Residential Real Estate in Northern Virginia

2011 Marks Worst Year on Record for New-Home Sales

David Himes — Fri, 27 Jan 2012 19:00:30 +0000

Sales of new-home declined in December, dropping 2.2 percent, and marking the end to the worst year on record for new-home sales, the Commerce Department reported Thursday.

New-home sales reached a seasonally adjusted annual pace of 307,000 in December — less than half the 700,000 pace that economists consider healthy for the sector.

In 2011, 302,000 new homes were sold nationwide, overtaking 2010’s 323,000 sales that had previously marked the worst year for sales on record.

The new-home sector continues to struggle to compete against discounted distressed properties that are plaguing many markets and have put downward pressure on home prices. Builders also say tighter lending standards are preventing some home buyers for qualifying for financing, and appraisals of new-homes are coming in lower on the agreed upon purchase price, causing more deals to fall through.

In December, the median sales price of a new-home was $210,300, according to the Commerce Department.

Turnaround Coming?

Despite the latest numbers from December, new-home sales rose in the overall final quarter of 2011. Home construction for single-family homes increased in the final three months of 2011, and an index measuring homebuilder sentiment showed builders are more positive about where the market is heading too.

“Although this [December] decline was unexpected, it does not change the story that housing has likely bottomed,” Jennifer H. Lee, senior economist at BMO Capital Markets, told the Associated Press.

Source: “New Home Sales 2011: Worst Year on Record,” Associated Press (Jan. 26, 2012)

Record Rates Push Housing Affordability Higher

David Himes — Mon, 23 Jan 2012 18:39:34 +0000

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 20, 2012

The 30-year fixed-rate mortgage hit another all-time low this week, marking the seventh straight week it has averaged below 4 percent, Freddie Mac reports in its weekly mortgage market survey.

Here’s a closer look at rates for the week ending Jan. 19:

30-year fixed-rate mortgages: averaged 3.88 percent, with an average 0.8 point, a new all-time low and dropping from last week’s previous record of 3.89 percent. A year ago at this time, 30-year rates averaged 4.74 percent.
15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.8 point, up slightly from last week’s record low of 3.16 percent. Last year at this time, 15-year rates averaged 4.05 percent.
5-year adjustable-rate mortgages: averaged 2.82 percent, with an average 0.7 point, the same as last week’s average. Last year at this time, 5-year ARMs averaged 3.69 percent.
1-year ARMs: averaged 2.74 percent, with an average 0.6 point, dropping from last week’s 2.76 percent average. Last year at this point, the 1-year ARM averaged 3.25 percent.

Source: Freddie Mac

December Existing-Home Sales Show Uptrend

David Himes — Mon, 23 Jan 2012 18:37:48 +0000

Existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above where they were a year ago, according to the National Association of REALTORS®.

The latest monthly data shows total existing-home salesrose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.

Affordability Conditions

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.

NAR President Moe Veissisaid more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.

Mortgage Rates Reach New Record Lows

David Himes — Fri, 13 Jan 2012 18:39:38 +0000

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 13, 2012

Mortgage rates were back to hitting record lows again, pushing housing affordability even higher to home buyers, Freddie Mac reports in its weekly mortgage market survey. For the sixth consecutive week, the 30-year fixed-rate mortgage, the most popular choice among buyers, has averaged below 4 percent — unheard of until a few weeks ago.

“Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” Frank Nothaft, chief economist at Freddie Mac, said in a statement. The economy added 1.6 million jobs in 2011 — the highest number since 2006 — but overall unemployment still remains high, Nothaft noted.

Here’s a closer look at rates and the new record lows they posted for the week ending Jan. 12:

30-year fixed-rate mortgages: averaged 3.89 percent, with an average 0.7 point, reaching a new all-time low. Previously, 30-year mortgages’ record low was last week’s 3.91 percent average. A year ago at this time, 30-year rates averaged 4.71 percent.
15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.8 point, dropping from last week’s 3.23 percent average. Last year at this time, 15-year rates averaged 4.08 percent.
5-year adjustable-rate mortgages: averaged 2.82 percent, with an average 0.7 point, dropping from last week’s 2.86 percent average. Last year at this time, 5-year ARMs averaged 3.72 percent.
1-year ARMs: averaged 2.76 percent, with an average 0.6 point, this week, falling from last week’s 2.80 percent average. A year ago, 1-year ARMs averaged 3.23 percent.

