Real Estate News
National, California, and Local Ventura County Real Estate News and other real estate related tidbits from around the web.
Homeownership can offer more long-term perks for college students than a dorm room would, so parents are stepping in to help their college-age children buy a home in their college town. Real estate professionals told Bankrate.com they’ve noticed this long-held trend is growing.
- Existing-home sales rose 2% on a seasonally adjusted annual rate from June to July, with no sales declines showing in any regions.
- The inventory of unsold homes increased 7.3% to 1.32 million from June to July – equivalent to 2.6 months of the monthly sales pace.
- The median existing-home sales price rose at a year-over-year pace of 17.8%.
Up-to-date data on crucial California real estate trends from RPI (Realty Publications, Inc.).
- Interest rates hit historic lows for mortgages.
- Plummeting interest rates send refinances soaring.
- The Yield spread forecasts the long recovery ahead.
Ever wonder what causes mortgage rates to go up and down? Watch this short video!
The average U.S. mortgage rate for a 30-year fixed loan remained steady this week, gaining one basis point to 2.81%, Freddie Mac said in a report on Thursday. The average fixed rate for a 15-year mortgage was 2.32%, falling from last week’s 2.33%.
After this week’s dip, there have now been 14 consecutive weeks when average mortgage rates have been below 3%. According to Freddie Mac’s chief economist, Sam Khater, low rates have provided tangible support to the economy at a critical time.
“Strong purchase demand is helping to lift the construction, manufacturing and transportation industries that build new homes and it is also leading to more consumer spending for owners, who are selling or improving their
homes,” said Khater. “On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payment, which means they can spend, save or pay down debt more so than they have in the past.”
The Federal Reserve began buying bonds in March to buffer the shutdown’s economic blows and make borrowing cheaper, and consistently low and steady mortgage rates have pushed homebuyers to flood the market. On Wednesday, Case-Shiller’s home price index for August jumped 5.7% – the greatest year-over-year gain since 2018.
According to Mike Fratantoni, chief economist of the Mortgage Bankers Association, today’s GDP data shows a picture of the economy re-opening and restocking over the summer.
“MBA expects that the pace of economic growth will slow in the fourth quarter and into next year, but expansion should nonetheless continue, provided the current spike in virus cases does not lead to another complete lockdown,” Fratantoni said.
While one end of the market continues to flourish from demand, 34% of home sellers said they are staying out of the market due to COVID-19’s uncertainty in a recent Zillow survey, and approximately 3 million homeowners are currently in forbearance plans, according to the MBA.
“This is further evidence of the unevenness in the current economic recovery,” said Fratantoni. “The housing market is booming, as shown by the extremely strong pace of home sales last week. However, many homeowners continue to struggle, as the pace of the job market’s improvement has waned.”
As the coronavirus began sweeping through the country in March, many states issued shut-down orders for businesses, putting as many as 40 million people out of work by May. On March 27, Congress passed the CARES Act to offer economic relief to those affected by the shut-downs, expanding unemployment benefits and offering mortgage forbearance to homeowners with mortgages backed or insured by the federal government, including Freddie Mac, Fannie Mae, VA and FHA.
Under the CARES Act, homeowners can ask for forbearance from their mortgage servicer and suspend payments for up to 12 months. Approximately 4.3 million homeowners have requested forbearance since the program began, although, over the last several months, the number of people with mortgage loans in forbearance has continued to drop, decreasing to 3.4 million in the last week of September, according to the Mortgage Bankers Association.
Now, servicers are doing the hard work of helping borrowers as they exit forbearance with payment deferral/partial claim plans, lump-sum payments and other modifications.
“The share of loans in forbearance continues to decline and is now at a level not seen since mid-April,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Many homeowners with GSE loans are exiting forbearance into a deferral plan and resuming their original mortgage payment, but waiting to pay the forborne amount until the end of the loan.”
We have partnered with Freddie Mac to bring you this FAQ page to answer those questions and provide updates to the program.
Our goal is to provide a resource that is continuously updated with the latest news and information so that lenders, servicers and homeowners can work together during this period of crisis and recovery.
All of the following conditions are required to allow a garage conversion without permits for all financing:
· If a garage was converted without a permit, the appraiser must show the value as a garage, not as a converted room.
The appraiser must also estimate a cost to cure for re-conversion back to a garage.
· If the garage is converted to living space with no extra plumbing or electrical work, no permit is required if the appraiser indicates it was completed in a “workmanlike manner”, the comparables support the value, and the lack of car storage is not prohibited by local ordinances.
· If the appraiser can obtain comparables that are the same as the non-permitted living space, no adjustment to the property value is necessary.
If the comparables do not have a similar living space the room must be valued based on its original use.
This requirement applies to family rooms and patio enclosures as well.
However, if the above requirements for garage conversions are not met, permits are required unless the loan meets the un-permitted addition requirements as listed in the Lending Product Profile.
Additionally, if permits are specifically required by purchase agreement, sales contract, etc. for the conversion, then they must be provided.
· The subject addition complies with all lending guidelines
· The quality of the work is described in the appraisal and deemed acceptable (“workmanlike quality”) by the appraiser
· The addition doesn’t result in a change in the number of units comprising the subject property (e.g. a 1 unit converted into a 2 unit – regardless of how the appraiser classifies the property with the addition, improvement or conversion)
· If the appraiser gives the un-permitted addition value, the appraiser must be able to demonstrate market acceptance by the use of comparable sales with similar additions and state the following in the appraisal
· If Non-Permitted additions are typical for the market area and a typical buyer would consider the “un-permitted” additional square footage to be part of the overall square footage of the property.
· The appraiser has no reason to believe the addition would not pass inspection for a permit.
Sales of existing homes took off in September, jumping 9.4% from August to a seasonally adjusted annual rate of 6.54 million, the National Association of Realtors said in a report on Thursday. Compared to a year ago, sales are up 20.9%.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” said Lawrence Yun, NAR’s chief economist. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”
That surge in potential buyers, however, may be met with what Yun says is historically low inventory. At the end of September, housing inventory totaled 1.47 million units, down 1.3% from August and down 19.2% from one year ago when inventory sat at 1.82 million.
The average U.S. mortgage rate for a 30-year fixed loan fell to 2.8% this week, another record low, Freddie Mac said in a report on Thursday. The rate fell one basis points from the week prior and is now six basis points lower than the original all-time low set in mid-September.
The average fixed rate for a 15-year mortgage was 2.33%, falling from last week’s 2.35%.
After this week’s dip, there have now been 13 consecutive weeks when average mortgage rates have been below 3%, and rates have broken records 11 times this year.
“Mortgage rates remain very low, providing homeowners who have not already taken advantage of this environment ample opportunity to do so,” said Sam Khater, Freddie Mac’s chief economist. “Mortgage rates today are on average more than a full percentage point lower than rates over the last five years.”
California housing market outperforms expectations, breaking record high median price for fourth straight month, C.A.R. reports
– Existing, single-family home sales totaled 489,590 in September on a seasonally adjusted annualized rate, up 5.2 percent from August and up 21.2 percent from September 2019.
– September’s statewide median home price was $712,430 up 0.8 percent from August and up 17.6 percent from September 2019.
– Year-to-date statewide home sales were down 3.7 percent in September.
“With the statewide home price hitting new highs for the past four months, it’s sounding like a broken record as California home sales and prices continue to outperform expectations,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “However, with the shortest time on market in recent memory, an alarmingly low supply of homes for sale, and the fastest price growth in six and a half years, the market’s short-term gain can also be its weakness in the longer term as the imbalance of supply and demand could lead to more housing shortages and deeper affordability issues.”