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Tag Archives: Home Prices

Household Net Worth Plummeted After 2005, Alongside Income

The middle class seemed to take another drubbing Monday with news that U.S. median household net worth fell 35 percent between 2005 and 2010. Excluding home equity, the Census Bureau found that median household net worth ticked up by 8 percent during the financial crisis. Who got hit the hardest? Of the many age groups, heads of households from 35 to 44 accounted for nearly 60 percent of the decline in net worth during the five-year period. But they weren't alone: Median net worth also declined for all age groups between 2005 and 2010.

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C.A.R.: Housing Sales Up in May, Inventory Still a Concern

The housing market in California looked sunny in May with strong sales and stabilizing home prices, the California Association of Realtors (C.A.R.) reported Friday. A release from the association showed that home prices in the state posted gains for the third consecutive month, and home sales finished well above last year's pace. Closed escrow sales of existing, single-family detached homes in California rose 3.4 percent to a seasonally adjusted annualized rate of 572,260. This is up from April's revised rate of 553,670 and is a 21.5 percent increase from 470,910 in May 2011.

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Delinquent Homeowners More Negative than Underwater Group: Survey

Delinquent borrowers who responded to Fannie Mae's National Housing Survey for the first quarter of 2012 expressed more negative viewpoints toward homeownership and paying their mortgage compared to underwater borrowers and those who have seen their home values decline. The data was collected to learn more about the attitudes of the delinquent borrower population that is oftentimes difficult to reach.

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New Mortgages 20% More Likely to Default than Those from the ’90s

Investors and lenders should expect loans currently originated to have a 20 percent higher chance of default than those originated in the '90s due to current economic conditions, according to the University Financial Associates (UFA). The UFA Default Risk Index rose slightly to 120 in the second quarter of 2012 from 119 compared to the previous quarter. While loans currently originated are more likely to default than those from the '90s, loans originated today are still much less likely to default compared to vintages from 2006 to 2008.

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Positives of Negative Equity on Home Prices: CoreLogic

Declines in the share of REO properties and in the months' supply of unsold inventory are all leading to a revival in home prices, and these drops are being driven, in part, by negative equity, CoreLogic concluded in a report. Prices rose by 1.1 percent in April compared to the year before and 2.2 percent from the month before in March. One factor helping boost prices is the decreasing months' supply of homes. While a lower supply during a time of increasing demand is a positive for home prices, Sam Khater, chief economist for CoreLogic and author of the report, explained negative equity is the main reason behind the low supply, not an increase in sales. Negative equity not only makes consumers more reluctant to buy, but it can also discourage homeowners from selling, leading to a smaller number of homes listed on the market.

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IRR: Down Payment Biggest Obstacle to Homeownership

Feelings about homeownership remain positive in the face of a diminished market, but an uncertain economy and increasing down payments are keeping Americans from making purchases, a report from Integra Realty Resources (IRR) said. Wednesday's report detailed results from an IRR-commissioned survey of non-homeowners ages 22-50 in 11 major markets. While 85 percent of potential buyers indicated that market conditions are favorable for purchasing a home, unemployment and job instability make many respondents reluctant or unable to buy a home.

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Recovery Still in Place: Capital Economics

Negative reports on the economy may be shaking up confidence, but Capital Economics released a report Friday stating that in their view, the foundations for a sustainable recovery are still in place. The employment situation in the U.S. and issues overseas such as the euro-zone crises are all taking a toll on the economy and consumer confidence. Yet, there are still reasons to make the argument that the recovery is not going to be derailed. Home sales and prices have increased, and mortgage affordability continues to be at an all-time high.

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Fannie Mae: Positive Trends in Consumer Sentiment Leveling Off

Lulls in employment and income growth led to a plateau in consumer sentiment in May, according to Fannie Mae's May 2012 National Housing Survey. The data released by Fannie Mae on Thursday showed that although many consumers (72 percent) believe that now is a good time to purchase a house, the percentage of respondents who said they would buy a house after moving actually dropped for the second consecutive month-63 percent in May compared to 64 percent in April and 66 percent in March. Fifteen percent of respondents said now is a good time to sell a home.

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HVF: Elastic Markets Have Highest Rental Yield

The June 6 edition of HVF's ""Lessons from the Data"" showed that rent-to-value ratios, also called rental yields, tend to be highest in areas with elastic markets, such as Las Vegas. In areas of the city where the ease of adding new housing keeps home prices low, rental yields in certain neighborhoods climbed to 14 percent or higher. On the other hand, areas with restrained housing markets (like many neighborhoods in the New York metro) see yields lower than 2 percent.

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FHA 203(k) Program Offers Way to Finance Repairs for Foreclosures

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA 203(k) loan, potential buyers who want to purchase a discounted foreclosure but don't have cash for the repairs may find a way to receive financing.

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