Two big changes makes it easier to get mortgage.

Two big changes will make it easier to get a mortgageT
Source: CNBC

Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan. The changes will also add more risk to the mortgage market.

First, the nation's three major credit rating agencies, Equifax, TransUnion and Experian, will drop tax liens and civil judgments from some consumers' profiles if the information isn't complete. Specifically, the data must include the person's name, address, and either date of birth or Social Security number. A sizeable number of liens and judgments do not include this information and have subsequently caused some misrepresentations and mistakes.

Additionally, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent. That is designed to help those with high levels of student debt.

California housing market bounces back in May

California’s housing market rebounded in May as existing home sales and median home price recorded strong gains on both a monthly and annual basis, a trend in every major region of the state, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said this week. 

Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 14th consecutive month and totaled a seasonally adjusted annualized rate of 430,060 units in May. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the May pace throughout the year. The May figure was up 5.4 percent from the revised 408,030 level in April and up 2.6 percent compared with home sales in May 2016 of a revised 419,000. 

“Mortgage rates dropping to the lowest level since November could have been a motivating factor for the sales increase in May,” said C.A.R. President Geoff McIntosh. “The low interest rate environment, however, may not last long as the Federal Reserve’s gradual rate hike and plan to reduce its balance sheet will likely lead to higher rates and could change the momentum of the market.”  

The statewide median price stayed above the $500,000 mark for the third straight month and reached the highest level since August 2007. The median price was up 2.3 percent from a revised $537,920 in April to reach $550,200 in May, and was 5.8 percent higher than the revised $519,930 recorded in May 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values. 

“Despite a solid performance thus far in the spring housing market, the continued mismatch between buyers and available homes for sale that’s driving up home prices remains an issue,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Stubbornly low supply levels will continue to propel prices higher and, when combined with imminently higher interest rates, will worsen an already dismal affordability situation in the housing market.” 

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Best Regards,

Skand Mittal, Realtor®
Alliance Bay Realty
Direct : 510.938.8960
E-mail: mittalrealty@gmail.com

www.mittalrealty.com

Fast Facts

Calif. median home price: May 2017: California: $550,200 Calif. highest median home price by region/county: San Francisco, $1,501,680 Calif. lowest median home price by region/county: Lassen, $192,500 Calif. Pending Home Sales Index: Statewide pending home sales decreased in April on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI) declining 8.9 percent from 141.9 in April 2016 to 129.3 in April 2017. Calif. Traditional Housing Affordability Index:  First Quarter 2017: 32 percent Mortgage rates: Week ending 6/15/2017 (Source: Freddie Mac) 30 year fixed: 3.91% fees/points: 0.5% 15-year fixed: 3.18% fees/points: 0.5% --  Best Regards, Skand Mittal, Realtor® Alliance Bay Realty Direct : 510.938.8960 E-mail: mittalrealty@gmail.com www.mittalrealty.com

Talking Points

Talking Points 

• House price appreciation accelerated to a seasonally adjusted annual rate of 7.3 percent in July, according to the Federal Housing Finance Agency (FHFA) index. The Standard and Poor’s/Case-Shiller (CS) index shows house prices rose at an annual growth rate of 4.6 percent in July.

• Both indexes have been rising since the housing market stabilized in late 2011-early 2012. Activity from these indicators strongly reflects movement in existing home sales.

• Accelerating sales put upward pressure on prices and declining sales put downward pressure on prices.

Talking Points …

Talking Points..

• Lower interest rates and stabilizing home prices over the past year combined to make it easier for more Californians to purchase a home in the first quarter of 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

• The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in first-quarter 2015 rose to 34 percent from the 31 percent recorded in the fourth quarter of 2014 and up from 33 percent in the first quarter a year ago.

• Home buyers needed to earn a minimum annual income of $87,700 to qualify for the purchase of a $442,430 statewide median-priced, existing single-family home in the first quarter of 2015. 

C.A.R. Market matters- Talking Points

• Diminished housing affordability continued to hold back pending home sales for the fifth straight month in August as rising home prices contributed to a further reduction in the share of distressed home sales, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

• California pending home sales fell in August, with the Pending Home Sales Index (PHSI) dropping 4.5 percent from 104.5 in July to 99.8 in August, based on signed contracts.  The month-to-month drop was inconsistent with the seasonal trend, which typically shows a slight increase from July to August. 

