Remodelers' Outlook Positive, Real Estate Changes on the Horizon

CF Funding is happy to share that remodelers’ ratings of current market conditions have increased to a score of 56 in the second quarter of 2014. In the NAHB’s quarterly survey, the Remodeling Market Index (RMI) rose three points, “reclaiming the territory it had lost during what was likely a weather-related dip in the first three months of the year,” according to a blog post today by Paul Emrath. A score of 50 or higher is positive, as more than half of remodelers in the survey reported high market activity, a great indicator for future activity.

The survey measures current conditions with 3 factors: major additions/alterations, minor additions/alterations, and maintenance /repair. In Q2 2012 scores were as low as 42 in some categories, and in Q2 2014 all scores were above 53. Future market indicators such as calls for bids, amount of work committed for the next 3 months, backlog of remodeling jobs, and appointments for proposals were also all above 53. Improvement in the jobs market has impacted the RMI, as homeowners have regained equity and confidence in the housing market has increased.

In other real estate news today, Realtors may be surprised to hear that Zillow Inc. is seeking to purchase Trulia Inc., and the two rival real estate websites may combine in the near future. The two websites are used by realtors, homebuyers, and home sellers to list homes and apartments for sale or rent. The companies make money by charging realtors and homesellers a fee for advertising. In June, the sites had over 85 million visitors and acquired almost 90 percent of traffic out of the 15 most visited real estate sites. According to Bloomberg Businessweek, Zillow may pay up to 2 billion dollars to acquire its rival site, and two-thirds of the price may be paid with Zillow stock. Both companies saw a rise in stock today, with Zillow rising more than 15 percent and Trulia rising 32 percent. Trulia’s revenue is expected to increase 76 percent this year to reach 253 million dollars, and Zillow’s revenue is expected to increase about 58 percent, reaching 311 million dollars.

Rumors of the two companies merging have not been publicly confirmed by members of either company. Regardless of the outcome, CF Funding hopes to see the sites continue to support realtors, FSBOs, and homebuyers as they buy and sell properties. Realtors and other home sellers who need assistance using these online tools to list properties may contact CF Funding today by calling 630-328-8905.

Foreclosure Activity Decreases to Lowest since 2006

CF Funding is happy to share that foreclosure activity has been reported at its lowest levels since before the housing crash. In the first half of 2014 (January through June) there were 613,874 foreclosure filings, which is a 23 percent decrease from the first half of last year. As CF Funding mentioned earlier this month on their blog, the Obama administration is taking steps to continue to decrease foreclosures, and the lender expects that more improvement is to come in the next few years as the economy improves.

The Midyear 2014 U.S. Foreclosure Market Report, released this week by RealtyTrac, revealed that one in 214 homes in the U.S. reported a foreclosure in the first six months of this year (about 0.47 percent). Foreclosure activity for June totaled 107,194 properties, which is down 2 percent from May 2014 and down 16 percent from a year ago. Ten states reached their lowest levels of foreclosure activity since the housing crash in 2006, including Texas, Georgia, Colorado, Tennessee, Arizona, and Nevada. CF Funding is licensed in Texas, Florida, and Colorado, and the lender was happy to see such high foreclosure improvement in those states.

Only nine states saw an increase in foreclosure activity in the first half of 2014 in comparison to the first half of 2013. Those states include New Jersey (up 54 percent), Maryland (up 18 percent), and Iowa (up 10 percent).

It may be disheartening to see that Illinois is ranked at the country’s third highest foreclosure rate in the first half of 2014, at one in every 123 housing units. However, Illinois has a longer foreclosure filing process than many other states in the country. This means that although foreclosures are recovering in Illinois, the statistics reporting a decrease in filings may lag behind other states by a few months. CF Funding is happy to share that Illinois foreclosure activity did decrease 16 percent in comparison to the second half of 2013, and 32 percent from a year ago. The Chicago metro area also saw a 30 percent decrease in foreclosure activity in the first half of 2014 compared to a year ago.

Those who are in danger of foreclosure should contact CF Funding today to take advantage of free credit repair services with a refinance. The lender has assisted thousands of homeowners to regain positive equity in their homes. Call 888-344-4080 or visit www.cffunding.com today. 

Has the American Dream Evolved?

CF Funding has helped many families achieve the dream of homeownership over the past 14 years. As the Independence Day holiday weekend has come and gone, CF Funding  evaluates what other factors are considered to be a part of “ the American Dream.” Does the dream refer to a shiny car, a large family, or a 3-figure salary? According to James Adams, who coined the term, “The American Dream is that of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement… It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are immediately capable, and be recognized by others for what they are.”

A glance at recent economic news may indicate that the American Dream is out of reach in present day. College graduates are having trouble finding jobs and are often living at home with parents. Recovery from the recession is slower than expected in many markets.  However, a majority of Americans have achieved the American Dream, in regards to the dream of homeownership, education, and job opportunities, says the DDB of North America. The study revealed that 66 percent of US adult respondents have been able to own a home in their lifetime, 78 percent were able to obtain a good education, and 74 percent were able to find a decent job in their lifetime , yet only 40 percent described themselves as living the American Dream. The reason Many Americans remain pessimistic may be that the American Dream has evolved.

