RealtyTrac, released its year-end and fourth quarter 2013 Home Flipping Report, which shows 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16% from 2012 and up 114% from 2011.
Profits are strong in flipping right now. The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from $52,746 in the fourth quarter of 2012.
It looks like the market for flips is slowing, which could portend ill for housing in general. Flips accounted for 3.8% of all sales in the fourth quarter, down slightly from 3.9% of all sales in the third quarter and down from 7.1% of all sales in the fourth quarter of 2012.
"Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase," said Daren Blomquist, vice president of RealtyTrac. "For the year 21% of all properties flipped were purchased out of foreclosure, but that is down from 27% in 2012 and 32% in 2011. Meanwhile flipped homes were still purchased at an average discount of 13% below market value in 2013, the same average discount as 2012, indicating that investors are finding discounted buying opportunities outside of the public foreclosure process — particularly in those markets with the biggest increases in flipping for the year."
RealtyTrac, one of the nation’s leading sources for comprehensive housing data, reported that homes flipped in 2013 accounted for 4.6% of all U.S. single-family home sales during the year, up from 4.2% in 2012 and up from 2.6% in 2011.
Who is flipping? People with lots of extra cash. The report shows the biggest increases in flipping nationwide occurred on homes with a flipped price of $400,000 or more. Although flipping increased across all price ranges, flips on homes with a flipped sale price above $400,000 increased 36% from 2012, while flips on homes with a flipped sale price at or below $400,000 increased 17% from 2012.
Major metro areas with big increases in home flipping in 2013 compared to 2012 included Virginia Beach (up 141%), Jacksonville, Fla., (up 92%), Baltimore, Md. (up 88%), Atlanta (up 79%), Richmond, Va., (up 57%), Washington, D.C. (up 52%) and Detroit (up 51%).
Major markets with big decreases in home flipping in 2013 compared to 2012 included Philadelphia (down 43%), Phoenix (down 32%), Tampa (down 17%), Houston (down 17%), Denver (down 15%), Minneapolis (down 9%), and Sacramento (down 5%).
Friday, January 31, 2014
Monday, January 27, 2014
New Home Sales Expected to End 2013 on a Flat Note- When all else fails, just be optimistic
New home sales are expected to be flat in December due to seasonal factors and severe weather, according to economists at Wells Fargo Securities.
They expect the Census Bureau report slated to be released Monday morning will show December new home sales to come in at a 463,000 seasonally adjusted annual rate, compared to a 464,000 rate in November.
The WFS economists remain optimistic about the outlook for housing and they are forecasting that new home sales will hit 520,000 in 2014, up 20% from last year.
WFS senior economist Anika Khan noted that builders remain optimistic. She noted, however, that builders are catering more to move-up buyers and building fewer homes priced below $150,000.
“I am most concerned about first-time homebuyers,” she said. Even when it comes to existing home sales, the percentage of first-time buyers is low.
She blames this on tight credit conditions. “It continues to be very difficult for these folks to get into the housing market,” Khan said.
They expect the Census Bureau report slated to be released Monday morning will show December new home sales to come in at a 463,000 seasonally adjusted annual rate, compared to a 464,000 rate in November.
The WFS economists remain optimistic about the outlook for housing and they are forecasting that new home sales will hit 520,000 in 2014, up 20% from last year.
WFS senior economist Anika Khan noted that builders remain optimistic. She noted, however, that builders are catering more to move-up buyers and building fewer homes priced below $150,000.
“I am most concerned about first-time homebuyers,” she said. Even when it comes to existing home sales, the percentage of first-time buyers is low.
She blames this on tight credit conditions. “It continues to be very difficult for these folks to get into the housing market,” Khan said.
Friday, January 24, 2014
Fifth Third sets aside $69 million to pay lawyers- just goes to show that more issues are coming
Depending on who you believe, the fourth-quarter results at Fifth Third (FITB) came in either as expected or as beating expectations.
Nonetheless, the bank did manage to pull off a profit despite a huge settlement with Freddie Mac and even added capital to its litigation reserve fund.
In the fourth quarter, the bank reported net income of $383 million, or $0.43 per diluted common share.
Results included the mortgage repurchase provision of $28 million primarily related to Fifth Third’s settlement with Freddie Mac and expectations for future repurchase requests. The bank also recored $69 million in charges to increase its litigation reserves.
Fifth Third entered into a settlement for $25 million with Freddie Mac to resolve certain repurchase claims associated with mortgage loans originated and sold prior to 2009.
This was charged against the representation and warranty reserve.
A big driver of profit is the bank's stake in Vantiv, one of the nation's top payment processors and a strategic business partner of Fifth Third.
Additionally, overall credit improved at the bank.
Allowance for loan and lease losses decreased $95 million. Nonperforming assets declined $39 million and the bank changed its policy on home equity nonaccruals, which added another $46 million.
Nonetheless, the bank did manage to pull off a profit despite a huge settlement with Freddie Mac and even added capital to its litigation reserve fund.
In the fourth quarter, the bank reported net income of $383 million, or $0.43 per diluted common share.
Results included the mortgage repurchase provision of $28 million primarily related to Fifth Third’s settlement with Freddie Mac and expectations for future repurchase requests. The bank also recored $69 million in charges to increase its litigation reserves.
Fifth Third entered into a settlement for $25 million with Freddie Mac to resolve certain repurchase claims associated with mortgage loans originated and sold prior to 2009.
This was charged against the representation and warranty reserve.
A big driver of profit is the bank's stake in Vantiv, one of the nation's top payment processors and a strategic business partner of Fifth Third.
Additionally, overall credit improved at the bank.
Allowance for loan and lease losses decreased $95 million. Nonperforming assets declined $39 million and the bank changed its policy on home equity nonaccruals, which added another $46 million.
Thursday, January 23, 2014
Foreclosures, short sales increased 1% in Dec.
Foreclosures and short sales remained relatively frozen in December, with U.S. residential properties, including single-family homes, condominiums and townhomes, selling at an estimated annual pace of 5.16 million in December, a less than 1% increase from November and a 10% increase from a year ago, the latest RealtyTrac report found.
Annualized sales volume dropped from a year ago in 18 of the nation’s 50 largest metropolitan statistical areas and was down in five states: California, Arizona, Nevada, Rhode Island and Oregon.
In addition, the national sales price of U.S. residential properties, including both distressed and non-distressed, hit $168,391 in December, virtually unchanged from November and up 2% from December 2012.
