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May 20th, 2014 by Bill Collins Leave a reply »

TUESDAY, MAY 20TH, 2014

Have Buyers Hit the “Pause” Button?

Yesterday, Freddie Mac lowered its 2014 housing forecast in several areas with an acknowledgement that the spring home buying season was falling short of earlier projections. 

Reports from many real estate markets around the country have been disappointing.  Writing in MarketWatch on May 12th, Amy Hoak suggests “4 reasons young Americans are staying out of the housing market”:

~Unemployment and low savings: most younger renters do not have sufficient assets for the down payment and other costs associated with purchasing their first house.

~Low credit scores: Ms. Hoak cites an Experian report that Millenials have low credit scores in relation to the overall population with substantial numbers lacking the higher scores needed to obtain a mortgage today.

~Student debt: Greater numbers of college graduates today are saddled with high levels of student debt, contributing to overall debt to income ratios which exceed requirements for mortgage eligibility.

~Delaying marriage and family: The U.S. Census Bureau reports that the median age of first marriage and first-time mothers has increased significantly.  The median age of first marriage is 27 for women (21 in 1950) and 29 for men (24 in 1950). The Centers for Disease Control & Prevention report that in 1970, the average age of first-time mothers was 21.4; this had risen to 25.8 in 2012. These demographic shifts are resulting in a lengthened period of renting apartments and postponing purchases of real property.

Links to the Freddie Mac Economic and Housing Market Outlook for May and the MarketWatch article are found here: Freddie Mac: Demand and Supply

Why Millenals are hurting the real estate recovery, 4 reasons young Americans are staying out of the housing market

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Courtesy of Trulia Pro Blog: 5 Frightful Facts that Affect Today’s Buyers (and How to Help Them Overcome the Fear).

Jovan Hackley posted this relevant list on May 8th:
1 ) “The Market Tanked”: Overcoming the continuing fears that remain from the market crash circa 2007 is still important.

2 ) “30 Years of Money on the Line”: Not unlike buying a new car, dealing with the “sticker shock” of three decades worth of principal and interest payments is a daunting task.

3 ) “There’s No Landlord to Call”: What to do when something breaks…

4 ) “Dream Homes can be Hard to Find”: Maybe that pink and green bathroom is not a deal breaker if everything else on the checklist is in place.

5 ) “Price-Rise is a Reality”: Many prospective purchasers regret their decision not to buy before recent price increases in their market area, this is not a reason by itself for holding off buying now.

The resulting withdrawal of qualified and motivated buyers is reflected in Census Bureau statistics on homeownership: as of the 1st Quarter of 2014, the homeownership rate had declined to 64.8%, down from 65.2% at the end of 2013 and 68.9% at the peak in 2006.

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AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers support and grow their businesses. Please consider supporting us today by seeing what we and our sponsors have to offer.

Superior E&O insurance from the Landy Insurance Agency- click here to apply and receive your policy in about two hours!


"Big Data List" of the 100 Most Significant People of All Time

Interesting to view the results of Time’s “data-centric” approach in light of the movement towards “Big Data” usage in the appraisal profession.  Here are Time’s “top 10” most significant people of all time:

1) Jesus  2) Napoleon  3) Muhammad 4) William Shakespeare
5) Abraham Lincoln 6) George Washington  7) Adolf Hitler
8) Aristotle  9) Alexander the Great 10) Thomas Jefferson

Time notes that “significance is related to fame but is something different”.  They did not approach this project in a manner similar to historians “…through a principled assessment of their individual achievements” but more like Google “…by integrating a diverse set of measurements about their reputation into a single consensus value”.  

A link to the entire list is found here:
Who’s Biggest?

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Newly Released!

Appraiser Help has Released its 2014 Directory of AMC’s and National Appraisal Companies. Click the link above to learn more and to download your copy today!


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Please visit our website now to make your purchase securely or contact us at (877) 434-2825 for more information on this comprehensive directory!

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Recent Real Estate Reports

Last Tuesday, CoreLogic released an analysis of home price trends in more than 380 U.S. markets through the end of last year based on the CoreLogic Case-Shiller Home Price Indexes.  The CoreLogic news release reported that: “The CoreLogic Case-Shiller Indexes estimate that home prices increased by 11.3 percent in the fourth quarter of 2013 compared to the same time a year ago. Home prices nationwide were 20 percent above the trough reached in the fourth quarter of 2011, but remained 21 percent below the peak reached in the first quarter of 2006. The analysis projects that price appreciation is expected to slow across all U.S. markets to 5.3 percent nationally through the end of 2014, slightly above its long-term annual average of 4.5 percent recorded since 1975”.

