Mortgage standards that have kept many potential buyers out of the market are beginning to loosen. In addition, banks are speaking about increasing their mortgage business soon and shore up their residential mortgageassets within the next year.  All these prospective changes are being driven by a sharp rise in mortgage demand in conjunction with more home purchase applications being approved (60% compared to 55% of a year ago). This will combat but not fully eliminate the highly competitive home buying marketthat will still require standards such as 20% down.

“Fear Fannie Mae and Freddie Mac will force lenders to take back risky mortgages continues to be the primary condition constraining lending,” RealtyTrac reports. “Other conditions that have lenders holding tight to mortgage purse strings include obtaining insurance, slow economic growth, concerns about securitization, and processing capacity.”

“Mortgage Squeeze Loosens, Somewhat,”

Data Shows Mortgage Credit Easing, Others Not so Sure

Here are the national averages for mortgage rates for the week ending May 16: 

• 30-year fixed-rate mortgages averaged 3.51 percent, with an average 0.7 point, increasing from last week’s 3.42 percent average. A year ago at this time, 30-year rates averaged 3.79 percent. 

• 15-year fixed-rate mortgages averaged 2.69 percent, with an average 0.7 point, rising from last week’s 2.61 percent average. Last year at this time, 15-year rates averaged 3.04 percent. 

• 5-year adjustable-rate mortgages averaged 2.62 percent, with an average 0.5 point, rising from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.83 percent. 

• 1-year ARMs averaged 2.55 percent, with an average 0.4 point, rising from last week’s 2.53 percent average. A year ago at this time, 1-year ARMs averaged 2.78 percent. 

Housing starts are at 1.04 million, up 7% from this February and up 47% from this time last year.

This number is achieved highly due to the recent surge in building apartments and condominiums. These multi-family units alone jumped 82% as compared to last year. Each unit within these types of complexes is counted in the statistics so they can be extremely volatile. When looking at a more stable number, single family units, the percentages have actually fallen by 6% since February.

But, there is a strong demand for the multi-family and rental type living environments that does not seem to be waning anytime soon. Young workers moving out of their parents’ houses, a little older workers who stuck around with their parents through the recession, and even seasoned workers who gravitated towards living together are all beginning to move out and find places of their own.  In addition to the workforce contributing to the demand, many home owners how lost their home to banks are wary of buying again and are choosing to downsize into a lower risk situation.

With the great benchmark of hitting the 1 million-point and beyond comes details everyone should keep their eyes on: the demand, as mentioned above, is very dependent on the trends of society, raw material costs are on the rise, and there is an increasing shortage of construction workers.

“The supply/demand balance is clearly tilted toward sellers in a good portion of the country,” said NAR Chief Economist Lawrence Yun. “Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation.  If home builders can continue to ramp up production, then home price growth is expected to moderate in 2014.” - See more at: http://www.inman.com/2013/05/09/home-prices-post-highest-gain-in-over-7-years/#sthash.KboECc0L.dpuf

Great news right! Not so fast…

Some dark shadows are brewing on the real estate horizon. Looking at who is leading the recovery, the rate at which the market is recovering, and the future governmental programs all paint a picture a little different than the major headlines.

This market boom is being spearheaded by investors. Seeing the low interest rates in conjunction with the depressed home prices, investors are able to move with more assurance and speed then the average home buyer. Once prices rise, many of these investors will pull back—leaving a hole in the market again.

"These days, I worry more about the economy hurting housing than housing hurting the economy," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a Washington D.C.-based think tank. Employment is intimately integrated with the housing market and hiring has slowed since March—the weakest growth since last June. Discouraged workers are increasingly leaving the workforce hinting that the housing market recovery will being slowing more and more. Once the jobs market improves, there will be a direct surge in the housing market once more.

Governmental cuts, $85 billion, will be hitting their peak this summer. The cuts will hit the gut of the American workforce since workers comp, military spending, the expiration of payroll tax breaks, and other pieces will all contribute to overall loss of income—impacting the spending capabilities of many families.

http://money.cnn.com/2013/04/18/real_estate/housing-recovery/index.html

Related: 5 best markets to buy a home

 Related: Was your home a good investment?

Location and Views! And if that isn't enough to wow you, completely remodeled and brand new through out, to include new exterior paint and roof. Granite counters, sleek cabinets, bright sunny breakfast nook and family room. Hardwood floors, wood burning fireplace, large down stairs family room, sprawling new deck. Over sized south facing windows take in the sweeping view with great private back yard, all located just minutes from down town on the east side. Come see what we are so excited about.

HUD—Who are They?

In 1937, the U.S. Housing Act planted the seeds for the development of the Department of Housing and Urban Development in 1965. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable home for all.

The U.S. Department of Housing and Urban Development is reportedly releasing more of its homes to the market here shortly in order to counterbalance the slim inventory being seen across the country and the backlogged foreclosures/short sales.

“The inventory is there, [it’s] just not being released during the banks/servicers review of the loan/mortgage documents,” says Nat Genis, a HUD listing broker in Riverside County, Calif., which is already seeing an increase in HUD-owned homes.  