The median price of a distressed residential property—in foreclosure or bank owned—was $108,494 in December, 38% below the median price of $174, 401 for a non-distressed residential property.
Furthermore, short sales and foreclosure-related sales — including both sales to third-party buyers at the public foreclosure auction and sales of bank-owned properties — made up 16.2% of all residential sales in 2013, up from 14.5% of all sales in 2012 and 15.2% of all sales in 2011.
"It may surprise some to see distressed sales rising in 2013 given that new foreclosure activity dropped to a seven-year low for the year," said Daren Blomquist, vice president of RealtyTrac.
"And while short sales did trend lower in the second half of the year, there are still more than 1.2 million properties in the foreclosure process or bank-owned, providing a sizable pool of inventory that the housing market is in the process of absorbing," Blomquist said. "Meanwhile, non-distressed sellers have not listed their homes for sale in droves, helping to keep the distressed share of sales at a stubbornly high level."
Annualized sales volume dropped from a year ago in 18 of the nation’s 50 largest metropolitan statistical areas and was down in five states: California, Arizona, Nevada, Rhode Island and Oregon.
In addition, the national sales price of U.S. residential properties, including both distressed and non-distressed, hit $168,391 in December, virtually unchanged from November and up 2% from December 2012.
The median price of a distressed residential property—in foreclosure or bank owned—was $108,494 in December, 38% below the median price of $174, 401 for a non-distressed residential property.
Furthermore, short sales and foreclosure-related sales — including both sales to third-party buyers at the public foreclosure auction and sales of bank-owned properties — made up 16.2% of all residential sales in 2013, up from 14.5% of all sales in 2012 and 15.2% of all sales in 2011.
"It may surprise some to see distressed sales rising in 2013 given that new foreclosure activity dropped to a seven-year low for the year," said Daren Blomquist, vice president of RealtyTrac.
"And while short sales did trend lower in the second half of the year, there are still more than 1.2 million properties in the foreclosure process or bank-owned, providing a sizable pool of inventory that the housing market is in the process of absorbing," Blomquist said. "Meanwhile, non-distressed sellers have not listed their homes for sale in droves, helping to keep the distressed share of sales at a stubbornly high level."
Wednesday, January 22, 2014
Mortgage applications rise 4.7%-Refinance share increases 10%
Mortgage applications continue to climb, rising 4.7% for the week ending Jan. 17, the latest report from the Mortgage Bankers Association said.
The refinance index also reported a 10% jump from last week, compared to the purchase index, which fell 4% from a week ago.
Overall, the refinance share of mortgage activity edged higher to 64% of total applications.
The 30-year, fixed-rate mortgage with a conforming loan limit decreased to 4.57%: the lowest level since November 2013.
In addition, the 30-year, FRM with a jumbo loan balance dipped to 4.57% from 4.58%, while the 30-year, FHA rate also dropped to 4.24% from 4.29%.
All three 30-year mortgage rates reached their lowest levels since November 2013, with the 15-year FRM decreasing to 3.68% from 3.72% a week earlier.
Meanwhile, the average contract interest rate for a 5/1 ARM fell to 3.23% from 3.28%.
The refinance index also reported a 10% jump from last week, compared to the purchase index, which fell 4% from a week ago.
Overall, the refinance share of mortgage activity edged higher to 64% of total applications.
The 30-year, fixed-rate mortgage with a conforming loan limit decreased to 4.57%: the lowest level since November 2013.
In addition, the 30-year, FRM with a jumbo loan balance dipped to 4.57% from 4.58%, while the 30-year, FHA rate also dropped to 4.24% from 4.29%.
All three 30-year mortgage rates reached their lowest levels since November 2013, with the 15-year FRM decreasing to 3.68% from 3.72% a week earlier.
Meanwhile, the average contract interest rate for a 5/1 ARM fell to 3.23% from 3.28%.
Tuesday, January 21, 2014
The most overvalued housing market in America
Housing markets resting on the laurels of juiced up home prices may be at risk in 2014 if those dramatic price swings are not supported by economic fundamentals.
And while Fitch Ratings expects most of the U.S. to experience modest and slow home price appreciation in 2014, a few markets have the research firm's bubble radar going off, according to Rui Pereira, managing director of structured finance for the ratings giant.
The Fitch Sustainable Home Price Model shows national prices overall overvalued by 15% in real terms. But when looking at individual local markets, prices in many cases are in line with economic fundamentals.
It’s when looking at California markets that much of the risk comes in.
One of the state’s riskiest zones – San Francisco – also captured the attention of HousingWire this past week.
In the West Coast city, price-to-rent and price-to-income ratios have risen nearly 25% since the start of 2012, Fitch points out. In fact, both metrics are now nearing all-time highs.
As DataQuick recently reported, the median price for a "Bay Area" home hit $548,500 in December, which is slightly down from November, but still up 23.9% from $442,750 a year earlier, the research firm said.
San Francisco prices are getting closer to levels reached in the 2006-2007 bubble when the median Bay Area price hit the $665,000-mark.
"Fitch believes most of the U.S. will see continued home price growth reflecting market momentum, the effects of inflation, the improving economy, and a return of buyers attracted by signs of stabilization," Pereira said.
"However, gains are expected to slow compared to prior years due to rising mortgage rates and more inventory becoming available. Mortgage volumes are expected to decline as rising rates further curtail refinancing."
And while Fitch Ratings expects most of the U.S. to experience modest and slow home price appreciation in 2014, a few markets have the research firm's bubble radar going off, according to Rui Pereira, managing director of structured finance for the ratings giant.
The Fitch Sustainable Home Price Model shows national prices overall overvalued by 15% in real terms. But when looking at individual local markets, prices in many cases are in line with economic fundamentals.
It’s when looking at California markets that much of the risk comes in.
One of the state’s riskiest zones – San Francisco – also captured the attention of HousingWire this past week.
In the West Coast city, price-to-rent and price-to-income ratios have risen nearly 25% since the start of 2012, Fitch points out. In fact, both metrics are now nearing all-time highs.
As DataQuick recently reported, the median price for a "Bay Area" home hit $548,500 in December, which is slightly down from November, but still up 23.9% from $442,750 a year earlier, the research firm said.
San Francisco prices are getting closer to levels reached in the 2006-2007 bubble when the median Bay Area price hit the $665,000-mark.
