FROM MARTY WILLIAMS AND THE ENTIRE STAFF AT WHITE HOUSE PROPERTIES, HAVE A HAPPY AND SAFE MEMORIAL DAY.

Minimum Wage Not Enough for Rising Rents

Minimum wage workers are finding they aren't earning enough to afford rental increases, finds a new report released by the National Low Income Housing Coalition, which highlights the widening gap between stagnant incomes and the rapid increase in rents across the country.

Renter households would need to earn at least $19.35 an hour working full-time in order to afford a two-bedroom rental – that is $4 more than the estimated minimum wage of U.S. workers, according to the report. In some locations, renters would need to earn even more. For example, a household in San Francisco would need to make $39.65 an hour to afford the rent for at two-bedroom apartment.
The report finds that there is no state in the country where someone earning either the state or federal minimum wage could afford a market-rate one-bedroom apartment. To afford a one-bedroom apartment, a minimum wage worker would need to work 86 hours per week.
The affordability crunch for renters who earn minimum wage was most pronounced in San Francisco, followed by Stamford-Norwalk, Conn., where earners would need to make $37.37 an hour working full-time to afford a standard two-bedroom apartment there.
On a statewide comparison, Hawaii renters could face the biggest troubles. Renters in Hawaii need to earn at least $31.61 an hour – which equates to working more than four full-time jobs at minimum wage – in order to afford a two-bedroom apartment, the report notes. Also close behind, in Washington, D.C., households would need to earn $28.04 per hour and in California they'd need $26.65 an hour – which equates to renters having to work three minimum-wage jobs in order to afford a two-bedroom rental unit.
Source: "Minimum Wage in U.S. Cities Not Enough to Afford Rent, Report Says," The Wall Street Journal (May 19, 2015)Daily News

Mortgage Rates Trend Higher

The 30-year fixed-rate mortgage climbed to average 3.80 percent this week while 15-year rates rose above 3 percent, both reaching their highest levels in nearly two months, Freddie Mac reports in its weekly mortgage market survey.
Freddie Mac reports the following national averages with mortgage rates for the week ending May 7:

• 30-year fixed-rate mortgage: averaged 3.80 percent, with an average 0.6 point, rising from last week’s 3.68 percent average. Last year at this time, 30-year rates averaged 4.21 percent.
• 15-year fixed-rate mortgages: averaged 3.02 percent, with an average 0.6 point, rising from last week’s 2.94 percent average. A year ago, 15-year rates averaged 3.32 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.90 percent, with an average 0.4 point, up from last week’s 2.85 percent average. Last year at this time, 5-year ARMs averaged 3.05 percent.
• 1-year ARMs: averaged 2.46 percent, with an average 0.4 point, dropping from last week’s 2.49 percent average. A year ago, 1-year ARMs averaged 2.43 percent. Daily Real Estate News. Source Freddie Mac

More Buyers Than Usual Enter Spring Market

An unusually high volume of home-buyer demand is flooding the spring market, as pending home sales rose in March for the third consecutive month and hit the highest level since June 2013, according to the National Association of REALTORS®.
Pending sales rose 1.1 percent month-over-month in March and are 11.1 percent above year-ago levels, according to NAR's Pending Home Sales Index, a forward-looking indicator based on contract signings.

"Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year," says Lawrence Yun, NAR's chief economist. "While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term home owners."

However, Yun cautions that insufficient inventory and accelerating home prices could be a drawback to sales reaching their full potential.
"Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer," Yun says. "This, in turn, has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability."Daily Real Estate News

Home Buyers Push Up Loan Demand

Mortgage applications were on the rise last week, as home buyers remain behind the upswing in demand. The Mortgage Bankers Association reported that applications for home purchases, viewed as a leading indicator of future home sales, rose 5 percent week-over-week on a seasonally adjusted basis for the week ending April 17.
Applications for home purchases are now 16 percent higher than the same week one year ago.
"Purchase applications increased for the fourth time in five weeks as we proceed further into the spring homebuying season," says Mike Fratantoni, chief economist for the MBA. "Applications for FHA purchase loans remained strong as well."
Overall, MBA's mortgage application index, which reflects combined applications for refinances and home purchases, rose 2.3 percent last week. Applications for refinances increased only 1 percent last week but remain up 41 percent from a year ago due to lower mortgage rates. A year ago at this time, the 30-year fixed-rate mortgage was significantly higher, averaging around 4.25 percent.
The average 30-year fixed-rate mortgage has mostly hovered around historical lows for the past few weeks. Last week, it dropped slightly to 3.83 percent, its lowest level since January, MBA reports.
Source: Daily Real Estate News

