It Is Taking Longer to Sell a Home in November: Redfin

The median number of days a property for sale has remained on the market increased to 34 in November from 31 in October, according to a Redfin study of 23 markets.

The percentage of homes which entered contract within two weeks of being placed on the market remained in the area of 27% during the same time frame.
Nearly half the homes listed in San Jose during November entered into contract within two weeks and the median time a property is listed for is just 12 days.
Philadelphia is at the other end of the spectrum, with only 7% of homes going into contract within two weeks of listing, up from 6% in October. Homes here are on the market for a median of 71 days, up from 69 days in October.
Homes listed for sale in Boston are spending 25% fewer days on the market. The median time on market for a Boston for sale property is 42 days, down from 55% for October.
Redfin previously found that there were 7% fewer potential buyers seeking house tours in November versus October.

Pending Sales of U.S. Existing Homes Rise Less Than Forecast

Contracts to purchase previously owned U.S. homes rose less than forecast in November, indicating higher borrowing costs are holding back the recovery in residential real estate.
A gauge of pending home sales increased 0.2 percent, the first gain in six months, after a 1.2 percent drop in October that was larger than initially reported, the National Association of Realtors said today in Washington. The median projection in a Bloomberg survey of economists called for a 1 percent advance.
Higher mortgage rates, tight lending standards and price increases driven by a limited supply of homes for sale are discouraging some prospective buyers. Further gains in hiring, household wealth and consumer confidence would help boost the housing recovery and give greater momentum to the economy.
“Next year we think housing is going to continue to grow at a fairly solid pace,” said Daniel Silver, an economist at JPMorgan Chase & Co. in New York. “You have a story of things getting better in the economy, better job growth, driving the numbers.”
Estimates in the Bloomberg survey of 30 economists ranged from a decline of 1 percent to an advance of 5 percent.
Stocks were little changed as the Standard & Poor’s 500 Index headed toward its biggest annual gain since 1997. The S&P 500 fell less than 0.1 percent to 1,840.69 at 11:13 a.m. in New York.

Year Ago

Purchases dropped 4 percent from the year prior on an unadjusted basis after a 2.7 percent decrease in the 12 months ended in October, the NAR reported.
The pending sales index was 101.7 on a seasonally-adjusted basis. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the Realtors group.
Two of four regions showed a decrease from October, with pending home sales in the Northeast dropping 2.7 percent and the Midwest falling 3.1 percent. Pending sales rose 2.3 percent in the South and 1.8 percent in the West.
Economists consider pending home sales a leading indicator because they track contract signings. Existing-home sales are tabulated when a contract closes, usually a month or two later.
Purchases of previously owned homes dropped 4.3 percent to a 4.9 million annual rate in November, the lowest level of the year, the National Association of Realtors reported earlier this month. Nonetheless, the NAR projects 2013 will be the best year for the industry since 2006, with an estimated 5.1 million transactions.

‘Cyclical Low’

“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” NAR chief economist Lawrence Yun said in a statement.
New-home sales were close to a five-year high in November as builders responded to pent-up demand unleashed by employment gains and record stock prices.
The S&P/Case-Shiller national home-price gauge rose 11.2 percent in the third quarter from the same period in 2012, the biggest year-over-year advance since the first three months of 2006. Its index of property prices in 20 U.S. cities, set for release tomorrow, probably increased 13.5 percent in October from a year earlier, according to a Bloomberg survey.
Higher mortgage rates are also reducing affordability. The average rate for a 30-year, fixed mortgage was 4.48 percent in the week ended Dec. 26, up from 3.35 percent a year earlier. In August, the rate reached a two-year high of 4.58 percent.

Slower Growth

After two years of rapid-fire growth, the housing market shows signs of returning to normal, said Budge Huskey, president and chief executive officer of Coldwell Banker LLC, a real estate services firm in Madison, New Jersey.
“We’ve been picking up slack, that’s why the pace has been so torrid,” Huskey said in an interview. “Going forward, when we start to take a look at year-over-year gains and activity, it’s going to appear far more boring, which is not a bad thing.”
Investors and speculators who contributed to the run-up in property values in recent years are becoming a less-important factor in the market, Huskey said.
“We’re getting on the right track,” he said. “We’re now getting to a real estate environment that’s more about the fundamentals and less about these external factors that are artificially shaping the recovery.”

