Sales of Existing Homes Rise as Market Stabilizes

Sales of existing U.S. homes rose in April, driven by broad-based gains in demand that signal the market is stabilizing.

Purchases, tabulated when a contract closes, increased 3.4 percent to a 4.62 million annual rate, figures from the National Association of Realtors showed today in Washington. The median price jumped by the most in six years. 

Owner-occupied properties are taking over from all-cash deals by investors snapping up distressed houses, the agent’s group said. Employment gains, depressed prices and record-low mortgage rates may bring more dwellings within reach of Americans, eliminating a source of weakness for the world’s largest economy just as risks from Europe’s debt crisis climb.

“We are making incremental progress,” said Millan Mulraine, a senior U.S. strategist at TD Securities Inc. in New York, who correctly forecast the sales pace. “People are becoming more confident about job prospects and about taking on mortgages. This is all positive for the economy.”

Stocks climbed after the report. The Standard & Poor’s 500 Index rose 0.5 percent to 1,322.63 at 12:04 p.m. in New York. The S&P Supercomposite Homebuilder index jumped 2.4 percent.

The April sales pace was in line with the 4.61 million median forecast in a Bloomberg News survey. Estimates of the 73 economists ranged from 4.47 million to 4.8 million. The prior month’s pace was revised to 4.47 million, from a previously reported 4.48 million. April’s total was just shy of the 4.63 million reached in January that was the highest in almost two years.

Europe and Asia

Elsewhere, U.K. consumer prices climbed 3 percent in April from a year earlier after a 3.5 percent gain in the 12 months ended in March, the Office for National Statistics said today in London. The rate is within the government’s boundaries for the first time since February 2010.

Japan’s foreign investments and assets, meantime, grew to the second-highest level on record as companies used the stronger yen to make acquisitions abroad.

The U.S. real estate market’s improvement has been slow to evolve. Existing-home sales climbed to 4.26 million last year from 4.19 million in 2010. Demand peaked at 7.1 million in 2005 during the housing boom. In 2008, sales totaled 4.11 million, the least since 1995. Resales may rise to a 4.6 million to 4.7 million range this year and reach as much as 4.8 million in 2013, the Realtors group projected this month.

“We are breaking out,” Lawrence Yun, NAR chief economist, said in a news conference today as the figures were released. “With each passing month, there is job creation. Affordability has been very high. This is a very good combination.”

Median Price

The median price of an existing home climbed 10 percent to $177,400 from $161,100 in April 2011, today’s report showed. It was the biggest year-to-year gain since January 2006 and reflected a seasonal mix in demand toward bigger houses and fewer distressed sales, Yun said.

Families return to the market at this time before the start of a new school year, pushing up demand, he said. Cash transactions, distressed properties and investors accounted for a smaller share of all purchases last month, he said.

Purchases improved in all four regions, led by a 5.1 percent gain in the Northeast.

The number of previously owned homes on the market climbed 9.5 percent to 2.54 million. At the current sales pace, it would take 6.6 months to sell those houses compared with 6.2 months in March. April is usually the peak, or close to the peak, month for inventory for the year, Yun said.

Single-Family Homes

Sales of existing single-family homes increased 3 percent to an annual rate of 4.09 million, while those of multifamily properties, including condominiums and townhouses, rose 6 percent to a 530,000 pace.

The group’s affordability index, which is based on a combination of resale prices, household income and mortgage rates, reached a record high in the first quarter, a report this month showed.

Borrowing costs remain attractive. The average rate on a 30-year fixed mortgage fell to an all-time low of 3.79 percent in the week ended May 17, according to data from Freddie Mac going back to 1971. The average 15-year rate dropped to 3.04 percent, also a record low, the McLean, Virginia-based mortgage- finance company said.

Rising employment and incomes may provide more support for housing. The unemployment rate fell in April to a three-year low of 8.1 percent as employers added 115,000 jobs, according to Labor Department figures.

Pulte Orders

PulteGroup Inc. (PHM), the largest U.S. homebuilder by revenue, said orders rose 15 percent to 4,991 homes in its first quarter, and backlogs increased 12 percent to 5,798 homes.