"HUD homes are back," Genis told HousingWire. "FHA financing went away with the 'creative' financing of the 80/20 loans, and now with the increase of FHA financing, these government-backed loans guarantee that if the borrower defaults, HUD will pay off the mortgage, obtain the deed, and re-sell the home."

READ MORE

HUD homes add to inventory-starved market,

'Shadow Inventory' Threat Reduced

Custom log home in desirable Hyalite Foothills built by Nordique Log Homes and GDL Construction. Expansive floor plan boasts 6 bedrooms, 3.5 baths split on 3 levels (inclusive of finished basement), flowing living/kitchen/entryway with vaulted ceiling and impressive stone fireplace. Additional amenities include 3 car attached garage, 2 car carport, central vac system, 9 X 10 walk in refrigeration meat cooler, new soft water system, extensive sound systems, 480 amp service throughout and much more!

What beautiful views from nearly all directions! Quiet, rolling hills with easy access to Helena, Butte and Bozeman. Elbow room and plenty of options for placing a home, come stake your claim on just over 26 acres and build your dream home! Three forks is nearby with grocery, the Sacajawea Hotel for fine dining, as well as Headwaters State park, Lewis and Clark Caverns, and endless fishing, hunting, and outdoor recreation. This is a banana belt, very easy to live here. Has high producing well already in!

What beautiful views from nearly all directions! Quiet, rolling hills with easy access to Helena, Butte and Bozeman. Elbow room and plenty of options for placing a home, come stake your claim on just over 26 acres and build your dream home! Three forks is nearby with grocery, the Sacajawea Hotel for fine dining and entertainment, as well as Headwaters State park, Lewis and Clark Caverns, and endless fishing, hunting, and outdoor recreation. This is a banana belt, very easy to live here.

What beautiful views from nearly all directions! Quiet, rolling hills with easy access to Helena, Butte and Bozeman. Elbow room and plenty of options for placing a home, come stake your claim on just over 22 acres and build your dream home! Three forks is nearby with grocery, the Sacajawea Hotel for fine dining and entertainment, as well as Headwaters State park, Lewis and Clark Caverns, and endless fishing, hunting, and outdoor recreation. This is a banana belt, very easy to live here.

As it is well known, the housing market is uniquely bound to the U.S. Treasury. This is never more apparent than a policy found within the Treasury Department’s Office of Home Ownership. Laurie Maggiano is the architect of a plethora of the government-backed Making Home Affordable program, uniform guidelines for loan modifications, Home Affordable Foreclosure Alternatives short sales, and foreclosure prevention.

“Her work at Treasury has not only helped servicers and investors adopt HAFA short sales, but also led to new guidelines that include making deficiency releases and relocation money standard when it comes to these transactions. Maggiano and her team were also responsible for programs that have helped so many people across the country avoid foreclosure.”

The changes Maggiano will affect the tools provided to agents and consumers if they get bogged down in the midst of their short-sale process by:

• adjusting short-sale timeline

• change occupancy restrictions in addition to

• an increase in payments to second mortgages and relation assistance to sellers.

Related Content: 

Beating the Odds on Short Sales

Expect Gradual Changes at Fannie & Freddie

FHA: Unsung Hero of the Recovery

Lenders: What’s Holding Back Loans

http://realtormag.realtor.org/news-and-commentary/feature/article/2013/04/us-treasury-offers-resources-for-distressed-sales

From the moment you walk through the custom designed barn wood front door you realize this is a special place. Slate entry and hardwood welcome you into the open living spaces with custom fireplace. On into the kitchen, graced with Corian tops, tile back splashes, stainless appliances, and custom cabinetry. The master on the main floor is grand and flows into the bath and outdoor spaces. The theater room tops this home off and I haven't even begun to touch the amenities here. Come find home!

I chose to evaluate Valley West first because we recently moved and call this neighborhood home.  We were drawn to the neighborhood early in its development because of the park, lake and architectural interest and diversity.  Since moving here, I realize just how convenient it is.   My third grader walks or rides his bike to school.  My teenagers drive to the high school in 6 minutes (so I am told).  Four groceries, a fish market, banks, gas stations and the mall are all within a short bike ride or up to a four minute drive.  I am also 4 minutes from my office, which comes in handy when I’m late for dinner.

Valley West offers traditional and contemporary architecture, condos and single family residences with or without attached dwelling units.  Small lots encourage neighbors to congregate in the park to get to know one another, play with their kids and walk their dogs.  Kids meet at the park to play tag and tube on the creek.  Common walk areas were designed to “flow” through the neighborhood, providing a safe and natural connection to the community.  Groups frequent the pavilion in the summer and gather for ice skating at the pond in the winter.

The neighborhood’s residents’ life stages are diverse, ranging from the college student renting an ADU to retired individuals investing their lives in the community.  Therefore, several property choices are available.  Currently on the market are 5 condos ranging in price from $143,000-$239,000 and an average price per square foot of $132.00.  There are 7 single family homes on the market, including 4 existing homes and 3 new constructions.  The prices range from $234,900 - $499,500, with an average price per square foot of $150.00.

