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Delinquencies up, volume down, HAMP failing – mortgage overview

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Tax credit expiration ramifications

This week brought signs of a general real estate recovery as the U.S. Commerce Department announced building starts are up and that building permits are steady and not overly ambitious.

With the expiration of the home buyer tax credits, analysts are publishing an array of forecasts for how the market should react with some proving to right and others proving to be completely off.

One of the immediate effects felt in the mortgage world is a drop in volume of mortgage applications which has now hit a 13 year low, down 27% from the previous month, according to the Mortgage Bankers Association.

Delinquencies and other bad news

The volume can be recovered with a strong summer, so that is not worrysome, but trouble lies in news that of all mortgage loans in America, 10% are delinquent. Even more troubling but less surprising is the continuing failure of the Obama Administration’s Home Affordable Modification Program (HAMP), now showing that a large number of participants are “flunking out,” according to CNN Money. We’ve noted before but must reiterate that HAMP is not working.

Politicians are currently considering plans from various states on how they will use funds coming their way, and although the plans are not public, they have been reported to all include subsidizing mortgage payments for underwater homeowners and paying down principle. Critics point to HAMP as a hesitation for supporting any further government programs in any effort to prop up the residential real estate sector.

This next quarter may be critical for the stabilization of the real estate market as it has the chance to make a stable recovery but could continue to bounce at the bottom if everything doesn’t line up properly. What say you?

CC Licensed image courtesy of sean dreilinger via Flickr.com.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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9 Comments

9 Comments

  1. Alex Cortez

    May 23, 2010 at 12:13 am

    Tara, insightful article. I was a big proponent for ending the tax credit, as further evidenced by HAMP, government intervention hinders the free market from correcting itself. What do you foresee for the rest of the year with interest rates likely to increase and a wave of REO’s due to enter the market?

  2. Lani Rosales

    May 24, 2010 at 12:04 pm

    It looks like interest rates are forecasted to actually go down to 4.5%, the lowest in 50 years. I don’t know about everyone else, but personally I think more REOs will enter the market regardless. People are finally tired of being scared and buying seems to be warming up, even after the tax credit expiration. This summer won’t be a boom but it will be a heck of a lot better than 2009!

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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