“It was the first quarter in several years that fundamental demand came in stronger than expected,” Richard Dugas, chief executive officer of the Bloomfield Hills, Michigan-based company, said during an April 26 conference call with analysts. “We are pleased with how the year has started off, including a continuation of better sales activity thus far in April.”

Foreclosure filings fell to a five-year low in April as lenders sought to avoid seizing property. The number of default, auction and seizure notices sent to homeowners totaled 188,780 last month, down 14 percent from a year earlier and 5 percent from March, according to RealtyTrac Inc.

To contact the report on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010

FHA may loosen limits on condo mortgages

The revisions could remove at least some of the obstacles that have dissuaded condo homeowner association boards from seeking approval or recertification of their buildings for FHA loans.

By Kenneth R. Harney  May 20, 2012

WASHINGTON — Thousands of condominium owners and buyers around the country could soon be in line for some welcome news on mortgage financing: Though officials are mum on specifics, the Federal Housing Administration is readying changes to its controversial condominium rules that have rendered large numbers of units ineligible for the agency's low-down-payment insured mortgages.

The revisions could remove at least some of the obstacles that have dissuaded condominium homeowner association boards from seeking FHA approval or recertification of their buildings for FHA loans in the last 18 months. Under the agency's regulations, individual condo units in a building cannot be sold to buyers using FHA-insured mortgages unless the property as a whole has been approved for financing.

According to condominium experts, realty agents, lenders and builders, the FHA's rules have become overly strict and have cut buyers from their best source of low-cost mortgage money, thereby frustrating the real estate recovery that the Obama administration says it advocates.

Christopher L. Gardner, managing member of FHA Pros, a national consulting firm based in Northridge that assists condo boards in obtaining FHA approvals, said barely 25% of all condo projects that are potentially eligible for FHA financing are now approved. That is despite the fact, Gardner said, that FHA financing is the No. 1 mortgage choice for half of all condo buyers and is crucial to many first-time and minority purchasers.

Moe Veissi, president of the National Assn. of Realtors and a broker in Miami, said the FHA's strict rules "have had an enormous impact on individuals" across the country, especially residents of condo projects who find they are unable to sell their units because their condo board has not sought or obtained approval from the FHA as a result of objections to the agency's strict criteria.

This in turn depresses the prices that unit owners can obtain and ultimately harms their equity holdings and financial futures, Veissi said.
FHA officials defend their requirements as prudent and necessary to avoid insurance fund losses but have expressed a willingness to reconsider some of the issues that have upset condo owners and the real estate industry. Among the biggest areas of criticism of the FHA's rules are its limitations on:

•Non-owner occupancy. The agency requires that no more than 50% of the units in a project or building be non-owner-occupied. This rule alone has made large numbers of condominiums in hard-hit markets ineligible for FHA financing, where investors have purchased units for cash to turn into rentals.

•Delinquent condo association fee payments. The FHA refuses to approve a project where more than 15% of the units are 30 days or more behind on payments of condo fees to the association. Given the state of the economy, this has been a problem for thousands of associations, even in relatively prosperous markets. Steve Stamets, a loan officer with Apex Home Loans in Rockville, Md., said some sellers and buyers have been so frustrated by the rule that they have offered to pay the amount of delinquent fees needed to bring the overall project into compliance "just to get the deal done. This is a ridiculous situation," Stamets said. "When somebody calls up now and says they want to buy a condo with an FHA loan, I cringe."

•Nonresidential space usage. The FHA has set a cap of 25% of the total floor space in a project for commercial use. Critics say this is too low and unrealistic for condo projects in urban areas, where retail and office revenues can be important to overall financial feasibility.

The agency has imposed a long list of other requirements on insurance and reserves, plus a highly controversial rule that associations interpret as creating harsh legal liabilities for condo board officers if applications for FHA approvals contain inaccuracies. Andrew Fortin, vice president for government and public affairs at Dallas-based Associa, one of the country's largest homeowner association management firms, said many boards, facing the prospect of severe penalties, have refused to apply solely because of this personal liability burden.

