Mortage Rates Hit New Low for the Year!

Average fixed mortgage rates fell for the fourth consecutive week, reducing borrowing costs for home buyers during the key spring selling season. Freddie Mac’s Thursday press release shows the average rate for a 30-year fixed mortgage to be 4.14 percent this week, down from 4.2 percent and the lowest since late October.



Source: Builder Online

Santa Maria Real Estate Market Breaks Recession’s Grip

April 25, 2014 1:00 am  •  Ben Miller/

When Larry Appel first started working for the city of Santa Maria in 2009, he remembers seeing only a couple of permits for single-family residences being issued. The next year, there were about six.

This year, there are 700 units — single-family or otherwise — either under construction or poised to begin construction. Next year, he anticipates as many as 1,200 units to hit that stage as well.

“We’re having a very healthy return to the economy through residential development,” said Appel, the city’s director of community development.

While the city hasn’t quite reached the same levels of development it saw between 2002 and 2005, Appel said those standards were based on a bubble.

Rather, what the city is seeing now is a return to normalcy. Courtney Seeple, project manager of the Towbes Group-owned La Vigna subdivision, said Santa Marians seem to be more willing and able to buy homes and housing values have increased. For instance, the 140-home La Vigna subdivision has only 25 units unsold. Seeple expects those to be claimed by the end of the year.

“It started out slow, because the market really didn’t come back until last year,” Seeple said. “But it’s continued, and we would expect 2014 to be as active as 2013.”

The development has been a boon for the city, though not enough to make up for financial shortfalls in other budget lines, City Manager Rick Haydon said. During the last two financial quarterly reports, the city’s permits, licenses and fees revenue line has been on track to reach about double what staff estimated at the beginning of the fiscal year.

Part of what’s driving the activity in the market, Seeple said, is that more people are no longer weighed down with financial burden. Fewer homes are underwater, meaning the owners of those homes are more able to move out and into different housing. Home loans are more accessible and the people applying for them seem more knowledgeable about how to get their financing approved, he said.

Job security could also give people more financial freedom.

“People are just feeling better because their jobs appear to be … more secure,” he said.

The Towbes Group has also begun work on 211 apartments in the Siena development adjacent to La Vigna and is planning on beginning construction on the 262-apartment Hancock Terrace project in about six months.

Even with that development, the Santa Clarita-based Williams Homes company senses that there’s a shortage of new homes to meet demand in Santa Maria. The organization started acquiring properties in the city last year, expanding its presence to the Central Coast for the first time.

“The economy is definitely coming back and people are looking for housing,” Director of Sales and Marketing Dan Faina said. “And we feel there is a shortage — on the Central Coast there used to be a builder on every corner.”

Williams Homes bought a partially-built development project that was abandoned during the recession and began construction anew. The Harvest Glen project should have four model homes available for showing near the end of May. After that, the group hopes to have 13 homes ready for delivery during the summer.

“(We’ve looked) at Santa Maria, we’ve seen a lot of the difficulties that people needed to work through during the economic downturn … and there’s a lot of gainfully employed families out there looking for homes,” Faina said.



New Homes are Less Expensive to Maintain

April is new homes month. And one of the virtues of a newly constructed home is the savings that come from reduced energy and maintenance expenses.

In a previous analysis, we used data from the 2009 American Housing Survey (AHS) to offer proof. The AHS classifies new construction as homes no more than four years old.

For routine maintenance expenses, 26% of all homeowners spent $100 or more a month on various upkeep costs. However, only 11% of owners of newly constructed homes spent this amount. In fact, 73% of new homeowners spent less than $25 a month on routine maintenance costs.

monthly maint costs

Similar findings are available for energy expenses. According to the 2011 AHS, on a median per square foot basis, homeowners spent 81 cents per square foot per year on electricity. Owners of new homes spent less: 68 cents per square foot per year. For homes with piped gas, homeowners spent on average 50 cents per square foot per year. Owners of new homes spent just 34 cents per square foot per year.

