Mortgage Rates Show Biggest Weekly Leap in 26 Years!

The 30-year fixed-rate mortgage rate leaped this week, rising from 3.93 percent last week to 4.46 percent this week -- the largest weekly rise since 1987, Freddie Mac reports in its weekly mortgage market survey.

Fixed-rate mortgages soared with bond yields amid the Fed’s recent remarks on June 19 that it might soon reduce its bond purchase program, which has helped to keep mortgage rates at historical lows. The Fed plans to moderate its purchases of bonds later this year and end purchases altogether by the middle of 2014.

"Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong,” says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending June 27:

• 30-year fixed-rate mortgages: averaged 4.46 percent, with an average 0.8 point, rising from last week’s 3.93 percent average. It was the highest the 30-year fixed-rate mortgage has averaged since July 28, 2011. A year ago at this time, 30-year rates averaged 3.66 percent. 
• 15-year fixed-rate mortgages: averaged 3.50 percent, with an average 0.8 point, rising from last week’s 3.04 percent average. Last year at this time, 15-year rates averaged 2.94 percent. 
• 5-year adjustable-rate mortgages: averaged 3.08 percent, with an average 0.7 point, rising from last week’s 2.79 percent average. Last year at this time, 5-year ARMs averaged 2.79 percent. 
• 1-year ARMs: averaged 2.66 percent, with an average 0.5 point, rising from last week’s 2.57 percent average. A year ago at this time, 1-year ARMs averaged 2.74 percent. 

Source: Freddie Mac

30-year Mortgage Rate at 2-Year High

Average U.S. rates on fixed mortgages surged this week to their highest levels in two years, and the rate on the 30-year loan jumped by the most in 26 years.

The increase is evidence that the Federal Reserve’s comments about possibly reducing its bond purchases are already affecting consumers.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan jumped to 4.46 percent. That’s up from 3.93 percent last week and is the highest since July 2011. The increase was also the biggest since April 1987.

The rate on the 15-year mortgage rose to 3.50 percent from 3.04 percent last week. That’s the highest since August 2011.

Interest rates jumped after Fed Chairman Ben Bernanke said on June 19 that the Fed could slow its bond purchases later this year if the economy strengthens. Since Bernanke’s comments, the yield on the 10-year Treasury note has risen to a two-year high. Mortgage rates tend to track the yield on the Treasury note.

Mortgage rates remain low by historical standards. But the sudden jump in rates could make home buying more expensive with each passing week.

A buyer taking out a $200,000 mortgage at a 3.35 percent rate would pay $881 a month, according to Bankrate.com. The monthly mortgage payment jumps to $1,008 a month at a rate of 4.46 percent. That’s an increase of $127 a month, which over 30 years adds $45,720 to the cost of the loan. The figures don’t include taxes and insurance.

Patrick Newport, an economist at IHS Global Insight, doesn’t see the rise in mortgage rates dampening the housing market over the long term.

“We will probably see some impact. … Any time the price of something goes up, people buy it,” Newport said. “But demand for housing is so strong right now. Higher mortgage rates won’t do much to slow down the housing market.”

Rates remain historically low, he noted, and there’s still pent-up demand for houses after several years of depressed construction and a limited number of homes for sale.

A more pressing problem than higher rates is the availability of credit for home borrowers, Newport said. The biggest barrier for many homebuyers has been difficulty obtaining a mortgage. Banks have tightened lending standards since the financial crisis erupted in 2008.

Copyright: Associated Press 2013

Investors Taking a More Cautious Approach to Real Estate

Investors are becoming cautious about appreciation in home prices in some markets and the possibility of lower affordability, according to a report by Bank of America Merrill Lynch.

While investors have helped to stabilize the housing market in the downturn, they now may start to back away from the market, which will leave opportunities for other home buyers to step in.

Investor demand has been shrinking as the number of distressed homes shrinks. Investors mostly targeted the hardest hit housing markets to take advantage of low home prices. Investor transactions make up the highest share of total transactions in Miami, according to first-quarter data from RadarLogic.

"This will be part of the transition back to a more normal housing market, but also another reason to expect slowing price appreciation in coming years," writes Chris Flanagan, Michelle Meyer and Justin Borst, mortgage-backed securities strategists for Bank of America Merrill Lynch. "The dynamics of investor buying and their subsequent sales will be important to monitor over the coming years.”

Source: “Changing market leaves investors cautious on housing,” HousingWire (June 26, 2013)

Tips for Buyers to Act Quickly

Tips for buyers to act quickly due to homes selling quickly:-

Get pre-approved, not just pre-qualified: This helps show the seller that the buyer is serious about this home purchase and has a greater likelihood of being approved for a loan and making it to closing.

Be responsive to lender requests for extra information: “If you are diligent about providing the lender everything they request, you should be able to close in 25 days or less, provided the real estate agent title company and everyone is diligent about meeting contractual time frames,” says Scott Sheldon, a loan officer with Sonoma County Mortgages.

Be decisive, but not careless: Real estate professionals usually advise that no matter how much of a hurry a buyer is in they should still make their offer contingent upon a satisfactory home inspection. Buyers don’t want to get stuck with a problematic home, says NAR Spokesman Walt Molony.

Source: “How Fast Can You Buy a Home?” Credit.com (June 24, 2013)

Pending Sales Highest Since 2006

Pending home sales increased in May to the highest level in over six years, indicating a potential spark as mortgage interest rates began to rise, according to the National Association of REALTORS®.

The Pending Home Sales Index is a leading indicator of home sales based on contract signings, and it increased by 6.7 percent to 112.3 in May from 105.2 in April, and is 12.1 percent above May 2012 when it was 100.2. Contract activity is at its strongest pace since December 2006, when it reached 112.8. In addition, pending sales have now been above year-ago levels for 25 consecutive months.

Lawrence Yun, NAR chief economist, said there may be a fence-jumping effect. “Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher,” he said. “This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand.”

Source: NAR

New Home Orders for Lennar Jump 27%

The nation’s 3rd largest home builder is showing stronger than expected gains in revenue and home sales during the spring selling season.

As home prices continue to rise, Lennar Corp. observed a 53 percent increase in second quarter revenue. The company also reported new home orders increasing 27 percent, illustrating an encouraging housing recovery.

As buyer demand outpaces supply, Lennar has increased its selling price by 13 percent and achieve an average sales price of $283,000 during the second quarter.

Lennar has been actively purchasing land to try to meet increased demand. The company’s backlog of ordered homes that have not yet been completed rose 55 percent in the second quarter.
Lennar’s competitor Toll Brothers, a builder of luxury homes, recently reported that its second quarter profit increased 46 percent, mainly due to higher demand among buyers and higher selling prices. 

Source: “Lennar Says Results Point to Solid U.S. Housing Recovery,” Reuters (June 25, 2013) and “Lennar sales jumps, sees 'solid housing recovery',” The Wall Street Journal (June 25, 2013)

Less Home Owners Falling Behind on Payments

U.S. mortgage delinquency rate continues to fall, which is a positive sign for the housing recovery. The delinquency rate fell 2.11 percent in May and is now 12 percent below the levels from one year ago, according to mortgage performance data from Lender Processing Services.

