement during April, increasing for the first time in nearly a year.Overall, the FHFA's House Price Index climbed by 0.8 percent after experiencing a 0.3 percent decline in March, which was later revised to 0.4 percent. The last month recording a gain in home prices was May 2010.Since April 2010, home prices were down 5.7 percent, according to the index. However, this figure is skewed, as prices increased last year due to the government's first-time homebuyer tax credit. As more buyers came to market to beat the April 30, 2010 deadline for the credit, home prices increased significantly.Historically, the index is well below its peak reached in April 2007, falling 19.3 percent since then. The current index level is on par with January 2004's figure.In Texas, the price actually increased 2.1 percent, the largest jump in more than a year. While the national trend has seen several months of downward movement, Texas has only recorded two months of price declines during October 2010. Thus, the Dallas, Fort Worth and Houston real estate markets are showing signs of improvement.Courtesy of 2M Realty News?

Houston experienced increased number of renters

Houston is experiencing an increased in rentals.According to a recent report from My Fox Houston, the region is experiencing an uptick in home seekers opting for rental leases in place of mortgages.The report relayed that, during May alone, the number of rentals taking place for single-family homes increased by 20 percent.”We will have a greater number of renters than owners,” Wojciech Kic, president of ManageRentHouses.com, told the news source.Kic further relayed that Houston residents have typically been split between owning a home and renting one, however, as the real estate market continues to struggle, the demand for rentals will increase significantly.Tighter lending standards and higher down payments have discouraged many potential homebuyers from entering the market. Furthermore, as the region's job market continues to improve, many workers are moving away from homes they are unable to sell quickly. Thus, they have opted to rent their Houston properties out.”The folks that are leaving their cities still have to dispose of the properties that they own and before they do so they have to rent something because very few people can have two mortgages,” Vic told the news source.Courtesy of 2M Realty News?

Home sales for May still obscured by 2010’s tax credit

Home sales were down in Houston during May.The Houston Association of Realtors recently released new data regarding home sales in the region for May.While property transactions remained steady during the month, the figures compared to last year's activity are up significantly. In all, 35 percent more listings went under contract last month when compared to May 2010. This figure is obscured by last year's first-time homebuyer tax credit, however, as many home seekers pushed to meet the government's April 30, 2010 deadline.Overall, single-family home sales were down 11.9 percent in May, compared to May 2010. However, the total of these homes sold – 5,043 – was the highest monthly amount since June 2010, right after the tax credit had expired.”Getting an accurate read on the Houston real estate market remains challenging because the 2010 tax credit prompted a surge in home sales during the first half of last year that otherwise would have occurred throughout the summer,” said Carlos Bujosa, HAR chairman.Single-family home prices increased during the last 12 months as well, as May's average settled at $220,210 – 6.5 percent higher than May 2010. Single-family median home prices also increased, climbing to $157,900, which is 3.2 percent higher than the previous year.Houston's rental volume showed significant improvement yet again, as a greater number of new residents moved to the area and opted to avoid entering the lending process. Tighter mortgage regulations have hindered the real estate market, as more lenders are less willing to take chances on borrowers they've deemed risky.Foreclosure sales were down 3 percent during the month, compared to May 2010. In all, distressed property transactions represented 19.8 percent of all home sales, which is down from 22 percent in April and 23.5 percent in March. The median price for foreclosure sales in May settled at $79,000, which is down 11.2 percent from May 2010.Active listings for Houston properties were up 0.9 percent from May 2010, as 51,652 became available. The total number of available single-family homes grew to eight months worth of inventory, which is up from 6.8 months from the previous year. Nationally, 9.2 months worth of homes are available, according to the National Association of Realtors.Courtesy of 2M Realty News?

Existing home sales decline during May

Existing home sales fell during May nationwide.According to recent data released by the National Association of Realtors, existing home sales for May declined, as several factors weighed heavily on potential buyers.Overall, sales were down 3.8 percent from April, reaching a seasonally adjusted annual rate of 4.81 million. This rate is also down from April's revised 5.00 million, as well as 15.3 percent lower than May 2010's 5.68 million pace. Last year's rate was boosted by the government's first time homebuyer tax credit, however, as more property seekers rushed to beat the deadline.The month's lower sales were a result of many more factors, past last year's tax credit, NAR chief economist Lawrence Yun explained.”Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” said Yun. “The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”A recent report from the Houston Association of Realtors revealed that the region's single-family home sales fell 11.9 percent last month from May 2010. Despite the fall, the 5,043 Houston properties sold was the highest monthly amount since June 2010.Courtesy of 2M Realty News?

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