In the last 6 months, 7 single family homes have sold, ranging in price from $184,000-$485,000.  The average sold price per square foot was $142.00.  Ten condos have sold, ranging in price from $144,750-$261,250.  Of the sold condos, the average price per square foot was $111.00. 

This is a series that will continue with blogs and newsletters.  The next article in the series will feature Harvest Creek.    If you would like to share your perspectives, I would love to include them in future articles.   If you would like to hear about a particular neighborhood, email me and I will be happy to include it.

 ATHOMEINBOZEMAN

The American Dream has at its core the idea of home ownership.  The dream, according to CNBC-All-American Economic Survey, is being acknowledged more and more. 79% of Americans believe home ownership is the essential piece of the American dream. 69% of Americans think owning is more advantageous to renting. Home ownership is regaining the confidence it had in re-recession times.

“The housing numbers are all heading in the right direction,” reports Diana Olick for CNBC. “Home prices up, foreclosures down and, perhaps the most important, consumer confidence in housing is swelling.” 

The one demographic that still seems to be the unknown element within the market is that of the first-time home buyers. There is a surge in first-timers looking for their first home, but they are highly dependent on their low down payment financing, and that may cause a plateau of actual home purchases. What are your predictions?

READ ON:

Parents as Kids’ Mortgage Lender

More Reasons to Buy v. Rent

People Are Becoming More and More Confident in Housing Market

Home Ownership and the American Dream

 ATHOMEINBOZEMAN

Seeing the investment: 

In 1972, a ranch could sell for $36/acre. In 2011, that same land sold for $500/acre. Even accounting for the inflation of the dollar through history, the land has doubled in value. Amenities on ranches extend beyond the utilitarian use of the land. Wildlife habitat, fishing, scenic views, and other nontangibles are spiking in value on top of the solid financial endeavor of running a ranch. Few investments are as secure as property and few property investments are as secure as one with the multiplicity of profitable uses as a ranch.

How does this inform Montanan values?

Places to hunt, fish, spend quality and semi-isolated time with family and friends are all strong central values of Montanans at large. With the city centers of Montana growing rapidly, the return to where Montana started speaks of how deep these important land and family ethics run. Time on a ranch is hard work and togetherness.

Future….

Trusting this strong market entirely is a bit naïve so those monitoring the market ought to remain skeptical. Fay sees ranch prices as bottomed out, but not yet appreciably rising making this moment in time as a good time to buy. Tomorrow, who knows… All that can be said is that there are “excellent opportunities everywhere right now.” (http://billingsgazette.com/news/state-and-regional/montana/ranch-sales-rise-as-wealthy-investors-put-cash-in-land/article_c0b70ee3-2e86-5a23-83f3-81e1eb281b5a.html)

 ATHOMEINBOZEMAN

Oddly enough, the time to decide may be based on when they purchased their home rather than watching the current market like a hawk. If your home was purchased during the sluggish market in the last few years, moving up in 2013 is their prime opportunity.

"Because they bought near the bottom, these home owners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace," Blomquist, vice president of RealtyTrac, told HousingWire.

Home owners who wait much longer may miss their chance by being overly cautious. If you are looking to sell and then buy, waiting for prices to rise because there is no ultimate benefit. They will get more out of their home, but turn around and spend more too. In addition, the costs of financing your next home may increase in the months to come since mortgage rates are anticipated to rise from their current 3.5% to 4.4%... The time to sell may be now or else you may miss the boat...

Read more:http://realtormag.realtor.org/daily-news/2013/03/25/home-owners-who-are-delaying-selling-may-miss-out?om_rid=AACuz5&om_mid=_BRUHT7B8xiPzNw&om_ntype=RMODaily

 “The Time to Sell Is a Waiting Game for Some,” HousingWire (March 21, 2013)

Home Owners Reluctant to Sell; Inventories Fall
 

 ATHOMEINBOZEMAN

This is a darling home in Three Forks with 2nd home on back of lot that could be used as a Mother in law, rental, or guest house! Main house has 2 bedrooms and single bath with the potential of another bedroom in the basement if egress windows are added, kitchen and bathrooms have been updated, and great old fashioned front porch area that has heat if you want to continue using it during the winter. Small home has 1 bedroom and 1 bath, all on one level, needs some work, but could produce some income!

“Buyer traffic is continuing to pick up, while seller traffic is holding steady," Lawrence Yun, the National Association of REALTORS®’ chief economist says. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."

Buyers and sellers alike are finding themselves in better positions then they found themselves at last year at this time. Price gains are being counter-balanced by low mortgage rates, and it is shifting to a seller’s market…. But it is not all good news.

Read More

Seller's Market Developing in Much of the U.S.
25 Quick, Cheap, and Easy Home Sale Tips

 Will housing market's revival last?

Housing heats up, but far from normal

 ATHOMEINBOZEMAN