FROM MARTY WILLIAMS AND THE ENTIRE STAFF AT WHITE HOUSE PROPERTIES

FROM MARTY WILLIAMS AND THE ENTIRE STAFF AT WHITE HOUSE PROPERTIES, HAPPY

Getting a Mortgage is Easy, Consumers Say

Fifty-four percent of Americans say that they believe getting a mortgage is easy—a record high number for Fannie Mae’s National Housing Survey, which is a monthly poll of about 1,000 Americans’ attitudes toward the housing market.

Mortgage Availability Easing?
3% Down Payments May Be Game Changer
FHA Lowers Mortgage Costs
Smaller Down Payments Lure More Buyers

The February 2015 edition of the survey finds a strengthening employment sector and consumers' growing confidence in the economy are leading to improved attitudes about the housing market.
"Continuing improvements in consumer attitudes in this month’s National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward," says Doug Duncan, chief economist at Fannie Mae. "The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey nearly five years ago and for the first time exceeded the share who believe it’s on the wrong track.”
Duncan notes that consumer confidence is getting a big boost from employment growth, which also reflects consumers’ increasing optimism over the ease of getting a mortgage today.
“We continue to see strength in attitudes about the current home buying and selling environment and consistently high shares of consumers saying they expect to buy a home on their next move,” Duncan notes. “At the same time, we still need to see further growth in consumer optimism toward personal finances and income for more robust improvement in housing market attitudes."
Here are some additional findings from February’s survey:

• The average 12-month home price change expectation remained at 2.5 percent.
• The share of respondents who say home prices will go up in the next 12 months declined to 46 percent, while the share who say home prices will go down dropped to 6 percent.
• The share of respondents surveyed who say mortgage rates will rise in the next 12 months returned to 48 percent.
• The number of those surveyed who say now is a good time to buy a home remained at 67 percent in February; the number who say now is a good time to sell fell by 4 percentage points to 40 percent.
• The percentage of respondents who expect their personal financial situation to improve over the next 12 months dropped to 46 percent.
• The number of those surveyed who say their household income is significantly higher than it was 12 months ago dropped 5 percentage points to 24 percent. Source: Daily Real Estate News

2015 REMODELING COST VS. VALUE: LESS IS MORE

Smaller replacement projects, particularly those that enhance curb appeal, remain the most cost effective way for sellers to improve value.

With home price gains slowing in most parts of the country, sellers will be looking for ways to get top dollar for their listing. Cleaning and staging make a big difference. But for some sellers—such as investors seeking to bring a property up to neighborhood standards before the sale—remodeling work may be the ticket.

What Is the Cost vs. Value Report?
The Remodeling Cost vs. Value Report, produced by Remodeling magazine in cooperation with the National Association of REALTORS® and REALTOR® Magazine, provides estimated costs for 36 midrange or upscale home-improvement projects, along with the percentage of cost that owners can expect to recoup when they sell. Projects range from a new garage door to a master suite addition.
Project costs for the 102 markets surveyed for the 2015 report were provided by RemodelMax, a publisher of estimating tools for remodelers, using Clear Estimates remodeling software. NAR members provided the expected value of the projects at resale.

 As the 2015 Remodeling Cost vs. Value Report makes clear, large-scale jobs aren’t likely to return sellers their full cost. But there are improvements worth doing in anticipation of an upcoming sale. Some will return almost 100 percent of their cost. Others may not have as great a payback, but they can improve the market position of the property in relation to the competition. (Think about the impact of beautiful kitchen photos on online home shoppers.) In addition, several pricier projects can provide owners with a few years of enjoyment while still offering a decent payback down the road.
As a general rule:

• Simpler, lower-cost projects tend to return greater value. The national average cost for a steel door replacement was $1,230, for example. That’s the least expensive project on the list, and it ranks highest on the payback scale, returning 101.8 percent nationally on average. In fact, in 43 of the 102 markets surveyed, REALTORS® said the new door would recoup more than 100 percent of its cost. Other projects expected to top 100 percent payback in multiple markets: the midrange garage door replacement, the upscale garage door replacement, the midrange wood window replacement, and the minor kitchen remodel. Notice a pattern? With the exception of the kitchen job, they’re all replacement projects. In general, replacements cost less and provide a bigger payback than remodels or additions.
• First impressions are important. The replacements that offer the greatest payback are the ones that are most obvious to buyers when they first view a house in person or online, such as new door or garage door. Siding replacement also provides great value at resale—particularly this year’s one new project, manufactured stone veneer,  which is expected to recoup 92.2 percent of its cost nationally on average.
• Kitchens still offer the most remodeling bang for the buck. The only remodeling job breaking into the top 10 in terms of payback is the minor kitchen remodel with a national average cost of $19,226 and a national average payback of 79.3 percent.

Top 5 projects nationally in terms of cost recouped:
1. Entry door replacement (101.8%)
2. Manufactured stone veneer (92.2%)
3. Garage door replacement—mid-range (88.5%)
4. Siding replacement, fiber cement (84.3%)
5. Garage door replacement—upscale (82.5%)

• Expect bigger payoffs in the West. In addition to reporting national averages, Remodeling magazine breaks down Cost vs. Value data by Census region. In the Pacific region—which includes Alaska, California, Hawaii, Oregon, and Washington—six projects are expected to top 100 percent payback. The nearest competitor is the East South Central region—Alabama, Kentucky, Mississippi, and Tennessee—where two projects are expected to top 100 percent payback.

Just how much sellers can expect to recoup from home improvements depends on the job and the region of the country they live in. There are also factors that vary from house to house and sale to sale, such as what updates are typical for the neighborhood, the quality of the work, and how important the improvement is to a particular buyer. And while you can’t apply this data directly to any specific house or neighborhood, you can use the Cost vs. Value Report as a starting point in discussions with buyers and sellers about the cost and value of remodeling.Source:Realtor magazine Stacey Moncrieff.

Does Starbucks Brew Higher Home Values?

|

The arrival of Starbucks’ coffee shops may help indicate where higher home values will soon surface, asserts a new analysis from Spencer Rascoff and Stan Humphries’s new book, Zillow Talk. They claim that “Starbucks equates with venti-sized home-value appreciation. Moreover, Starbucks seems to be fueling – not following these higher home values.”
To arrive at their findings, researchers compared a database of Starbucks locations with Zillow housing data, tracking home values within a quarter mile of Starbucks to houses slightly farther away over a five-year period of when a Starbucks location opened.
Homes closest to Starbucks appreciated a little more than 21 percent over five years, while the homes slightly farther away only appreciated just less than 17 percent.
Could it just be a coffeehouse effect? Homes near Dunk Donuts reflect a similar trend, but they don’t tend to appreciate as fast as properties a quarter-mile from a Starbucks, the study notes. Between 1997 and 2012, homes located near Starbucks and Dunkin’ Donuts followed similar trends in rising home value appreciation. But during the recent housing recovery, homes near Dunkin’ Donuts have appreciated 80 percent since 1997, whereas homes near Starbucks have appreciated 96 percent, nearly doubling their value.
But as the study notes, properties near Starbucks locations do tend to start out more expensive. Also, possibly Starbucks and Dunkin’ Donuts are just waiting for a neighborhood’s property values to increase before moving in. As such, there is question whether Starbucks is the actual cause or the consequence of higher home values in an area.
Regadless, researchers maintain that the study shows homes near Starbucks tend to appreciate at a faster rate than U.S. housing on a whole, and are recovering much more quickly from the housing bust.
Arthur Rubinfeld, who oversees Starbucks’ location selection process, says that the company has about 20 analytics experts around the world scouring maps and geographic information systems data to assess an area’s traffic patterns and businesses.
“The beauty of Starbucks is our understanding of real-estate site locationing,” Arthur said in the Zillow Talk chapter about the analysis. “It’s an art and a science.”Daily Real Estate News | Wednesday, February 04, 2015
Source: “Are Starbucks Fueling America’s Increasing Home Prices?” HousingWire (J

FHFA Defends Lower Down Payments

New programs that back mortgages with down payments as low as 3 percent are “just as safe” as a loan with a 10 percent down payment, Melvin Watt, director of the Federal Housing Finance Agency, assured lawmakers Tuesday.