The 2011 data show similar results for various other utilities. For water bills, homeowners averaged 28 cents per square foot per year, while owners of new homes averaged 22 cents.  For trash bills, the median for all homeowners was 15 cents per square foot per year, while for new construction the median was 13 cents per square foot per year.

These data highlight that a new home offers savings over the life of ownership due to reduced operating costs. And in fact, these reduced costs result in lower insurance bills as well. The median cost for all homeowners of property insurance is 39 cents per square foot, while it is only 31 cents per square foot for owners of new homes.

These reduced expenditures represent one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.


NAHB – Eye on Housing


Morgate Rates Fall for 6th Straight Week!

Mortgage Rates Fall for 6th Straight Week


Mortgage rates for most U.S. home loans have fallen for the sixth straight week, although a majority of analysts predict rates will start to increase soon with the upcoming release of the latest unemployment data.

Key averages have seen steady declines since the beginning of January and saw a drop this week after economic reporting showed a cooling in home sales for the month of December.

This week the average for a 30-year fixed-rate mortgage dropped to 4.23 percent, down from 4.32 percent last week, according to the latest survey from mortgage buyer Freddie Mac. At the beginning of January, the same loans averaged an interest rate of 4.53 percent. A year ago, the 30-year average was 3.53 percent – a year-over-year increase of 0.7 percentage point.

The average rate on a 15-year fixed loan also dropped this week, falling to 3.33 percent from 3.40 percent last week. It averaged 3.55 percent at the beginning of this year, and was at 2.77 percent a year earlier.

Additionally, averages for the two most popular hybrid adjustable-rate mortgages fell.  At 3.12 percent a week ago, the five-year ARM is now trending at 3.08 percent. A year ago, it averaged 2.63 percent. The one-year ARM dropped to 2.51 percent from 2.55 percent a week ago. It averaged 2.53 percent at this time last year.

“Mortgage rates fell further this week following the release of weaker housing data,” Frank Nothaft, vice president and chief economist for Freddie Mac, said in a statement. “The pending home sales index fell 8.7 percent in December to its lowest level since October 2011. Fixed residential investment negatively contributed to GDP in the fourth quarter for the first time since the third quarter of 2010. Also, the Institute for Supply Management reported a significant slowing in growth in the manufacturing industry in December than the market consensus forecast.”

Mortgage rates had been rising steadily in December after the Federal Reserve announced it would begin to curb its bond-buying stimulus program in January. However, rates have eased over recent concerns that the market would not be able to support a dramatic upward shift in home prices.

The bond-purchase program has helped offset dramatic gains in real estate prices and kept affordability elevated while the market has stabilized. Despite the recent economic reporting, the housing market at large continues to show signs of recovery.

Looking ahead, rates may rise in the short-term as a result of the upcoming January employment report. In the latest Mortgage Rate Trend Survey by, half of the analysts polled believe averages will increase over next week, while 33 percent believe rates will hold steady.

“I predict that the January employment report, to be released Feb. 7, will be stronger than expected, especially if you include the revisions to the December numbers,” said Assistant Managing Editor Holden Lewis. “Non-farm payrolls will be better than expected; the unemployment rate could actually go up. A higher unemployment rate would imply continued low inflation, but the market might not interpret it that way. Money will flow from bonds to stocks, resulting in higher bond yields and mortgage rates.”



Feb 6, 2014

By:   for

Infographic: History of Mortgage Rates

Since 1971, when mortgage rates first started being tracked, they have ranged from a high of 18.63 percent in the early 80′s to a low of 3.20 percent in late 2013. Currently, rates are still relatively low and for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment. But, what will the future hold?

“After dropping to all-time lows at the end of 2012, rates have steadily rebounded throughout 2013. Now that the Federal Reserve has announced plans to begin winding down its stimulus program, which has helped keep rates low while the economy was still fragile, we expect rates will rise above 5 percent in 2014 as the economic recovery gains steam. Although those who missed out on mortgages in the 3 percent range may be disappointed that they missed that historic window, rates are still extraordinarily low by historic standards,” says Erin Lantz, director of Zillow Mortgage Marketplace.


