Cherry Hill Real Estate Agent

Friday, July 12, 2013

Buyers beg to get off rate roller coaster

Posted on July 4, 2013 by grim

Posted in Economics, Housing Recovery, Mortgages | 17 Comments

From CNBC:

Housing Recovery Rides Mortgage Rate Roller Coaster

Mortgage rates are moving so fast and so dramatically that even reports from barely a week ago seem suddenly outdated.
The average rate on the 30-year fixed conforming loan moved to its highest level in two years last week, according to the Mortgage Bankers Association weekly survey. That had a direct effect on consumers shopping for mortgages. Applications to refinance fell 16 percent and applications to purchase a home dropped 3 percent week-to-week.
That comes one day after another report from Zillow, an online real estate company, showed mortgage rates moving off their highs, although not that far off.
"Last week mortgage rates retreated from a 23-month high as the Fed sought to reassure markets that the wind-down of the stimulus program would be gradual, and contingent upon strong improvement in economic fundamentals," said Erin Lantz, director of Zillow Mortgage Marketplace.
"This coming week, market participants will be focused on Friday's jobs report as an indicator of whether the economic recovery is strong enough to withstand an earlier-than-expected withdrawal of Fed stimulus."
…
Mortgage rates are up about a full percentage point from where they were at the beginning of May. That translates into about a 15 percent jump in monthly payments for the average home buyer, or 15 percent less purchasing power, depending on how you look at it. That can certainly be make or break for some buyers, especially first-time home buyers who may have been stretching in the first place.
…
The very recent rate retreat gave back around 15 basis points, but buyers really can't play these small moves, which are largely dependent on investors buying or selling Treasury bonds.
"Although 10-year Treasury yields have come down slightly in recent days, we do not expect the bulk of the increase in mortgage rates to be reversed," said Paul Diggle of Capital Economics. "We've penciled in mortgage rates of 4.5 percent at year end, rising to 5 percent next year and 5.5 percent in 2015."

Delinquencies ease, fewer homeowners underwater

Posted on July 9, 2013 by grim

Posted in Housing Recovery, Mortgages, National Real Estate | 65 Comments

From HousingWire:

Less sickness in housing as delinquencies fall 43% from peak

The housing market continues to recover from post-meltdown levels with mortgage delinquencies down 43% from 2010 levels, Lender Processing Services Applied Analytics said Monday.
The number of borrowers who remain underwater – or who owe more on their homes than their current worth – also fell a sharp 47% from Q1 2012 to Q1 2013, LPS said in its Mortgage Monitor Report.
Underwater borrowers now account for 14.7% of all active loans studied by the mortgage analytics platform, LPS explained.
Homeowners carrying high loan-to-value ratios also are on the decline.
In 2011, 17 million homeowners had LTVs greater than 100%.
That figure now sits at 7.3 million mortgages, with borrowers benefitting from rising home prices.
…
Overall, the loan delinquency rate is hovering at 6.08% down 2.11% from the prior month. The pre-sale foreclosure inventory rate sits at 3.05%, down 3.91%.
"As we've noted before, negative equity appears to still be one of the strongest drivers of new problem loans, and — primarily buoyed by home price increases nationwide — that situation also continues to improve," said Herb Belcher, senior vice president of LPS.
…
"We looked once again at the number of 'underwater' loans in the U.S., and found that the total share of mortgages with LTVs of greater than 100 percent had declined to just 7.3 million loans as of the end of the first quarter of 2013. This accounts for less than 15 percent of all currently active loans and represents a nearly 50 percent year-over-year decline," he explained.

Thursday, July 11, 2013

Chinese paying cash for US homes|Home|chinadaily.com.cn

Chinese paying cash for US homes|Home|chinadaily.com.cn

Chinese paying cash for US homes

Updated: 2013-07-11 11:36

By Chen Jia in San Francisco (China Daily)

A property project from Detroit promotes itself at a real estate show in Beijing in April. Wu Changqing / for China Daily

A new wave of buyers from China is injecting billions of dollars into the US residential real-estate market.

Chinese investors spent $12.3 billion on US real estate over the 12 months ending March 31, according to the latest data released by the National Association of Realtors (NAR).

When Chinese housewife Alice Zhang of California saw a house in her neighborhood advertised for $1.23 million, she told her husband, "Nobody will buy that house quickly at such a high price."

One week later, they were surprised to hear that the single family home in Silicon Valley had been sold and their new neighbor was from China.

"This house was definitely a bargain at under $1.1 million just six months ago when we purchased our house," Zhang told China Daily.

"Our new neighbor paid cash, and that's why the owner made the decision to sell so quickly," she said.

Over the past year, foreigners made $68.2 billion worth of real estate purchases in the US, 18 percent of which were Chinese, according to the NAR.

The median price of homes purchased by Chinese was $425,000, higher than all foreign buyers' median of $276,000.

Some 70 percent of the Chinese buyers used cash to pay for their homes in the US, according to a report on CNN on Monday.

An official with the Asian Real Estate Association of America (AREAA) said she didn't see any increase in the number of Chinese buyers who chose mortgages, due to the strict examination process at US banks. "I have seen more and more Chinese house buyers come with cash," said Huang Jiaying.

"Chinese clients are definitely asking about mortgages now and we have access to certain banks who will work with them. But most of the US banks are still unable to make loans to foreigners," Huang said.

"I signed about 30 pieces of paperwork via an agency for a $800,000 house purchase in north California last month, but I failed to get the contract, as my offer was 50 percent bank mortgage ," a 26-year-old Chinese IT engineer, who declined to be identified, told China Daily.

He said his competitors were mostly from the Chinese mainland offering to pay in cash.

People were still talking about the story last summer of a Chinese couple who spent $34.5 million on a Versailles-style mansion in Beverly Hills, Los Angeles. Another Chinese businessman reportedly paid around $28 million for an estate.

"More and more house owners in California are holding on to their estates waiting for prices to go up," Kelly Wong, a Silicon Valley citizen, told China Daily. "The competition for foreign buyers is getting dramatic."

Wong has two houses in California and she expects their market prices to increase more than 30 percent this year.

Earlier this year, Bloomberg reported that home prices in 20 United States cities rose in the 12 months prior to November by the most in more than six years, it said.

Joan Brothers, president of New York-based Manhattan Global Properties, said 50 percent of her clients are international buyers, many of them Chinese.

In previous years, the Chinese buyers were more like "lookers" than "buyers" and there was always a lot of "talking", she said. "They understood that there was value in purchasing real estate, but did not always want to commit.

"Recently they have begun to follow through and make more purchases, and their preferred payment method is cash," she said, adding that Chinese buyers have always been a "smart and savvy crowd", who mostly purchase US property for three reasons: to have another asset out of China, because they have a child going to school in the US, or for business.

Hu Haidan in New York contributed to this story.

(China Daily USA 07/11/2013 page2)