"Fitch believes most of the U.S. will see continued home price growth reflecting market momentum, the effects of inflation, the improving economy, and a return of buyers attracted by signs of stabilization," Pereira said.
"However, gains are expected to slow compared to prior years due to rising mortgage rates and more inventory becoming available. Mortgage volumes are expected to decline as rising rates further curtail refinancing."
Monday, January 20, 2014
A "recovery" that needs life support-What happens when they pull the plug?
What happens when they pull the plug?
A new report from the brain trust at Capital Economics asks a question that stopped us short in the HousingWire newsroom.
Paul Diggle, property economist at Capital Economics, looked at several months worth of existing and new home sales, and made a simple but bracing observation:
"Given that existing home sales make up more than 90% of all home sales, a key question is whether the current slump will prove temporary or permanent."
Diggle goes on to consider various factors that could hurt sales. Most are well known but one no one looks enough at is housing prices. Combined with slowly rising rates, inflated home prices have reduced mortgage availability.
"The share of respondents to Fannie Mae’s monthly housing survey who think that now is a good time to buy a home dropped from 76% in May to 64% in November, while NAR’s index of buyer traffic declined from 72 to 53 between April and October," Diggle reports.
Whether housing is in a bubble depends on how a bubble is defined, of course, but there are some startling disparities in home prices and incomes.
The current spike in prices is not being driven by first-time homebuyers entering the market.
Homes are best priced relative to incomes, and that relationship is approaching 2007 bubble levels.
The median income today is about $51,000, while the median home price is $328,000. As noted in a post by Phoenix Capital Management, that means the average price is 6.4 times more than median incomes.
In 2007, when the bubble was its fattest, homes cost 6.8 times median incomes.
And while home prices have been rising (to the delight of real estate agents), incomes have been stagnant or declining. Median income today is close to levels seen in 1987.
Anthony Sanders, distinguished professor of real estate finance at George Mason University, has been sounding the alarm about this for a while.
"After decades of “affordable” housing policies from HUD and the Federal government, U.S. housing is now the most unaffordable that it even has been," he writes. "Note the decline in real median household income since peaking in 1999 and is now $5,000 lower (or 9% lower). Average U.S. house prices are, on the other hand, 68.4% higher today than in December 1999."
As Kerri Panchuk notes, it’s really hitting younger, would-be first-time buyers. They are either living at home with their parents, or else choosing to live in multifamily much longer than previous generations. It’s not because they want to but because they are priced out of home ownership.
The big driver of rising home prices has not been incomes or sales, but rather institutional investors buying up swathes of vacant properties which they turn into rentals.
That, along with an all-stops policy on the part of the Federal Reserve to keep liquidity in the market and interest rates suppressed have fueled what recovery we've seen.
"The simple reality is that there has really been very little actual recovery in housing. With five years of economic recovery now in the rear view mirror, it is clear that the average American is really not recovering as evidenced by the lowest level of home ownership since 1980," says Lance Roberts, at STA Wealth Management. "As I stated previously, the optimism over the housing recovery has gotten well ahead of the underlying fundamentals."
"While the belief was that the Government, and Fed's interventions would ignite the housing market creating a self-perpetuating recovery in the economy - it did not turn out that way. Instead, it led to a speculative rush into buying rental properties creating a temporary, and artificial, inventory suppression," Roberts says. "Despite the Federal Reserve flooding the system with liquidity, suppressing interest rates and the current Administration's efforts to bailout banks and homeowners, owner occupied housing remains near its lows."
With no wage growth in the rearview mirror or ahead, interest rates ticking up, prices being artificially pumped up, and tepid job creation, it seems obvious that the only growth we’ve seen in housing has been illusory.
The housing "recovery" is on life support. What happens to the housing market when the plug gets pulled and all those programs end?
A new report from the brain trust at Capital Economics asks a question that stopped us short in the HousingWire newsroom.
Paul Diggle, property economist at Capital Economics, looked at several months worth of existing and new home sales, and made a simple but bracing observation:
"Given that existing home sales make up more than 90% of all home sales, a key question is whether the current slump will prove temporary or permanent."
Diggle goes on to consider various factors that could hurt sales. Most are well known but one no one looks enough at is housing prices. Combined with slowly rising rates, inflated home prices have reduced mortgage availability.
"The share of respondents to Fannie Mae’s monthly housing survey who think that now is a good time to buy a home dropped from 76% in May to 64% in November, while NAR’s index of buyer traffic declined from 72 to 53 between April and October," Diggle reports.
Whether housing is in a bubble depends on how a bubble is defined, of course, but there are some startling disparities in home prices and incomes.
The current spike in prices is not being driven by first-time homebuyers entering the market.
Homes are best priced relative to incomes, and that relationship is approaching 2007 bubble levels.
The median income today is about $51,000, while the median home price is $328,000. As noted in a post by Phoenix Capital Management, that means the average price is 6.4 times more than median incomes.
In 2007, when the bubble was its fattest, homes cost 6.8 times median incomes.
And while home prices have been rising (to the delight of real estate agents), incomes have been stagnant or declining. Median income today is close to levels seen in 1987.
Anthony Sanders, distinguished professor of real estate finance at George Mason University, has been sounding the alarm about this for a while.
"After decades of “affordable” housing policies from HUD and the Federal government, U.S. housing is now the most unaffordable that it even has been," he writes. "Note the decline in real median household income since peaking in 1999 and is now $5,000 lower (or 9% lower). Average U.S. house prices are, on the other hand, 68.4% higher today than in December 1999."
As Kerri Panchuk notes, it’s really hitting younger, would-be first-time buyers. They are either living at home with their parents, or else choosing to live in multifamily much longer than previous generations. It’s not because they want to but because they are priced out of home ownership.
The big driver of rising home prices has not been incomes or sales, but rather institutional investors buying up swathes of vacant properties which they turn into rentals.
That, along with an all-stops policy on the part of the Federal Reserve to keep liquidity in the market and interest rates suppressed have fueled what recovery we've seen.
"The simple reality is that there has really been very little actual recovery in housing. With five years of economic recovery now in the rear view mirror, it is clear that the average American is really not recovering as evidenced by the lowest level of home ownership since 1980," says Lance Roberts, at STA Wealth Management. "As I stated previously, the optimism over the housing recovery has gotten well ahead of the underlying fundamentals."
