Average 30-year mortgage rate drops to 4.17%

WASHINGTON (AP) — Average U.S. rates on fixed mortgages eased slightly this week, remaining near historic lows.

Mortgage buyer Freddie Mac said Thursday the average rate for a 30-year loan declined to 4.17% from 4.20% last week. The average for the 15-year mortgage dipped to 3.30% from 3.31%.

Rising prices and higher interest rates beginning in mid-2013 have made homes less affordable for would-be buyers. At the same time, a limited supply of homes is available to buy. Sales of new homes are running about half the rate of a healthy housing market.

HOME PRICES: Eight housing markets at all-time highs

Reflecting the struggle for many Americans to afford new houses, data issued Tuesday by the Commerce Department showed that the pace of U.S. home construction slipped in May. Builders started work at a seasonally-adjusted yearly rate on 1.01 million homes, down 6.5 % from 1.07 million in April.

And U.S. homebuilders are feeling more confident about the housing market but don’t think it is healthy yet, the National Association of Home Builders/Wells Fargo builder sentiment index for June showed Monday.

Mortgage rates are about a quarter of a percentage point higher than they were at the same time last year. The increase in rates over the past year or so was driven in part by speculation that the Federal Reserve would reduce its bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced five declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.

After the central bank ended a two-day policy meeting, Fed Chair Janet Yellen sent the message Wednesday that

the economy still isn’t healthy enough

to grow at a consistently strong pace without the Fed’s help. Yellen made clear that despite a steadily improving job market and signs of creeping inflation, the Fed sees no need to raise short-term interest rates from record lows anytime soon.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from a week earlier at 0.6 point. The fee for a 15-year loan also was steady, at 0.5 point.

The average rate on a one-year adjustable-rate loan ticked up to 2.41% from 2.40%. The average fee remained at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 3.00% from 3.05%. The fee was stable at 0.4 point.

Courtesy of your Arcadia Real Estate Agent

The New Math of Renting vs. Buying

Here’s how to figure out which strategy makes the most financial sense.


May 2, 2014 6:17 p.m. ET
Buying a home has long been part of the American dream. But rising prices have made renting less expensive in many places.

People often aspire to own a home for reasons that have little to do with money, and rental options are limited in some communities. Yet owning property can limit your flexibility to move when you want and ties up a lot of your money.

Scott Anderson

The median sales price of existing single-family homes rose 11.4% in 2013 from the previous year—the highest yearly increase since 2005, according to the National Association of Realtors. Prices in many places, including Los Angeles, Baltimore and Portland, Ore., rose even more last year.

The monthly cost of renting was lower than buying in 20 large metropolitan areas at the end of last year, the most recent period for which data are available, according to figures provided exclusively to The Wall Street Journal by Deutsche Bank.DBK.XE -1.06% That is up from 15 large metropolitan areas a year earlier.

The bank calculates the costs in 54 markets based on average local rents and median home-sale prices, which it uses to estimate monthly mortgage payments for a hypothetical buyer in the 25% federal income-tax bracket.

Renting had been less expensive than buying on average across all the areas Deutsche Bank tracks since at least the early 1990s. But that changed during the financial crisis, as home prices plummeted and interest rates on mortgages dropped. The current rally in home prices appears to be pushing the housing market back toward the historical norm.

Where Renters Made Gains

Here are the metro areas where renting made the biggest gains against buying in the fourth quarter of last year compared with a year earlier.

A renter in Orlando paid $1.24 a month for every $1 a buyer spent last year, down from $1.44 in 2012.Corbis

The five markets where renting recently became cheaper than buying include some popular cities and suburbs where home prices are climbing fastest: Sacramento, Calif.; Phoenix; San Bernardino and Riverside, Calif.; Austin, Texas; and Northern Virginia.

Buying is still cheaper in 34 metropolitan areas Deutsche Bank examined, including Cleveland, Chicago and Atlanta, though prices rose last year in those areas, as well.

Renting has become more appealing financially than it was at the end of 2012 in places such as St. Louis; Orlando, Fla.; and Minneapolis, though buyers still pay much less than renters in those areas.

The buying advantage was slight in some places. Miami, San Antonio and Las Vegas are among the hot markets where renters appeared to be on the verge of being better off than buyers at year-end, according to the bank’s figures.

Buyers, of course, can build up equity as they pay down a mortgage, which can compensate for higher monthly costs.

Here is what you need to know to help figure out the most cost-effective way to keep a roof over your head. The first step is to understand the arguments in favor of buying and renting.

The Case for Buying

Many Americans see buying a home as an essential step in a successful life, and owning one can bring significant financial benefits.