There are about 3 million properties that are 30 or more days past due on their mortgage payments but not yet in foreclosure, representing a delinquency rate of 6.08 percent. However, according to LPS, there are about 1.5 million homes in some stage of foreclosure.

The states with the highest percentage of delinquent loans are:

• Florida
• New Jersey
• Mississippi 
• Nevada
• New York 

Source: “Loan Delinquency Continues to Improve, Falling 2.11% Last Month,” Mortgage News Daily (June 25, 2013)

New Home Sales Now at Fastest Pace For Five Years

For the third consecutive month, sales of new single-family homes increased, up by 2.1 percent in May, according to housing data by HUD and the U.S. Census Bureau.

Builders are seeing increased demand for new homes with buyers looking to take advantage of low mortgage rates while they can. People are more confident about purchasing a home as price increases are sustained and inventories remain low.

New-homes sales are now at the fastest pace since July of 2008. Inventories also rose in May, hitting a 4.1-month supply at the current sales pace.

Regionally, sales posted double-digit increases in May by 40.7 percent in the Midwest and a 20.7 percent increase in the Northeast. In the West, new-home sales rose 3.6 percent while posting a 9 percent decrease in the South.

Source: National Association of Home Builders

Panther Ridge Homes For Sale

Panther Ridge homes are built on either 1+ acre lots or 5+ acre lots. The larger size of these home sites affords Panther Ridge real estate a sense of privacy and lends the community a more stately aesthetic.

The picturesque landscape of the area is one of the main attractions of Panther Ridge homes. Just imagine living beneath mature hammocks of pine and oak and enjoying the gentle bubbling of creeks as they trickle through the untouched land that surrounds your property.

Panther Ridge real estate really is magical.

Panther Ridge offers charming country living with estate-property distinction. Its natural setting evokes 'old Florida' and is vast enough for residents to enjoy horseback riding, elaborate gardens and complete privacy.

Single-family homes are showcased on home sites that encompass from five to twenty acres. Designs vary from 'old Florida' southern estates to modern country mansions, each adding its own luster to this beautifully-conceived equestrian community.

"The Preserve" is one of several communities which make up Panther Ridge, an attractive development of acre plus home sites in Eastern Manatee County, Florida. The Preserve is located on State Route 70, just 10 miles east of Interstate 75. This location is in close proximity to the culture and cuisine of Sarasota and the gulf coast, world class golf and other amenities.

The community is nestled in a setting of natural beauty and wildlife. The lakes and trees are as plentiful as the warm sunshine. Sandhill cranes, ibis and heron are abundant, as well as turtles, armadillos and deer. The Preserve is also host to a rare Scrub Jay preserve, as well as many other beautiful birds and animals.

Panther Ridge real estate is an upscale community that has been one of Bradenton, Florida’s best kept secrets. This area is abounding with new development all around bringing growth to the local economy and putting Panther Ridge in the forefront of home communities. Panther Ridge offers luxury estate homes and real estate for sale in Manatee County. Panther Ridge is a deed restricted community located on just the outskirts of Sarasota, Florida. Its prime location off State Road 70 is central to everything.

You are just moments away from local Bradenton restaurants, shops, schools and churches. If you like partaking in the latest events at Lakewood Ranch Main Street, that too is just a short drive away. Panther Ridge offers convenience for those who want the benefits of city living with a country atmosphere boasting the more land the better. Panther Ridge real estate is most appealing to those who want the best of both worlds.

Panther Ridge homes for sale

New Home Sales Now at Fastest Pace in Five Years

Sales of new homes rose in May to the fastest pace in five years, a solid gain that added to signs of a steadily improving housing market.

New home sales rose 2.1 percent last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008, the Commerce Department reported Tuesday.

The median price of a new home sold in May was $263,900, up 3.3 percent from a year ago.

Sales of new homes remain below the 700,000 annual rate that’s considered healthy by most economists. But the pace has increased 29 percent from a year ago.

Analysts say the housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some drag from higher taxes and federal spending cuts.

The sales gains in May were led by a 40.7 percent increase in the Midwest followed by a 20.7 percent gain in the Northeast. Sales were also up 3.6 percent in the West but they fell 9 percent in the South.

The inventory of unsold homes rose 2.5 percent to 161,000 in May, the highest level since August 2011 but still just 13 percent higher than the record low for inventories set in July 2012. Prices of new homes have been rising in part because more people are bidding on a limited number of homes.

The National Association of Realtors reported last week that sales of previously occupied homes surpassed 5 million in May. It was the first time that’s happened in 3 1/2 years.

Sales of previously owned homes rose to an annual rate of 5.18 million in May. The last time sales had exceeded 5 million was in November 2009, a month when the pending expiration of a home-buying tax credit briefly inflated sales.

Steady hiring and low mortgage rates have encouraged more people to buy homes. And with demand up, prices rising and few homes on the market, builders have grown more optimistic about their prospects, leading to more construction and jobs.

Last week, Federal Reserve Chairman Ben Bernanke cited the housing gains as a major reason the Fed’s economic outlook has brightened.

Still, mortgage rates have jumped in recent weeks. And they’re expected to rise further now that the Fed has signaled it plans to scale back its bond purchases this year if the economy continues to strengthen. A pullback in the bond purchases would likely send long-term borrowing rates up. Higher mortgage rates could slow some of the housing market’s momentum.

For now, a brighter outlook for housing has made builders more optimistic. The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 52, up from 44 in May.

That was the highest reading in more than seven years and the largest monthly increase in more than a decade. A reading above 50 indicates that more builders view sales conditions as good rather than poor.

Source: Associated Press 2013

First Impressions Matter More Than Ever

A good first impression is important in real estate. Online appeal gets buyers to view the home in person, and curb appeal gets them in the door.

With 90 percent of buyers looking for homes online, listing photos are crucial and should not be blurred or distorted, taken at the wrong time of day, or overly focused on furniture or other items.

When it comes to curb appeal, here are some suggestions for sellers:

Add plants at the front corners of the yard, along driveways or walkways, and in front of the house

• Fertilize grass and shrubs
• Replace worn gutters
• Patch driveway cracks
• Spruce up or replace the front door
• Install exterior lighting
• Ensure that entry hardware matches

To jazz up the entryway, sellers should remove clutter and personal items, remove dated carpeting, and ensure that the home smells nice. As for other improvements, experts say sellers should pay close attention to return on investment, spending most of their money in the kitchen and bathrooms but avoiding major overhauls given that buyers are likely to make changes when they move in.

Source: "Make Prospective Buyers' First Impressions Truly Count" Sarasota Herald-Tribune (FL) (06/22/13)

High-End Home Buyers Get Loan Boost

Jumbo loans are reportedly becoming easier to obtain, which may be welcome news for high-end home buyers.

Jumbo loans are mortgages larger than $417,000 in most parts of the nation and $625,000 in high-cost areas.

In the first quarter of 2013, lenders originated $54 billion in jumbo loans, up from $47 billion one year earlier, according to Inside Mortgage Finance.

Many jumbo lenders also reportedly are increasing the amount of a home’s value they will agree to finance.