A Boost for Homeownership?
3% Down Payments May Be Game Changer
FHA Lowers Its Harangued Mortgage Costs
Smaller Down Payments Lure More Buyers

When FHFA, the regulator of Fannie Mae and Freddie Mac, announced at the end of last year that first-time buyers would be able to qualify for loans with down payments as low as 3 percent, some expressed fears that the move could stir a wave of future defaults. The change was intended to expand credit for qualified home shoppers who had been sidelined from the housing market the last few years due to high down-payment requirements. Some lawmakers worry that smaller down payments may lead to the return to irresponsible lending practices blamed for the last housing crisis. Others express concern that smaller down payments will allow buyers to purchase homes they really can’t truly afford.
"When the down payment is lower, there’s the potential it can be a riskier loan," Watt told lawmakers. "But when you pair that with other compensating factors… you offset that additional risk. That’s exactly what we’ve done."
To qualify for the smaller down payment loans, Fannie and Freddie require full documentation, strong credit scores, housing counseling, and private mortgage insurance, Watt said. Also, the loans will comprise only “a very small percentage” of the mortgages in Fannie Mae and Freddie Mac’s portfolios.
Fannie began backing the loans with the smaller down payments in December; Freddie will begin in March.
"If somebody can’t pay a loan, they shouldn’t be given a loan," Watt told lawmakers. "It would be irresponsible to say we should be making those loans or that Fannie and Freddie should be backing those loans." Watt argued that the smaller down payments will allow those who have not been able to save enough for a large down payment to break into home ownership sooner.
The National Association of REALTORS® has voiced its support of the smaller down payments backed by Fannie Mae and Freddie Mac.
“REALTORS® support responsible lending to qualified buyers, which is essential for building strong communities,” NAR President Chris Polychron said in a statement released Tuesday. “NAR research shows that saving for a down payment is the biggest hurdle to home ownership for many first-time buyers, who have been entering the market at lower than normal rates. Improved access to safe, affordable mortgage credit through FHFA’s 3 percent down payment program will help new borrowers achieve the dream of home ownership.”
Housing and Urban Development officials also recently defended the Federal Housing Administration’s move to lower annual premiums on its insurance, which could save a typical first-time home buyer about $900 a year. FHA, which insures home loans with down payments as low as 3.5 percent, dropped its annual premiums this week from 1.35 percent to 0.85 percent. Some lawmakers and critics have voiced concern that the lower premium could lead to another FHA bailout from taxpayers. FHA last year had regained its financial footing, after requiring a $1.7 billion taxpayer bailout in 2013. But officials with HUD, FHA’s regulator, said that the lower premiums will not come at the cost of taxpayers and also will help FHA increase its market share.
Source: The Los Angeles Times (Jan. 27, 2015)

Why Inventory Problems Aren't Going Away

Despite recent increases, new-home inventories remain near all-time lows and are unlikely to return to their highs any time soon, according to a new analysis by John Burns Real Estate Consulting.
The rise in single-family inventory levels over the last few months bring them back only to 2012 levels. What's more, the supply of condos continues to be at record lows, with fewer new high-rise developments and condo conversions occurring now than in the mid-2000s, John Burns Consulting says.
From 1984 to 2014, there was an average of 9,900 units on the market. The current inventory is 72 percent below the average of the last 30 years and 79 percent below the average since 1971, Pete Reeb, senior vice president at John Burns Consulting, notes in a recent article for the firm.
Why are new-home inventory levels so low, and why will supply not likely reach the previous highs? John Burns offers the following reasons:

• Decrease in available lots. Los Angeles, Orange County, and San Diego, for example, have less land for large-scale new-home developments than five years ago. Fewer master-planned communities will lead to less supply.
• Fewer overall projects. With fewer projects, there are fewer units coming on to the market. Actively selling community counts are far lower today than 10 or 20 years ago, Reeb notes.
• Lower unit counts. The average total number of units in a project has significantly decreased in the last three decades. For example, in San Diego County, project sizes have dropped from a median size of around 125 units per project in the 1980s to 59 units today. "With fewer units per project, there are less total units to bring to market," Reeb says.
• Tight construction financing. Lenders now often require builders to have 50 percent to 100 percent of units under contract before releasing funds for the next phase. That has greatly reduced the potential for overbuilding, Reeb says. Source, Daily Real Estate News

FROM MARTY WILLIAMS AND THE ENTIRE STAFF AT WHITE HOUSE PROPERTIES

FROM MARTY WILLIAMS AND THE ENTIRE STAFF AT WHITE HOUSE PROPERTIES