The most obvious upside is that a home can significantly increase in value. The median sales price of existing single-family homes rose 81% from 1993 through 2013, according to the NAR.

The potential payoff can loom large in a buyer’s mind when home prices are going up rapidly, as they have recently. “We’ve already seen six to seven years of normal appreciation in the last 12 months” in many markets, says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla.

Many homeowners also can deduct mortgage interest from their income-tax bills along the way.


In addition, homeowners can tap into the equity in their homes for big-ticket expenses, such as college tuition, at interest rates that can be lower than other financing options—though that can backfire by saddling homeowners with debt they can’t easily repay.

Homeowners also don’t have to worry about a spike in rents. Jacquelyn Bilton, who is 34 years old, bought a three-bedroom home with a pool in Margate, Fla., in February for $200,000, after her landlord raised her rent 28% last year. She says her monthly housing costs are now about $300 lower.

“I couldn’t afford to be throwing money down the drain in rent when I could purchase a home,” she says.

As they age, homeowners can enjoy another benefit. If they pay off their mortgages around the time they retire, their housing costs can drop significantly just when they may want extra cash for travel, medical expenses and the like, says Chris Mayer, research director at the Paul Milstein Center for Real Estate at Columbia University.

To be sure, the dream also can turn into a financial nightmare. The collapse of the housing market starting in 2008, which triggered millions of foreclosures, is a vivid recent example of what can go wrong.

Still, owning a home can be well worth it for personal and psychological reasons that go beyond financial calculations.

The Case for Renting

Given the wide array of potential benefits, homeowners are sometimes surprised to learn that buying isn’t always the smartest financial option.

To begin with, the monthly cost of renting can be lower, even for a home of similar size and quality in the same community.

Homeowners are sometimes surprised to learn that buying isn’t always the smartest financial option.Bloomberg

Renters, for example, don’t pay property taxes, homeowner’s insurance and, in most cases, maintenance costs. These expenses can cost homeowners about 3% of the price of their home annually, experts say.

While those costs can be folded into monthly rent, apartment renters often pay a smaller share as landlords spread the costs among many tenants, says Stijn Van Nieuwerburgh, director of the Center for Real Estate Finance Research at New York University. If a window breaks or the toilet plugs up, your landlord—not you—pays for the repairs.

Renters don’t end up with a valuable asset, as buyers do when they pay off a mortgage. But renters might be able to make more money by investing the monthly savings, as well as the cash they would otherwise use for a down payment, he says.

The value of the average single-family home increased by 3.6% a year in the three decades through 2013, compounded annually, according to mortgage giant Freddie Mac. By contrast, the compound annual return on the S&P 500 over that period was 11.1%, according to Chicago-based investment-research firm Morningstar.

After moving to New York two years ago, Hunter Kearney, 27, looked into buying a condominium worth at least $2 million. But Mr. Kearney, an executive at a firm that sells graphite, concluded that renting a similar apartment was significantly less expensive.

“Your monthly costs end up being lower,” says Mr. Kearney, who says he saves about $2,000 a month over the cost of buying. He is investing some of the savings in the stock market.

Renters often have greater flexibility to move to a different part of the country, which can be important in a weak job market. They may feel freer to look for work in another city, and they don’t have to wait to sell their home if the right opportunity opens up.

Housing prices don’t need to decline as severely as they did during the financial crisis to cost homeowners significant sums, if they need to sell during a downturn. Modest declines in home prices are common.

Even people who want to own a home at some point can benefit from renting for a while to save up for a larger down payment. If the available inventory is thin, they can rent while they wait for a wider variety of homes to be listed for sale.

Handling a Hot Market

To calculate whether buying or renting makes more sense financially, you need to have a sense of your monthly costs in each case, including rent, mortgage payments, taxes, insurance and other related expenses that may apply to each option—as well as whether you would be more likely to spend or invest any savings from renting.

The verdict could differ considerably within a city, suburb or town, based on the location and the style and size of the homes you are exploring.

The Deutsche Bank data reflect an attempt to do that math across metropolitan areas, and essentially function as a general guide to each market.

Would-be buyers should proceed carefully. First, they should try to get a sense of how hot the local real-estate market is and whether buyers generally still have the upper hand, which is often the case far from the coasts and outside large cities.

If you are in a more-competitive market, be alert to the risk that you could end up in a bidding war that could drive up the purchase price. Being patient could pay off if prices cool down. In fact, slight corrections already have occurred in some markets.