• Pending sales were down 8.7 percent from the 109.3 index recorded in August 2013.  The year-over-year decrease was in line with the six-month average of -8.9 percent recorded between February 2014 and July 2014.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Fast Facts

According to C.A.R;-

Calif. median home price:December 2013:

• California: $438,040
• Calif. highest median home price by region/county December 2013: San Mateo, $1 million
• Calif. lowest median home price by region/county December 2013: Tehama, $137,500

Calif. Pending Home Sales Index:
December 2013: Decreased 25.2 percent from 92 in November to 68.8 in December.

Calif. Traditional Housing Affordability Index: Fourth Quarter 2013: 32 percent (Source: C.A.R.)

Mortgage rates: Week ending 1/30/2014 (Source: Freddie Mac)

• 30-yr. fixed: 4.23% fees/points: 0.7%
• 15-yr. fixed: 3.33% fees/points: 0.7%
• 1-yr. adjustable: 2.51% Fees/points: 0.5%

Delinquency rate on downward course

The delinquency rate, which includes loans 30 days or more past due, slipped to 6.41 percent in July after increasing to 6.7 percent in June. The decrease represents a monthly and yearly decline of 3.96 percent and 8.76 percent, respectively.

Foreclosure inventory also fell in July, dropping to 2.82 percent, down from 3.46 percent in June. Compared to a year ago, the decrease is much steeper, at 30.76 percent.

According to LPS, the foreclosure inventory rate is at the lowest level since February 2009.

Real Estate - Talking Points

• Home prices continued to post strong annual gains, and home sales recorded the first annual increase in six months, according to the CALIFORNIAASSOCIATION OF REALTORS® (C.A.R.). Closed escrow sales of existing, single-family detached homes in Californiatotaled a seasonally adjusted annualized rate of 443,520 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associationsand MLSs statewide.

• C.A.R. reports that sales in July were up 7 percent from a revised 414,670 in June and up 1.5 percent from a revised 436,870 in July 2012.  The year-to-year sales increase was the first since December 2012, following six consecutive months of declines.

• C.A.R.’s July 2013 resale housing report also notes that the available supply of existing, single-family detached homes for sale held steady in July at 2.9 months, unchanged from June’s Unsold Inventory Index. The index was 3.5 months in July 2012.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.

MLSListings Market Indicators Report: Dec. 2012

Fast Facts

Calif. median home price: November 2012: $349,300 (Source: C.A.R.)
Calif. highest median home price by region/county November 2012: Marin, $837,840 (Source: C.A.R.)
Calif. lowest median home price by region/county November 2012: Madera, $113,330 (Source: C.A.R.) 

Calif. Pending Home Sales Index: November 2012: 103.5 , down 14.4 percent from October's 121. 
 
Calif. Traditional Housing Affordability Index: Third quarter 2012: 49 percent (Source: C.A.R.)

Mortgage rates: Week ending 1/3/2013 30-yr. fixed: 3.34% fees/points: 0.7% 15-yr. fixed: 2.64 fees/points: 0.6% 1-yr. adjustable: 2.57% Fees/points: 0.4% (Source: Freddie Mac) 

American Taxpayers Relief Act signed into law

Last week, Congress reached an agreement in the “fiscal cliff” negotiations, and President Obama signed the American Taxpayers Relief Act into law last Wednesday.

C.A.R. would like to recognize and thank the tens of thousands of C.A.R. members who worked to successfully maintain the mortgage interest deduction by responding to the Call for Actions and open letter advertisements in the state’s major newspapers.

Here are some housing-related provisions included in the federal law:

• Mortgage Forgiveness Debt Relief Act extended for one year
• The “Pease Limitations” that reduced the value of itemized deductions, including the mortgage interest deduction, are permanently repealed for most taxpayers but will be reinstituted for high income filers.  This provision reduces a taxpayer's itemized deductions by 3 percent of the amount of his or her adjusted gross income (AGI) that exceeds the threshold amount.  Under the new law, the Pease thresholds are $300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000).  No matter how high a taxpayer's AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year. 
• The restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers.  This provision expired at the end of 2011 but has now been retroactively extended for all of 2012 as well as 2013.
• 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.
• Capital gains rates will remain at 15 percent for those earning less than $400,000 (individual) and $450,000 (joint).   Gains above those income levels will be taxed at 20 percent.  Gains on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 taxpayers filing jointly.  