“The pickup in jumbo lending comes as home prices are rising and banks are looking to build closer ties with affluent clients and put more loans on their balance sheets,” The Wall Street Journal reports.

J.P. Morgan Chase originated $5.6 billion in jumbo loans in the first quarter, which is 67 percent more than a year ago.

"Housing prices are going up, consumer confidence is growing, and the affluent segment is in better shape," says Kevin Watters, chief executive of mortgage banking at JP Morgan Chase.

Bank of America has increased its jumbo loan origination by 37 percent in the first five months of 2013.

Source: “High-End Home Loans Stage a Comeback,” The Wall Street Journal (June 21, 2013)

Five Questions Buyers Should Consider

Your home buyers find the house they love, they’ve had it inspected, and they’re ready to go to closing. But to make sure they stay happy after they move in, real estate professionals say that buyers need to add the following items to their checklist: 

1. How’s the noise? Real estate professionals recommend that buyers check the noise level surrounding the home at various times of day and days of the week, such as the weekday versus the weekend. For example, is the home in a flight path or on an ambulance or fire truck route? 

2. Are there any easements or encroachments on the property? An easement will allow others to use a portion of your property for a specific purpose. A land survey will reveal property lines, any easements, or encroachments—such as from a garage or fence—from neighbors either intentionally or unintentionally invading the property line. 

3. Is the house up to code? Ensure that the home’s previous owners did not fail to get a permit for any major renovation project. It’ll become the buyer’s responsibility otherwise. 

4. What are the school, park, and police districts? School district boundaries can affect the home’s resale value and marketability so they're important to note, even if the buyer doesn’t have children. Also, real estate professionals say it’s important to determine whether a home lies within the local park district or not. “The upside of living in it: You pay in-district fees for fitness classes. The downside: Your tax bill might be higher,” The Chicago Tribune reports. “The same goes for library and community college districts. In-district library cards are free and tuition is less, but you are likely to pay steeper taxes.”

5. What are the local rules? Even when the buyers move in, they’ll still have to abide by city and county rules. Buyers should check with any rules by their homeowner association, if applicable, beforehand too. "If you're in the trades and your van has your company name on it, you may not be able to park it in front of the home because it is considered 'business signage,'" says Ralph Schumann, a Schaumburg, Ill., attorney. 

Source: “Don't overlook these homebuying details,” The Chicago Tribune (June 21, 2013)

International Buyers Continue To See Value in U.S. Real Estate

The National Association of REALTORS®' 2013 Profile of International Home Buying Activity, which asks REALTORS® to report their annual international business activity within the U.S. ending each March, showed that total international sales were $68.2 billion, down approximately $14 billion from the previous year. The decline is attributed to a number of temporary factors, including economic slowdowns in a number of major foreign economies, tighter credit standards in the U.S., and unfavorable exchange rates.

Despite the temporary slowdown, foreign buyers continue to have a substantial interest in U.S. properties. Over a five-year time frame, more than 70 percent of REALTORS® reported a constant or increasing level in the number of international clients contacting them.

Twenty-seven percent of REALTORS® reported having worked with international clients this year. According to those surveyed, the most important factors influencing international clients’ purchases were that the U.S. is viewed as a desirable location and that real estate is regarded as a profitable investment.

REALTORS® reported purchases from 68 countries, but five have historically accounted for the bulk of purchases. These five countries accounted for approximately 53 percent of transactions, with Canada and China as the fastest-growing sources:

• Canada (23 percent)
• China (12 percent)
• Mexico (8 percent)
• India (5 percent)
• The United Kingdom (5 percent)

Five states made up 61 percent of reported purchases:

• Florida (23 percent)
• California (17 percent)
• Arizona (9 percent)
• Texas (9 percent)
• New York (3 percent)

About half of foreign buyers preferred to purchase in a suburban area, while a quarter preferred a more central city/urban area.

Source: NAR

Finally, Appraisals Are Playing Catch-Up

Many real estate professionals have been blaming low appraisals for derailing transactions over the last few years. But now home prices are heating up across the country, are appraisals still coming in lower than the agreed-upon sales price?

Even with prices rising and the number of foreclosures falling, some appraisers say assigning a value to a property isn’t getting any easier. One of the big reasons, they say, is because of low inventories in many markets. An undersupply of available homes has prompted bidding wars above list price, a price that isn’t necessarily justified by an appraisal.
Appraisers say they are using sound data to base their valuations, including motivations of buyers and sellers. 

Consumers don't always value the appraiser in a friendly light because they are the person coming in and saying yea or nay, and they've been the bearer of bad news for too many years. Homeowners don't really know where the values are. They're hearing rosy values in some markets, but not all, and a lack of real data does not support a higher appraisal.

Source: “As housing warms up, appraisers feel the heat,” The Chicago Tribune (June 21, 2013)

Home Sellers’ Ranks Growing

The big jump in home prices in the past year is finally bringing more sellers to the housing market, but inventories remain lean.

The number of existing homes for sale ticked up to 2.2 million in May, up 3.3 percent from April, the National Association of Realtors said Thursday.

When adjusted for seasonal factors, inventory has risen for four months in a row, suggesting the supply bottom came in January, says Jed Kolko, economist for real estate website Trulia.

The new sellers are making moves they’ve put off for years as home prices tanked. They’re taking jobs in other locations, enjoying fast sales of existing homes. And some are pricing properties at levels higher than Realtors think prudent – and getting their price anyway.

The new sellers hardly constitute a flood, more like a trickle from a huge lake. They still are far too few for the balance of power in many markets to shift from sellers to buyers, says Budge Huskey, CEO of Coldwell Banker. But with home prices up 12 percent in April from a year ago, more are expected if prices continue to rise.

“There is huge pent-up seller demand,” Huskey says. “Every Realtor knows a seller who’d like to move to the next chapter in their life.”

Martha Gove and Josh Cohen are doing just that.

They’re moving just three blocks from their current home in Ann Arbor, Mich., to a bigger home they just bought.

The couple were “waiting and watching” for three years to find a suitable home for sale. In recent months, “things finally started to loosen up,” says Gove, 40, a lawyer.

In May, Ann Arbor posted an 11 percent jump in homes listed for sale from April, Realtor.com says – almost twice as much as the national average. And its May asking prices tracked by Realtor.com were up 17 percent from a year earlier.

Ann Arbor’s market is so strong that the couple is attempting to sell their home themselves. That’s not something they would have tried even six months ago, Gove says.

In the first week after listing their home, they had six showings. “People are suddenly on the move,” Gove says.

In May, existing home sales nationwide were up a robust 4.2 percent from April and almost 13 percent from a year ago, NAR says.

Supply improving but tight

The shift in supply is broad-based.

Earlier this month, the number of homes listed for sale on real estate website Zillow was down 12.2 percent year-over-year. That’s still better than in January, when listings were down almost 18 percent year-over-year.

Data from brokerage Redfin, which tracks listings in 19 major markets, including Los Angeles, Chicago and Philadelphia, shows listings down 22 percent in May from a year ago. That’s also better than the 32 percent year-over-year drop in January.

Realtor.com, which tracks listings in 146 markets nationwide, shows listings up 5.8 percent in May from April.

But in 18 of the markets, including Los Angeles, Orlando and Seattle, inventory was up 10 percent or more in May from April.