In San Francisco’s East Bay area, for example, asking prices of some new homes declined 1% to 5% during the second half of last year, after builders raised prices by 5% to 18% in the prior quarter, according to Metrostudy, a housing research and consulting firm based in Palm Beach Gardens, Fla.

Gene and Erin Lash plan to sell their home in Danville, Calif., and are prepared to spend $1 million to $2 million on a larger house. But the couple has faced as many as 30 competing offers on each of the five homes they bid on and lost out every time, says Mr. Lash, a 48-year-old forensic accountant.

Now, the Lashes are also looking into renting a single-family home or an apartment as a short-term alternative to buying. “Everything is on the table,” Mr. Lash says.

Even in a hot market, the math can be more advantageous for buyers who plan to stay put for a while, typically at least five to seven years. That should be enough time for market corrections to pass, says Landon Nash, a real-estate agent in San Francisco with national brokerage Redfin.

Mr. Nash says he is telling would-be buyers in his area who plan to sell in fewer than five years that they run significant risk of selling at a loss. “We’re at the top of the market,” he says. “They might be better off as renters.”

Courtesy of your Arcadia Real Estate Agent

Paint Color Ideas: 7 Bright Ways With Yellow and Orange

Jennifer Ott
Yellow and orange are, hands down, the happiest hues of all. They remind us of glowing sunshine, pretty spring flowers and refreshing citrus fruits. They’re attention-grabbing hues best reserved for elements in a room that you want to stand out.If you lack ample lighting, I’d suggest using the bolder shades sparingly, as they can easily overwhelm a space, especially a small one. I’ve gathered seven examples of how to decorate with orange and yellow, and created paint color palettes inspired by each room so you can add some bold, warm color to your own home.

tropical bedroom by Gary McBournie Inc.
Gary McBournie Inc.
My favorite colors for ceilings are blue or yellow. Blue mimics the sky and gives a room a calm, expansive feeling. Yellow creates a sunny glow that warms up the entire room, as shown here. If you live in a hot and sunny climate, you probably want to stick to cooler colors, such as blue. But those of you in a cold or overcast climate can bring warmth and brightness into your home with hot yellow and orange hues. The orange used here is quite vibrant and works best as a small accent color — on the headboard and in the bedding.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Torchlightand Flame, from BehrNote: Due to differences in how interiors are lit and photographed, as well as how computer monitors are calibrated, the colors you see in these swatches and photographs may differ slightly from the actual colors. It’s always a good idea to view actual paint swatches from the manufacturer, or better yet, evaluate a large paint sample of the color you are considering, before finalizing your selection.

traditional bathroom by Linda Jaquez Architectural Photography
Linda Jaquez Architectural Photography
I love this happy-hued bathroom. How could you not start your day on the right foot stepping into this space first thing in the morning? The walls are the perfect shade of yellow — neither too soft nor too bright. A nice punchy orange is brought in through the tile and the shower curtain. If you want a low-commitment option using this palette, just stick to paint and accessories in the featured hues — they are relatively easy and affordable to change down the road.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Outgoing Orange and Jonquil, from Sherwin-Williams
contemporary living room by Maria Killam
Maria Killam
This is a lot of bold color, but it works here because there is nothing else competing with the hues. Bright colors are best paired with toned-down and neutral furniture, textiles and accessories. This is also a great example of using assertive color to call attention to desirable architectural elements, such as a fireplace.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Coconut Scent and Autumn Blaze, from Valspar
traditional kids by California Closets
California Closets
These fun colors work well in a kid’s or teen’s room. I like how the juicy orange color was used to set off the desk niche.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: New Dawnand Golden Groves, from Benjamin Moore
mediterranean living room by Matt Varnado - Varnado Photography
Matt Varnado – Varnado Photography
We tend to associate bold color with modern and contemporary spaces, but you can also inject big color into more traditional rooms. The rich reddish-orange wall color here pairs well with the lighter yellow-orange hue as well as the deep wood tones used throughout the room. What a gorgeous space — perfect for curling up in front of the fire on a cold evening.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Crowne Hill Yellow and Fireball Orange, from Benjamin Moore
contemporary kitchen by Kenneth M Wyner Photography Inc
Kenneth M Wyner Photography Inc
Neon yellow and orange hues are best used sparingly, and adjacent to windows where plenty of natural light can help ease the intensity. I like the small swaths of color here that punch up the otherwise white kitchen.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Yarborough Yellow and Fireworks, fromGlidden
contemporary family room Contemporary Family Room
Here’s another colorful sun-filled space with a bold orange on the wall. This is a rather saturated orange, but the beautiful oversize windows cut into the painted area, so it doesn’t feel overwhelming. The muted orange-yellow on the ceiling offers a soft contrast to the wall color. A white ceiling here could have looked too cold and jarring against the orange.
by Jennifer Ott Interior Design
Jennifer Ott Interior Design
Example palette: Navel andCherish Cream, from Sherwin-WilliamsTell us: Are you a fan of these hot orange and yellow color combos, or do they leave you cold?