Ending extension for federal unemployment triggers housing concerns

News that the federal government has decided to forego an extension of long-term benefits for the unemployed prompted the California Employment Development Department (EDD) to fire off a warning notice to impacted workers.
The news affects housing mildly since many of these workers also carry mortgage debt that is now at risk without the continuation of the unemployment lifeline. In just California, the EDD says more than 220,000 long-term unemployed citizens have been notified that they will lose the federally funded extended benefits in two weeks unless lawmakers renew the extensions.
"Though the decision to renew the unemployment benefit extensions is in the hand of Congress and the President, the EDD is warning our customers that, if no further action is taken in Washington D.C., their federal extension benefits will end on Dec. 28," said Sharon Hilliard, EDD’s chief deputy director.
The development prompted the organization, Keep Your Home California, to remind homeowners that it offers 12 months of mortgage assistance under the Unemployment Mortgage Assistance Program.
"To qualify for our unemployment program, you have to receive benefits within the last 30 days," said Diane Richardson, program director for Keep Your Home California. "We have made a concerted effort to make sure homeowners receiving benefits make that call before the end of January."
Richardson says the group can pay as much as $3,000 a month to help an unemployed California borrower who applies for the program. Keep Your Home California has a partnership with the California EDD office, which sent out a special mailer advising impacted unemployment beneficiaries of some of the mortgage assistance available to them.

$500 Billion Drop in Fannie/Freddy/Ginnie MBS Insurance- AKA- less lending

The headwinds of rising interesting rates and the end of the refinancing wave could reduce agency MBS issuance by more than 30% next year.

 

Gross Fannie Mae, Freddie Mac and Ginnie Mae MBS issuance will total more than $1 trillion in 2014, down over $500 billion from 2013, MBS strategists at Bank of America Merrill Lynch are forecasting.
“That forecast is aligned with our forecast for total originations of about $1.2 trillion," Mortgage Bankers Association chief economist Mike Fratantoni told NMN.
The interest rate on the 10-year Treasury note rose above 3% on Thursday. The yield on the 10-year Treasury could reach 3.75% by yearend 2014 as the Federal Reserve proceeds with tapering and purchases fewer and fewer U.S. Treasury and agency mortgage-backed securities, accord to the MBS strategists.
“Assuming a linear taper for the Fed, its net MBS purchases in 2014 could total $240 billion,” down from $480 billion in 2013, according to a Dec. 20 BAML “Securitization Weekly” report.
Homebuilders are optimistic about the outlook for 2014, but they remained concerned about tight credit and recent declines in mortgage purchase applications, the MBS strategists noted. “As a result, we continue to think that, due to persistence of a tight mortgage credit regime, mortgage purchase volume is more likely to surprise on the downside in 2014.”
December is generally a slow time of year for buying a home. Yet purchase mortgage applications are “continuing to run more than 10% below last year’s pace,” Fratantoni said.

Happy Holidays

2013 has been an enchanted year.  On this Holiday Season, The HomeLiberty Team extends to you and your family a joyous and wonderful holiday season.  We look forward to working with you in 2014.

New Home Sales Fall

New home sales slipped 2% in November after an 18% jump in the month prior as higher prices may be sidelining some potential buyers.

The Census Bureau reported Tuesday that sales of newly constructed homes fell to a 464,000 seasonally adjusted annual rate in November from a 474,000 rate in October.
Tuesday’s report shows that new single-family home sales are up 17% from a year ago.
“The slight drop of new home sales in November from the month prior is no cause for alarm as the market remains near a five-year high in sales,” says Quicken Loans vice president Bill Banfield.
However, the inventory of new homes for sale remains tight.
The government report shows there were just 169,000 new homes on the market as of Nov. 30, which represents a 3.1-month supply at that the current sales pace. At the end of October, there were 179,000 new homes for sale and builders completed construction on 11,000 homes in November.
Yet demand for new homes is strong and it’s pushing up prices, according to economists at IHS Global Insight. The average price hit $340,000 in November, up 17% from a year ago.
“Increased buyer traffic and low inventories combined to lift the average sales price to its highest recorded value,” the Global Insight economists said.
The Census Bureau recently reported that single-family starts in November jumped to the highest level since March 2008.

AllRegs Provides Financial Education for Consumers

AllRegs is offering mortgage lenders and consumers financial education courses to help them meet requirements set forth by the Consumer Financial Protection Bureau.

As part of best practices, a mortgage lender should be supporting consumers with understanding the path to homeownership, as well as providing knowledge with regard to maintaining a home throughout the length of the mortgage.
To support this ideology, AllRegs is now providing online training that any lender can make available to their consumers, members, borrowers and potential borrowers. This homeownership training curriculum can seamlessly be accessed by users through a lender’s website.
All courses are approximately one hour, with over 22 titles to choose from including how to make and stick to a budget, the impact of credit scores, defining the industry players that homeowners will meet, and the mortgage process itself.
In addition, consumers can be made aware of how to avoid predatory scams and learn about their consumer rights.
“Financial education is a key component of any lender program to support the consumer’s protection in financial decisions,” says Dan Thoms, executive vice president of AllRegs, based in Eagan, Minn. “Lenders can now seize the opportunity to provide this turnkey financial education to their consumers and meet CFPB requirements.”