The FHA is expected to clarify the personal liability language and make other modifications in its forthcoming rules. Whether the changes will be enough to persuade homeowner boards to apply for approvals in large numbers is uncertain, but industry experts say they — and residential unit owners — are likely to welcome whatever loosening of the current restrictions FHA can offer.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

Homes for sale grow scarce as sellers wait

By John Gittelsohn and Prashant Gopal BLOOMBERG NEWS

 A real estate agent near California’s Silicon Valley seeks sellers by combing property records for people who’ve owned their houses for at least 40 years. A Denver-area broker offers half his commission for a listing, while a counterpart in South Florida hosts happy hour gatherings at bars to loosen up homeowners reluctant to sell.

Real estate agents, who spent the six-year U.S. housing collapse coaxing buyers off the fence, are now hunting for sellers as home inventories hover near lows last seen in 2005. A scarcity of properties signals the housing market’s uneven recovery as purchasers trying to take advantage of record affordability run up against homeowners choosing to stay put in properties that aren’t worth as much as they owe.

“It’s a sign of transition from a slow slide down to what hopefully will be a solidly improving market,” Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School, said in a telephone interview. “We’re not going to have a healthy market until we can have move-up buyers purchase homes and not simply stay in place.”

The number of homes listed for sale in the U.S. fell 22 percent to 2.37 million in March from a year earlier, according to the National Association of Realtors. That’s a 6.3-month supply at the current sales pace, which is considered by the association to be a balance between buyers and sellers. In April, inventories fell to less than a three-month supply in markets including San Francisco, Silicon Valley, Denver, Phoenix, San Diego, Los Angeles, northern Virginia and Seattle, according to online brokerage Redfin.

Lack of Sellers
“The places where the market is most competitive — like Washington, D.C., Phoenix and San Francisco — are where sales volume is actually declining,” Glenn Kelman, Redfin chief executive officer, said in a telephone interview from Seattle, where his company’s based. “The limiting factor on sales volume isn’t a lack of buyers. It’s a lack of sellers.”

Silicon Valley homes were on the market for a median 49 days in April, down 29 percent from a year earlier, according to Altos Research LLC. That compares with a median 107 days in 30 metropolitan areas tracked by the Mountain View, Calif.- based real estate data company.

Phyllis McArthur, a Realtor in San Mateo, Calif., sent letters to 18 homeowners who bought their properties more than four decades ago, asking if they were willing to sell to families who want to put their children in the school system.

“I got a call back from one gentleman who said, ‘They’ll have to carry me out feet first,’ ” McArthur said. “I said to him, jokingly, ‘When you feel yourself slipping away, will you call me?’ ” Record Affordability
A housing affordability index that’s based on a combination of resale prices, household income and mortgage rates reached an all-time high in the first quarter, the National Association of Realtors reported. The index shows that a family with the median income of almost $61,000 could afford a $325,500 house, which is more than double the median existing single-family home price of $158,100 in the U.S.

Finding a seller takes work. The average person who bought in the last decade would lose money on a sale, because home prices have plunged to October 2002 levels, the S&P/Case-Shiller index of home prices in 20 U.S. cities shows. About 11.1 million homeowners have negative equity, or owe more on their mortgages than their homes are worth, which limits their mobility, according to a March 1 report by real estate data provider CoreLogic Inc.

Prices haven’t recovered even as demand rises. Existing home sales this year through March were the highest for a first quarter since 2007, the National Association of Realtors reported on May 9. The median price in 146 metropolitan areas tracked by the group fell 0.4 percent from a year earlier to $158,100.

Time to Buy
While it’s unclear when prices will increase, rising rents and record-low interest rates make now a good time to buy, Mark Kiesel, a Pacific Investment Management Co. managing director, said in a May 4 research note about his decision to become an owner again six years after selling his last house at the peak of the market in 2006.

The inventory has tightened as investors, drawn by bargain prices and rising rents, bought 22 percent of homes sold in the first quarter, according to the National Association of Realtors. That’s up from 21 percent of deals a year earlier.

Most home sellers list only if they must move because of financial distress, a new job or a lifestyle change, such as divorce, death, growing children or an empty nest, said Cari Linn, president of the Minneapolis Area Association of Realtors.

