Affordable Housing Programs Extended through December 2016

CF Funding is pleased to share that the Obama administration has announced the expansion of its affordable housing program. The program helps to support the construction of rental housing, and provides assistance to underwater homeowners in order to avoid foreclosures. The administration will be tapping into Treasury funds in order to support these programs. The Home Affordable Modification Program was set to expire at the end of 2015, but is now extended for another year. According to the Washington Post, the program has “reduced the payments of about 1.3 million homeowners, far short of its initial 4 million projection.”

The announcement was scheduled to coincide with the Making Home Affordable program’s 5^th anniversary, as the program was introduced in 2009 (after the housing crash) as a means of stimulating the economy and improving the housing industry. As CF Funding has shared previously, the housing industry has come a long way since then. In CF Funding’s April press release “Underwater Homes at Lowest Level in Two Years,” the lender shared news that foreclosures and shadow inventory are continuously decreasing, and that an increase in home values has allowed homeowners to regain equity. Increased equity has allowed many homeowners to refinance or invest in remodeling projects. However, more improvement is needed to reach peak levels of housing activity.

The program is now extended through December 2016, according to US Treasury Secretary Jack Lew. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said. The program not only helps to construct affordable rental housing, but allows state housing finance agencies to underwrite multifamily FHA loans. In doing so, the finance agencies take on a risk, as they share any losses from those loans.

The new program will receive anywhere from 500 million dollars to 1 billion dollars in annual funds from the Treasury and the FHA, in comparison to 363 million dollars which the FHA provided to the program last year.

The administration also hopes to bring back the private sector in order to reduce the government’s role in the mortgage market. The market is currently dominated by Freddie Mac and Fannie Mae, which are government-owned mortgage firms. Lew said he has directed his team “to bring investors and securitizers together in the months ahead so we can uncover new paths to increase private investment.”

CF Funding will keep readers updated on mortgage and housing news on the lender’s blog at http://cffundingcorporation.blogspot.com .

Home Prices at Peak, Gains Expected to Slow in 2014

CF Funding is pleased to share with homebuyers that home prices in the U.S. are at their peak, according to property analysts, and further increases are expected to be more subtle. Many homeowners have benefited from rising home prices in recent years, as they were able to regain the equity in their homes, allowing them to refinance or remodel. However, many counties have reached new home price peaks over the past few years, some now higher than pre-recession levels. A few counties that have reached price peaks include San Francisco County, CA, Travis County, TX, and Jefferson County, CO, as mentioned in a Reuters Press Release on Thursday.

Median home prices are up 11 percent from a year ago, and are now at their highest level since December 2008. On Wednesday, CF Funding shared that “Home price gains were high in Chicago, with a year-over-year gain of 11.5 percent. Price gains were also high in Cleveland, Detroit, Miami, Minneapolis, and New York.” Luckily for homebuyers, interest rates remain lower than expected as the Federal Reserve plans to keep interest rates below historic averages for awhile.

 The median sales price of residential properties in the U.S. reached $172,000 in April, which is the largest year-over-year increase “since median prices bottomed out in March 2012,” according to Realty Trac. Vice President Daren Blomquist said median home prices are still 28 percent lower than pre-recession peaks of $237,537, seen in August 2006. However, “There are a surprising number of markets… where median home prices have surpassed their previous peaks since the Great Recession ended in June 2009.” This “surprising number” of markets is about 19 percent of major counties in the U.S. CF Funding is happy to see homeowners regaining equity across the country.

Some markets have seen home prices slow down over the past year, such as Phoenix, AZ, which had a 9 percent home price appreciation in April 2014 versus a 30 percent annual appreciation in April 2013. Tampa, FL saw a 5 percent appreciation over the past year versus a 19 percent annual appreciation in April 2013. Jacksonville, FL had only 4 percent appreciation in April 2014 versus a 17 percent appreciation in April 2013. This is a clear sign of a slowdown in home prices that will allow homes to become affordable for many Americans this year. CF Funding will provide many homebuyers with the opportunity to fund their first home this year as the lender provides home mortgages in IL, CO, TN, CA, and FL.

Home Prices Rise in Corelogic Report

originally posted 5-6-14 at www.cffunding.com/index.php/news/home-prices-rise-in-corelogic-report/

Today the Home Price Index by Corelogic was released, revealing an 11.1 percent increase in home prices from March 2013 to March 2014. CF Funding has previously reported that home price increases such as these allow homeowners to regain equity in their homes, a great sign of economic improvement. Home prices have now been rising for 25 months on a year-over-year basis, and are expected to continue to rise into April on the HPI. From February to March, the HPI increased 1.4 percent including distressed sales (or 0.9 percent excluding distressed sales).

Although prices have been rising for over 2 years, current home prices are still about 16 percent below their peak seen in April 2006. Excluding distressed sales, home prices are about 11.6 percent below peak prices. Corelogic predicts that home prices, including distressed sales, will increase 0.8 percent month over month from March to April. According to Anand Nallathambi, president and CEO, “Home prices continue to rise across the nation, but affordability, tight credit and supply concerns are becoming an increasing drag on purchase market activity. In many markets—especially major metro areas like Los Angeles, Atlanta and New York—home prices are being driven up at double-digit rates fueled by a lack of inventory and record levels of cash purchases.”

All states had year-over-year price increases in March (excluding distressed sales) and 23 states plus the District of Columbia are at or within 10 percent of their peak, according to the HPI report. The largest home price appreciation was seen in California at 17.2 percent, and Nevada at 15.5 percent. CF Funding’s home state of Illinois is still 26.5 percent below peak values, and Nevada is 39.9 percent below peak values. CF Funding’s hometown of Chicago-Naperville-Arlington Heights saw an 11.5 percent price increase year-over-year excluding distressed sales. As seen in the National Snapshot graph, some states such as Texas and Hawaii saw little-to-no change from peak prices (including distressed sales).

 

from www.corelogic.com

It was also reported today that mortgage rates returned to their lowest levels of 2014, with the most prevalently quoted 30 year fixed rate mortgage rate (best-execution) at about 4.25 percent. Today’s best-execution 15 year fixed was reported at 3.375% and 5 year adjustable rate mortgage at 3-3.5 percent depending on the lender. For daily updates on mortgage rates and more detailed information about mortgage loan programs, visit the CF Funding Website.