Courtesy of your Arcadia Real Estate Agent

How to Almost Guarantee That You Will Get Your Apartment Deposit Back

Lee Hansen, Yahoo Contributor Network

Feb 24, 2014 “Share your voice on Yahoo websites.

Don’t make the mistake in assuming that you will automatically get your deposit back when leaving your apartment. Before moving into an apartment take “before” pictures to keep of how it looked when you first moved in. Do the same when you leave. It will be a good reference point to have. Be sure that it is move-in ready with no problems that you might be blamed for. Include the following items or things to do:

Holes from walls - If you have holes in your walls from hanging pictures be sure to use putty and a little paint to repair them. Landlords want the apartment to be left in good shape before renting it to another tenant. The less they have to do in prepping it the better.

Clean out closets completely - Be sure to remove all your clothing from closets and storage area. If you don’t want them, donate to a local charity if they are still in good shape. It is not the landlord’s responsibility to figure out what to do with them.

Clean appliances - Although they may not be in pristine condition they should be thoroughly cleaned for the next person who will occupy the apartment.

Trash and debris - Get rid of all trash and debris from the premises. Aside from being a sanitary issue, it could cause a problem with rodents and roaches being attracted to the garbage.

Floor care - If you have carpet be sure to vacuum it thoroughly. If you have hardwood floors sweep well.

Issues related to landlord - If you have problem with things such as broken pipes and plumbing, contact the landlord immediately. No need in paying for something that is the landlord’s responsibility.

Paint - Some landlords will allow tenants to paint their walls when they move in with the stipulation that they paint them back to its original color before you leave.

Notification - Let the landlord know well in advance when you plan on leaving. Breaking your lease will almost guarantee that you won’t get your deposit back.


While it might take a little elbow grease on your part, it will be worth the effort when you get that deposit back.


What this article does not say, but in California you have a right to a pre inspection: ”Pursuant to California Civil Code § 1950.5, you have the right to request that the landlord or landlord’s agent (“Landlord”) make an inspection of the Premises prior to the termination of your tenancy for the purpose of giving you an opportunity to remedy deficiencies (consistent with your lease or rental agreement), in order to avoid certain deductions from your security deposit.”

Courtesy of your Arcadia Real Estate Agent


Mortgage Rates Only Slightly Lower After Weak Employment Data

Feb 7 2014, 3:10PM

Mortgage rates were finally lower today, but the drop was modest given that it was the product of a weak jobs report–typically a bigger market mover.  Additionally, when viewed against the past three straight days of weakness, today only got us back to Wednesday’s levels.    The most prevalently quoted conforming 30yr fixed rate for the very best borrower scenarios (best-execution) remains at 4.375% for the most part though 4.25% and 4.5% are both fairly close.  When adjusted for day to day changes in closing costs, rates fell an equivalent of 0.04% today.

Throughout January, rates were moving lower with purpose.  This continued into early February to a point where we were left to consider whether this was a market-based correction that had run its course or potentially just the first phase in a bigger move lower.

Any time rates are approaching those sorts of “crossroads levels” ahead of a report like the Employment Situation, we can infer some indecision on the part of financial markets as well as the hope that the important report will provide guidance.  In that regard this week has ended in somewhat of a frustrating fashion.

While the numbers were weaker, and while this did help rates improve a bit today, the movement didn’t do anything to clear up the indecision.  In other words, rates had been approaching a fork in the road and the jobs report did not clearly indicate which path has been chosen.  When that happens, we move on to the next major potential dose of guidance.  Fortunately, we don’t have to wait long this time as the most likely event will be Janet Yellen’s first congressional testimony next week.  In terms of lock/float risk, ideally, we’d want to be seeing a stronger response to weak jobs data in order to perceive a higher probability that rates continue lower unassisted.