"While the belief was that the Government, and Fed's interventions would ignite the housing market creating a self-perpetuating recovery in the economy - it did not turn out that way. Instead, it led to a speculative rush into buying rental properties creating a temporary, and artificial, inventory suppression," Roberts says. "Despite the Federal Reserve flooding the system with liquidity, suppressing interest rates and the current Administration's efforts to bailout banks and homeowners, owner occupied housing remains near its lows."
With no wage growth in the rearview mirror or ahead, interest rates ticking up, prices being artificially pumped up, and tepid job creation, it seems obvious that the only growth we’ve seen in housing has been illusory.
The housing "recovery" is on life support. What happens to the housing market when the plug gets pulled and all those programs end?
Friday, January 17, 2014
Property Appreciation Topping Out: Veros
Home value acceleration and residential real estate appreciation continued to steadily improve for the sixth consecutive quarter.
The Veros HPI real estate market forecast for the top 100 metro areas covers more than 1,000 counties, 345 metro areas and 13,770 zip codes.
“Markets appear to be topping out for now,” says Eric Fox, vice president of statistical and economic modeling and author of VeroFORECAST.
The future HPI forecast continues to show good appreciation that demonstrates an overall healthy real estate market, but a slight quarterly increase that indicates much slowing in the forecasted rate.
Over 90% of the markets across the country are expected to see price appreciation, Fox adds. Despite currently strong appreciation forecasts, weaker increases are expected in the top five markets (typically metro areas with more than 250,000 residents) compared to the previous quarter’s top markets, which topped at 15%.
The projected five strongest markets are: San Francisco-Oakland-Fremont, Calif., at 13.4%; San Jose-Sunnyvale-Santa Clara, Calif., is 10.7%; Seattle-Tacoma-Bellevue, Wash., is 10.2%; Los Angeles-Long Beach-Santa Ana, Calif., is 9.6%; Midland, Texas at 9.5%.
Meanwhile, depreciation levels that are still present tend to be down between 1% and 2%.
VeroFORECAST finds that local population trends and unemployment rates remain the key drivers with the least populated metro areas expected to perform the worst. (Average population of the top 50 metros is 2.4 million and the average population of the bottom 50 metros is 527,000).
Nonetheless, most underperforming markets are primarily in the Northeast, with parts of Connecticut and some sections of New York, New Jersey and Maryland expected to fare poorly compared to the remainder of the U.S. due to persistent unemployment and demand factors.
The Veros HPI real estate market forecast for the top 100 metro areas covers more than 1,000 counties, 345 metro areas and 13,770 zip codes.
“Markets appear to be topping out for now,” says Eric Fox, vice president of statistical and economic modeling and author of VeroFORECAST.
The future HPI forecast continues to show good appreciation that demonstrates an overall healthy real estate market, but a slight quarterly increase that indicates much slowing in the forecasted rate.
Over 90% of the markets across the country are expected to see price appreciation, Fox adds. Despite currently strong appreciation forecasts, weaker increases are expected in the top five markets (typically metro areas with more than 250,000 residents) compared to the previous quarter’s top markets, which topped at 15%.
The projected five strongest markets are: San Francisco-Oakland-Fremont, Calif., at 13.4%; San Jose-Sunnyvale-Santa Clara, Calif., is 10.7%; Seattle-Tacoma-Bellevue, Wash., is 10.2%; Los Angeles-Long Beach-Santa Ana, Calif., is 9.6%; Midland, Texas at 9.5%.
Meanwhile, depreciation levels that are still present tend to be down between 1% and 2%.
VeroFORECAST finds that local population trends and unemployment rates remain the key drivers with the least populated metro areas expected to perform the worst. (Average population of the top 50 metros is 2.4 million and the average population of the bottom 50 metros is 527,000).
Nonetheless, most underperforming markets are primarily in the Northeast, with parts of Connecticut and some sections of New York, New Jersey and Maryland expected to fare poorly compared to the remainder of the U.S. due to persistent unemployment and demand factors.
Thursday, January 16, 2014
Foreclosure filings drop 25%
Foreclosure filings plummeted 26% from 2012 to 2013, with 1.4 million actions recorded last year — the lowest annual total since 2007.
Default data firm RealtyTrac published those numbers Thursday in its Foreclosure Market Report, noting that since the peak of foreclosure filings in 2010, completed default actions have fallen 53%.
Back in 2010, 2.9 million properties faced foreclosure filings.
"Millions of homeowners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst — both in the form of homes lost to directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales," said Daren Blomquist, vice president at RealtyTrac.
"But the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater numbers of scheduled foreclosure auctions in 2013 in judicial states — which account for the bulk of U.S. foreclosure inventory," Blomquist added.
The amount of housing units that had at least one foreclosure filing during the year fell to 1.04% from 1.39% in 2012.
Meanwhile, the five states with the highest foreclosure rates in 2013 included Florida (3.01%), Nevada (2.16%), Illinois (1.89%), Maryland (1.57%) and Ohio (1.53%).
In December alone, more than 1.2 million properties nationwide were in some stage of foreclosure or bank owned, down 19% from December 2012.
In addition, Florida accounted for the biggest share of U.S. foreclosure inventory, with 306,018 properties in some stage of foreclosure or bank owned — 25% of the national total.
However, Florida’s foreclosure inventory was almost unchanged from a year ago, while still down 18% from the peak of 371,216 in November 2010.
Default data firm RealtyTrac published those numbers Thursday in its Foreclosure Market Report, noting that since the peak of foreclosure filings in 2010, completed default actions have fallen 53%.
Back in 2010, 2.9 million properties faced foreclosure filings.
"Millions of homeowners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst — both in the form of homes lost to directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales," said Daren Blomquist, vice president at RealtyTrac.
"But the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater numbers of scheduled foreclosure auctions in 2013 in judicial states — which account for the bulk of U.S. foreclosure inventory," Blomquist added.
The amount of housing units that had at least one foreclosure filing during the year fell to 1.04% from 1.39% in 2012.
Meanwhile, the five states with the highest foreclosure rates in 2013 included Florida (3.01%), Nevada (2.16%), Illinois (1.89%), Maryland (1.57%) and Ohio (1.53%).
In December alone, more than 1.2 million properties nationwide were in some stage of foreclosure or bank owned, down 19% from December 2012.
In addition, Florida accounted for the biggest share of U.S. foreclosure inventory, with 306,018 properties in some stage of foreclosure or bank owned — 25% of the national total.
