VARbuzz

Existing-home sales up, inventory down

Andrew Kantor, Editor & Blogmaster — Wed, 22 Feb 2012 16:01:04 +0000

Existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve, according to NAR. Read all about it at Realtor.org. --------------------------------------------------------------------- Setting yourself apart from other agents is closer than you think, “Go Beyond” with zipLogix. The creator of zipForm® real estate forms software, zipForm Mobile, zipLogix Digital [...]

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FHFA head has his own plan for the secondary mortgage market

Andrew Kantor, Editor & Blogmaster — Wed, 22 Feb 2012 15:44:37 +0000

Federal Housing Finance Agency acting director Edward DeMarco has consistently blocked efforts to offer principal writedowns for holders of federally backed mortgages. Now he’s offering his own plan for fixing the mortgage finance market.

The basic idea: Make Fannie/Freddie/FHA mortgages more expensive for borrowers by increasing fees, thus encouraging them to either go to private lenders or, if the private market won’t offer an affordable mortgage, not buy a home at all.

He also recommends building a completely new infrastructure (taxpayer financed) for the secondary mortgage market, while winding down F&F. It’s part of a three-prong plan: Build (the new infrastructure), contract (Fannie and Freddie), and maintain (foreclosure prevention activities and credit availability).

The problem, as the Huffington Post points out, is that the market isn’t recovered, and DeMarco’s plan would shut many potential (and qualified) home buyers out of the market.

The fundamental problem, which the report acknowledges, is that Fannie and Freddie benefit from an implicit Treasury guarantee that they won’t default, which is helping keep mortgage rates low. In a true market-based system interest rates for homeowners would certainly be higher–and many homeowners likely wouldn’t qualify at all. (Emphasis mine.)

Of course, any plan such as this would require Congressional approval — not likely in an election year. Further, even DeMarco admits that his plan only paints the broad strokes: FHFA’s ideas of the goals, not the means.

Click here for the HuffPost story.

Click here for the Washington Post story.

Or click here to read FHFA’s detailed plan (PDF).

Home builders: New homes are larger, fancier

Andrew Kantor, Editor & Blogmaster — Wed, 22 Feb 2012 15:04:04 +0000

Looking at data from the Census Bureau, the National Association of Home Builders finds that the trend in 2011 was toward larger homes with more amenities.

Average size: 6% from 2010 (from 2,381 to 2,522 sq. ft.)
Four-bedroom homes: 42% of the construction (up from 36%)
Finished basement: 30% of construction (up from 25%)
Average sales price of a newly constructed home: $274,400 (up from $264,900)

NAHB asks the obvious question: How can the average home be getting bigger, more expensive, and have more amenities when the housing market remains weak and the overall economy is yet to see a robust recovery?

The answer is simple: it comes down to who has been buying homes. In the last couple of years, a typical home buyer had to have a 20% down payment, a high credit score, well-documented income, and stable employment history in order to qualify for a mortgage.

Fannie Mae: Housing will add to GDP for the first time since ’05

Andrew Kantor, Editor & Blogmaster — Wed, 22 Feb 2012 14:51:32 +0000

According to Fannie Mae’s Economic & Strategic Research Group, in 2012 the U.S. housing market will add to the nation’s gross domestic product for the first time in seven years.

Quoth:

Housing also showed signs of improvement late last year with existing home sales rising in December for the third consecutive month. Indicators point to some good pickup in construction of apartment buildings and modest pickup in single-family construction in some locations.

Overall, housing is expected to add to gross domestic product (GDP) for the first time in seven years, albeit by a very modest amount.

Sales and prices are still low, so it’s not going to make a tremendous difference, but it’s another sign of the improving market. We’re pulling out of the recession.

Click here for the full release.

Tech note: Blackberry continues its fall, Android continues to dominate

Andrew Kantor, Editor & Blogmaster — Wed, 22 Feb 2012 14:50:56 +0000

Blackberry’s market share dropped 59% from a year ago, according to the latest figures from NPD.

Android phones now account for about 53% of the smartphone market, with iOS (iPhone and iPad) taking 29% and Blackberry accounting for 10%. The remainder is made up of Windows phones (5%), Nokia, and old HP devices.

Click here for more from Engadget.

More borrowers look to 15-year fixed mortgages

Andrew Kantor, Editor & Blogmaster — Tue, 21 Feb 2012 18:19:24 +0000

Only about 60 percent of homebuyers in Q4 2011 took out 30-year, fixed-rate loans; three years ago, the figure was closer to 90 percent. Instead, they’re opting more and more for 15- or 20-year loans instead. (A quarter of people refinancing from 30-year loans are opting for 15-year ones instead.)

That’s despite the fact that the typical payment on a 15-year loan is 50 percent higher than on a 30-year mortgage, because the interest rate is significantly lower — 3.41% for a 15-year mortgage today, vs. 4.05% for a 30-year.

Click here to read more at The Mortgage Reports.

Settlement money to fill budget gaps

Andrew Kantor, Editor & Blogmaster — Tue, 21 Feb 2012 18:03:34 +0000

Virginia’s General Assembly plans to use the state’s $69 million portion of the foreclosure fraud settlement to plug various holes in the budget. The money will help pay for a variety of initiatives including funding community health centers and free clinics, increasing Medicaid reimbursements for hospitals and nursing homes, paying for school maintenance, and reducing K-3 class size.

The Department of Justice had said the banks’ payments to states were intended “to be used to repay public funds lost as a result of servicer misconduct and to fund housing counselors, legal aid and other similar public programs determined by the state attorneys general.”

REOs to rent: Morgan Stanley’s rose-colored outlook

Andrew Kantor, Editor & Blogmaster — Fri, 17 Feb 2012 15:50:44 +0000

File under "Read the fine print": According to Housing Wire, "Morgan Stanley predicts REO rental program will create 1.8 million jobs." That’s referring to the government program to sell Fannie/Freddie/FHA repos to investors, who will turn those properties into rental units.

Sounds good, that 1.8 million jobs. But read a bit further.

Each of these homes would employ four construction workers to work for three weeks. That’s the equivalent of 1/4 of a annual job. So if there are four million homes needing work, that’s the equivalent of a million jobs… but that only lasts a year.

And then there’s the other 800,000 jobs that will be created. What are those? "The 800,000 jobs would comprise the cottage industry for servicing REO rental units, from cleaning properties to collecting the rent."

So Morgan Stanley’s "1.8 million jobs" really means "a lot of construction workers hired for a few weeks at a time, plus 800,000 maids and bill collectors."