Loan Originator Perspectives




“Lender pricing isn’t much better this morning despite the weak employment data and gains in MBS. With the employment data behind us now I think floating is the way to go. The employment data has been weakening as has some other data of late. Weaker economic data is good for mortgage rates.” -Victor Burek, Open Mortgage

“Yesterday I said lock, and while there has been a small “token” of improvement, I think that was and still is the best piece of advice. We appear to be at the low end of the current range and we’ll need significant data or equity market sell off to further our cause. On the other hand, we could start seeing a tick upward in rates, simply as a course of action with no data. Lock ‘em up is still the best advice.” -Brent Borcherding, Capital M Lending

“This is proof that the market is rigged. Maybe not, but I guess it will take 3 bad jobs reports in row for the reality to get traded. Weather is once again the excuse for low numbers. If this is the result of a bad number, then we would have gotten killed had numbers been on target and Dec revised higher. Lock while we’re still near 3 month lows as any excuse for stocks to rebound is on the table and that hurts bonds.” -Michael Owens, VP of Mortgage Lending at Guaranteed Rate, Inc. NMLS # 107434

“January’s NFP report disappointed today, which helped us recoup the past several days’ losses. Pricing improved by around .25% for most loans. Not anticipating further huge gains soon, looks like rates are settling into the current range.” -Ted Rood, Senior Mortgage Planner, Wintrust Mortgage

“As much of the advice given over the week leading up to todays always important NFP report, many of us felt it would not be as important with the weather as a viable reason to point a finger if it was a poor number. We got just the poor number that usually leads to a large rally. The number helped cut into the losses from Wednesday or Thursday, but it still wasn’t enough for a big rally or a move lower in best execution rates. I still recommend locking at application moving forward as it feels it will take something very big to push lower lows in rates and we are already at or near the lowest rates seen in months.” -Steve Chizmadia, Mortgage Consultant MLO#244902, American Capital Home Loans


Today’s Best-Execution Rates

  • 30YR FIXED - 4.25% -4.375%
  • FHA/VA – 3.75%
  • 15 YEAR FIXED -  3.25-3.375%
  • 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

  • The prospect of the Fed reducing its asset purchases weighed heavy on interest rates for the 2nd half of 2013, causing volatility and generally pervasive upward movement.
  • Tapering ultimately happened on December 18th, 2013.  Markets had done so much to come to terms with it ahead of time that it essentially just confirmed the the 6 month move higher in rates, but didn’t make for another immediate spike higher.
  • Rates moved gradually higher into the end of 2013 and began to move gradually lower into the beginning of 2014, helped along by a weak employment report on January 10th.  This report raised doubts as to whether or not the Fed would continue tapering asset purchases at the same pace, but it was ultimately a flare up in emerging markets and weakness in stocks that fueled bond-market positivity and allowed rates to hit 2014 lows on the same afternoon the Fed reduced asset purchases by another $10bln.
  • With that in mind, further interest rate resilience in the face of tapering only looks limited by ability of emerging markets and equities to continue being weak.
  • (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

Quantum Properties Accepts Bitcoin For Condo Deposits

The Huffington Post B.C.  |  Posted: 01/17/2014 11:03 pm EST  |  Updated: 01/21/2014 8:10 pm EST

quantum properties bitcoin

A Fraser Valley-based developer is tapping into digital currency to provide more options for buyers.

Quantum Properties in Abbotsford is B.C.’s first real estate developer to accept Bitcoin for deposits on its condos, Business in Vancouver reported.

And while no buyers have used the currency to purchase a home, the company wants to be innovative, CEO Diane Delves told the newspaper.

“I like to keep up with current trends,” she said. “Why not get in on it?”

Bitcoin is a form of Internet money that allows peer-to-peer purchases online. It appeals to consumers because it removes a middleman such as a central bank or credit card company, and it permits anonymity in online payments.

Vancouver became the first city to host a Bitcoin ATM after a kiosk was installed at a downtown Waves Coffee in October 2013. Quantum Properties’ Vancouver office islocated next door, Global News reported.

While popular, the currency’s value has shown some vulnerability. The price of Bitcoin crashed in early December after China’s central bank told financial institutions that the currency was not real.

Delves, however, doesn’t seem concerned by any sudden drops in value.

“We’re not going to expose ourselves to undue risk, so we will probably convert a lot of the Bitcoin into Canadian dollars,” she told The Abbotsford News.

Quantum Properties’ projects include Mahogany at Mill Lake, a luxury high-rise in Abbotsford, where 78 units are for sale; Orchid Riverside Condo Homes in Port Coquitlam, which is currently under construction; and Abacus Uptown in Abbotsford, where there are 68 homes are on the market.

The company, however, is not the first B.C. business to jump in on Bitcoin fever.

ClearlyContacts.ca, a Vancouver-based eyewear business, became the first major Canadian e-commerce retailer to accept the currency earlier this month, The Vancouver Sun reported.

That decision came after the Montreal Economic Institute warned that Bitcoin lacks the legal framework needed to become mainstream.