Letters to Homeowners
Linn sent letters last month to 28 owners in a town house development in Eagan, about 15 miles south of Minneapolis, where one of her clients was looking for a house, a prospecting technique she has used rarely since becoming a Realtor in 1982. She received responses from owners of two units, neither of which her client wanted.

Fewer bank-owned homes are coming to market as lenders comply with terms of a $25 billion February settlement to resolve allegations that the five-largest loan servicers seized homes without proper documentation. In the first quarter, foreclosure filings in the U.S. fell to the lowest level since 2007, RealtyTrac Inc. said last month.

Resales of foreclosures by Fannie Mae and Freddie Mac, the government-sponsored mortgage buyers, fell to 77,104 homes in the first quarter, down 18 percent from a year earlier, according to company filings. Seemingly Vast Iceberg
In Florida, the state with the largest share of homes in the foreclosure pipeline, median prices are rising and transactions have declined for bank-owned homes. That defies predictions the state would face a flood of distressed properties, according to John Tuccillo, chief economist for the Florida Association of Realtors.

Another source of supply, the inventory of new homes, fell to 144,000 in March, the fewest on records dating to 1963, the Commerce Department reported April 24. Homebuilders, still reeling from the construction and land-buying spree of the past decade, have cut the number of so-called spec homes, which are built without a buyer already lined up. PulteGroup Inc., the largest U.S. builder by revenue, reduced its inventory of such homes to 1,039 as of March 31, down 30 percent from the end of last year. Stronger Market Position
As sellers sit on the sidelines, bidding wars are flaring up in Denver, Miami, Minneapolis, Phoenix, Seattle and Washington, where bargain hunters, sensing a market bottom, have stepped up shopping.

“The sellers are not willing to move because they don’t perceive that their house today is worth as much as it might be a year from now,” Jay Brinkmann, chief economist for the Washington-based Mortgage Bankers Association, said in an interview.

Stressed Shoppers
Troy Springston of Denver sent an email to more than 6,000 fellow agents on May 1 asking for homes yet to be listed for sale and offering half his commission for a deal reached by May 11 for the couple he represents. His clients, who have a baby on the way, were scheduled to complete the sale of their current house that day and couldn’t find the right property to buy for less than $125,000, Springston said. They arranged an extension of the move-out date to May 18 because they hadn’t yet found a home to buy, he said.

In Florida’s Miami-Dade County, the number of listings fell 35 percent in April from a year earlier, to a 5.7-month supply, according to Esslinger Wooten & Maxwell Inc., a Coral Gables, Fla.-based brokerage owned by Berkshire Hathaway Inc. In neighboring Broward County, the inventory fell 31 percent to a 4.2-month supply, Esslinger Wooten said.

Monthly Happy Hours
Patti Reid, an Esslinger Wooten agent, hosts monthly happy hours at bars in central Broward County near the city of Davie, where she owns a house. She invites empty-nesters who might be interested in selling a single-family home and buying a condominium near the coast. The parties have helped Reid find four homes to sell, all of which landed buyers within a week.

 

Phoenix Listings Fall
In the Phoenix area, listings fell 64 percent in March from a year earlier, according to an April 25 report by Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University. Properties marketed by traditional sellers dropped 31 percent while distressed listings — including foreclosures and short sales, in which lenders accept prices lower than the mortgage balance — plunged 81 percent.

“It’s hard to convey how difficult it is to find and buy a home that’s under $150,000,” Orr said in a telephone interview. “We’ve got a two-week supply.”

Absentee owners, including investors and vacation-home buyers, purchased 46 percent of Phoenix area houses in March, paying a median $116,900, up from $100,000 a year earlier, according to a May 4 report by DataQuick.

The inventory of homes in Minnesota’s TwinCities area sank 29 percent in April from a year earlier to 17,312 listings, a 4.6-month supply, the Minneapolis Area Association of Realtors reported May 10. For homes with an asking price below $120,000 — those most attractive to investors and first-time buyers — the supply shrank to 3.1 months in April from 7.6 months a year earlier as the inventory fell 43 percent to 3,802 listings. Near Good Schools
The shortage seems magnified because move-up buyers are looking in the “safe zone,” near good schools, for three- bedroom, two-bath houses priced at less than $250,000, said Travis Callstrom, an agent with Re/Max Advantage Plus in the Minnetonka, about 12 miles west of Minneapolis.

