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Bud Zeller's Blog

By Bud Zeller | Broker in Placerville, CA
  • ‘Affordability Issues Are Real, Major Hurdle’

    Posted Under: Market Conditions in Gold River, Home Buying in Gold River  |  June 4, 2014 3:28 PM  |  180 views  |  No comments

    Fifty-two percent of Americans say they’ve had to make at least one major sacrifice in order to cover their rent or mortgage over the last there years, according to the newly released “How Housing Matters Survey,” commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation. The sacrifices may include moves from getting a second job and deferring saving for retirement to cutting back on health care and running up credit card debt. 

    “Affordability issues are real and a major hurdle,” says Lawrence Yun, chief economist at the National Association of REALTORS®. 

    In the past two years, home prices have risen 20 percent while wages have mostly stayed stagnant, Yun says. 

    “Only by adding more new supply, via housing starts, can home prices be tamed,” Yun told The Wall Street Journal

    About 15 percent of home owners report that their monthly mortgage payments on a median-priced home required more than 30 percent of the monthly median household income, which has long been considered the maximum for household payments. In some cities, home owners and renters are paying even more for housing expenses. For example, in Manhattan, mortgage payments can represent 77 percent of the median income and in San Francisco County about 70 percent. 

    Source: “Half of Americans Can’t Afford Their House,” The Wall Street Journal (June 3, 2014)

  • Mortgage Rates Reverse Course Last Week

    Posted Under: Market Conditions in Gold River, Financing in Gold River  |  April 13, 2014 1:09 PM  |  451 views  |  No comments

    Following two weeks of increases, average fixed-rate mortgages inched down this week, providing buyers some relief heading into the spring home-buying season, Freddie Mac reports in its weekly mortgage market survey.

    Freddie Mac recorded the following national averages for the week ending April 10:

    • 30-year fixed-rate mortgages: averaged 4.34 percent, with an average 0.7 point, dropping from last week’s 4.41 percent. Last year at this time, 30-year rates averaged 3.43 percent.
    • 15-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.6 point, dropping from last week’s 3.47 percent average. A year ago, 15-year rates averaged 2.65 percent.
    • 5-year hybrid adjustable-rate mortgages: averaged 3.09 percent, with an average 0.5 point, dropping from last week’s 3.12 percent average. Last year at this time, 5-year ARMs averaged 2.62 percent.
    • 1-year ARMs: averaged 2.41 percent, with an average 0.5 point, falling form last week’s 2.45 percent average. A year ago, 1-year ARMs averaged 2.62 percent.

    “Mortgage rates eased a bit following the decline in 10-year Treasury yields,” says Frank E. Nothaft, Freddie Mac’s chief economist. “Also, the economy added 192,000 jobs in March, which was below the market consensus forecast but followed an upward revision of 22,000 jobs in February. Meanwhile, the unemployment rate held steady at 6.7 percent.”

    Source: Freddie Mac

  • Housing Markets Continue to Show Gradual Improvement

    Posted Under: Market Conditions in Gold River, Home Selling in Gold River, Home Ownership in Gold River  |  January 19, 2014 9:56 AM  |  1,485 views  |  No comments
    Markets in 56 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI). This represents a net gain of two from the previous month. The index’s nationwide score of .86 indicates that, based on current permits, prices, and employment data, the nationwide average is running at 86 percent of normal economic and housing activity.

    “Forty-five percent of metro areas are recovering at a faster pace than the nation as a whole, with smaller markets leading the way,” said NAHB Chief Economist David Crowe. “Of the 56 markets that are at or above normal levels, 48 of them have populations that are less than 500,000, and many of these local metros are fueled by a strong energy sector, which is producing solid job and economic growth.”

    “More than 35 percent of all the markets on this month’s LMI are operating at a capacity of 90 percent or better of previous norms, which is a good sign that the housing recovery will continue to pick up steam in 2014,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

    Source: http://www.nahb.org/news_details.aspx?sectionID=122&newsID=16608

  • Home Sales Down, Inventory Up!