Home Buying Season Isn’t Over

Nov 19, 2013


By: Realtor.com Team

The U.S. housing market is in a completely different position than this time last year, with solid price increases, steady inventory and strong demand continuing well into the fall season, according to realtor.com’s National Housing Trend Report for October 2013.

Median U.S. home prices in October were relatively unaffected by the usual seasonal patterns, with a 7.57 percent increase year over year. National inventory is stabilizing after the dramatic declines seen earlier this year, although the nation still is experiencing significant supply shortages. Most notably, median age of inventory – a leading indicator of demand – is down 11.32 percent from last year, demonstrating resilience to seasonal changes and stabilized inventory.

“Instead of the usual seasonal slowdown, October data show the 2013 fall market moving at a fast pace,” said Errol Samuelson, president of realtor.com. “Inventory has returned to last year’s levels, but prices continue to strengthen and homes are moving significantly faster compared to this time last year.”

“This demonstrates that the overall strength of the national housing market is determined partly by inventory availability,” said National Association of Realtors Chief Economist Lawrence Yun.  “We expect rising home price conditions to continue through the balance of the year.”

Key Market Indicators for October 2013

October 2013 Year-over-Year Percentage Change Month-over-Month Percentage Change
Number of Listings 1,905,064 -1.51 percent -0.71 percent
Median Age of Inventory 94 days -11.32 percent 1.08 percent
Median List Price $199,000 7.57 percent -0.25 percent


National Perspective:

    • After six months of steady improvement, housing supplies are now just 1.51 percent lower than they were one year ago, which signals a greater balance between demand and supply.
    • Median age of inventory is down 11.32 percent from last year, and rose slightly from 93 days last month to 94 days in October. This suggests that properties continue to turn over quickly in contrast to the usual seasonal patterns, and despite increasing prices and stablizing inventory.
      • Median list prices are 7.57 percent higher than where they were one year ago. Monthly prices fell slightly in October, but remained resilient against the usual seasonal patterns and stabilizing inventory.

Market Highlights:

    • The report’s October figures identified several markets with rapid turnover, some at roughly half of the national median “days on market” figure of 94 days. Oakland remains the national leader at just 30 days. Only Washington, DC has shortened its age of inventory from September; the rest have increased time on market, while Phoenix remained flat.

Metropolitan Areas with the Shortest Median Days on Market

October 2013

Oakland, CA


San Francisco, CA


San Jose, CA


Denver, CO


Stockton-Lodi, CA


Washington, DC-MD-VA-WV(DC)


Phoenix-Mesa, AZ


Detroit, MI


Sacramento, CA


Seattle-Bellevue-Everett, WA














The report also highlighted two other sectors of individual market health.

      • Widespread Price Increases  ­– Detroit continues to lead the country in year-over-year list price increases, followed by markets in California and Nevada.  Eighty-five percent of the 146 markets covered by realtor.com reported year-over year increases in list price, with just 19 markets showing price declines in October.
      • Market Inventories Shift – Decreases are steady and increases are on the rise. The number of markets where inventories were down by 5 percent or more on a year-over-year basis continued its steady decline, dropping from 102 markets in June to 65 markets in October. At the same time, inventory grew in more than twice the number of markets in October (49) compared to June (22), and the number of markets with inventories that are up by at least 5 percent over the year rose from 15 markets in June to 30 markets in October.

Note: Realtor.com regularly tracks real estate data and develops monthly reports featuring the number of listings, median age of inventory and median list price across the U.S. and in specific markets, as well as provides year-over-year and month-over-month changes. These reports are the only ones pulled directly from the realtor.com database, where 90 percent of listings are updated every 15 minutes from more than 800 MLSs. National data in October reflects an adjustment in inventory of approximately 1 percent compared to previous months, reflecting an update in four southern California markets identified by realtor.com’s enhanced auditing protocols and attributed to a system change in data collection earlier in the year. Realtor.com regularly reviews and updates historical data to provide the most accurate and comprehensive market information available.

Banks abandon mortgage preapprovals

What the decline of preapprovals means for homebuyers

By AnnaMaria Andriotis

The mortgage preapproval, for years a crucial step in the home-buying process, is losing its luster with lenders, new data shows.

A mortgage preapproval is a written commitment lenders give to buyers that states the maximum size home loan they can get as well as the likely interest rate. Buyers rely on preapprovals to make sure they’re shopping for a home that’s in their price range. But new federal data suggests lenders are scaling back on preapprovals. Among the top 25 mortgage lenders, just 29,912 preapprovals resulted in mortgages that borrowers received to purchase a home last year, according to data released last month by the Federal Financial Institutions Examinations Council. That’s down from 101,626 in 2007, before the housing downturn. Preapprovals accounted for 4% of purchase mortgages that were originated by these lenders last year, down from 9% in 2007.

The bank that rejects the most mortgages

In addition, preapprovals—which have traditionally been considered one of the first steps to getting a home loan—did not precede any of the mortgages doled out to home buyers by 14 of the largest 25 lenders last year. “The popularity of preapprovals is quite low,” says Mike Lyon, vice president of mortgage operations at Quicken Loans. (The mortgage lender had 598 preapprovals result in mortgages last year, down 43% from 2007, according to this government data.)

Andy Dean Photography / Shutterstock.com

The demise of the preapproval comes at a delicate time for home buyers. As competition heats up, bidding wars are becoming the norm; for prospective buyers to stand out to sellers, they often need to show proof that they have lined up financing and are ready to proceed with the transaction, says Jim Gaines, research economist at Texas A&M University’s Real Estate Center. Preapprovals provide that evidence to sellers, and buyers who lack them will have a hard time getting a home that has many offers on it. Preapprovals may also provide some leverage to buyers who are competing against all-cash buyers, who accounted for 32% of existing-home sales in August, up from 27% a year prior, according to the latest data from the National Association of Realtors. Because they don’t need a mortgage, all-cash buyers often make lower offers on homes; a home buyer with a higher offer and a preapproval could beat them out, says Gaines.

Bernanke gives home buyers a breather

To be sure, this government data may not encompass all preapprovals. The numbers are released under the Home Mortgage Disclosure Act, which requires lenders to submit their mortgage and preapproval numbers to the federal government. Some lenders say they don’t submit data for their preapprovals because they don’t meet the federal definition. The official criteria include a written commitment to give a home loan for a certain period of time, with the caveat that approval can change only for a few reasons including a change in the home buyer’s financial standing or some other conditions that could derail a sale, like a report of termites in the home.

Housing experts, however, say the decline in preapprovals is largely due to dwindling competition among mortgage lenders for new clients. Prior to the recession, lenders used preapprovals as way to attract would-be borrowers. Buyers who had this commitment from a lender were more likely to turn to this company when they were ready to get the actual mortgage, says Keith Gumbinger, vice president at mortgage-info site HSH.com. In that way, preapprovals became a revenue source for lenders. Since the recession, many lenders have shut down, and that has decreased competition for buyers, he says.

Separately, lower-than-expected appraisals of homes have resulted in fewer preapprovals, says Gumbinger. Preapprovals are usually given before buyers identify the home they want to buy. When the home’s appraisal is determined to be lower than the purchase price the buyer and seller agreed to, the lender often requires the buyer to come up with the extra cash to make up the difference; buyers who are unable or unwilling to do so walk away, and the preapproval ends up derailed.

Housing markets about to get squeezed

Several banks, including Chase and Bank of America, say rather than preapproving home buyers, they’re mostly doing pre-qualifications. With pre-qualifications, lenders inform borrowers of the size of the loan they can qualify for based on their stated income and assets as well as an initial credit check. Historically, pre-qualifications were the first step buyers would take before shopping, which was then followed by a preapproval when they became serious about a specific home they wanted to purchase.

To give buyers a better idea of where they stand, Chase says it provides a more detailed prequalification program through which buyers get a “conditional approval” that usually lasts 90 days, which they can share with the seller. The bank says this type of approval differs from the federal definition of a preapproval because it is not a written commitment; instead, its commitment is often delivered after verifying borrowers’ income, employment and the home’s appraisal. Similarly, a Bank of America spokesman says the bank wouldn’t approve a buyer until the home is appraised and the borrower’s financial condition is fully vetted.

A prequalification doesn’t provide the same leverage to buyers though as an official preapproval. Pre-qualifications are typically based on average mortgage rates rather than the rate that’s close to what the borrower would actually get. Also, most lenders can rescind a prequalification, whereas a preapproval is a commitment that usually lasts two to three months.

Mortgage Rates Stumble in Feeble Economy

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Mortgage rates retreated this week as investors grew anxious over weaker-than-expected economic data and escalating tensions in Syria.

The benchmark 30-year fixed-rate mortgage fell to 4.62% from 4.74% last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.35 discount and origination points. One year ago, that rate stood at 3.8%. Four weeks ago, it was 4.59%.

The benchmark 15-year fixed-rate mortgage fell to 3.66% this week, compared to 3.75% last week, and the benchmark 5/1 adjustable-rate mortgage fell to 3.615 from 3.69%. The benchmark 30-year fixed-rate jumbo fell to 4.77% from 4.88%.
Weekly national mortgage survey
Results of Bankrate.com’s Aug. 28, 2013, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
30-year fixed 15-year fixed 5-year ARM
This week’s rate: 4.62% 3.66% 3.61%
Change from last week: -0.12 -0.09 -0.08
Monthly payment: $847.84 $1,192.56 $751.09
Change from last week: -$11.88 -$7.36 -$7.44

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The drop brings rates closer to where they were before last week’s spike, when rates reached their highest levels in more than two years.

“Mortgage rates had increased a fair amount over the last 60 days. A pullback was inevitable,” says Bob Walters, chief economist for Quicken Loans.

Bad news pushes rates down

Weak economic news and concerns over the situation in Syria have helped keep a lid on rates this week, Walters says.

U.S. orders for long-lasting manufactured goods, such as cars and appliances, fell by 7.3% in July, the Commerce Department said this week. New-home sales plunged 13.4% in July, the Census Bureau reported. And pending home sales declined 1.3% in July, according to the National Association of Realtors.

“Bad economic news is good for interest rates,” Walters says. That’s because they cause nervous investors to seek safety in U.S. Treasury and mortgage bonds. Increased demand for bonds tends to result in lower mortgage rates.

The decline in home sales could be a reflection of higher mortgage rates, some industry observers say.

“The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown,” says Lawrence Yun, NAR’s chief economist. “However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West.”

Despite the recent adjustment, mortgage rates are still 1 percentage point higher than they were in May.

Where are rates headed?

Homebuyers may get a short break on rising interest rates for now, mortgage professionals say. “Mortgage rates should ease through mid-September,” says Dan Green, a loan officer for Waterstone Mortgage in Cincinnati. “There’s little reason for rates to rise.”

Investors remain anxious about a potential U.S.-led attack on Syria and concerns over use of chemical weapons by President Bashar al-Assad’s government.

“The recent escalation of tensions in the Middle East has caused a flight to quality, where traders sell stocks and buy safer bonds,” Walters says.

It’s possible that the tension in Syria will push rates a little lower in coming days, but don’t bet on it.

“Rates falling one-eighth of a percentage point won’t change your life,” Green says.


Courtesy of your Arcadia Real Estate Agent

Housing recovery continues to heat up

Despite uncertainties, housing has found its footing

Christina Mlynski
August 13, 2013 4:06pm
Regardless of an inadequately housing supply, rising home prices reacting to strong demand and difficult lending environment, market expectations remain bullish on housing.

Nonetheless, housing is in its early stages of recovery and panelists at the Bipartisan Policy Center’s conference believe it’s not time for the Federal Reserve to take their foot off the bond-buying gas pedal just yet.

“There is a cyclical and structural nature to the problem,” explained Paul Weech of Housing Partnership Network.

He added, “We haven’t solved for the underlying structural problem and if we revert back to the norm, we still have millions of homes trying to get back in the full market recovery.”

One of the major factors still impacting the housing market is underwriting standards.

Fannie Mae senior vice president and chief economist Doug Duncan pointed out that there is a high correlation between the business cycle and the credit cycle, which will ultimately lead to an established fixed floor of the credit box.

“If in the regulatory process we can establish a fixed floor then we’ll change fundamentally the level of housing,” Duncan explained.

Looking to the future state of housing, experts agreed that immigration will play a significant role in the housing recovery.

Data taken from 2012 and estimated through 2050 shows that the economy will have 15 million less workers if the immigration rate continues, meaning less people in the housing market and less people paying into their entitlements, Duncan noted.

Another group of Americans that will affect the future of housing is the baby boomer generation, which is the fastest growing age group.

Many have a desire to remain in a home, but want to be mobile. As a result, homebuilders are trying to find new ways to accommodate these needs as well as attract first-time homebuyers to market.

Conine Residential Group president Kent Conine explained that homebuilders are introducing new innovations and productions into the marketplace.

For instance, Conine is in the process of developing a system in which seniors sell their current homes and downgrade to plain vanilla property, which will allow them to travel, while still maintaining a home.

On the reverse side, many homebuilders are going back into the inner cities to tear renovate properties in the hopes of enticing first-time homebuyers into the market.

“While it’s far from where it needs to be, housing is improving,” stated Realogy Holdings Corp. chairman and chief executive officer Richard Smith.

He concluded, “If given a little nudge from regulators and Congress to put in some definitive rules, housing has only one way to go, up.”


Courtesy of your Arcadia Real Estate Agent