Source: Freddie Mac

Mortgage Rates Match Record Lows This Week

David Himes — Fri, 06 Jan 2012 19:18:56 +0000

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 06, 2012

With signs of an improving housing market, mortgage rates took another dip this week, matching at or near the all-time record lows, Freddie Mac reports in its weekly mortgage market survey.

For the fifth consecutive week, 30-year fixed-rate mortgages have averaged below 4 percent, which was unheard of until a few months ago.

“Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement. Pending home sales for existing-homes soared 7.3 percent in November — its strongest pace since April 2010, the National Association of REALTORS® recently reported. Construction spending also increased in November by 1.2 percent — all serving as positive signs that housing is on the rebound.

Here’s a closer look at rates for the week ending Jan. 5:

30-year fixed-rate mortgages: averaged 3.91 percent, with an average 0.8 point, matching its previous record low that it set a few weeks ago. Last week, 30-year rates averaged 3.95 percent and a year ago at this time, 30-year rates averaged 4.77 percent.
15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.8 point, dropping from last week’s 3.24 percent average. Last year at this time, 15-year mortgages averaged 4.13 percent.
5-year adjustable-rate mortgages: averaged 2.86 percent, with an average 0.7 point, dropping from last week’s 2.88 percent average. Last year at this time, 5-year ARMs averaged 3.75 percent.
1-year ARMs: averaged 2.80 percent this week, with an average 0.6 point, inching up slightly from last week’s 2.78 percent average. A year ago, 1-year ARMs averaged 3.24 percent.

Source: Freddie Mac

Which Home Improvement Projects Offer the Best Returns?

David Himes — Fri, 16 Dec 2011 19:47:38 +0000

Which Home Improvement Projects Offer the Best Returns?.

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS^® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.

“This year’s Remodeling Cost vs. Value Report shows the value of putting your home’s best façade forward, so to speak,” said National Association of REALTORS^® President Moe Veissi. “Inexpensive exterior replacement projects are not only crucial to a home’s regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal.”

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS^® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.

The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project — upscale vinyl — rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.

The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.

Source: NAR

Mortgage Rates Continue to Hover at Record Lows

David Himes — Fri, 02 Dec 2011 19:19:11 +0000

Averages on fixed-mortgage rates continued to hover near historic lows for the week, while adjustable-rate mortgages inched down slightly to reach new record lows, Freddie Mac reports in its weekly mortgage market survey.

“Mortgage rates were little changed this past week, with the average 30-year fixed-rate mortgage at or below 4 percent for the fifth consecutive week,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement. “The extraordinarily low mortgage rates of the past month may provide a needed spur to housing activity.”

This week, the National Association of REALTORS® reported a 10.4 percent jump in pending home sales in October, the strongest pace since November 2010.

“More optimistic consumers, lower house prices, and bargain mortgage rates may have contributed to the 10.4 percent jump in pending home sales … and may bode well for future home sales,” Nothaft says.

Here’s a closer look at rates for the week ending Dec. 1:

30-year fixed-rate mortgages: averaged 4 percent, with an average 0.7 point, ticking slightly up from last week’s 3.98 percent average. A year ago at this time, 30-year rates averaged 4.46 percent.
15-year fixed-rate mortgages: averaged 3.30 percent, with an average 0.8 point, holding at last week’s average. Last year at this time, 15-year rates averaged 3.81 percent.
5-year adjustable-rate mortgages: averaged 2.90 percent, with an average 0.6 point, dropping slightly from last week’s 2.91 percent average. Last year at this time, the 5-year ARM averaged 3.49 percent.
1-year ARMs: averaged 2.78 percent this week, with an average 0.6 point, dropping from last week’s 2.79 percent average. A year ago at this time, the 1-year ARM averaged 3.25 percent.