However, Florida’s foreclosure inventory was almost unchanged from a year ago, while still down 18% from the peak of 371,216 in November 2010.
Wednesday, January 15, 2014
Blackstone-backed real estate firm learns how to be a landlord
A number of big companies are betting against the American Dream. They think lots of people are going to want to rent instead of buy a home. One of the biggest bet-makers, with 40,000 rental properties under its belt, is Invitation Homes.
Realtor Jim Tice first noticed the company popping up as a buyer in a Minneapolis suburb. He was trying to sell a client's house that was headed to foreclosure. Then the client got a cash offer from Invitation Homes. Tice says the company provided a bank statement to prove it had enough cash to cover the deal. He says the account balance was eye-popping.
"A buyer usually isn't showing you millions of dollars of savings in order to buy. So it was pretty impressive in that respect," Tice says.
Invitation Homes is a subsidiary of the Blackstone Group, the world's largest private equity firm. And over the past year and a half, it has spent a whopping $7.5 billion buying those 40,000 properties—1,000 of them in the Twin Cities.
Invitation Homes largely buys low-priced foreclosures. Then it spiffs them up and rents them out. Experts say large-scale purchases of foreclosures by investors like Invitation Homes have helped housing markets heal.
"Had it not been for them, prices would've fallen further and it would've taken longer to recover," says Elliot Eisenberg, a housing economist.
Eisenberg says since the foreclosure crisis, credit standards have tightened and a lot of people can't get a mortgage. As a result, Invitation Homes and other big investors are betting that home rentals will become increasingly popular.
"It's certainly a bet. Whether it's worth making -- we'll know in a couple years how it turns out," he says.
Until recently, it's largely been mom and pop outfits that rent houses. Eisenberg says big investors could potentially run that business more professionally.
So far, Micheal Apple has had a good experience renting a four-bedroom house from Invitation Homes in a Minneapolis suburb. Apple says if something's broken, his property manager jumps right on it.
"Either I call her or I email her, and she gets back to me within a day or so," he says.
Not so for another Twin Cities renter, Brad Dukes. He's got a beef about the "throne" in his rental home. When Dukes sits on the toilet, his knees barely clear the wall in front of him.
Dukes says the house was advertised as having two bathrooms. But one was just a free-standing toilet in the basement. Invitation Homes agreed to frame up a real bathroom and dropped a few thousand dollars to add walls, a shower and a sink.
Still, Dukes is dismayed by the end product.
"The exterior of this box they put in this unfinished room is going to remain. I'm going to be looking at sheetrock," he says.
Renters in other markets have panned Invitation Homes in online reviews. But in the Twin Cities at least, the company may not have enough renters yet to establish a clear track record. I checked out a random sample of homes the company's purchased. All of them were vacant, some for more than six months.
Andrew Gallina is a spokesman for Invitation Homes. He's aware of the empty houses and complaints from renters. Gallina admits the company is still learning the ropes. It has, after all, purchased 40,000 homes in a short period of time.
"There are times we're going to be disappointing to a resident. But at the same time, we have a real commitment to getting it right," he says.
Of course, if the landlord gig doesn't work out, the firm always has an exit strategy: Sell the homes at a profit as prices rise.
Realtor Jim Tice first noticed the company popping up as a buyer in a Minneapolis suburb. He was trying to sell a client's house that was headed to foreclosure. Then the client got a cash offer from Invitation Homes. Tice says the company provided a bank statement to prove it had enough cash to cover the deal. He says the account balance was eye-popping.
"A buyer usually isn't showing you millions of dollars of savings in order to buy. So it was pretty impressive in that respect," Tice says.
Invitation Homes is a subsidiary of the Blackstone Group, the world's largest private equity firm. And over the past year and a half, it has spent a whopping $7.5 billion buying those 40,000 properties—1,000 of them in the Twin Cities.
Invitation Homes largely buys low-priced foreclosures. Then it spiffs them up and rents them out. Experts say large-scale purchases of foreclosures by investors like Invitation Homes have helped housing markets heal.
"Had it not been for them, prices would've fallen further and it would've taken longer to recover," says Elliot Eisenberg, a housing economist.
Eisenberg says since the foreclosure crisis, credit standards have tightened and a lot of people can't get a mortgage. As a result, Invitation Homes and other big investors are betting that home rentals will become increasingly popular.
"It's certainly a bet. Whether it's worth making -- we'll know in a couple years how it turns out," he says.
Until recently, it's largely been mom and pop outfits that rent houses. Eisenberg says big investors could potentially run that business more professionally.
So far, Micheal Apple has had a good experience renting a four-bedroom house from Invitation Homes in a Minneapolis suburb. Apple says if something's broken, his property manager jumps right on it.
"Either I call her or I email her, and she gets back to me within a day or so," he says.
Not so for another Twin Cities renter, Brad Dukes. He's got a beef about the "throne" in his rental home. When Dukes sits on the toilet, his knees barely clear the wall in front of him.
Dukes says the house was advertised as having two bathrooms. But one was just a free-standing toilet in the basement. Invitation Homes agreed to frame up a real bathroom and dropped a few thousand dollars to add walls, a shower and a sink.
Still, Dukes is dismayed by the end product.
"The exterior of this box they put in this unfinished room is going to remain. I'm going to be looking at sheetrock," he says.
Renters in other markets have panned Invitation Homes in online reviews. But in the Twin Cities at least, the company may not have enough renters yet to establish a clear track record. I checked out a random sample of homes the company's purchased. All of them were vacant, some for more than six months.
Andrew Gallina is a spokesman for Invitation Homes. He's aware of the empty houses and complaints from renters. Gallina admits the company is still learning the ropes. It has, after all, purchased 40,000 homes in a short period of time.
"There are times we're going to be disappointing to a resident. But at the same time, we have a real commitment to getting it right," he says.
Of course, if the landlord gig doesn't work out, the firm always has an exit strategy: Sell the homes at a profit as prices rise.
Just how seriously should we take the latest bank earnings?- don't be fooled
It's a big week for the big banks. Bank of America beat expectations with its earnings report today, $3.4 billion last quarter. Earlier this week, Wells Fargo announced record profit. JP Morgan had better than expected earnings.
"You can tell that the banking industry is recovering, and that our economy is on a recovering path," says Ken Carow, a finance professor at Indiana University's Kelley School of Business.
