Category: Residential

Top 10 U.S. States Where Homebuyers Are Most Likely Thankful They Bought During the Winter

In this special #FiguresFriday post on the eve of Thanksgiving, ATTOM Data Solutions ranks the top 10 U.S. states where homebuyers are most likely thankful they bought during the winter months.

According to ATTOM Data Solutions’ annual analysis of the best time to buy a home issued this week, winter is the best time to buy given the discounts homebuyers are realizing below estimated market value during the winter months.

ATTOM’s new report notes the analysis of more than 23 million single family home and condo sales over the past six years is evidence of the continuation of a hot sellers’ market. The study highlights the three days of the year that offer the most significant discounts below estimated market value — all falling in the month of December.

The data shows that buyers willing to close on a home purchase the day after Christmas realize the biggest discounts below full market value of any day in the year.

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Top 10 Major Metros Increasing in Foreclosure Starts

In October 2019, foreclosure filings climbed upward, increasing 13 percent from the previous month, according to ATTOM Data Solutions’ newly released October 2019 U.S. Foreclosure Activity Report.

The report featured the rise of foreclosure completions (or REOs) in October, which reached the highest point in 2019. Lenders repossessed 13,484 U.S. properties through REOs in October, up 14 percent from the previous month.

ATTOM’s October foreclosure report also noted that foreclosure starts increased monthly in 36 states. Lenders started the foreclosure process on 28,667 U.S. properties in October, up 17 percent from last month but down 1 percent from a year ago — the first double-digit month-over-month increase since February 2018.

On the state level, states that saw double digit increases from last month included: Arizona (up 52 percent); Ohio (up 52 percent); Florida (up 48 percent); New Jersey (up 47 percent); and California (up 36 percent).

On the other hand, 13 states including Washington, DC posted month-over-month decreases in foreclosure starts in October, including Maryland (down 42 percent); Idaho (down 36 percent); Delaware (down 32 percent); Nebraska (down 26 percent); and Utah (down 25 percent).

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Top 10 Housing Markets with Highest Share of Properties Seriously Underwater

ATTOM Data Solutions’ new Q3 2019 U.S. Home Equity and Underwater Report issued this week revealed that homeowners were found far more likely to be equity rich than seriously underwater.

According to the report, in the third quarter of 2019, 14.4 million residential properties in the U.S. were considered equity rich, meaning the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value. The count of equity rich properties in Q3 represented 26.7 percent, or about one in four, of 54 million mortgaged homes.

ATTOM’s Chief Product Officer Todd Teta stated in the report, “There are notable equity gaps between regions and market segments. But as home values keep climbing, homeowners are seeing their equity building more and more, while those with properties still worth a lot less than their mortgages represent just a small segment of the market.”

The report primarily focused on the equity rich areas; however, the report also noted that just 3.5 million, or one in 15, mortgaged homes in Q3 2019 were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 6.5 percent of all properties with a mortgage.

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Top 10 Major Metros with Highest Home Seller Gains

The ATTOM Data Solutions’ recently released Q3 2019 Home Sales Report cited that U.S. median home prices have reached a new high. According to the report, single-family homes and condos sold for a median price of $270,000 in Q3 2019, up 2.9 percent from Q2 2019 and up 8.3 percent from Q3 2018.

The report also noted that homeowners who sold in Q3 2019 earned a median profit that ticked up to a post-recession high of 34.5 percent, up from 34.4 percent last quarter and 34.3 percent from a year ago.

Homeowners who sold in Q3 2019 realized an average home price gain since purchase of $68,686, up from an average gain of $66,995 from last quarter and up from an average gain of $63,750 a year ago. The average home seller gain of $68,686 in the third quarter represented an average 34.5 percent return as a percentage of original purchase price.

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Top 10 U.S. Housing Markets with Highest Foreclosure Rates in Q3 2019

According to ATTOM Data Solutions’ recently released Q3 2019 U.S. Foreclosure Report, there were 143,105 U.S. properties with foreclosure filings in the third quarter. That number is down 6 percent from Q2 2019 and down 19 percent from Q3 2018, to the lowest level since Q2 2005 — a more than 13-year low.

The report noted that U.S. foreclosure activity in the third quarter was 49 percent below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the 12th consecutive quarter where U.S. foreclosure activity has registered below the pre-recession average.

The report also featured Q3 2019 foreclosure rate data. Nationwide one in every 946 properties had a foreclosure filing in the third quarter. States with the highest foreclosure rates in Q3 2019 were Delaware (one in every 415 housing units with a foreclosure filing); New Jersey (one in every 436); Maryland (one in every 500); Illinois (one in every 517); and Florida (one in every 577).

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It’s official: Appraisals are no longer required on some home sales of $400,000 and under

Regulators raise appraisal threshold for first time since 1994.