    Posted Under: Market Conditions in Gold River, Home Buying in Gold River, Home Selling in Gold River  |  July 22, 2013 1:53 PM  |  641 views  |  No comments

    Existing-home sales declined in June, but have remained well above year-ago levels for the past two years. Also, the median price shows seven straight months of double-digit, year-over-year increases, according to the National Association of REALTORS®.

    Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 1.2 percent to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2 percent higher than the 4.41 million-unit level in June 2012.

    “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” said Lawrence Yun, NAR chief economist.  “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

    “Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun predicted.

    The national median existing-home price for all housing types was $214,200 in June, up 13.5 percent from June 2012.  This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.

    Distressed sales were 15 percent of the market in June, down from 18 percent in May, and are at the lowest share since monthly tracking began in October 2008.  The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the price growth. Foreclosures sold for an average discount of 16 percent below market value in June, while short sales were discounted 13 percent.

    All-cash sales made up 31 percent of transactions in June, down from 33 percent in May; they were 29 percent in June 2012.  Individual investors, who account for many cash sales, purchased 17 percent of homes in June, down from 18 percent in May and 19 percent in June 2012.

    Source: National Association of REALTORS®

  • Some borrowers shortchanged in foreclosure settlement

    Posted Under: Financing in Gold River, Foreclosure in Gold River, Home Ownership in Gold River  |  May 19, 2013 9:15 AM  |  788 views  |  No comments

    Nearly 100,000 troubled borrowers were shortchanged on payments from Goldman Sachs Group Inc. and Morgan Stanley & Co., the Federal Reserve said — money intended to compensate for possible errors and abusesduring foreclosure proceedings in 2009 and 2010.

    The company hired to distribute the money, Rust Consulting, sent checks to about 96,000 borrowers on May 3 that “were smaller than the amounts that the Federal Reserve had specifically instructed Rust to send,” the central bank said Wednesday.

    It was just the latest in a series of problems afflicting a program known as the Independent Foreclosure Review. 

    Source: http://www.latimes.com/business/la-fi-mo-foreclosure-settlement-incorrect-checks-20130508,0,6535090.story

  • Court 'Confirms Block' on Clean-Energy Loans

    Posted Under: Remodel & Renovate in Gold River, Going Green in Gold River, Home Ownership in Gold River  |  March 20, 2013 4:06 PM  |  1,182 views  |  No comments

    A federal appeals court on March 19 upheld the government's decision to block Fannie Mae and Freddie Mac's participation in the fledgling Property Assessed Clean Energy program for solar panels and other energy-saving measures on homes in California.

    PACE allows local governments to pay the upfront costs of home improvements that provide clean power and reduce water and energy use. State officials note that the costs are financed by bonds and repaid by homeowners in property tax assessments, typically over a span of 15 to 20 years.

    California was preparing to enter the nationwide program in July 2010 when the Federal Housing Finance Agency prohibited the two government-sponsored enterprises from acquiring mortgages in homes participating in PACE.

    Source: "Court Upholds Ruling on Clean-Energy Loans," San Francisco Chronicle (03/19/13)

  • Economist Makes Bold Statement on Home Prices

    Posted Under: Market Conditions in Gold River, Home Buying in Gold River, Home Selling in Gold River  |  March 1, 2013 9:15 PM  |  613 views  |  No comments

    Home values could surge 35 percent without stretching housing affordability, Raj Dosaj, vice president of the home price index at LPS Applied Analytics, said during a recent webinar hosted by HousingWire. 

    Dosaj says that the increase in home prices could be less than that if mortgage rates rise, which he says they are predicted to do. 

    "During the peak of the housing run-up, affordability was stretched as the market sold off," Dosaj said. "As home prices dropped, affordability dropped."

    Industry reports are showing home prices rebounding and rising across the country. 

    "There are definite signs that there's room for growth," said Dosaj. "Things are generally looking good for the housing market."

    Source: “LPS: Home prices could skyrocket 35% without affecting affordability,” HousingWire (Feb. 28, 2013)

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