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CALIFORNIA PENDING HOME SALES UP IN JUNE

CALIFORNIA PENDING HOME SALES UP IN JUNELed by the San Francisco Bay Area, California pending home sales continued their upward momentum in June to post three straight months of annual increases, C.A.R. said this week. 

Statewide pending home sales rose in June on an annual basis, with the Pending Home Sales Index increasing 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016, based on signed contracts. With pending sales on a rising trend in the past couple of months, June’s increase should portend for higher closed transactions in July and August.

California pending home sales declined 7 percent on a monthly basis compared to May, primarily due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales were down 3.2 percent from May and up 3 percent from June 2015.

DOES HOME BUYER EDUCATION LEAD TO HOUSING STABILITY?

DOES HOME BUYER EDUCATION LEAD TO HOUSING STABILITY?
Source: DSNews.com
 
Borrowers are making better choices to achieve housing and financial stability thanks to counseling programs in mortgage literacy and preparedness, home buyer outcomes, and loan performance, according to a new report from the U.S. Department of Housing and Urban Development (HUD). A study into the benefits of counseling buyers was released by HUD, titled, “The First-Time Home Buyer Education and Counseling Demonstration,” which found that programs to educate new buyers improved mortgage literacy, created greater appreciation for communication with lenders, and enhanced underwriting qualifications. HUD studied more than 5,800 prospective first-time home buyers across 28 metro areas.

HOW TO ADDRESS CALIFORNIA’S HOUSING AFFORDABILITY CRISIS

HOW TO ADDRESS CALIFORNIA’S HOUSING AFFORDABILITY CRISIS
Source: Intersections

State Treasurer John Chiang has penned an article calling for more housing supply in California to address the state’s affordability problem. He notes that “California is short 1.5 million affordable homes for families struggling to make ends meet, and the hole is growing bigger each year.” He added, “As our state’s chief investment officer, I see the cost of our neglect of housing needs from an economic lens as well as a human one. The credit rating agencies that influence the cost of borrowing for infrastructure projects and schools say the cost of housing is hurting businesses, and our CEOs say a lack of workforce housing is the reason companies like Toyota are moving jobs out of state.” He urges the state to start building.

WOMEN ARE THE PRIMARY BORROWER ON MILLENNIAL MORTGAGES
Within the Millennial generation, women were listed as the primary borrower on more than one-third of closed loans, according to Ellie Mae’s Millennial Tracker.

Out of those 32 percent of closed loans where women were the primary borrower, more than 60 percent are single, and only 38 percent are married, according to the tool. On the other hand, of the loans where men are the primary borrower, just 41 percent are single while 58 percent are married.

Highlights include:

• More Millennials tend toward FHA loans, which make up 37 percent of their closed loans. In the general population, FHA loans make up about 23 percent of total closed loans.
• The average day for Millennials to close got just a little slower, from 43 days in April to 44 days in May.
• The average FICO score among Millennials who closed loans is up from 721 in April to 722. The average FICO score for men was slightly higher than the average score for women at 724 versus 723.
• The average age for women who closed on a loan was 29, while men came in slightly higher at 29.2.

HOME PURCHASE SENTIMENT INDEX INCREASES TO 83.7 IN APRIL

HOME PURCHASE SENTIMENT INDEX INCREASES TO 83.7 IN APRIL
Fannie Mae’s April 2016 Home Purchase Sentiment Index (HPSI) rose 3.5 percentage points in April to 83.7. More consumers think home prices will go up over the next 12 months compared to March, and slightly fewer consumers expect Mortgage Rates to go up over the next 12 months. Overall, the HPSI is up 1.4 points since this time last year.

• The net share of American who say that it is a good time to buy a house fell 3 percentage points to 30 percent, reaching an all-time survey low.
• Selling sentiment approached its all-time survey high in March, with the net percentage of those who say it is a good time to sell rising 16 percentage points to 15 percent.
• The net share of respondents who say that home prices will go up rose 3 percentage point to 37 percent, continuing the rising trend from March.
• The net share of those who say mortgage interest rates will go down fell 1 percentage point to negative 46 percent.
• The net share of respondents who say they are not concerned with losing their job rose 6 percentage points to 74 percent, nearly making up the 7 percentage point decrease in March.
• The net share of respondents who say their household income is significantly higher than it was 12 months ago remained the same at 11 percent.

TALKING POINTS …

TALKING POINTS …

• It has taken nine years, but the number of U.S. homes in foreclosure has fallen to a level not seen since before the 2008 housing crisis. The number of properties in active foreclosure declined by 24,000 to 631,000 in March, according to Black Knight Financial Services. That’s the lowest since October 2007.

• The wave of foreclosures crested in 2010 when banks seized a record 1.2 million properties and served even more with notices of default, auction, or repossession.

• Delinquencies on home loans across the country fell to 4.08 percent in March, the lowest since March 2007.

TALKING POINTS …

TALKING POINTS …

• Mortgage applications decreased 4.1 percent from one week earlier for the week ending April 22, according to the latest figures from the Mortgage Bankers Association. Rates moved higher for the second week in a row.

• The refinance share of mortgage activity is also backing away from its once increasing trend and instead decreased to 54.4 percent of total applications from 55.4 percent the previous week. In addition, the adjustable-rate mortgage share of activity increased to 5.2 percent of total applications.

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $417,000) increased to 3.85 percent from 3.83 percent, with points increasing to 0.35 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio loans.

TALKING POINTS …

TALKING POINTS …

• According to the February Mortgage Bankers Association Builder Application Survey, new home purchases surged 24 percent in February, kicking off the spring buying season.

• Conventional loans composed 67.7 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.8 percent, and VA loans composed 12.8 percent. These levels are not too different from the month prior.

• The average loan size of new homes increased from $325,806 in January to $328,370 in February.

CALIFORNIA’S HOUSING MARKET LOSES MOMENTUM TOWARD END OF 2015

CALIFORNIA’S HOUSING MARKET LOSES MOMENTUM TOWARD END OF 2015
Source: C.A.R.

California existing home sales fell in November from both the previous month and year for the first time in nearly a year as low housing affordability extended into Southern California, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story

• Home sales posted below the 400,000 level in November for the first time since March 2015 and were at the lowest level since February 2015.

• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 369,680 units in November.

• The November figure was down 8.4 percent from the revised 403,580 level in October and down 1.6 percent compared with home sales in November 2014 of a revised 375,740.

• The year-to-year decrease was the first since January 2015 and was significantly below the six-month average of 8.3 percent observed between May 2015 and October 2015.  

• “The affordability crunch that has dampened home sales in the Bay Area for the past year or so could be spreading to other higher-priced areas, such as Los Angeles, Ventura, and Orange County,” said 2016 C.A.R. President Ziggy Zicarelli.

• The median price of an existing, single-family detached California home dipped 0.2 percent in November to $475,000 from $475,990 in October.  November’s median price was 6.8 percent higher than the revised $444,630 recorded in November 2014.

• As sales activity softened in November, there were also fewer active listings compared to the previous year. The number of active listings continued to drop from both the previous month and year. Active listings at the statewide level dropped 11.1 percent from October and decreased 8.8 percent from November 2014.