In the California cities of Stockton and Sacramento, May listings were up more than 35 percent from April. Both cities posted 22 percent price gains in April from a year earlier, market researcher CoreLogic says.

Rising home prices are likely driving the increase, Kolko says.

“Every day as prices rise, more people get back above water,” Kolko says. That makes selling easier.

Nationwide, 9.7 million, or almost 20 percent of homeowners with a mortgage, owed more on their homes than they were worth as of March, CoreLogic says. That’s down from 12.1 million at the end of 2011, just as home price gains were kicking off in many markets after a roughly 30 percent national drop.

“Sellers have finally noticed that they have some equity,” says Coldwell Banker agent Ramon Macias in San Diego. Prices there were up 17 percent in April year-over-year, CoreLogic says.

Gonzalo and Grace Hernandez never worried about whether they’d get back what they paid for their San Diego home.

That’s because they bought it just 11 months ago when prices were starting to move off their bottom. They’re now selling it to relocate to Nashville for a job change.

They paid $355,000 for the home and now have it under contract to sell for $420,000. It took a week to sell.

Nationwide, the median time on market for all homes that sold in May was just 41 days. That’s down from 72 days a year ago, NAR says.

Knowing that they’d turn a solid profit was a “big part of the decision” to accept a job transfer with his hotel chain employer, says Gonzalo Hernandez, 40.

Some sellers are getting prices that surprise even their Realtors, given tight supplies for sale in some markets and frequent multiple-offer situations.

Redfin agent Bree Al-Rashid recently handled the sale of a home in a popular Seattle neighborhood that sold for 10 percent more than she thought it was worth, based on comparable sales. The sellers were adamant that the listing price be higher than what she recommended, Al-Rashid says.

“I’ve been humbled in this market. We cannot predict what can happen,” Al-Rashid says. Seattle prices were up 16 percent in April from a year ago.

The supply of existing homes for sale in May was at 5.1 months, down from 5.2 months in April. But the supply was just 4.3 months in January, NAR data show.

That means that all homes would sell in that time frame if no more supply came on the market and sales continued at May’s pace. Generally, Realtors consider a six-month supply to be a balanced market between buyers and sellers.

Construction in play

It will be next year before the supply of existing homes for sale climbs to a six- or seven-month level, says Lawrence Yun, NAR chief economist.

One big factor is how fast home builders ramp up construction, which will increase the overall supply of homes for sale.

In the meantime, sellers still have big advantages in many markets, especially in the West where inventory tends to be tighter.

In California, May’s data show just a 2.6-month supply of single-family homes for sale – leaving that market firmly in the sellers’ camp after years of rampant foreclosures and big price drops.

“It’s amazing how quickly the dynamics have changed from a buyer’s market to a seller’s market,” Huskey says.

Copyright © USA TODAY 2013

Mortgage Rates Move Lower After Six Weeks of Rises

After six consecutive weeks of rising, mortgage rates inched slightly lower this week, with the 30-year fixed-rate mortgage staying below 4 percent.

Freddie Mac reports the following national averages for the week ending June 20:

• 30-year fixed-rate mortgages: averaged 3.93 percent, with an average 0.8 point, dropping from last week’s 3.98 percent average. A year ago at this time, 30-year rates averaged 3.66 percent. 

• 15-year fixed-rate mortgages: averaged 3.04 percent, with an average 0.7 point, dropping from last week’s 3.10 percent average. A year ago, 15-year rates averaged 2.95 percent. 

• 5-year hybrid adjustable-rate mortgages: averaged 2.79 percent, with an average 0.5 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 2.77 percent. 

• 1-year ARMs: averaged 2.57 percent, with an average 0.4 point, dropping from last week’s 2.58 percent average. A year ago, 1-year ARMs averaged 2.74 percent. 

Source: Freddie Mac

Home Prices Rising at ‘Unsustainable’ Rate According to the National Association of REALTORS®

Home prices have been soaring by double digits compared to last year’s numbers and the National Association of REALTORS® are calling the rises “unsustainable.” 

The price for existing home sales surged 15.4 percent higher in May compared to last year.
A correction in the market explains some of the increases, but with people's income rising at only 1 or 2 percent and prices rising in double digits, the question on some people's lips is can it continue?

Discounts for bank-owned homes are disappearing rapidly, particularly in markets like California, Arizona, and Florida, and prices are rising faster than traditional home prices.

It could be assumed that part of the dramatic increase in median home prices can be attributed to the foreclosure discount evaporating, suggesting that overall home price increases may be overstated.

However, according to NAR’s latest report, more expensive homes are seeing higher price rises. For example, homes priced at more than $500,000 have had prices increase by 33 percent in the last year while homes priced below $100,000 have had prices down 9 percent year-over-year.

Source: “Home Price Rise ‘Unsustainable,’ Realtors Report Says,” CNBC (June 20, 2013)

Longboat Key homes for sale

Longboat Key is a town in Manatee and Sarasota counties along the central west coast of the U.S. state of Florida, located on and coterminous with the barrier island of the same name. Longboat Key is south of Anna Maria Island, between Sarasota Bay and the Gulf of Mexico. It is almost equally divided between Manatee and Sarasota counties. The town of Longboat Key was incorporated in 1955 and is part of the Bradenton–Sarasota–Venice Metropolitan Statistical Area.

Known for tasteful luxury and manicured surroundings, Longboat Key is rich in gorgeous beaches, wildlife and upscale amenities. High-end boutiques and five-star restaurants make it an ideal destination for vacationers who like their beaches on the swankier side. Ignored by spring breakers and devoid of the garish attractions that characterize many Florida beach towns, Longboat Key is one of quietest barrier islands on the Gulf Coast—and all the more beloved for it.

Its history includes tales of explorers and Native Americans, pirates and pioneers. There are grand mansions and even grander yachts, plus some of the world’s most beautiful sunsets lining the tranquil Gulf of Mexico.

Scores of retirees, young families and romantic couples relocate or visit each year to take advantage of the superb angling, shelling, biking, shopping, dining and the luxury homes that dot its 12-mile stretch of shoreline. Just minutes away from the cultural attractions of Sarasota and world-famous St. Armand’s Circle, Longboat Key is the ideal base from which to explore the area.

Although Longboat Key is a locale that prizes its tranquil nights and lazy beach days, it also offers plenty of opportunities. Let us take the guess work out of our island by providing our local services.

Longboat Key homes for sale

Greyhawk Landing & Heritage Harbor homes for sale

Greyhawk Landing is a delightful, upscale, family friendly neighborhood. This guard-gated community offers exceptional home designs surrounded by pristine lakes, natural preserves, and beautiful wildlife. Extraordinary recreational features abound at Greyhawk Landing such as their enormous lagoon-style pool with water slides, waterfalls and spa. 

Your kids will love the playground and it’s many activities. Get your daily workouts in at the fitness center or on the tennis and basketball courts. Enjoy peaceful, walks; runs or bike rides along nearly 2 miles of nature trails. The fishing pier, soccer and baseball fields complete the family experience.