But, turns out these banking numbers maybe smell a little sweeter than they really are. The effects of the housing crisis linger on these balance sheets. Banks are writing fewer mortgages. They're facing lawsuits, government settlements.
One thing propping up these earnings reports—accountants. Big banks are adding billions of dollars from reserves that they'd set aside for loan-losses that never came to be. "Now they are reducing the reserve for the bad loans, and are going to have a positive income effect," says Anne Beatty, an accounting professor at Ohio State University. But, be very clear, "there's no cash flow associated related to this income being created. It is a pure accounting effect."
So what's a regular investor to do?
Fight back, with some math of your own.
"Do some accounting," says David Stowell, a finance professor at Northwestern University's Kellogg School of Management, "it's not easy to do, and you have to look carefully at the financial statements." But, he says, it's worth it. There's a lot of accounting noise in these earnings reports, obscuring the actual business of banking.
"You can tell that the banking industry is recovering, and that our economy is on a recovering path," says Ken Carow, a finance professor at Indiana University's Kelley School of Business.
But, turns out these banking numbers maybe smell a little sweeter than they really are. The effects of the housing crisis linger on these balance sheets. Banks are writing fewer mortgages. They're facing lawsuits, government settlements.
One thing propping up these earnings reports—accountants. Big banks are adding billions of dollars from reserves that they'd set aside for loan-losses that never came to be. "Now they are reducing the reserve for the bad loans, and are going to have a positive income effect," says Anne Beatty, an accounting professor at Ohio State University. But, be very clear, "there's no cash flow associated related to this income being created. It is a pure accounting effect."
So what's a regular investor to do?
Fight back, with some math of your own.
"Do some accounting," says David Stowell, a finance professor at Northwestern University's Kellogg School of Management, "it's not easy to do, and you have to look carefully at the financial statements." But, he says, it's worth it. There's a lot of accounting noise in these earnings reports, obscuring the actual business of banking.
Outlook for Originations Volume Is a Little Worse: Fannie
Originations will drop 30% in 2014 from an estimated $1.8 trillion in 2013 in Fannie Mae’s latest forecast, according to Doug Duncan, senior vice president and chief economist.
The projected decline to close to $1.26 billion is a little pessimistic than in Fannie’s December originations forecast for almost $1.32 billion in 2014, but more optimistic than the Mortgage Bankers Association’s recent forecast for just above $1.1 trillion in annual volume.
Fannie’s most recent forecast also calls for about a 37% refinancing share, a 1.7% increase in existing home sales and a 20% increase in new home sales. All these percentages are slightly more pessimistic that last month’s.
“We are cautious about the rate rise,” Duncan says.
Institutional purchases of rental housing have subsided, Duncan told editors of this publication at a meeting in New York. The apartment sector should be stable in the coming year, he says.
Monday, January 13, 2014
Ginnie Mae Mortgage Bond Issuance Tumbles
Ginnie Mae mortgage-backed securities issuance dropped 36% in the fourth quarter from the prior quarter to the lowest level since 2008, according to newly released agency data.
Issuers securitized $76 billion in Federal Housing Administration and other government-backed loans in the final quarter of 2013, down from $119 billion in 3Q.
Ginnie MBS issuance in December fell to $22.3 billion, which is the lowest level since March 2010.
The bulk of the decline comes from the sharp drop in refinancings during the fourth quarter, which is evident from Fannie Mae and Freddie Mac’s monthly reports.
Loan volumes have been declining across all single-family loan programs, but Federal Housing Administration loan production is falling at a particularly fast rate.
FHA endorsements have fallen steadily from 105,955 in July to 61,300 in November, the latest data from HUD show.
FHA purchase loan endorsements have dropped from 66,555 in July to 47,900 in November.
FHA loans along with loans guaranteed by the Department of Veterans Affairs and U.S. Department of Agriculture back Ginnie Mae securities.
Historically, the split between FHA, VA and USDA purchase originations was around 80% (FHA) and 20% (VA/USDA), according to mortgage consultant Brian Chappelle.
“It was about 66%-34% recently. I would bet it is now even closer to 50%-50%,” he says. The consultant is a co-founder of Potomac Partners in Washington.
Friday, January 10, 2014
Radian Takes More Than 1,600 Delinquencies Off Its Books in December- but is this number misleading
Radian Guaranty was able to remove more loans from its delinquent loan inventory in December than Mortgage Guaranty Insurance Corp., but both had more new notices than cures.
There were 4,104 cures and 2,084 paid claims during the month. As of Dec. 31, the inventory is 60,909 loans, a reduction of 1,647.
Last December, Radian’s inventory grew by 399 loans.
MGIC only had a 1,309 loan reduction. Its delinquency inventory started at 104,637, with 8,980 new notices.
In November, MGIC had more cures than new notices.
Cures took out 7,259, while it paid 2,445 claims, rescinded or denied coverage on 158 loans and removed an additional 427 loans from the inventory because of the settlement with Bank of America/Countrywide. There are now 103,328 loans in the inventory.
During December Radian had $2.9 billion of primary new insurance written, while MGIC did $2.1 billion. This compares with $3 billion for Radian and $2.2 billion for MGIC in November. In December 2012, Radian’s volume was $3.9 billion and MGIC was $2.2 billion.
Thursday, January 9, 2014
1 in 5 homeowners drowning- 9.3 million U.S. residential properties are underwater
RealtyTrac released its U.S. Home Equity & Underwater Report for December 2013, which shows that 9.3 million U.S. residential properties were deeply underwater, or about 1 in 5 of every property with a mortgage.
"Deeply underwater" is defined as worth at least 25% less than the combined loans secured by the property.
That was down from 10.7 million residential properties deeply underwater in September 2013, representing 23% of all properties with a mortgage, and down from 10.9 million properties deeply underwater in January 2013, representing 26% of all properties with a mortgage.
The high watermark for being deeply underwater came in May 2012, when 12.8 million U.S. residential properties were deeply underwater, representing 29% of all properties with a mortgage.
"During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity, which in turn put millions of homeowners at higher risk for foreclosure when they encountered a trigger event such as job loss," said Daren Blomquist, vice president at RealtyTrac. "Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure when they encounter a trigger event. On the other end of the spectrum, the percentage of equity-rich homeowners is nearing a tipping point that should result in a larger inventory of homes listed for sale and give the overall economy a nice shot in the arm in 2014."
