It’s Tuesday News Day and these are this weeks hot topics concerning the real estate market, the financial market, general market conditions, and interest rates.
DSNews.com – Down Payments Continue to Decline in Third Quarter
Lenders appear to have more confidence to lend with less cash down from qualified borrowers, as down payment percentages for 30-year, fixed rate purchase mortgages continue to decline. A new report reveals that the average down payment has dropped 2.74 percent since Q2 2013, according to a study released by LendingTree. As home values improve, the risk of borrowers defaulting on loans has decreased, so lenders have adjusted minimum requirements to attract borrowers.
The average down payment on a 30-year, fixed-rate mortgage loan in the third quarter of this year was 15.73 percent.
According to LendingTree, the national average loan amount for a mortgage loan originated in the third quarter was about $218,344.
New Jersey (18.8 percent), California (18.6 percent), New York (18.0 percent), D.C. (17.9 percent), and Massachusetts (17.5%) top the list with the highest average down payment percentages.
The lowest average down payment percentage in the third quarter took place in Nebraska, where down payments averaged 12.5 percent of loan values.
South Dakota (12.8 percent), Arkansas (12.9 percent), and Alabama (12.9 percent) followed Nebraska in the next lowest down payments. They all average under 13 percent for the quarter. Missouri filled the No. 5 spot with an average down payment of 13.1 percent.
D.C. ranked highest in loan amount with an average of $309,768 in the third quarter.
In other news…
Bloomberg – Bidding Wars Wane in U.S. Housing Markets on Supply Rise
Higher mortgage rates and an increase in values are reducing affordability, while also encouraging more sellers to list their properties. This could mean price growth will slow after the biggest increases since 2006. The government shutdown may have weakened confidence as well.
The LA Times – Young American adults aren’t moving as much as they once did
The lingering effects of the recession are evident in statistics from the Census Bureau, as young adults are stuck in place due to an inability to obtain sufficient credit and income to move to a new home or apartment. The share of moves fell back to 11.7 percent this year.
The Hill – Home builder confidence held steady in November
Home builder confidence was unchanged in November from October’s numbers, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). More builders have viewed market conditions as good than poor for the past six months.
Bloomberg – New Zealand Stops a Housing Bubble
The housing market in New Zealand is heating up, so its Central Bank put a limit on high loan-to-value mortgages. Each bank must ensure no more than 10 percent of its new mortgages finance more than 80 percent of a house’s value. Peter Orszag writes, “Perhaps the Federal Reserve has something to learn from the central bank of New Zealand about how to manage a mortgage market.” Orszag is a former director of the Office of Management and Budget.
NAHB – How Long Does It Take to Build Multifamily Housing?
On average it takes about 12.5 months to complete a multifamily building, with the timeframe defined by obtaining a building permit to full completion. According to a 2012 Survey of Construction (SOC) from the Census Bureau, buildings with 5 to 9 units had the highest average (14.5 months), while 10- to 19-unit properties came in at 11.9 months.
DSNews.com – Report: Recovery Hampered Until Lawmakers Focus on Housing Policy
The Opportunity Agenda, National Fair Housing Alliance, and the National Association of Real Estate Brokers (NAREB) have released a new report that argues U.S. housing policy is broken because the government has failed to provide millions of would-be homeowners the credit and financing they need to achieve the American Dream. The report calls for 10 administrative actions that the Federal Housing Finance Agency (FHFA) should take.
The Hill – Bureau updates mortgage disclosures
Rules requiring simplified mortgage paperwork will take effect in August 2015. The “know before you owe” forms are designed to make sure borrowers understand their options and know what to expect when they take out home loans.
Talking Points…
According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), California home sales declined for the third straight month in October, while sales of condominiums and townhomes continued to be strong. Economic uncertainty surrounding last month’s government shutdown and a typical seasonal slowdown dragged down the state’s home sales.
Sales in October were down 2.7 percent from a revised 412,260 in September and down 11.1 percent from a revised 451,090 in October 2012.
The statewide median price of an existing, single-family detached home edged down 0.3 percent from September’s median price of $428,740 to $427,290 in October. October’s price was 25.3 percent higher than the revised $340,910 recorded in October 2012, marking the 16th straight month of double-digit annual gains.
If you have any questions about the current real estate market give me a call at (408) 840-3852 or shoot me an email at Thomas.Feng@gmail.com to discuss your situation and how to get the most out of the current real estate housing market.
Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before making ANY decisions in ANY transaction
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* THIS ARTICLE WAS POSTED AT Thomas Feng’s Bay Area Connect *