January 6, 2014 – Author Erin Lantz for Zillow Blog



Buy a Home Before 2014

New rules, rising rates could mean fewer options

December 13, 2013 1:58PM via
real estate contract

The year 2014 will be a type of test market for the mortgage industry, with the Federal Reserve expected to eventually taper its mortgage securities purchases.

Not to mention the fact that 2014 is forecasted to bring a rise in rates and new lending rules that are likely to reshape the process of acquiring a mortgage.

With all of that in mind, is advising consumers to consider buying homes before the end of this year.

The site goes as far as naming the top five reasons for buying real estate before the dawn of 2014.

Among them the fact that rates are already up one to 2% over last year, and it’s still possible to grab a 30-year, FRM at 4.5%, according to lenders cited by HomeFinder.

New lending rules, including the qualified mortgage definition, will shift debt-to-income ratio requirements higher, potentially making it more difficult to buy a property, the report claims.

Lower sales during the holidays also could mean more inventory to comb through.

And finally, anyone who buys before the end of the year can begin deducting the interest right away, maximizing tax deductions.

Homebuyer Confidence Picks Up for the First Time in 2013

Source: by |

This quarter, buyers breathed a little easier. The latest Redfin Real-Time Buyer Survey found that homebuyer confidence picked up for the first time in 2013, a sentiment that almost certainly reflects softer competition and buyers’ improved negotiatingpower during real estate’s slow season. Also, mortgage rates have fallen from year-to-date highs in the third quarter, easing some affordability concerns.

Their relief is unlikely to last long, however. This quarter, new questions revealed that many homebuyers have unrealistic mortgage rate expectations and high rate sensitivity. To our surprise, over 80 percent of buyers surveyed believe that “normal” mortgages fall under 5 percent for a 30-year fixed rate loan. In fact, rates have averaged 6.7 percent since 1990. At the same time, over 40 percent said they would be unable or unwilling to buy a home if mortgage rates rose further. Given the Federal Reserve’s plans to unwind its stimulus program in 2014, which will push mortgage rates up, these survey results suggest that many buyers may face a tough adjustment in 2014.

This quarter, homebuyers:

  • Are slightly more confident in the market: After three consecutive quarters of decline, 28% of survey respondents said now is a “good” time to buy a home, up from 24% in the third quarter. At the same time, 58% of survey respondents believe it is an “OK” time to buy a home in their neighborhood, nearly flat from 59% in the third quarter.
  • Continue to be frustrated with the level of home inventory: Buyers in the fourth quarter were most frustrated with the number of homes for sale, with 60% of buyers citing “low inventory” as their top concern about buying a home, compared to 58% in the third quarter. Buyers also named “rising prices” as a top concern, with 52% of buyers choosing this option.
  • Are very rate-sensitive: Responding to a new question on mortgage rates, 85% said that mortgage rates were important in their home-buying decision, with 42% of respondents saying the level of mortgage rates were “very important,” and that they “would be unable or unwilling to buy a home if rates rose further.”

About the Survey

The survey was taken between November 21 and November 24, 2013. Survey respondents included 518 active homebuyers who had toured a home with a Redfin agent since August 27, 2013. Respondents spanned 22 metropolitan markets in the U.S.: Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Dallas, Denver, Houston, Los Angeles, Orange County, Miami, Long Island, Philadelphia, Phoenix, Portland, Raleigh, Sacramento, San Diego, San Francisco, Seattle, Washington, D.C.

Survey data and charts are below. If there are questions you’d like us to include in the survey next time, please let us know in the comments section below!

Buyer Confidence Shifts Course…

For the first time in 2013, buyer confidence is starting to improve.

Good time to buy

…While Perspectives on Selling Plunge

As buyers have become more confident about buying a home, fewer believe this is a “good time” to sell a home.
Good time to sell

Low Inventory Remains Top Concern

Buyers continue to be frustrated by the limited number of homes for sale, followed by rising prices.
Concerns about Buying

Mortgage Rates Matter

Survey respondents showed high sensitivity to fluctuations in mortgage rates.
Importance of mortgage rates

30-Year Fixed Mortgage Rates Plummet 16 Basis Points

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.06 percent, down from 4.22 percent at this same time last week.