“It’s like the shoe store where everyone wants the size 7,” said Callstrom, who sold about 125 houses last year with his partner, Laura Scott. “That’s the one they run out of first.”

Discouraged Sellers
That’s an indication that sellers in those markets are becoming discouraged, akin to a decline in the unemployment rate when job seekers lose heart, said Jed Kolko, chief economist for Trulia Inc., a San Francisco-based real estate information service.

In recovering markets, owners need to be persuaded that it’s worth taking a step back by selling for less so they can take two steps forward to buy more, said Greg Anderson, the broker at Re/Max Advisors West in Chaska, Minn. It’s the same as selling a stock at a loss to buy shares of a growing company, he said.

“It’s an old real estate adage: You always buy up in a down market,” Anderson said. “If you buy up in a down market, you make money on arbitrage.” Twice the Size
His clients Steve and Lee Ann O’Sell sold their home of 18 years in March for $200,000, about $60,000 less than it would have fetched in 2006.

When it took only eight days to find a buyer, Lee Ann O’Sell worried the asking price was too low.

Waiting for a higher offer might have allowed another buyer to grab the house they wanted to buy, Steve O’Sell said.

The O’Sells paid $450,000 for a 4,124-square-foot home, almost twice the size of the old one, with individual bedrooms for each of their three children and a golf course outside the backyard where they can walk their two dogs when the course isn’t busy.

“It’s a major, major upgrade,” Steve O’Sell, a salesman for Blue Cross Blue Shield of Minnesota, said as he sat in his living room overlooking the second hole of the Chaska Town Course. “Two or three years ago, it would never have crossed our minds as a possibility.”

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

When Does It Make Sense to Refinance?

SANTA ANA, CA, May 21, 2012 (MARKETWIRE via COMTEX) --
While most people usually think of real estate "affordability" in terms of buying a home, the concept also applies to refinancing. Rate reductions may cut monthly costs and the overall expense of ownership, making a home more affordable. The big question: When is the right time to refinance?

"Many borrowers have the opportunity to reduce mortgage payments at a time when expenses such as gas and healthcare are rising," said Ray Brousseau, executive vice president of Carrington Mortgage Services, a lender in the District of Columbia. "In addition, many people who lacked sufficient equity to refinance may now be able to get a replacement mortgage because of changes in the government's HARP program."

( http://www.firstcapitalmtg.com/ ) provides information regarding a wide variety of FHA, VA and conventional loans. "It pays to watch the changes to these programs," "For instance, the government has greatly reduced mortgage insurance premiums for borrowers who refinance older FHA loans. Some FHA borrowers may be able to cut their rate significantly, plus reduce their annual mortgage insurance premium by $1,000 or more, according to government estimates. These are major discounts for most households."

In mid-April, mortgage rates across the country were near 4 percent for a 30-year fixed-rate loan while Adjustable Rate Mortgage (ARM) start rates were less than 3 percent. Such rates are significantly below the levels now paid by many homeowners.
Monthly Savings
To see the benefits of refinancing consider the following example:

        
        -----------------------------------------------------------------
        -----------
           Balance            Rate           Payment
           Amount     Term    (%)    (Principal & Interest)   Lifetime Interest Cost
        ----------------------------------------------------------------------------
          Original
            Loan
        ----------------------------------------------------------------------------
          $150,000     30      6            $899/mo.                 $173,759
        ----------------------------------------------------------------------------
          $150,000     30      4            $716/mo.                 $107,803
        ----------------------------------------------------------------------------
           After 6
            Years
        ----------------------------------------------------------------------------
          $137,000     30      4            $654/mo.                 $98,461
        ----------------------------------------------------------------------------
          $137,000     15     3.5           $979/mo.                 $39,290
        ----------------------------------------------------------------------------
          

The monthly savings are clear for a rate reduction from 6 to 4 percent. Taxes and insurance are extra.
Borrowers also need to consider the age and the length of the mortgage. Over time you will owe less than the original balance. In the table above, after six years, you will owe about $137,000. Refinancing reduces the payment to $654 per month, but the term of the loan is extended to 30 years again, meaning that the borrower will make an extra six years of payments over the term of the loan.