Beginning Oct. 9, 2019, certain home sales of $400,000 and under will no longer require an appraisal.

Under previous rules that have been in place since 1994, appraisals were not required on all home sales of $250,000 and below, but last year, federal regulators proposed increasing the appraisal threshold for the first time in 25 years.

Last November, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal to increase the appraisal requirement from $250,000 to $400,000, citing the home price appreciation that’s taken place since the threshold was last increased in 1994.

Last month, the agencies all approved the rule. And Tuesday, the rule was published in the Federal Register, making the appraisal threshold increase effective the following day, Oct. 9, 2019.

That means that certain home sales of $400,000 and below will no longer require an appraisal as of Oct. 9, 2019.

Now, it’s important to note that the new rules do not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored agency.

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Zillow: Over half of renters blame student debt for delay in buying a home

Almost a third of Gen Z and Millennials are turned down for home financing due to debt

In a paper released at the beginning of this year, the Federal Reserve estimated that about 20% of the decline in homeownership among young adults could be attributed to increased student loan debts since 2005.

Based on the 2019 Zillow Group Report on Consumer Housing Trends released on Monday, that percentage may be a little low.

The report surveyed 13,000 U.S. household decision-makers about their homes, including how they search for them, pay for them and what challenges they encounter along the way. Among these findings, there was a recurrent topic of debt holding back potential buyers. From medical and credit card debt to student loans, an increasing amount of Americans are putting off buying a home.

“More than two-thirds of renters have debt, and about a quarter of renters and homebuyers said their debt caused them to be denied either a rental agreement or a mortgage at some point. That impact was most commonly reported by those with medical debt, which has a unique capacity to bust budgets,” the report stated.

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Borrowers in the Multifamily Sector Are Increasingly Looking for CMBS Loans

CMBS shops are currently offering higher leverage and slightly lower interest rates than agency lenders.

CMBS lenders may be gaining in popularity with multifamily borrowers as Freddie Mac and Fannie Mae slow down in the race to make loans on apartment properties.

“Freddie Mac and Fannie Mae increased the borrower spreads dramatically,” says Mitchell W. Kiffe, co-head of national production for the debt & structured finance group at CBRE Capital Markets. “That creates an opportunity for other lenders.”

Long-term interest rates have dropped sharply in 2019. Economists have begun to seriously worry about a potential slowdown in the global economy. Federal Reserve officials no longer plan to raise their benchmark interest rates in 2019. Instead they have cut rates to give the economy a boost.

Lower interest rates have created a lot of new business for lenders. And the competition to make deals has changed the balance of power between different segments of the market.

“I have members who might be talking to banks who might not have been talking to banks until recently… People have been exploring CMBS,” says Dave Borsos, vice president of capital markets for the National Multifamily Housing Council (NMHC), an industry association.

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How rate sensitive are borrowers? Slight uptick in interest rates leads to decline in mortgage applications

MBA report shows mortgage applications fell in last week

Are mortgage borrowers sensitive to small movements in interest rates? Recent data shows that refinances are on the rise thanks to the low interest rates of the last few weeks, but what happens if mortgage rates start to move back up? Will that demand dry up just as quickly as it appeared, even if rates only pick up by a few basis points?

It appears that may be the case, as new data from the Mortgage Bankers Association shows that mortgage applications fell for the second straight week as mortgage rates increased for the first time in more than a month.

According to the MBA’s Weekly Mortgage Applications Survey for the week ending Aug. 23, 2019, mortgage applications fell by 6.2% on a seasonally adjusted basis from one week earlier.

On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, fell 7% compared with the previous week.

Interestingly, the decline was seen across both purchase and refinance applications, perhaps indicating that borrowers, especially those looking to refinance, are paying close attention to mortgage rates.

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PMI gains as fewer first-time homebuyers use FHA

Most young buyers aren’t waiting to save for a 20% down payment

The share of first-time homebuyers using conventional mortgages that require private mortgage insurance, or PMI, to compensate for low down payments increased in the second quarter while the use of FHA loans fell.

Fannie Mae and Freddie Mac typically require buyers to purchase PMI if they’re using down payments smaller than 20% of a home’s value. While PMI allows buyers to get into a property earlier than if they waited to save for a larger down payment, it can add hundreds of dollars to a monthly mortgage bill. FHA loans also charge a monthly insurance premium which can be lower than PMI, depending on a borrower’s credit score.

The share of first timers using conventional mortgages with low down payments requiring PMI rose 6% from a year earlier, while the share using FHA mortgages fell 5%, according to a report from Genworth, one of the nation’s largest providers of PMI.

Overall, purchases of single-family homes by first-time buyers dropped 4% to 559,000 in the second quarter, the report said. The total share of first timers using some form of low down payment mortgages was about 80%, Genworth said.

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