A link to the CoreLogic news release is found here:
Corelogic Case-Shiller Home Prices Confirm 11.3 Percent Increase in 2014

On Friday, Zillow released the results of a survey of experts which projected that median home prices would increase by approximately 4.4% in 2014.  The survey suggested that price appreciation would slow to approximately 3.8% in 2014 followed by 3.4% in 2016.  It projected that prices would finally reach their “pre-recession” peaks by the 1st Quarter of 2018.

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Rates & Dates

Freddie Mac, the Mortgage Brokers Association (MBA) and HSH Market Trends reported that mortgage interest rates generally declined in their most recent surveys. 

On May 15th, Freddie Mac reported that 30-year fixed-rate mortgages fell to 4.20% from 4.21% the previous week. They also noted that last year at this time the 30-year rate was at 3.51%.

The Mortgage Bankers Association (MBA) reported on May 14th (for the week ending May 9th) that 30-year rates with conforming loan balances ($417,500 or less) fell to 4.39% from 4.43%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) was unchanged from the previous week’s rate of 4.29%.  Rates for FHA backed mortgages declined from 4.13% to 4.09%. 

Mortgage applications increased by 3.6% from the previous week with the share of refinance applications as a percentage of all applications rising to 50% from 49%.

On May 12th, the MBA released its Builder Application Survey for April which showed an increase of 5% from March in mortgage applications for new homes. 

Later in the week, on May 15th, the MBA released their National Delinquency Survey for the 1st Quarter of 2014.  The survey indicated that the delinquency rate for one to four family homes fell to 6.11% of all loans, the lowest point since the last quarter of 2007.  The percentage of mortgage loans in the foreclosure process declined to 2.65% of all loans, its lowest point since the first quarter of 2008.

Mike Fratantoni, the MBA’s Chief Economist, commented that:
“We are seeing sustained and significant improvement in overall mortgage performance.  A more stable and stronger job market, coupled with strong credit standards on new loans, has kept delinquency rates on recent vintages low, while the portfolio of loans made pre-crisis is steadily being resolved.  Increasing home prices, caused by tight inventories of homes for sale, have helped build an equity cushion for many new borrowers and have helped some homeowners who had been underwater regain positive equity in their properties.  The increase in values also helps to facilitate sales of distressed properties, which may further expedite the pace of resolution of pre-crisis loans.”

Mr. Fratantoni noted that New Jersey (a judicial state) was the only state in the country which reported an increase from the previous month in loans in foreclosure from the previous quarter and now has 8% of its loans in the foreclosure process.  New Jersey also had the highest rate of new foreclosures in the 1st Quarter.

The MBA study also showed that the top 25 metro areas all reported declining foreclosure and delinquency metrics in the 1st Quarter.  While Miami and Tampa continued to have the greatest percentage of loans in foreclosure, along with Chicago they also had the greatest improvement in foreclosed loans during the past year.

On May 16th, HSH Market Trends reported that 30-year mortgage rates dropped to 4.27% (the lowest point in 2014) from 4.30% the previous week. Rates for FHA-backed mortgages also fell, from 3.99% to 3.98%.

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

Additional information from HSH can be found by going to: HSH.Com

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Ask Angie

We would first like to congratulate our most recent winner: Texas appraiser Peri Jordan of 5 Star Appraisals in Austin, Texas.  5 Star Appraisals covers Austin and the counties of Hays, Travis, Williamson, Burnet, Bastrop and Caldwell.  Peri was the first to answer correctly that Thomas Mann was responsible for the quote "Order and simplification are the first steps toward the mastery of a subject"; Napoleon Hill wrote "Whatever the mind can conceive and believe, the mind can achieve”; and Steve Jobs said "The only way to do great work is to love what you do".

Today’s Questions:

1. Who said: "He uses statistics as a drunken man uses a lamp post, for support rather than illumination.”

a) Andrew Lang
b) Lawrence Yun
c) Paul Ryan
d) Paul Krugman
e) None of the above

2. Who said: "Spring is the time of plans and projects."

a) Bob Vila
b) Leo Tolstoy, Anna Karenina
c) Tim Allen
d) E. E. Cummings
e) None of the above

3. Who wrote: “Love all, trust a few, do wrong to none.”

a) Eric Schmidt
b) Sheryl Sandberg
c) William Shakespeare, All’s Well That Ends Well
d) Hippocrates
e) None of the above

The first person to respond with the correct answers wins a choice of one of the following:

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the Newly Released 2014 Directory of Appraisal Management Companies (Available to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!

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We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at www.appraisernews.com

Regards,

Bill Collins, Appraiser Help Inc.

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