Factors such as “buying the car of one’s dreams” at 35 percent and “making a lot of money” at 25 percent were rated less easy to attain by respondents. However, factors that are less related to wealth such as “decent health and medical care,” “feeling relatively safe, “ being treated fairly,” and “having enough food to eat” rated closer to the 80-90 percent ranges. Are Americans less grateful than in previous decades, or has something else changed? According to Mosche Cohen, achieving and maintaining the American dream “have become so difficult that people are not enjoying it.” People are trying to “shoehorn themselves into this concept of the American dream, and they are losing the freedoms it’s supposed to provide… you take a step back and you say things are getting better. Are they enough? Never, because life is about growing higher and higher, but things are getting better.”

CF Funding agrees that the economy is improving, and will continue to improve in the coming years. The dream of homeownership is becoming more easy to attain, especially for first-time homebuyers and veterans who can receive up to $10,000 in down payment assistance from programs like IHDA’s Welcome Home Illinois. For more information on these programs, contact CF Funding at 888-344-4080 or www.cffunding.com.

New Home Sales Up, Busy Season Ahead for Housing

Data released today by the U.S. Census Bureau and the Department of Housing and Urban Development revealed that new residential home sales in April were up 6.4 percent from the revised March estimate of 407,000. Sales reached a total of 433,000, at a median sales price of $275,800. CFFunding is pleased to see another sign of economic recovery as this increase shows improvement in the housing industry.

The New Residential Sales report also shared revisions dating back to January 2012, when new home sales were at a rate of 335,000. New home sales saw large improvements from April 2012 to April 2013 with a jump from 354,000 to 452,000, and have dipped about 4.2 percent over the past year to reach the present estimate of 433,000. According to Wall Street Journal, “Sales of new single-family houses represent a fraction of homes purchased in the U.S. and can be subject to large revisions… but the report provides a more timely reading of the housing market than other measures because it tallies sales at the moment a contract is signed rather than at its closing.”

Many economists expect a busy spring and summer season for the housing industry, as new home construction increased for the third month in a row this April. Both multifamily and single-family construction increased, according to the Commerce Department. Stocks also increased for houses on the market in April, hitting a 3.5 year high, according to Lucia Mutikani. Although the outlook is positive, the industry is still considered to be in a “slump,” as high home prices, low inventory, and the harsh winter weather have had a negative effect over the past year. CF Funding hopes for a full recovery as the Federal Reserve plans to assist the housing industry by maintaining low interest rates.

Current mortgage rates remain unchanged, with the most prevalently quoted 30 year fixed rate (best-execution) at about 4.125-4.25 percent.  FHA and VA loans today range on average from 3.75 percent to 4 percent. 15 year fixed rate mortgages are at an average rate of 3.25 to 3.375 percent, and 5 year ARMs range from 3 to 3.5 percent. Homebuyers should keep in mind that interest rates range based on credit and program availability, and rates may change from day to day. Those interested in a purchase or refinance should contact a loans specialist at www.cffunding.com to see which programs and rates are available today.  

Housing Starts Rise Over 26 Percent

The U.S. Department of Housing and Urban Development has released the new residential construction statistics for April 2014, revealing that privately-owned housing starts increased by 13.2 percent last month, in comparison to the March revised estimate. CF Funding is happy to share that privately-owned housing starts were also up 26.4 percent in comparison to April 2013’s numbers. Increases in housing starts are an indicator of the housing industry’s recovery.

Building permits also rose in April, as privately-owned units were up 8.0 percent from the revised March rate of 1,000,000, reaching a seasonally adjusted rate of 1,080,000. Single-family building permits were up 0.3 percent from the revised March rate of 600,000, reaching 602,000. April marks the third month of permits reaching over 1 million annually.

Single-family housing starts were up 0.8 percent from March to reach 649,000. CF Funding is pleased to see that housing starts improved in every region in April. Privately-owned housing completions were down slightly (3.9 percent) from the revised March estimate. However, the 847,000 privately-owned completions were still 21.2 percent above April 2013’s rate or 699,000.

According to Doug Carroll of USA Today, “Bad weather was fingered as the main explanation for a slowdown in the housing market and the economy during the winter months. April’s housing starts report, along with better employment numbers, could be a sign that the economy will rebound in the second quarter.” CF Funding has explained previously on their blog the effects of bad weather on the housing market.

In other news from the HUD, the average size of newly constructed single-family homes increased during the first quarter of 2014, from 2,656 square feet to 2,736. The median rose from 2,465 square feet to 2,483. As seen in the following chart from the NAHB, there is a clear upward trend of increasing home sizes post-recession.  A new mix of buyers may also be contributing to the upward trend.

The NAHB says the recent rise is “consistent with the historical pattern coming out of recessions… home sizes fall into the recession as some homebuyers cut back, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions.” CF Funding has noticed this trend as the lender finances jumbo home loans, construction loans, and second home purchases. The lender recently shared that second home purchases are increasing as the housing industry improves and a rise in home equity allows many homeowners to complete a cash-out refinance or second mortgage.

For more housing industry updates, follow CF Funding on Facebook at www.facebook.com/cffundingcorp.

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.

Check out this new loan program available at CF Funding! To contact Frank Concialdi call (630)328-8906 or email fconcialdi@cffunding.com.

See more loan options at www.cffunding.com.