“However, there are still millions of homeowners who are in such a deep equity hole that it will take years for them to regain their equity," Blomquist added. "The longer these homeowners remain in a negative equity position without relief in the form of a principal loan balance reduction, the more likely that foreclosure will become the path of least resistance for them."
The universe of equity-rich properties — with at least 50% equity — grew during the fourth quarter as well, from 7.4 million representing 16% of all residential properties with a mortgage in September, to 9.1 million representing 18% of all residential properties with a mortgage in December.
“With available home inventory and interest rates at all-time lows, we experienced an increased rate of appreciation throughout the Ohio housing market during the fourth quarter of 2013," said Michael Mahon, executive vice president/broker at HER Realtors, covering the Cincinnati, Columbus and Dayton markets in Ohio.
RealtyTrac’s report also found the following:
"Deeply underwater" is defined as worth at least 25% less than the combined loans secured by the property.
That was down from 10.7 million residential properties deeply underwater in September 2013, representing 23% of all properties with a mortgage, and down from 10.9 million properties deeply underwater in January 2013, representing 26% of all properties with a mortgage.
The high watermark for being deeply underwater came in May 2012, when 12.8 million U.S. residential properties were deeply underwater, representing 29% of all properties with a mortgage.
"During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity, which in turn put millions of homeowners at higher risk for foreclosure when they encountered a trigger event such as job loss," said Daren Blomquist, vice president at RealtyTrac. "Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure when they encounter a trigger event. On the other end of the spectrum, the percentage of equity-rich homeowners is nearing a tipping point that should result in a larger inventory of homes listed for sale and give the overall economy a nice shot in the arm in 2014."
“However, there are still millions of homeowners who are in such a deep equity hole that it will take years for them to regain their equity," Blomquist added. "The longer these homeowners remain in a negative equity position without relief in the form of a principal loan balance reduction, the more likely that foreclosure will become the path of least resistance for them."
The universe of equity-rich properties — with at least 50% equity — grew during the fourth quarter as well, from 7.4 million representing 16% of all residential properties with a mortgage in September, to 9.1 million representing 18% of all residential properties with a mortgage in December.
“With available home inventory and interest rates at all-time lows, we experienced an increased rate of appreciation throughout the Ohio housing market during the fourth quarter of 2013," said Michael Mahon, executive vice president/broker at HER Realtors, covering the Cincinnati, Columbus and Dayton markets in Ohio.
RealtyTrac’s report also found the following:
- States with the highest percentage of residential properties deeply underwater in December were Nevada (38%) Florida (34%) Illinois (32%) Michigan (31%) Missouri (28%) and Ohio (28%).
- Major metropolitan statistical areas with the highest percentage of residential properties deeply underwater in December were Las Vegas (41%) Orlando, Fla., (36%) Detroit (35%) Tampa, Fla., (35%) Miami (33%) and Chicago (33%).
- States with the highest percentage of equity-rich residential properties were Hawaii (36%) New York (33%) California (26%) Montana (24%) and Maine (24%. The District of Columbia also posted an equity-rich rate of 24%.
- Major metropolitan statistical areas with the highest percentage of equity-rich residential properties were San Jose, Calif., (37%) San Francisco (33%) Pittsburgh (30%) Buffalo, N.Y. (30%) and Los Angeles (29%).
- States with the highest percentage of deeply underwater residential properties in the foreclosure process included Nevada (65%) Florida (61%) Illinois (61%) Michigan (55%) and Ohio (48%).
- Major metro areas with the highest percentage of deeply underwater residential properties in the foreclosure process were Las Vegas (66%) Tampa, Fla. (63%) Chicago (62%) Orlando (61%) and Detroit (61%).
- States with the highest percentage of foreclosure properties with some equity included Oklahoma (62%) Colorado (54%) New York (52%) Texas (51% and North Carolina (45%).
Wednesday, January 8, 2014
Mortgage credit loosens a bit
Accessing mortgage credit is getting a bit easier, a new report from the Mortgage Bankers Association says.
The mortgage credit availability index rose 0.6% from 110.2 in November to 110.9 in December, which means a loosening of credit on what is an otherwise flatline.
The MCAI was benchmarked to 100 in March 2012. By comparison, a 2007 benchmarking would have been scored at about 800, indicating that credit was far more available.
Investors continue tuning their credit score and LTV eligibility matrices, and many have already made changes in anticipation of new Consumer Financial Protection Bureau mortgage regulations.
The mortgage credit availability index rose 0.6% from 110.2 in November to 110.9 in December, which means a loosening of credit on what is an otherwise flatline.
The MCAI was benchmarked to 100 in March 2012. By comparison, a 2007 benchmarking would have been scored at about 800, indicating that credit was far more available.
Investors continue tuning their credit score and LTV eligibility matrices, and many have already made changes in anticipation of new Consumer Financial Protection Bureau mortgage regulations.
Mortgage credit loosens a bit
Accessing mortgage credit is getting a bit easier, a new report from the Mortgage Bankers Association says.
The mortgage credit availability index rose 0.6% from 110.2 in November to 110.9 in December, which means a loosening of credit on what is an otherwise flatline.
The MCAI was benchmarked to 100 in March 2012. By comparison, a 2007 benchmarking would have been scored at about 800, indicating that credit was far more available.
Investors continue tuning their credit score and LTV eligibility matrices, and many have already made changes in anticipation of new Consumer Financial Protection Bureau mortgage regulations.
The mortgage credit availability index rose 0.6% from 110.2 in November to 110.9 in December, which means a loosening of credit on what is an otherwise flatline.
The MCAI was benchmarked to 100 in March 2012. By comparison, a 2007 benchmarking would have been scored at about 800, indicating that credit was far more available.
Investors continue tuning their credit score and LTV eligibility matrices, and many have already made changes in anticipation of new Consumer Financial Protection Bureau mortgage regulations.
Monday, January 6, 2014
Many Real Estate Brokers Believe 5.5% Rates Will Stunt Market: Redfin
Nearly 40% of real estate agents surveyed believe home sales and price appreciation would be slowed if mortgage interest rates reach 5.5%, a survey from Redfin finds.
An additional one-third of respondents believe rates will have to get to 6% to affect sales and home values.
There is some room before conforming mortgage rates reach that point. The most recent Freddie Mac Primary Mortgage Market Survey puts rates for the 30-year fixed-rate loan at just above 4.5%.
