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.

Consumer Confidence Rises in May

CF Funding is pleased to share that consumer confidence has risen in May to a score of 83.0. The Consumer Confidence Index, provided by the Conference Board, had decreased in April to 81.7. The index is now at its second-highest reading since 2008, with March of this year slightly higher at a score of 83.9.

The lowest score seen in the Consumer Confidence Index was 25.3 in February of 2009. Consumer confidence has risen significantly since then, but is not yet at its peak  pre-recession levels. In 1985, the index was at a score of 100. Consumer confidence in regards to present-day conditions improved in May, with those stating business conditions as “bad” declining from 24.8 to 24.1 percent. Those who believe jobs are “plentiful” rose about 1 percent from 13.0 to 14.1, and those who believe jobs are “hard to get” decreased from 32.8 to 32.3 percent.

Consumer expectations increased in May, with those expecting business conditions to improve (over the next 6 months) increasing from 17.2 to 17.5 percent. Those expecting business conditions to worsen decreased from 10.5 to 10.2 percent. Confidence in the labor market improved slightly, with those expecting more jobs increasing from 14.7 to 15.4 percent, and those expecting their incomes to grow increasing from 16.8 to 18.3 percent. According to Lynn Franco, Director of Economic Indicators at The Conference Board, “Consumers assessed current conditions, in particular the labor market, more favorably. Expectations regarding the short-term outlook for the economy, jobs, and personal finances were also more upbeat. In fact, the percentage of consumers expecting their incomes to grow over the next six months is the highest since December 2007 (20.2 percent).”

Home prices rose slowly in March, according to the S&P/Case-Shiller Index released this week. The index for March revealed a 12.4 percent increase in home prices in comparison to February’s 12.9 percent. 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. Las Vegas had one of the highest annual returns at about 21 percent. Only two cities in the index have set record highs since the housing crisis: Dallas, TX and Denver, CO. CF Funding is happy to be a part of the growing housing industry in these cities as the lender is licensed in both Texas and Colorado.

For more updates on home prices, mortgage rates, and housing industry news, follow CF Funding on Facebook at www.facebook.com/cffundingcorp or visit the lender’s news feed at www.cffunding.com/index.php/news.

Housing Affordability and Refi Applications Increase

Originally posted on the CF Funding website at www.cffunding.com/index.php/news on May 15, 2014

CF Funding shares good news from the National Association of Home Builders’ Housing Opportunity Index (HOI) today as lower home prices and steady mortgage rates caused higher home affordability in Q1 2014. According to the index, 65.5 percent of new and existing homes sold between January and March were considered affordable. The index is adjusted based on the U.S. median income, which was $63,900 in the first quarter. The HOI increased from a score of 64.7 in the fourth quarter of 2013 to 65.5 percent in the first quarter 2014.

Syracruse was the most affordable in Q1 at a score of 93.7, where the median income was $67,700. Also rated highly were Buffalo-Niagara Falls, Youngstown-Warren-Boardman, and Ohio-Pennsylvania. All of the least affordable small markets were in California, including Santa Cruz-Watsonville, Napa, and Salinas.

As CF Funding has stated previously, buying a home in the present market can actually be more affordable than renting. As NAHB Chief Economist David Crowe said, "As home prices and mortgage interest rates are unlikely to go down, the first quarter HOI is another indicator that this is an opportune time to buy." CF Funding hopes to see more renters achieve the dream of homeownership as the market improves in 2014.

The MND NewsWire also reported positive housing news today as mortgage and refinance applications rose at the fastest pace in a month. According to the Market Composite Index, mortgage application volume increased by 3.6 percent on a seasonally adjusted basis, for the week ending May 9. The Refinance Index increased 7 percent in comparison to the week before, which is the best increase in nearly a month. Interest rates also decreased last week with the average 30-year fixed-rate mortgage at about 4.39 percent, the lowest rate since November 2013. The average contract interest rate for a 15-year fixed-rate mortgage was also at its lowest since November 2013 at about 3.48 percent.

According to CF Funding loan officer Robert Sepka, “The increase in applications has been evident this week as many spring shoppers took advantage of low interest rates and refinanced or purchased a new home with us. It is a great time to buy as interest rates and home prices are expected to rise later in the year.” 

For more updates on the housing industry and current mortgage rates, visit www.cffunding.com or follow the lender on facebook at www.facebook.com/cffundingcorp.

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.

Home Sales Increase in March, Rates Continue to Rise

Originally posted on www.cffunding.com/index.php/news/ on April 22, 2014

In a recent post on the Insights blog, Corelogic Senior Economist Molly Boesel shared that home prices have increased by 10 percent year-over-year as of March 2014. CF Funding is glad to see positive equity return to homeowners as home prices rise. The sales pace is now 5.17 million, which is 31.5 percent higher than February’s pace of 3.93 million. This is to be expected as home sales rise in the Spring as weather improves. In comparison to previous years, however, the jump was high, as the average increase from February to March is 27 percent.

As CF Funding shared last week on their website, single-family home starts grew in February, and the Insights Blog confirms this trend as “improvement in March home sales were led by newly constructed homes which increased by 24 percent, followed by re-sales which increased by 19 percent.” Improvements in the amount of distressed sales were also evident, as last year’s 20.4 percent is now reduced to 13.7 percent. REO sales and short sales were also down, with short sales accounting for only 3.8 percent of total sales in March. According to Boesel, “REOs typically sell at a larger discount compared to healthy sales than do short sales… the more recent shift away from REO sales is a driver of improving home prices.” She emphasizes that distressed sales will never reach a level of 0, but ideally could return to pre-crisis lows of about 2 percent.

The state with the largest amount of distressed sales was Michigan, at 29.7 percent. Illinois was second with 25.9 percent, followed by Nevada, Florida, and Georgia. CF Funding is happy to share that California saw a large decrease in distressed sales in March, with a 17.4 percent drop. Unfortunately CF Funding’s hometown of Chicago-Naperville-Arlington Heights was reported with the highest amount of distressed sales in March of 25 Core Based Statistical Areas (based on population).

In other mortgage news today, mortgage rates continue to rise, as Mortgage News Daily reported that “rates pushed into their 2-week highs yesterday, but are still well under the levels seen in the first week of April.” The most frequently quoted rate for a 30 year fixed mortgage was about 4.5 percent, making today’s rates about .02 percent higher. These rates can be compared to 2014’s lows of about 4.25 percent and highs of about 4.625 percent.

For more information about home price and interest rates, follow CF Funding Corporation on Facebook at www.facebook.com/cffundingcorp or contact a loan specialist today at (888)344-4080.