If the original loan is an ARM the comparison will be different. ARM rates can rise and fall, making refinancing to a fixed-rate mortgage an attractive option for those who prefer to lock-in today's historically low interest rates and have payment stability.

Is Now the Time To Refinance?

Going to a lower rate is a very good reason to refinance, but how much lower should the new rate be to justify the costs of refinancing? There's no "official rule" says Brousseau, but the new loan should produce a clear benefit to the borrower in terms of lower monthly payments or reduced interest costs, but you must also consider the costs of refinancing.

For example, imagine that refinancing will require $4,000 for taxes, closing and other expenses. If a borrower can save $150 a month with a lower rate loan, it will then take approximately 27 months to break even. If the borrower expects to remain in the home for a period longer than 27 months, then refinancing becomes attractive.

But some refinancings can be structured with little or no out-of-pocket costs. Instead, the borrower might accept a slightly higher interest rate to eliminate closing costs.

"There's a lot of flexibility built into the mortgage system, with combinations of rates and terms that offer different benefits," says Brousseau. "The trick is to assess your individual situation and pick the option that works best in your circumstances.

Financial Engineering One of the important aspects of refinancing is that you can engineer the loan to provide the type of benefit which is most important to you. For most people the goal is to have lower monthly costs but that's not always the case.

"The usual alternative to a 30-year loan is a 15-year mortgage," said Brousseau. "Such financing generally has a higher monthly principal and interest payment than a 30-year loan but a lower overall interest expense over the term of the loan. Some borrowers prefer a 15-year loan because it means they can pay off their mortgage much faster. That can be important when looking ahead toward retirement or facing new costs in the future such as college tuition."
"In effect it's a form of savings plan," said Brousseau. "By having a mortgage with a shorter term you can significantly reduce your overall financing costs."

In the example above, the borrower could reduce his or her monthly principal and interest payments from $899 to $654 by refinancing. That's a monthly savings of $245 or $2,940 per year. If that same $137,000 loan is refinanced over 15 years instead of 30 years, lenders have less risk of non-payment and will generally offer a lower rate. If the 15-year rate is 3.5 percent, the new monthly payment will be $979.

If the 15-year loan is more expensive on a monthly basis than the current 30-year mortgage, why would anyone refinance their loan to assume a bigger monthly payment? The answer lies in the interest paid during the full term of the loan.

The $150,000 loan at 6 percent over 30 years has a potential lifetime interest cost of $173,759. A 15-year loan has 180 fewer payments. The $137,000 replacement mortgage at a fixed interest rate of 3.5 percent over 15 years has a potential interest cost of approximately $39,290. That's a savings in this example of more than $134,000 -- almost as much as the loan amount being refinanced.

"It's all about savings and options," says Brousseau. "When homeowners examine the numbers, it's hard to beat the rates and refinancing opportunities which are now available."

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

Southern California Home - Sale Prices Up In April

in News > Residential Mortgage

Southern California's median sale price rose year-over-year in April for the first time in 16 months, according to new data released by San Diego-based DataQuick.
DataQuick reports the median price paid for a Southern California home in April was $290,000, up 3.6% from $280,000 in both the previous month and April 2011.

Last month's median was the highest since the median was also $290,000 in December 2010. The year-over-year gain in the April median was also the first since December 2010, when the median rose a scant 0.3%.

Furthermore, April's $290,000 median was 17.4% above the low point for the current real estate cycle - $247,000 in April 2009 - and 42.6% below the $505,000 peak in mid-2007.

Last month a total of 19,284 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 3.4% from 19,953 in March and up 5.1% from 18,344 in April 2011.

"The housing market continued its painfully slow crawl back toward normalcy last month. You can see it in the fading role of foreclosures, the uptick in median prices here and there, and the higher levels of sales in coastal counties," says John Walsh, DataQuick's president.

"Of course, there are still a lot of things that make this market abnormal - investor and cash buying are still unusually robust. The jumbo loan market has yet to recover, and the use of plain-vanilla adjustable-rate mortgages remains far below normal. Complete Article: Here

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256
Visit First Capital Online or call: 310-458-0010

Mortgage rates fall to another record low

WASHINGTON (AP) – Average rates for 30-year and 15-year fixed mortgages fell to record lows for a third straight week.