Meanwhile the run-up in values because of the inventory shortage is creating a logjam in the market. In 4Q13, 63% of agents said sellers have "unrealistic expectations" about the value of their home, nearly flat from the third quarter. At the same time, 31% say that sellers are frustrated with the number of homes available that they would be interested in buying.
Limited inventory is the No. 1 concern for buyers, nearly nine in 10 agents say, followed by bidding wars (65% of respondents). Eight in 10 respondents in 3Q13 cited a bidding war as a buyer concern.
An additional one-third of respondents believe rates will have to get to 6% to affect sales and home values.
There is some room before conforming mortgage rates reach that point. The most recent Freddie Mac Primary Mortgage Market Survey puts rates for the 30-year fixed-rate loan at just above 4.5%.
Meanwhile the run-up in values because of the inventory shortage is creating a logjam in the market. In 4Q13, 63% of agents said sellers have "unrealistic expectations" about the value of their home, nearly flat from the third quarter. At the same time, 31% say that sellers are frustrated with the number of homes available that they would be interested in buying.
Limited inventory is the No. 1 concern for buyers, nearly nine in 10 agents say, followed by bidding wars (65% of respondents). Eight in 10 respondents in 3Q13 cited a bidding war as a buyer concern.
Friday, January 3, 2014
Fed Purchase Stepdown Will Be $10B per FOMC Meeting
Judging from its most recent monetary policy moves, it appears the Fed's current plan is to reduce monthly asset purchases by about $10 billion at each of its FOMC meetings in 2014, according to Bill McBride, author of Calculated Risk.
The reduction of monthly purchases of U.S. Treasury and mortgage-backed securities to $75 billion, instead of $85 billion, means the Fed trimmed QE from $1.02 trillion of new money it created in 2013 to $900 billion in 2014, says Richard Ebeling, professor of economics at Northwood University.
The Fed has also pledged to keep key short-term interest rates practically at zero. As a result, "for the foreseeable future, America’s central bank will continue to prevent financial markets from working properly,” he adds.
Artificially low interest rates and the Fed’s control over prices affect savers and borrowers by distorting the balance between “sustainable resource use and investment decision-making,” not allowing financial markets from correctly setting the price to borrow and lend, he argues. “This means that the ‘trimmed’ quantitative easing and interest rate manipulation continues to threaten investment instability and the danger of another boom-bust cycle further down the road.”
The Fed’s highly expansive monetary policy has primarily encouraged an increase in the demand for existing assets leading to “asset bubbles, rather than new investment," generating a boom in the stock market but inadequate returns for savers, says Nicholas A. Lash, professor of finance at the Quinlan School of Business, Loyola University Chicago.
“Moreover, low rates encourage both increased borrowing and the pursuit of higher returns through riskier investments. Did we learn nothing from the last crisis?”
In his view, the current expansive monetary policy would work if accompanied by tax cuts and less regulation, which unfortunately is not the case causing inadequate economic growth and “stubbornly high” unemployment.
Very slow economic growth and the still high unemployment rate at the 7% range are among the top concerns for this year that directly affect the housing market recovery.
“It is very likely that QE3 will be completed by the end of 2014,” notes McBride, but it is unlikely the Fed “will accelerate the pace of the taper significantly.”
The reason, McBride wrote, is because although the Fed is not on auto-pilot, it remains data-dependent.
His calculations based on Federal Open Market Committee data suggest that during its eight upcoming annual meetings of 2014, the FOMC may reduce the pace of asset purchases at about $10 billion per meeting.
In January FOMC will start reducing its purchase to $75 billion in assets, then $65 billion in February, and progressively less at each meeting all year, “and conclude QE3 at the end of the 2014.”
The Fed would slow the taper, McBride notes, only if inflation declines sharply or if the economy stalls, which he finds unlikely.
Regulation is creating a vicious circle and investor responses the Fed cannot control.
“Whenever Fed officials speak of manipulating interest rates, money supply, or other aspects of the economy, they speak of manipulating people,” says Steve Stanek, research fellow, budget and tax policy at The Heartland Institute. “If its commitment to go much longer with interest rates near zero continues the Fed’s war on savers, conservative investors, and persons living on fixed incomes.”
Going from $85 billion to $75 billion a month in money creation is virtually meaningless, he adds.
“The only sure thing from the Fed’s policies is that another bust is on the way.”
Thursday, January 2, 2014
Freddie Mac mortgage rates continue upward creep
The results of the weekly Freddie Mac mortgage survey indicate that average fixed mortgage rates continue to a slow climb entering the new year.
"Mortgage rates edged up to begin the year on signs of a stronger economic recovery," said Frank Nothaft, chief economist for Freddie Mac.
"The pending home sales index inched up 0.2% in November, after five consecutive months of decline," he added. "The Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller 20-city composite house price index rose 13.6% over the 12 months ending in October 2013."
According to Freddie, 30-year fixed-rate mortgages averaged 4.53% with an average 0.8 point for the week ending Jan. 2, 2014. This is up from the last week of December when it averaged 4.48%. One year ago, the 30-year stood at 3.34%.
The 15-year fixed averaged 3.55% with an average 0.7 point, up from last week when it averaged 3.52%. Last year it was 2.64%.
The 5-year hybrid adjustable-rate mortgage stood at 3.05% this week with an average 0.4 point. It was 3% last week and 2.71% a year ago.
The 1-year adjustable averaged 2.56% this week with an average 0.5 point, unchanged from last week and down just 0.01% from a year ago.
"Mortgage rates edged up to begin the year on signs of a stronger economic recovery," said Frank Nothaft, chief economist for Freddie Mac.
"The pending home sales index inched up 0.2% in November, after five consecutive months of decline," he added. "The Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller 20-city composite house price index rose 13.6% over the 12 months ending in October 2013."
According to Freddie, 30-year fixed-rate mortgages averaged 4.53% with an average 0.8 point for the week ending Jan. 2, 2014. This is up from the last week of December when it averaged 4.48%. One year ago, the 30-year stood at 3.34%.
The 15-year fixed averaged 3.55% with an average 0.7 point, up from last week when it averaged 3.52%. Last year it was 2.64%.
The 5-year hybrid adjustable-rate mortgage stood at 3.05% this week with an average 0.4 point. It was 3% last week and 2.71% a year ago.
The 1-year adjustable averaged 2.56% this week with an average 0.5 point, unchanged from last week and down just 0.01% from a year ago.
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