WHAT YOU SHOULD KNOW

• Mortgage applications increased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 5, 2017. 

• The Market Composite Index, a measure of mortgage loan application volume, increased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to its highest level since October 2015. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 6 percent higher than the same week one year ago. The seasonally adjusted Conventional Purchase Index increased 2 percent from the previous week to its highest level since April 2009. 

• The refinance share of mortgage activity increased to 41.9 percent of total applications from 41.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.2 percent of total applications. 

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.23 percent, with points decreasing to 0.31 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

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GALLUP POLL SHOWS HIGH HOPES FOR HOMEOWNERSHIP

Source: Mortgage News Daily 
While the historically low homeownership rate as reported by the Census Bureau has improved only marginally over the last year, a recent survey by Gallup indicates that it may be on the edge of change. Forty-nine percent of non-homeowners contacted by the polling company in March indicated they expect to buy a home within the next five years, with 10 percent planning on doing so in the next year. An additional 20 percent say they plan on being homeowners within ten years. This leaves only 28 percent with no plans to purchase a home.

Those who plan on buying in the near future tend to be young. Of those aged 18 to 34, 52 percent plan to buy within five years as do 58 percent of those aged 35 to 54. An additional 31 percent of the younger cohort expect buy within 10 years, leaving only 14 percent who do not see homeownership in their foreseeable future. Among older non-homeowners, those over 55, only 30 percent have any plans to buy.

Full story
http://amp.mortgagenewsdaily.com/article/735618

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CONSUMER HOUSING OPTIMISM REBOUNDS IN APRIL

Source: Housing Wire 
Many consumers grew more optimistic about the housing in April, rebounding from March’s dip in confidence, according to the Fannie Mae Home Purchase Sentiment Index. The index increased 2.2 percentage points in April to 86.7, and five of the six components saw an increase.

Americans who said now is a good time to sell a home was the only component to decrease, dropping five percentage points to 26 percent, however those who said now is a good time to buy a home increased five percentage points to 35 percent.

Consumers were also more optimistic about the stability of their jobs, with that component increasing by seven percentage points to 77 percent. Respondents who reported a household income that’s significantly higher than 12 months ago increased by two percentage points to 13 percent.

Full story
http://www.housingwire.com/articles/40064-fannie-mae-consumer-housing-optimism-rebounds-in-april

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MOST L.A. HOMES STILL WORTH LESS THAN BEFORE RECESSION

Source: KPCC Radio 
Southern California's residential market can feel overheated, with the bidding wars on homes and busy open houses. But new research from the real estate website Trulia shows area home prices still have a ways to go before they hit pre-recession peaks. 

The researchers found that in Los Angeles County, just 37.4 percent of homes are priced at more than they were before the housing bust. In Orange County, 23.5 percent have hit that level, while just 3 percent have in the Inland Empire, one of the epicenters of the mortgage meltdown.

But real estate experts predict even if it takes them longer, homes in southern California will see a full rebound.

Making sense of the story • Geoff McIntosh, president of the California Association of Realtors, said the most desirable parts of L.A. County, those near good schools and the beach, are already fetching housing bubble prices.

• McIntosh, who sells homes in Long Beach, said he sees stark differences in home values just within the city itself. Prime properties that had fallen to the $600,000 range during the worst of the housing crisis are back to pre-recession prices of around $2 million, he said.

• So forlorn homeowners whose homes are struggling to recapture their pre-recession value may want to hold on. McIntosh said prices will keep climbing.

• "I don’t believe that it’s likely you’re going to see housing values level off because there’s not enough supply," McIntosh said, referring to California's failure to build enough homes for its growing population. "I think there's still a lot of pent-up demand."

• But he added that many unknowns may affect home prices in the future, such as higher interest rates. Realtors are also concerned that the Trump Administration's tax plan will result in a loss of tax benefits of owning a home.

Full story
http://www.scpr.org/news/2017/05/08/71619/most-la-homes-still-worth-less-than-before-recessi/

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WHAT YOU SHOULD KNOW

• California’s spring housing market posted a strong start to the year as existing home sales and median price registered healthy gains in March on both a monthly and annual basis, as did every major region in the state, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said. 

• Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for a full year and totaled a seasonally adjusted annualized rate of 416,580 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The March figure was up 4 percent from the 400,720 level in February and up 6.9 percent compared with home sales in March 2016 of a revised 389,770.


• “March’s solid sales performance was likely influenced by the specter of higher interest rates, which may have pushed buyers off the sidelines and close escrow before rates moved higher,” said C.A.R. President Geoff McIntosh. “The strong housing demand, coupled with a shortage of available homes for sale, is pushing prices higher as would-be buyers try to purchase before affordability gets worse.”


• Following back-to-back monthly price declines, the median price of an existing, single-family detached California home climbed back above $500,000 in March. The median price was up 8 percent from $478,570 in February to reach $517,020 in March, and was 6.8 percent higher than the $484,120 recorded in March 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values.

• “The spring homebuying season is off to a good start, as the economic and market fundamentals remain solid for the most part,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “However, higher interest rates, a dearth of housing inventory, and slow wage growth will continue to have an adverse effect on housing affordability that is putting upward pressure on home prices, and is sure to hamper the market throughout the year.”

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MILLENNIAL HOMEBUYERS FORGE AHEAD

As interest rates creep higher and housing markets across the country report lower inventory, the spring house-hunting season looks set to be intense – and perhaps even more so because of a rising number of young buyers testing home ownership for the first time. 

Economists and real estate agents alike are carefully watching Millennials – one of the largest demographics to reshape the American economy since baby boomers – to see not only what kind of effect this debt-laden, tech-savvy generation could have on the housing market but also when it may peak.

Full story
http://www.csmonitor.com/Business/2017/0412/Millennial-homebuyers-faced-with-a-tight-market-and- heavy-debt-still-forge-ahead

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IMMIGRANTS KEY TO HOMEOWNERSHIP GROWTH

Source: Urban Land Institute 

The housing and neighborhood location choices of immigrants will have a significant impact on urban growth in the U.S. for decades to come, particularly as more foreign-born residents seek to own homes in suburban communities, according to new research from the Urban Land Institute’s Terwilliger Center for Housing. Homebuilders and developers who can deliver the housing options immigrants want and need stand to benefit in the years to come.

Immigrants in general have strong aspirations for single-family homeownership. They're also increasingly targeting the suburbs in search of greater employment opportunities and lower-cost housing, the study notes.

Making sense of the story
• Nationally, the homeownership gap between all households and black and Latino households has changed little since 1970.

• Without growth of the foreign-population, regions with strong housing markets such as San Francisco would not have recovered as quickly following the recession; and markets that continue to struggle in the recession’s aftermath such as Buffalo would have experienced even weaker growth.

• Immigrants have strong aspirations for single-family homeownership, and homeownership rates for immigrants rise with their length of time in the U.S. This suggests that immigrants will be a key driver for owner-occupied housing for years to come.

• Immigrants seeking to own homes as well as those renting homes are increasingly drawn to the suburbs in search of employment opportunities, lower-cost housing and a higher quality of life. Suburbs are home to high-income, high-skilled immigrants as well as lower-income, lesser-skilled immigrants.

• While immigrants represent a key source of demand for new housing, a substantial share of immigrant housing demand will be met through purchases of existing homes. Sellers of these homes – many of whom will be baby boomers seeking to downsize – will create a strong market for smaller units.

Full story
https://uli.org/press-release/immigrants-housing-demand-report/

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