The 30-year fixed mortgage rate steadily declined last week, leveling off near 4.12 percent over the weekend before falling to the current rate this morning.

“Mortgage rates during the past week have fallen back to lower levels, helped by Federal Reserve vice chair Janet Yellen’s assurances before the Senate Banking Committee that Federal Reserve stimulus won’t be removed too quickly. This trend halves the increases of the prior two weeks,” said Stan Humphries, chief economist at Zillow. “Looking ahead, rates will be influenced by the Federal Reserve’s meeting minutes, scheduled for late Wednesday, as observers try to read the tea leaves to assess the likelihood of a December taper.”

Additionally, the 15-year fixed mortgage rate this morning was 3.05 percent, and for 5/1 ARMs, the rate was 2.69 percent.

November 19, 2013 | Category:Finance | Author:Alexa Fiander | Source:

Seven Reasons to Own Your Home

Published by Realtor Mag September 23, 2013.

7 Reasons to Own Your Home

  1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
  2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
  3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
  4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
  5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
  6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
  7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Housing Market Confidence on the Rise

Originally posted by on August 13, 2013.

Home buyers, home builders, and the general public have renewed their confidence in the economy and in the housing market. This doesn’t necessarily mean everything is back to normal, but because consumers are more than two-thirds of the economy, a confident consumer is more likely to buy a home.

The evidence of an improved outlook is widespread. Two organizations survey consumers on a monthly basis, and their indexes are at levels last seen in early 2008 before the financial collapse and the beginning of the worst recession in more than 70 years. In addition, these national surveys also ask questions about attitudes toward home buying.  The University of Michigan survey asks if it is a good time to buy a home, and more than 80 percent of those surveyed responded “yes,” which is the highest percentage since 2003. The Conference Board asks if the respondent intends to buy a home in the next six months, and affirmative responses are at the highest in the history of the index.

Builder Confidence Up Builders also are demonstrating renewed confidence. The NAHB/Wells Fargo Housing Market Index (HMI) is a monthly measure of builders’ confidence and the overall index is at its highest level since 2005. The survey driving the index asks three questions about current home sales, expectations for future sales, and customer traffic. The expectation component also is at its highest level since 2005, and the current sales index is at the highest since January 2006.

Builders’ confidence has been rising faster than builders’ production. The HMI increased 75 percent in a year while single-family housing permits rose 25 percent. A similar advanced confidence move occurred after the 1990 recession when the HMI rose 120 percent as permits increased 52 percent. Eventually, permits caught up with builders’ attitudes in the 1991–92 recovery, and I expect the same in this recovery.

Confidence has returned because the things that worried consumers and builders are improving. Households have reduced their debt levels to what they were in 2003 at a bit over one year’s income. At the peak, households owed 130 percent of their annual income and reducing that meant less spending and more repaying and saving. The savings rate has settled back to near historic levels, which means more income spent.

Meanwhile, households feel wealthier because house prices have moved forward. House prices have seen positive moves for more than a year in part because of pent-up demand and investors competing for limited inventories. House prices are back to levels seen in 2008 as they were falling and in 2004 as they were rising. Higher, consistently growing house prices offer consumers the comfort that they will not see a decline in their equity if they buy and provides more equity if they sell.

Employment Gains Job additions have not been as stellar as home values, but the number of people employed has increased steadily and the number of people looking for a job has declined. From the peak, the U.S. lost 8.7 million jobs and has since gained back 6.7 million, or more than three-quarters of the loss. Of course, in that time, the population of employable people increased so unemployment remains at least 2 percentage points above a sustainable level, and some workers are so discouraged that they dropped out of the labor force and do not count as unemployed.

Those working and with good credit face some of the best housing affordability conditions in history. Since 2009, the NAHB/Wells Fargo Housing Opportunity Index has been above 70; that is, a family earning the median income could afford more than 70 percent of all homes sold in the previous quarter. The most recent quarter did dip to 69.3 as home prices and interest rates rose.

All signals point to positive movements in the underlying causes of improved confidence and hence in continued growth in new-home construction and sales.


Link to original article: