4 Housing Predictions for the Rest of 2016

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 MONDAY, APRIL 25, 2016

Freddie Mac economists are still upbeat about the housing market’s outlook for the rest of the year, despite recent data that showed a gloomier first quarter in economic growth than originally projected. According to Freddie Mac's April outlook, housing will “maintain its momentum in 2016 and be an economic engine of growth."

"We've revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy,” says Sean Becketti, Freddie Mac’s chief economist. “However, we maintain our positive view on housing. In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity, particularly refinance."

Economists made the following predictions for the remainder of 2016:

• Employment: The labor market is expected to stay strong. The unemployment rate is projected to drop back below 5 percent for 2016 and 2017. “Stronger economic growth for the remainder of 2016 and reduced slack in the labor market will drive wage gains above inflation, though the gains are likely to be modest,” Freddie’s report notes.
• Mortgage originations: Loan originations are estimated to rise by $50 billion in 2016 and reach $1.7 billion. The forecasted boost is a result of low mortgage rates that are fueling a refinancing boom.  
• Mortgage rates: Low mortgage rates are expected to stick around longer. The 30-year fixed-rate mortgage averaged 3.7 percent in the first quarter. “After lowering the forecast for subsequent quarters by a tenth of a percent, expect rates to average 4 percent in 2016,” Freddie Mac researchers note.
• Housing prices: Home prices will rise by 4.8 in 2016 and by another 3.5 percent in 2017, Freddie Mac researchers predict. These rising home prices will lead home owners’ to see more equity gains.

Source: Freddie Mac

Home Prices Surge to Fastest Pace in Year

DAILY REAL ESTATE NEWS | TUESDAY, MARCH 24, 2015

Existing-home sales showed some improvement in February, but remain constrained by low inventories of homes for-sale that are pushing price growth to the fastest pace in a year, according to the National Association of REALTORS®.

"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsustainable levels," says Lawrence Yun, NAR’s chief economist. "Stronger price growth is a boon for home owners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before [mortgage] rates rise."The median existing-home price for all housing types was $202,600 in February – 7.5 percent higher than a year ago.

Mortgage rates, for now, continue to hover near historical lows. The 30-year fixed-rate mortgage averaged 3.71 percent in February, according to mortgage giant Freddie Mac.

"With all indications pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – affordability concerns could heighten as home prices and rents both continue to exceed wages," says Yun. Indeed, an NAR study earlier this month found a widening gap between rent and income growth across the country, which is making it more difficult for renters to become home owners.

Here are some more findings from NAR's latest housing report:4 Stats to Gauge the Market

1. Existing-home sales: Existing-home sales rose 1.2 percent month-over-month, reaching a seasonally adjusted annual rate of 4.88 million in February. Sales are 4.7 percent higher than a year ago.

2. Housing inventory: Housing inventories rose 1.6 percent to 1.89 million existing-homes for-sale in February, but remain 0.5 percent below a year ago. Unsold inventory is at a 4.6-month supply at the current sales pace. Most economists consider a 6-month supply healthy for the market.

3. Distressed sales: Foreclosures and short sales comprised 11 percent of sales in February, down from 16 percent a year ago. In February, 8 percent of sales were foreclosures, and 3 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value (in January, it was 15 percent) and short sales were discounted by 15 percent on average (from 12 percent in January).

4. Days on the market: Properties were on the market for 62 days, on average, in February, down from 69 days in January. Short sales were on the market for the longest – 120 days. Foreclosures tended to sell in 58 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month, according to NAR’s report.

By Region

The following is an overview of how sales fared in February across the country:

• Northeast: existing-home sales plunged 6.5 percent to an annual rate of 580,000, but are 3.6 percent above year ago levels. Median price: $241,800, up 3.3 percent year-over-year.
• Midwest: existing-home sales were mostly unchanged from January at an annual level of 1.08 million, but are 4.9 percent higher than February 2014 levels. Median price: $152,900, up 8.8 percent from a year ago.
• South: existing-home sales rose 1.9 percent to an annual rate of 2.11 million last month, and are 6 percent higher than year ago levels. Median price: $177,900, up 8.5 percent from a year ago.
• West: existing-home sales increased 5.7 percent to an annual rate of 1.11 million in February, and are 2.8 percent above a year ago. Median price: $290,100 -- 4.2 percent above February 2014.

Source: National Association of REALTORS®

Both Home Prices and Affordability on the Rise

DAILY REAL ESTATE NEWS | WEDNESDAY, FEBRUARY 18, 2015

The spring market will likely be a hotter one this year, as low interest rates and a healthier economy lure more home buyers to the marketplace. 

NAR's latest housing report:Tight Supplies Put Home Prices on the Move

“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, National Association of REALTORS® president, said in a recent news release showing fourth-quarter 2014 home prices moving up. 

An increase in the national family median income (to $65,782) mixed with low interest rates slightly improved affordability in the fourth quarter compared to the previous quarter, NAR reports. Affordability improved despite the national median single-family home price moving up to $208,700 in the fourth quarter, an increase of 6 percent year-over-year.

“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” says Lawrence Yun, NAR’s chief economist.

To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $45,863. A 10 percent down payment would require an income of $43,449, and $38,621 would be needed for a 20 percent down payment.

The following were the five lowest-cost housing markets in the fourth quarter:

1. Youngstown-Warren-Boardman, Ohio: $78,000
2. Rockford, Ill.: $86,800
3. Toledo, Ohio: $87,100
4. Decatur, Ill.: $90,400
5. Cumberland, Md.: $90,500

Source: National Association of REALTORS®

List Hub Cuts Off Zillow and Trulia!

Good morning,

Here are today’s rates and commentary:

CONF 30YR FRM*   CONF 15YR FRM*   FHA 30YR FRM*  JUMBO 30YR FRM*

3.500% Rate             2.875% Rate            3.250% Rate          3.500% Rate

3.542% APR              2.914% APR             3.299% APR           3.512% APR

0.000 Points              -0.250 Points           0.125 Points          0.000 Points

What's Driving Rates?

Germany expects negotiations with Greece to drag on until the current round

 of bailout funding runs out and is prepared to play a waiting game until April or

 May, when the country approaches a cash crunch, a person familiar with the 

matter said. Greece would not immediately go bankrupt at the end of February

 because it has resources to last beyond that point and Germany is ready to wait 

until there is a more urgent financing need to strengthen its bargaining position, 

said the person, who asked not to be identified discussing internal talks.

Have a great day.

Tammy Ranger-Mortgage Loan Officer

NMLS# 685286

Lake Michigan Credit Union

310 W. Front Street

Traverse City, MI 49684

P: (231) 932-6284

F: (231) 932-6298

C: (231) 218-1161
Send Secure Email

E: Tammy.Ranger@lmcu.org

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Alert Notice issued by Antrim County - November 18, 2013:

Alert Notice issued by Antrim County - November 18, 2013: 

Water levels in Antrim County are currently at extremely high levels. It is highly probable that additional precipitation will result in further
increases of water levels. Waterfront residents are strongly urged to take measures necessary to reduce potential damage to their property.