The steady decline has made home-buying and refinancing more affordable than ever for those who can qualify.

Mortgage buyer Freddie Mac says the average rate on 30-year loans dipped to 3.79%. That's down from 3.83% last week and the lowest since long-term mortgages began in the 1950s.

 Refinance your mortgage.

The 15-year mortgage, a popular option for refinancing, declined to 3.04%. That's down from last week's previous record of 3.05%.

Rates on 30-year loans have been below 4% since early December. But so far, those cheap rates haven't been enough to ignite home sales.

While sales of previously occupied homes picked up in January and February, they fell again in March and remain well below healthy levels.

Low mortgage rates have helped boost builder confidence, which rose in May to a five-year high. And home construction has improved in the past six months, a reflection of that increase in confidence.

Builders broke ground in April at a seasonally adjusted annual pace of 717,000 homes, the government reported Wednesday. That nearly matches January's pace, which was the best since October 2008.

Construction rose for both single-family homes and apartments. And builders requested more permits to build single-family homes, a sign they expect more demand in the coming months.

Still, many would-be buyers can't qualify for loans or afford higher down payments required by banks.

In addition, home prices in many cities continue to fall. That has made those who can afford to buy uneasy about entering the market. And for those who are willing to brave the troubled market, many have already taken advantage of lower rates — mortgage rates have been below 5% for more than a year.

Mortgage rates are lower because they tend to track the yield on 10-year Treasury notes. Slower U.S. job growth and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasurys, which are considered safe investments. As demand for Treasurys increases, the yield falls.

To calculate its average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week.

The average rate does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

 

The average fee for 30-year loans was 0.7 last week, unchanged from the previous week. The fee on 15-year loans also was 0.7, the same as the previous week.

The average one-year adjustable rate was 2.78% last week, up from 2.73% the previous week. The fee on one-year adjustable rate mortgages was unchanged at 0.5.

Copyright 2012 The Associated Press. All rights reserved. Used for editorial purposes only.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

New Construction Market Expected To Soar This Summer

Buyers of new construction are on the clock. With builder confidence rising and new home sales expected to pop, the best time to buy a new home this year may be right this very minute.

Builder Confidence At 5-Year High

After a seasonal dip in April, the National Association of Homebuilders reports that the May Housing Market Index rose 5 points to 29.
The 5-point jump marks the sharpest one-month climb for homebuilder confidence in close to 10 years.

It also raises the benchmark index to a 5-year high.
As an index, the NAHB's homebuilder confidence report is scored from 1-100. Readings north of 50 indicate favorable conditions for builders. Readings south of 50 indicate unfavorable conditions.
The HMI has been below 50 since April 2006. It's never been higher than 78 (December 1998).

Buyer "Foot Traffic" Soaring

The Housing Market Index is different from most home market statistics in that it's a psychological reading as opposed to a physical one. It doesn't measure actual homes sold but builders' expectation for how many homes will sell.
The HMI is a composite of three separate surveys sent to NAHB members. The survey questions are as follows :

1. How are market conditions for the sale of new homes today?
2. How are market conditions for the sale of new homes in 6 months?

3. How is prospective buyer foot traffic?

Based on the responses from homebuilders, the Housing Market Index is scored.
This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points from April; sales expectations for the next 6 months are up 3 points form April; and, perhaps most importantly, buyer foot traffic is up 5 points from April and is now its highest point since 2007.
Higher "buyer foot traffic" tells us there's an increased demand for new construction -- the highest in 5 years, actually.

Buying New? Find Your Mortgage Budget.

With buyer traffic up and home supplies down, new construction prices appear set to rise later this summer. And, although builders aggressively compete with home resales and foreclosures for today's home buyers, don't expect to buy a home on a steal.
Builders know their market and price it right.
The good news, though, is that mortgage rates remain low and low downpayment programs are plentiful. In addition to the FHA's 3.5% downpayment program, the VA and the USDA both offer 100% financing to home buyers who meet underwriting criteria.
Looking to get approved for a home loan. Click here.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010