Home prices nationwide rise for eighth consecutive month

CoreLogic’s October CoreLogic HPI report shows home prices nationwide, including distressed sales, increased on a year-over-year basis by 6.3 percent in October 2012 compared with October 2011, representing the biggest increase since June 2006 and the eighth consecutive increase in home prices nationally on a year-over-year basis.

On a month-over-month basis, including distressed sales, home prices decreased by 0.2 percent in October 2012 compared with September 2012. Decreases in month-over-month home prices are expected as the housing market enters the offseason. The HPI analysis from CoreLogic shows that all but five states are experiencing year-over-year price gains.

Highlights as of October 2012:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona, 21.3 percent; Hawaii, 13.2 percent; Idaho, 12.4 percent; Nevada, 12.4 percent; and North Dakota, 10.4 percent.
• Including distressed sales, the five states with the greatest home price depreciation were: Illinois, -2.7 percent; Delaware, -2.7 percent; Rhode Island, -0.6 percent; New Jersey, 0.6 percent; and Alabama, -0.3 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada, -53.5 percent; Florida, -44.5 percent; Arizona, -40.2 percent; California, -36.6 percent; and Michigan, -35.3 percent.

Freddie Mac releases December outlook

Freddie Mac recently released its U.S. Economic and Housing Market Outlook for December showing what some of the market features are expected to look like in 2013.

According to the outlook, long-term mortgage rates will remain near their record lows for the first half of 2013, then rise gradually during the second half of the year, but remain below 4 percent.

Property values are expected to continue to strengthen with most U.S. house price indexes likely rising by 2 to 3 percent in 2013.

Household formation should step up further to a net 1.20 to 1.25 million household increase in 2013 with housing starts up around the 1 million annualized pace by the fourth quarter.

Vacancy rates for both apartments and the single-family for-sale market could bring aggregate vacancy rates down to 2002-2003 levels as household formation outpaces new construction.

While the refinance boom will continue into early 2013, it will be less compared with 2012, so single-family mortgage originations are likely to decline by 15 percent conversely, expect multifamily lending to rise approximately 5 percent.

California's most affordable counties..

6 TAX FACTS - Home Sellers should know

Foreclosures fall in 62 percent of U.S. cities

NEW YORK (CNNMoney) -- Foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, according to RealtyTrac Thursday.

With 62% of the nation's 212 largest markets seeing foreclosure activity shrink during the latest quarter, the ongoing decline is yet another sign that the housing market is starting to stabilize.

During September, foreclosure activity in 58% of the major metro markets had even dropped below September 2007 levels.

32% of homebuyers are first-timers

Nearly one in three homebuyers in September were first-timers to the housing market, reported the National Association of Realtors on Wednesday in its Realtors Confidence Index.

That's up from 31 percent recorded in August and down from the historical norm of 40 percent, based on research from the trade group. The share of first-time buyers peaked in 2009, when it was 50 percent.

Fast Facts

Calif. median home price: September 2012: $345,000 (Source: C.A.R.)
Calif. highest median home price by region/county September 2012: San Mateo, $779,000 (Source: C.A.R.)
Calif. lowest median home price by region/county September 2012: Madera, $120,000 (Source: C.A.R.) 

Calif. Pending Home Sales Index: August 2012: 118.9, up 2.7 percent from July's 115.8
 
Calif. Traditional Housing Affordability Index: Second quarter 2012: 51 percent (Source: C.A.R.)

Mortgage rates: Week ending 10/18/2012 30-yr. fixed: 3.37% fees/points: 0.7% 15-yr. fixed: 2.66 fees/points: 0.6% 1-yr. adjustable: 2.60% Fees/points: 0.4% (Source: Freddie Mac) 

New-home sales hit 2-year high

NEW YORK (CNNMoney) -- In another sign of a housing market recovery, new-home sales rose in September to the highest level in more than two years, according to a government report released Wednesday.

Sales sold at an annual rate of 389,000 homes in the month, according to the Census Bureau report, up 5.7% from the 368,000 sales pace in August. The last time sales were at this pace, in April 2010, they were being helped by a short-term home buyer's tax credit.

Mortgage rates are near record lows, pushed down by the Federal Reserve's decision to buy $40 billion in mortgages to spur greater economic growth. The low rates, coupled with years of weak home sales, have resulted in affordable housing prices. Recently, home prices have started to rise, which is attracting buyers who were waiting for prices to bottom out.

There has also been a drop in unemployment, a positive development for people looking for mortgage loans.

Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market.