Housing Affordability Surges to Highest Level in 18 Years

RISMEDIA, May 20, 2009-Nationwide housing affordability jumped 10 percentage points during the first quarter of 2009 to its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 72.5% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000, up from 62.4% during the previous quarter and up from 53.8% during the first quarter of 2008.

“Underlying the increase in affordability are lower home prices and record low interest rates. Combined with the $8,000 federal tax credit for first-time home buyers, consumers are beginning to return to the marketplace,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla.

Indianapolis was the most affordable major housing market in the country during the first quarter. Almost 95% of all homes sold were affordable to households earning the area’s median family income of $68,100. Indianapolis has now topped the affordability list 15 consecutive quarters.

Also near the top of the list of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Akron, Ohio; Grand Rapids-Wyoming, Mich.; and Syracuse, N.Y.

Several smaller housing markets posted even higher affordability scores than Indianapolis, with Sandusky, Ohio outscoring all others. There, almost 98% of homes sold during the first quarter of 2009 were affordable to median-income earners. Other small housing markets ahead of Indianapolis on the affordability scale included Monroe in Michigan and Mansfield, Springfield and Canton-Massillon in Ohio.

New York-White Plains-Wayne, N.Y.-N.J., where just over 21% of all homes sold during the period were affordable to those earning the median income of $64,800, was once again the nation’s least affordable major housing market in the first quarter. Though affordability jumped 7 percentage points for the quarter, this was the New York metro area’s fourth consecutive appearance at the bottom of the list. Other major metros near the bottom of the chart included San Francisco; Los Angeles-Long Beach-Glendale, Calif.; Nassau-Suffolk, N.Y.; and Honolulu.

Among smaller metro areas, Ocean City, N.J. was the least affordable market, along with San Luis Obispo-Paso Robles, Calif.; Flagstaff, Ariz.; Hanford-Corcoran, Calif.; and Santa Cruz-Watsonville, Calif., respectively.

For more information, visit www.nahb.org.

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Tax credit can be used as down payment on FHA Loans

The government today gave the green light to the financing of bridge loans of up to $8,000 to first time home buyers who qualify for tax credits under the Obama Administration’s economic stimulus plan. The new mortgagee letter stipulates that government agencies, non-profits and FHA-approved lenders can give advances on the tax credits. Housing secretary Shaun Donovan told a national Realtor group Tuesday that, “We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that cash can be used as a down payment.

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After Stress Test, Banks May Loosen Up

Bank stress tests, which assess how banks would handle it if the economy were to sour further, may make some banks more prone to lend if the results were good, analysts say. But don’t expect a miracle turnaround.

"In reality, it is still a weak economy out there," said analyst Joe Morford of RBC Capital Markets. "Whether they have the capital or not, banks are going to be cautious making loans — commercial real estate, commercial business or even residential mortgages.

"Some banks have been frozen by their fear of falling capital levels, holding onto bad loans and reluctant to sell foreclosed homes at a loss.

"Now they're not as concerned," said Stuart Plesser, bank analyst with Standard & Poor's. "If they are able to raise capital, I would assume they would get more aggressive.”

Source: Investor’s Business Daily, Marilyn Alva (05/07/2010)

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Market Shift: More Houses Get Multiple Offers

Julie Holt of Tarpon Springs, Fla.-based Anclote Title Services says 10 percent of the homes for sale are generating more than one bid.

Experts say markets hit hard by foreclosure are seeing more multiple offers, as residential price declines make homes more affordable and banks low-ball asking prices on distressed properties.
"If a house is in a good neighborhood, is maintained and is a good value, it'll get multiple offers," says Holt.Although many markets are far from fully shaking off the downturn, the pick-up in multiple offers is a reason for optimism.

"When you begin to see people willing to fight for a property, that's a good sign," says Beth Peerce, treasurer of the CALIFORNIA ASSOCIATION OF REALTORS®. "We are beginning to see the beginning of the end of a disaster time."

To check out great inventory on foreclosures and short sales (Hot Buys) and even leases do a search on www.RoxanaGreenman.com for your area of interest including Newport Coast Real Estate, Newport Beach Real Estate, Corona Del Mar, and Irvine Real Estate.

Mortgage Applications Up, Despite Rate Rise

Total mortgage loan applications inched up last week, according to the Mortgage Bankers Association weekly applications survey. The Market Composite Index, a measure of mortgage loan application volume, was 979.7, an increase of 2.0 percent on a seasonally adjusted basis from 960.6 one week earlier. On an unadjusted basis, the Index increased 2.4 percent compared with the previous week and 43.7 percent compared with the same week one year earlier. The Refinance Index increased 1.2 percent to 5169.3 from 5108.2 the previous week.
The refinance share of mortgage activity decreased to 74.4 percent of total applications from 75.3 percent the previous week.

Interest rates rose slightly last week:
30-year fixed-rate mortgages increased to 4.79 percent from 4.62 percent.
15-year fixed-rate mortgages increased to 4.57 percent from 4.45 percent.
One-year ARMs increased to 6.36 percent from 6.23 percent.

To check out great inventory on foreclosures and short sales (Hot Buys) and even leases do a search on www.RoxanaGreenman.com for your area of interest including Newport Coast Real Estate, Newport Beach Real Estate, Corona Del Mar, and Irvine Real Estate.

Turnaround in the residential real estate market

Major stock investor Warren Buffet said this morning on CNBC that he is very optimistic about the future of the economy and that he is seeing signs of a turnaround in the residential real estate market. Warren is one of the wealthiest men on the planet and the reason? He is not fearful to do the opposite of the herd. With all the doom and gloom on TV about how bad things are, here's Warren saying how very optimistic he is.
Remember this famous quote by him - "Be fearful when others are greedy and be greedy when others are fearful". There sure is a lot of fear out there right now, which is why Mr. Buffet sees opportunity.

To check out great inventory on foreclosures and short sales (Hot Buys) and even leases do a search on www.RoxanaGreenman.com for your area of interest including Newport Coast Real Estate, Newport Beach Real Estate, Corona Del Mar, and Irvine Real Estate.