Heritage Harbour is a premier master-planned community located in East Manatee County. A prime riverfront location with more than 2,500 acres of natural beauty, including 200 acres of island in the Manatee River. The residents enjoy a family resort-style life, where amenities such as championship golf, excellent shopping and a Central Park take full advantage of the pristine location.

The Heritage Harbour community is made up of three distinct neighborhoods, Stoneybrook, River Strand and Lighthouse Cove. Each with its own personality and amenities, the varied lifestyle choices will match any taste.

River Strand, an exclusive gated Golf and Country Club, is the northernmost neighborhood.. Bordering the Manatee River, there are 27 holes of championship golf and a magnificent, Tuscan-inspired clubhouse will full amenities. Featuring a collection of gracious homes, residences range from single-family and coach homes to maintenance-free golf course condominiums. Enjoy golf, lake, preserve and river views.

Stoneybrook, with its winding roads and beautiful lakes, makes the perfect Florida experience happen everyday for its residents. Entering through the guard gate, the first views are of the sprawling golf course and beautiful clubhouse, with full amenities and dining. An additional clubhouse/community center features a magnificent pool and spa area with pavered patio, grills, playground, meeting area and library. The single-family homes are spacious, of Spanish-Mediterranean architecture, and are nestled along beautifully landscaped streets.

Lighthouse Cove offers residents a very hometown feeling at affordable prices. Located adjacent to the Central Park with 70-acre Beacon Lake, outdoor activities, family picnics and a neighborhood playground are just steps away from the residences. With features that first-time buyers won't find anywhere else, residences are town homes, condominiums and single-family homes that come with access to the Stoneybrook Clubhouse and golf course.

GreyHawk Landing & Heritage Harbour homes for sale

Is 10% Downpayment Making a Comeback?

The 10 percent down payment may be back. Reportedly, some lenders are offering 90 percent financing once again on all loan types.

RPM Mortgage, based in San Francisco, resumed its “piggyback” loans in the first quarter of this year. The company had put its piggyback loans on hiatus in late 2007 during the financial crisis. A piggyback loan allows a borrower to put down 10 percent without having to pay private mortgage insurance.

The last few years lenders have tightened up their underwriting standards and raised their downpayment requirements, mostly by enforcing a minimum of 20 percent down. That has kept some buyers on the sidelines. But certain lenders say they’re starting to cautiously ease up as home prices rise and the market picks up.

However, Julian Hebron, vice president of RPM Mortgage, says to qualify for a 10 percent down payment, applicants must still meet some high standards. For example, they must have a credit score above 700 and have monthly housing, car, student loan, and credit card debt that is no higher than 45 percent of their earnings.

In some cases, lenders are reportedly allowing borrowers to come with down payments as little as 5 percent, although those tend to come with private mortgage insurance on conforming loans that are less than $417,000 and are reserved for the most credit-worthy borrowers, says mortgage lender Tom Gildea of Prospect Lending in Rockland County, N.Y.

Source: “A Return To 10 Percent Down Payments,” Forbes.com (June 18, 2013)

Existing-Home Sales Up in May

Existing-home sales improved last month and remain solidly above a year ago, according to the National Association of REALTORS®. Total existing-home sales, which are completed sales of single-family homes, townhomes, condominiums, and co-ops, rose 4.2 percent to a seasonally-adjusted annual rate of 5.18 million in May. That number was 4.97 million in April, and is 12.9 percent higher than the 4.59 million-unit pace experienced last May.

Source: National Association of REALTORS®

Fed Stimulus Program Could End in 2014

Federal Reserve Chairman Ben Bernanke said that the Fed will begin later this year to ease up on its controversial stimulus program, which has helped to keep interest rates low. Bernanke said that the program—which includes buying up $85 billion a month in U.S. bonds and mortgage-backed securities to help strengthen the economy—may end entirely by the middle of 2014.

The Fed has signaled that it will end the “quantitative easing” program if unemployment falls to under 7 percent. Unemployment is projected to reach 6.5 percent in 2014, according to the Fed’s projections. Currently, unemployment stands at 7.6 percent.

Bernanke said that the Fed will “ease the pressure on the accelerator” if the economy continues to show improvement. The Fed has kept interest rates low to stimulate the economy and the low rates have helped boost housing affordability.

"The fundamentals look a little better to us, in particular the housing sector," Bernanke said about the decision. "State and local governments are now coming to a position where they don't have to lay off a lot of workers. The economy is improving."

Bernanke said the Fed will adjust accordingly if the economy veers from projections.

In a new report, economists with Freddie Mac say that the housing market shouldn't fear rising mortgage rates. It would take interest rates rising closer to 7 percent before families earning median incomes would face housing affordability issues, according to the mortgage giant’s latest U.S. Economic and Housing Market Outlook.

Source: “Fed sets road map for end of stimulus,” CNNMoney (June 19, 2013)

Freddie Mac: Rising Mortgage Rates 'Will Not Derail the Recovery'

Rising mortgage rates shouldn't stall the housing recovery, according to Freddie Mac’s latest U.S. Economic and Housing Market Outlook.

After steady rises the last few weeks, the 30-year fixed-rate mortgage -- the most popular among home buyers -- is expected to remain around 4 percent during the second half of 2013.

Despite the rising rates, housing still remains affordable. According to Freddie Mac economists, it would take interest rates rising closer to 7 percent before families earning median incomes would face housing affordability issues.

"The recent upturn in interest rates is sparking fears among some that the nascent economic and housing recoveries will be choked off before they produce sustained growth," says Frank Nothaft, Freddie Mac’s chief economist. "Nothing in the recent trends suggests that we need to fear a major slowdown. A gradual rise in interest rates will not derail the recovery, and are an indication that the overall economic situation is improving."

Source: Freddie Mac and “Don’t fear rising mortgage rates just yet: Freddie Mac,” HousingWire (June 18, 2013)

Senate Working Toward GSE Reform

Congress is preparing to address an issue that has loomed for five years: the fate of Fannie Mae and Freddie Mac.

In the Senate, bipartisan legislation is in the works that would replace the two government-sponsored enterprises with a new “public guarantor” within five years. The move is part of a broader plan where Washington no longer will backstop the country’s $10 trillion mortgage market.

Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) are leading the effort. To date, two other Democrats – Sens. Jon Tester of Montana and Heidi Heitkamp of North Dakota – and two other Republicans – Sens. Mike Johanns of Nebraska and Dean Heller of Nevada – also are working on the bill, which has yet to be formally introduced.

Serious talks about the future of the two GSEs faded quickly after President Obama issued a short “white paper” in the first quarter of 2011 that mapped out a trio of scenarios for their future.

Today, almost all concerned concur that the status quo is untenable. However, several centrist Republicans and a large number of Democrats say that a federal role is necessary in order to preserve liquid markets for the 30-year, fixed-rate mortgage. Conservative Republicans want a private mortgage market with no new federal guarantees at all.

Source: “Fannie, Freddie Future Finds a Focus,” Wall Street Journal (June 17, 2013)

U.S. Home Construction Rises 6.8% in May

U.S. builders stepped up home construction in May and applied for permits to build single-family homes at the fastest pace in five years. The gains show housing remains a key source of growth for the economy.

The overall pace of homes started rose 6.8 percent last month to a seasonally adjusted annual rate of 914,000, the Commerce Department said Tuesday. That offset part of the 14.8 percent decline in April. May’s rate is still below March’s pace of more than 1 million – the fastest in five years.

Construction increased in May for both single-family homes and apartments and condos.

And builders sought more permits to build single-family homes, which make up nearly two-thirds of the market. The seasonally adjusted annual rate rose 1.3 percent to 622,000 – the highest since May 2008. That’s a sign that construction will increase further in the coming months.

Overall permits fell 3.1 percent in May to a seasonally adjusted 974,000. But that was because of a drop in apartment permits, which are more volatile.

Overall, the report points to more evidence of a housing recovery that has become sustainable. New-home construction has risen 28.6 percent since May of 2012.

“Starts have clearly been trending up,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. “While levels are still low, housing has been the strongest part of the economy in growth terms.”

Improved hiring and low mortgage rates have encouraged more people to buy homes. The increased demand, along with a tight supply of homes for sale, has pushed home prices higher.

Stronger housing markets are helping the economy grow and offsetting some of the drag this year from higher taxes and federal spending cuts.

A better outlook for housing has made builders more optimistic, leading to more construction and jobs. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose to 52 this month, up from 44 in May. That was the highest reading in seven years and the largest monthly increase in more than a decade.

A reading above 50 indicates more builders view sales conditions as good, rather than poor.

Still, some markets are recovering faster than others. In May, housing starts rose 17.8 percent in the South and 5.7 percent in the West. But they fell 13.7 percent in the Midwest and 9 percent in the Northeast.

Many of the nation’s major homebuilders have reported strong annual growth in sales during the spring home-selling season. The increased demand has paved the way for builders to raise prices and ramp up construction of more homes, despite lingering concerns over rising costs for land, building materials and labor.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.

Source: Associated Press 2013

Homebuilder Confidence Continues to Improve

Homebuilder confidence is at its highest level in seven years, reaching a big milestone in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The index, which measures homebuilder sentiment over the new-home market, rose eight points in June to 52 — any reading above 50 indicates that more builders view sales conditions as good rather than poor.

"This is the first time the HMI has been above 50 since April 2006, and surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," says NAHB Chairman Rick Judson. "With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."

The index measures builders’ perceptions of single-family home sales, buyer traffic, and sales expectations for the next six months. The index measuring just builders’ expectations for future sales surged nine points in June to 61, reaching its highest level since March 2006.

"Builders are experiencing some relief in the headwinds that are holding back a more robust recovery," says NAHB Chief Economist David Crowe.

NAHB is predicting a 29 percent increase in housing starts this year, which would put housing starts at the 1 million mark for the first time since 2007.

Source: National Association of Home Builders

Do QM Requirements Limit Consumer Options?

During House Financial Services Committee testimony on June 18, the National Association of REALTORS® called on Congress to revise the Qualified Mortgage requirements that limit consumer choice.

In a testimony before the House, NAR president Gary Thomas implored Congress to revisit the definition of fees and points applied to affiliated mortgage lenders that require the counting of title company charges, the amount of homeowner’s insurance held in escrow, loan level price adjustments, and payments made by lenders in wholesale transactions towards the 3 percent cap in the QM rule.

Another area of concern about QM underwriting standards is the 43 percent debt-to-income limit on jumbo and non-government backed loans. In high cost areas where high-income borrowers obtain jumbo financing, this could be particularly problematic. Greater flexibility with regard to DTI limits is preferable so that credit is not restrained in high cost communities.

Source: National Association of REALTORS®

Downtown Sarasota Condominium Proposed

Demand from retiring baby boomers in Sarasota, Florida and a dwindling supply of available units has spurred interest in luxury condos that has not been seen since the Great Recession took hold more than seven years ago.

Nothing has been built in Sarasota in a while. But the world has changed. People have changed. And they're looking for something new.

The Golden Gate condo proposal comes just months after the developer of another luxury tower, an 18-story project known as "The Jewel" at the corner of Gulfstream Avenue and Main Street, unveiled plans to begin construction.

Across the region, condo sales have rebounded, fueled by buyers who do not want the maintenance of a single-family home and who want to be in downtown Sarasota or on Longboat Key.

Source: Sarasota Herald-Tribune, (Josh Salman), June 15, 2013

New NAR Ad Prompts Owners to List Their Home

"Satellite Earth" commercial shows buyers' demand for homes, as the National Association of Realtors changes its public marketing name to Consumer Advertising Campaign. 

Watch ad.

U.S. Homebuilder Confidence Soars to 7-year High

For the first time in seven years, most U.S. homebuilders are optimistic about home sales, a sign that construction could help drive stronger economic growth in coming months.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday leaped to 52 this month from 44 in May.

A reading above 50 indicates more builders view sales conditions as good, rather than poor. The index hasn’t been that high since April 2006, just before the housing market collapsed.

Measures of customer traffic, current sales conditions and builders’ outlook for single-family home sales over the next six months also soared to their highest levels in seven years.

The housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some of the drag from higher taxes and federal spending cuts.

Steady hiring and low mortgage rates have encouraged more people to buy homes. The increased demand, along with a tight supply of homes for sale, has pushed home prices higher. That’s made builders more optimistic about the market for newly built homes, leading to more construction and jobs.

In April, applications for new home construction reached a five-year peak. And sales of new homes rose to a seasonally adjusted rate of 454,000, nearly matching the fastest pace since July 2008. Sales are still below the 700,000 pace considered healthy by most economists. But they have risen 29 percent in the past year.

In recent weeks, many of the major large homebuilders have reported strong annual growth in sales during the spring home-selling season. The increased demand has paved the way for builders to raise prices and ramp up construction of more homes, despite lingering concerns over rising costs for land, building materials and labor.

“Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,” said David Crowe, the NAHB’s chief economist.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.

The latest builder confidence index was based on responses from 255 builders.

A gauge of current sales conditions for single-family homes jumped eight points to 56, the highest level since March 2006, while a measure of traffic by prospective buyers improved seven points to 40.

Builders’ outlook for single-family home sales over the next six months increased nine points to 61, the highest reading since March 2006.

On a regional basis, confidence grew strongest among builders in the South, while firms in the Northeast and Midwest also posted a gain. An index of confidence among builders in the West declined by one point.

Source: Associated Press 2013

First-Time Home Buying Still at Low Levels

First-time home buyers make up about 29 percent of the housing market, which is “weaker than the historic norm” of 40 percent, according to Walt Molony, spokesman for the National Association of REALTORS®.

As the housing market’s recovery strengthens, why are the numbers of first-time home buyers numbers still so low? The leading culprits have been identified as tight credit conditions, limited housing inventories, and steep competition from investors for the same properties.

“Many lower-income home buyers have been effectively cut out of the market” since the housing bubble burst in 2007, says economist Kevin Gillen of the University of Pennsylvania’s Fels Institute. "Whether they're unemployed, underemployed, can't assemble a sufficient down payment, or can't get credit, these are problems that disproportionately affect young, first-time home buyers. We've been left with a housing market composed of relatively wealthier households trading relatively high-priced homes with each other."

Some economists say they’re starting to see that change, however, with the number of first-time home buyers increasing in some regions, particularly where inventory levels are increasing.