Source: Freddie Mac

Mortgage Rates Stay Low Again This Week

David Himes — Fri, 18 Nov 2011 18:50:20 +0000

For the third week, 30-year fixed-rate mortgages, the most popular choice among home buyers, averaged at or below 4 percent, Freddie Mac reports in its weekly mortgage market survey.

“Mortgage rates were little changed this week just as the economy is showing potential for further gains in the near term,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.

Here’s a closer look at rates for the week ending Nov. 17.

30-year fixed-rate mortgages: averaged 4 percent with an average 0.7 point, rising slightly from last week’s 3.99 percent average. A year ago at this time, 30-year rates averaged 4.39 percent.
15-year fixed-rate mortgages: averaged 3.31 percent with an average 0.7 point, increasing from last week’s 3.30 percent. Last year at this time, 15-year rates averaged 3.76 percent.
5-year adjustable-rate mortgages: averaged 2.97 percent with an average 0.6 point, decreasing slightly from last week’s 2.98 percent average. Last year at this time, 5-year ARMs averaged 3.40 percent.
1-year ARMs: averaged 2.98 percent with an average 0.6 point, up from last week’s 2.95 percent average. A year ago, 1-year ARMs averaged 3.26 percent.

Source: Freddie Mac

Appraisals Take Center Stage in More Deals

David Himes — Mon, 07 Nov 2011 20:15:32 +0000

Appraisals continue to hamper deals. In the first six months of the year, one-third of real estate professionals say appraisals have caused a delay or canceling of contracts — that’s up from 29 percent for all of last year, the National Association of REALTORS® reports.

Lenders are requiring more thorough appraisals, which appraisers are saying requires them to pull more comparable sales, which sometimes may include foreclosures or short sales that sell at discounted prices. Appraisers used to cite about three recently sold homes but now lenders require two to three times that, David Stevens, president of the Mortgage Bankers Association told SmartMoney.

When the appraisals come in lower then the accepted offer — which more frequently is what is occurring — the seller either has to lower their price or the buyer has to pay the difference. From the three months ending September, 13 percent of real estate professionals say contracts were renegotiated to a lower sales price due to a low appraisal, according to NAR data.

Housing experts recommend that buyers add a statement in their contracts that says they’ll receive their initial down payment back if financing doesn’t come through the agreed price or the appraised value is below the offer in the contract, according to the SmartMoney article.

Source: “How Appraisals Are Derailing Home Sales,” SmartMoney (Nov. 4, 2011)

Mortgage Rates Drop Sharply This Week

David Himes — Fri, 04 Nov 2011 20:48:16 +0000

The 30-year fixed-rate mortgage, the most popular choice among home buyers, dropped to its second lowest reading on record this week, Freddie Mac reports in its weekly mortgage market survey.

“Market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates,” says Frank Nothaft, chief economist at Freddie Mac.

Here are how rates fared for the week:

30-year fixed-rate mortgages: averaged 4 percent, with an average 0.7 point, down from last week’s 4.10 percent average. The 30-year fixed-rate mortgage is the second lowest on record, just behind the 3.94 percent record reached on Oct. 6. A year ago at this time, 30-year rates averaged 4.24 percent.
15-year fixed-rate mortgages: averaged 3.31 percent, with an average 0.7 point, falling from last week’s 3.38 percent average. Last year at this time, 15-year mortgages averaged 3.63 percent.
5-year adjustable-rate mortgages: averaged 2.96 percent this week, with an average 0.6 point, dropping from last week’s 3.08 percent. At this time last year, 5-year ARMs averaged 3.39 percent.
1-year ARMs: averaged 2.88 percent this week, with an average 0.6 point, dropping from last week’s 2.90 percent average. A year ago at this time, the 1-year ARM averaged 3.26 percent.

Source: Freddie Mac