"I think there was a huge buildup of potential buyers 'on the fence,' waiting to see what the economy and housing market were going to do," says John Duffy of Duffy Real Estate in Narbeth, Penn.

Source: “Are there enough first-time buyers to sustain housing recovery?” The Philadelphia Inquirer (June 16, 2013)

Millennials' Housing Shift Affects Baby Boomers Ability to Sell?

The Millennial generation is showing different housing preferences than previous generations, and some analysts say that Baby Boomers may be growing concerned that they will have a tough time selling their suburban, larger homes due to the Millennials’ differing tastes.

The Millennial generation has been called a key to the housing recovery, and housing experts are taking careful note of how the younger group's housing preferences differ from previous generations.

A new survey by the Urban Land Institute’s Terwilliger Center for Housing shows that about 60 percent of the millennial generation say they prefer a mix of housing choices and prefer to be near shops, restaurants, offices, and transit. Seventy-five percent of Millennials say they value walkability. Of the 63 percent of Millennials who say they plan to move within the next five years, about 40 percent say they expect to move to multifamily housing.

One of the biggest obstacles facing this generation is student loan debt. Fifty-four percent of those aged 22 to 32 said that debt is their biggest financial concern. Forty-two percent referred to their debt as “overwhelming.”

Source: “Home Loans for Millennials,” The New York Times (June 13, 2013)

Buying a Home in Lakewood Ranch, Sarasota and Bradenton

Buying a home is a momentous occasion full of joy and achievement. It is also one of the most significant financial investments you will ever make.

Home ownership is the culmination of the American dream. It is a symbol of financial security and stability won by hard work and saving. The process of buying a home is both a thrilling and exhausting experience, but with the help of the right real estate agent and some useful tips, you can own a beautiful — and affordable — piece of the American dream.

Whether you are a seasoned buyer or new to homebuying, the process can be a complex and intimidating experience, especially if you've never done it before. So the first thing you should do before you start the home buying process is to figure out whether owning a home is right for you. It may or may not be and this decision depends on you and what your circumstances are. Take into account that if you do buy a home, there are extra responsibilities and costs that go along with owning a home-such as lawn care, home maintenance and repairs, etc.

When you're looking for a real estate professional to help you, know that above all else, good agents put their clients first. This is your dream, and your agent is your advocate to help you make your dream come true. The following is my eight step process to help you in buying your dream home.

1. Decide to buy

Although there are many good reasons for you to buy a home, wealth building ranks among the top of the list. We call home ownership the best “accidental investment” most people ever make. But, we believe when it is done right, home ownership becomes an “intentional investment” that lays the foundation for a life of financial security and personal choice. There are solid financial reasons to support your decision to buy a home, and, among these, equity buildup, value appreciation, and tax benefits stand out.

• Base your decision to buy on facts, not fears
• If you are paying rent, you very likely can afford to buy
• There is never a wrong time to buy the right home. All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it for the long run
• The lack of a substantial down payment doesn’t prevent you from making your first home purchase
• A less-than-perfect credit score won’t necessarily stop you from buying a home
• The best way to get closer to buying your ultimate dream home is to buy your first home now
• Buying a home doesn’t have to be complicated – there are many professionals who will help you along the way

2. Hire your agent

The typical real estate transaction involves at least two dozen separate individuals – insurance assessors, mortgage brokers and underwriters, inspectors, appraisers, escrow officers, buyer’s agents, seller’s agents, bankers, title researchers, and a number of other individuals whose actions and decisions have to be orchestrated in order to perform in harmony and get a home sale closed. It is the responsibility of your real estate agent to expertly coordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests throughout.
A Buyer’s Real Estate Agent:

• Educates you about your market
• Analyzes your wants and needs
• Guides you to homes that fit your criteria
• Coordinates the work of other needed professionals
• Negotiates on your behalf
• Checks and double-checks paperwork and deadlines
• Solves any problems that may arise

3. Secure financing

While you may find the thought of home ownership thrilling, the thought of taking on a mortgage may be downright chilling. Many first-time buyers start out confused about the process or nervous about making such a large financial commitment.
From start to finish, you will follow a six-step, easy-to-understand process to securing the financing for your first home.

• Choose a loan officer (or mortgage specialist)
• Make a loan application and get preapproved
• Determine what you want to pay and select a loan option
• Submit to the lender an accepted purchase offer contract
• Get an appraisal and title commitment
• Obtain funding at closing

4. Find your home

You may think that shopping for homes starts with jumping in the car and driving all over town. And it’s true that hopping in the car to go look is probably the most exciting part of the home-buying process. However, driving around is fun for only so long – if weeks go by without finding what you’re looking for, the fun can fade pretty fast. That’s why we say that looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long terms.
Questions to ask yourself:

• What do I want my home to be close to?
• How much space do I need and why?
• Which is more critical: location or size?
• Would I be interested in a fixer-upper?
• How important is home value appreciation?
• Is neighborhood stability and priority?
• Would I be interested in a condo?
• Would I be interested in new home construction?
• What features and amenities do I want? Which do I really need?

5. Make an offer

When searching for your dream home, you were just that – a dreamer. Now that you’re writing an offer, you need to be a businessperson. You need to approach this process with a cool head and a realistic perspective of your market. The three basic components of an offer are price, terms, and contingencies.
Price – the right price to offer must fairly reflect the true market value of the home you want to buy. Our market research will guide this decision.
Terms – the other financial and timing factors that will be included in the offer. Terms fall under six basic categories in a real estate offer:

• Schedule – a schedule of events that has to happen before closing
• Conveyances – the items that stay with the house when the sellers leave
• Commission – the real estate commission or fee, for both the agent who works with the seller and the agents who works with the buyer
• Closing costs – it’s standard for buyers to pay their closing costs, but if you want to roll the costs into the loan, you need to write that into the contract
• Home warranty – this covers repairs or replacement of appliances and major systems. You may ask the seller to pay for this
• Earnest money – this protects the sellers from the possibility of your unexpectedly pulling of the deal and makes a statement about the seriousness of your offer

6. Perform due diligence

Unlike most major purchases, once you buy a home, you can’t return it if something breaks or doesn’t quite work like it’s supposed to. That’s why home owner’s insurance and property inspections are so important.
A home owner’s insurance policy protects you in two ways:

• Against loss or damage to the property itself
• Liability in case someone sustains an injury while on your property

The property inspection should expose the secret issues a home might hide so you know exactly what you’re getting into before you sign your closing papers. Your major concern is structural damage. Don’t sweat the small stuff. Things that are easily fixed can be overlooked. If you have a big problem show up in your inspection report, you should bring in a specialist. If the worst-case scenario turns out to be true, you might want to walk away from the purchase.

7. Close

The final stage of the home buying process is the lender’s confirmation of the home’s value and legal statute, and your continued credit-worthiness. This entails a survey, appraisal, title search, and a final check of your credit and finance. Your agent will keep you posted on how each if progressing, but your work is pretty much done.
You just have a few pre-closing responsibilities:

• Stay in control of your finances
• Return all phone calls and paperwork promptly
• Communicate with your agent at least once a week
• Several days before closing, confirm with your agent that all your documentation is in place and in order
• Obtain certified funds for closing
• Conduct a final walk-through

On closing day, with the guidance of a settlement agent and My Home On The Gulf, you’ll sign documents that do the following:

• Finalize your mortgage
• Pay the seller
• Pay your closing costs
• Transfer the title from the seller to you
• Make arrangements to legally record the transaction as a public record

As long as you have clear expectations and follow directions, closing should be a momentous conclusion to your home-searching process and commencement of your home-owning experience.

8. Protect your investment

Throughout the course of your home-buying experience, you’ve probably spent a lot of time with us and you’ve gotten to know each other fairly well. There’s no reason to throw all that trust and rapport out the window just because the deal has closed. In fact, we want you to keep in touch.
Even after you close on your house, we can still help you:

• Handle your first tax return as a home owner
• Find contractors to help with home maintenance or remodeling
• Help your friends find homes
• Keep track of your home’s current market value
• Attention to your home’s maintenance needs is essential to protecting the long-term value of your investment

Home maintenance falls into two categories:

• Keeping it clean: Perform routine maintenance on your home’s systems, depending on their age and style
• Keeping an eye on it: Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later

30-Year Mortgage Rates Climb Near 4% Range

For the sixth consecutive week, mortgage rates inched higher, continuing to climb from all-time lows, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage—the most popular among home buyers—has now climbed a half percentage point since last month.

A strengthening economy and positive employment report this month prompted fixed-rate mortgages to climb higher this week, says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending June 13:

• 30-year fixed-rate mortgages averaged 3.98 percent, with an average 0.7 point, rising from last week’s 3.91 percent average. A year ago at this time, 30-year rates averaged 3.71 percent. 
• 15-year fixed-rate mortgages averaged 3.10 percent this week, with an average 0.7 point, increasing from last week’s 3.03 percent average. Last year at this time, 15-year rates averaged 2.98 percent. 
• 5-year adjustable-rate mortgages averaged 2.79 percent, with an average 0.6 point, rising from last week’s 2.74 percent average. Last year at this time, 5-year ARMs averaged 2.80 percent. 
• 1-year ARMs averaged 2.58 percent, with an average 0.4 point, holding the same as last week. A year ago, 1-year ARMs averaged 2.78 percent. 

"With the ongoing run-up in fixed mortgage rates, adjustable-rate mortgages (ARMs) are becoming more popular among home owners looking to refinance and for home purchasers,” says Nothaft.

Source: Freddie Mac

House Hunter App Coming to Google Glass

Trulia has developed an app for Glass, Google's augmented-reality glasses. The app is designed to display property listings right before the eyes of the wearer.

The Trulia for Glass app will also let them know when they are close to an open house that matches their search criteria, even providing directions to the home. Additionally, it will let them contact the real estate agent and can read a property description out loud.

"The idea is to provide just enough fresh information that is personalized for me and relevant to my location," says Jeff McConathy of Trulia. "It's a very different experience than having your head buried in your phone while the world passes by."

The app is slated for release in July.

Source: "Google Glass Real Estate App Enables House Hunting on the Go," CBC News Canada (June 11, 2013)

Banks Ease Standards on Downpayments

Banks are relaxing downpayment requirements, a sign that the housing market is strengthening.

A new LendingTree report reveals that U.S. homebuyers in May put down an average 16.1 percent on a home backed by a 30-year fixed mortgage. That is down from 17.6 percent two years ago, according to the survey.

Lenders had tightened credit standards in the wake of the financial crisis, many demanding minimum downpayments of 20 percent; but the improving economic climate has made them more open to smaller downpayments.

“Lenders have increasing confidence that the loans they’re originating today are less likely to default,” said LendingTree founder and CEO Doug Lebda. Low downpayments are not without their drawbacks, however, according to Lebda and other industry insiders.

Borrowers willing to make only a small downpayment could lose out to other bidders in competitive housing markets; likely will have to make bigger monthly loan payments and pay more in interest if their bid is accepted; and could find it more difficult to unload their home later if prices depreciate.

Source: MarketWatch (06/04/13) Marte, Jonnelle

Economic Growth on the Road to ‘Normal’ according to Fannie Mae

A strengthening housing market is pushing the economy forward, but steady economic growth is still a ways off, according to Fannie Mae's midyear outlook.

Fiscal headwinds are expected to keep growth to below 2 percent for the first half of the year, with gradual strengthening in the second half of 2013 and into 2014. However, as fiscal drags wane, growth should continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.

"At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed," says Fannie Mae Chief Economist Doug Duncan. "We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy's potential. Our forecast calls for growth to push past 2.5 percent in 2014, boosted largely by tailwinds from the strengthening housing market."

Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.

Source: Florida Realtors®

Foreclosure Activity Back on the Rise

Foreclosure filings—which include default notices, scheduled auctions, and bank repossessions—increased 2 percent in May, rising from a 75-month low in April, according to the latest foreclosure report from RealtyTrac. Still, foreclosure filings are down 28 percent from a year ago.

The May increase was largely attributed to an 11 percent increase in bank repossessions. Foreclosure starts also ticked up 4 percent in May over last month, with 26 states posting increases, according to the report.

“Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years,” says Daren Blomquist, vice president at RealtyTrac. “Places like Nevada, where foreclosure starts increased to a 20-month high, and Maryland, where overall foreclosure activity increased to a 33-month high. Still, the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures.”

The top foreclosure rates in the country were in Florida, Nevada, and Ohio. Florida saw a 20 percent increase in foreclosure activity in May, accelerating it to the highest foreclosure rate in the country for the month. One in every 302 Florida households received a foreclosure filing in May—nearly triple the national average.

After 27 months of decreases, Nevada foreclosure activity rose in May, with one in every 305 households receiving a foreclosure filing. The increase was driven by an 81 percent year-over-year increase in foreclosure starts, which reached a 20-month high in May, RealtyTrac reports.

Ohio posted the third-highest foreclosure rate in the country, where one in every 584 households received a foreclosure filing during May. Still, that’s a 27 percent decrease from a 31-month high the state reached in April.

Source: RealtyTrac

Shortage of Housing Inventory Starting to Ease

The percentage of homes for sale has risen 25 percent this year and housing inventories have started to outpace typical seasonal upticks, realtor.com® reports.

Rising home prices likely are encouraging more home sellers to test out the market. The inventory crunch may be showing signs of easing with listings rising 5.8 percent in May. Still, the number of homes for sale is low by historical standards. Listings in May are still 10 percent below year-ago levels.

The places where the number of homes for sale rose the most were Atlanta (rising 3.4 percent in May), Miami (2.8 percent), and Tuscon, Ariz. (1.8 percent).

“Even with the increases, inventories in many markets remain tight, but any easing in the extreme shortages of the past year could ultimately cool the pace at which home prices have been rising,” The Wall Street Journal reports.

Meanwhile, median asking prices rose 4.8 percent nationally over year-ago levels, according to the report. Sacramento posted the highest increase in asking prices (rising 42.3 percent from April 2012) and Oakland (a 38 percent increase).

Source: “Housing-Inventory Crunch Could Be Easing,” The Wall Street Journal (June 13, 2013)