Consumer Attitudes are Positive in Fed Survey

A survey released today by the New York Fed revealed that consumer expectations have improved in regards to the job market and household finances. Consumers are also optimistic about housing prices, as home price change declined slightly in March. CF Funding is happy to see a positive outlook returning to consumers as the economy improves.

Expectations for inflation increase rose slightly on the one-year and three-year scale. The one-year expectation rose 3.2 percent and the three-year expectation rose 3.4 percent. Expected home price change declined in all quartiles for the second month in a row, and is now at the lowest level since October 2013. Home price expectations in the West, however, are expected to grow more strongly than other areas.

In regards to the labor market, earnings growth rose to 2.4 percent, which is the highest level since the survey began in June 2013. According to the NY Fed’s Press Release, “The upper quartile has grown considerably over the past few months” and “the average perceived chance of finding a job among the currently employed (if current job was lost) rose to 49 percent.” The perceived chance of being laid off fell slightly. The age group between 40 and 60 saw about 45 percent chance of finding a replacement job, while those over 60 saw about a 30 percent chance. This was an improvement from February’s expectations, which were the lowest since the survey began (for those over 60).

CF Funding is happy to share that household income expectations were stable in the survey, and household heads under 40 have an expected income growth of 4.6 percent. More Americans believe that credit is easier to obtain in comparison to a year ago, and expectations for debt delinquency have declined slightly. This is consistent with CF Funding’s recent news article “Foreclosures Down 35 Percent from Last Year” in which the lender shared that foreclosure inventory is down 35 percent nationally from last year, and less than 1.9 million mortgages are in serious delinquency. Consumer attitudes were also positive in this month’s Fannie Mae National Housing Survey, as 52 percent of respondents believe it would be easy to get a home mortgage and 68 percent of consumers said they would buy if they were to move.

CF Funding Corporation will continue to post mortgage industry updates on the lender’s Facebook page at www.facebook.com/cffundingcorp and the CF Funding blog at http://cffundingcorporation.blogspot.com/ . Those who are looking to buy a home in 2014 should contact the lender directly at (888) 344-3080 or submit a form for a free pre-approval at www.cffunding.com. 

Americans are Buying Second Homes As Market Recovers

According to Fannie Mae’s report released Monday, titled “Second Homes: Recovery Post Financial Crisis,” the second home mortgage market is recovering after the housing market crash, and is expected to continue to grow. CF Funding is happy to share this sign of economic recovery. The Housing Insights report shared that second home mortgage origination has averaged about 4.6 percent of the total purchase market since 1998, and it has grown in the past few years. Fannie Mae and Freddie Mac have acquired about 64 percent of these second home purchase mortgages.

The National Association of Realtors’ survey of second home buyers, which was released last week, is used in the report to share general characteristics of second home buyers vs. those of primary residence buyers (those who have only one home). The typical second home buyer was profiled as about 47 years old, as opposed to a primary home buyer’s average age of 38. A second home buyer usually comes from a two-earner household and has a median household income of $90,660, whereas the primary homebuyer has a median household income of $74,580. The average second home buyer finances the purchase of their home about 61 percent of the time and usually puts down a larger down payment on their home than a primary homebuyer.

The increase in second home buying correlates with CF Funding’s April 2 article titled “Vacation Sales Rise Strongly in NAR Survey,” as the lender observed that more high-net-worth households gained enough confidence in the housing market to buy a recreational property last year. Fannie Mae also mentioned that “34 percent of all second home mortgages have been originated on properties located in Florida, California, and Arizona,” which makes sense as these states are located in warmer climates where many purchase vacation homes. Read the full CF Funding article here.

Fannie Mae also shared a history of the second home mortgage market, as the second home share of PMM has more than tripled from the late 90’s through about 2006, then declined through 2009. This is relatively consistent with the cycle of the real estate market. Since 2009, the second home mortgages share of all purchases has increased, as “private lenders are increasingly more willing to lend to second home borrowers.” During the housing peak (around March 2006), the share of second home mortgages peaked at more than 15 times its share compared to 1998 volumes, while other purchase mortgages were at less than 4 times their 1998 mortgages.

Although the population aged 45-64, who are most likely to buy a second home, is expected to grow more slowly than the rest of the adult population through 2060, it is still predicted that second homes will occupy a large part of real estate and mortgage business in the years to come. CF Funding looks forward to assisting second home buyers in financing their new home purchase. 

For more updates on daily mortgage news, follow CF Funding on Twitter at www.twitter.com/CF_Funding or visit our daily news feed at www.cffunding.com/index.php/news/ .

ATTENTION:

The CF Funding / PACC Ribbon Cutting Ceremony has been cancelled (until further notice).. We will keep you updated on the reschedule date ! Sorry for the inconvenience.

Please email mgarland@cffunding.com with any questions. Thank you for your patience!

Leading Markets Index Shows Housing Market Improvement

The National Association of Home Builders released their Leading Markets Index (LMI) yesterday, revealing that “recovery continues to spread” as 59 metro markets nationwide returned to (or exceeded) their normal levels of housing activity. CF Funding is happy to share that the nationwide average is at 88 percent of normal economic and housing activity, based on current permit, price, and employment data. As CF Funding mentioned yesterday in the lender’s daily news feed, consumer attitudes are increasing per the Fannie Mae National Housing Survey, and 68 percent of respondents said it is a good time to buy a home. The LMI confirms these consumer attitudes to be true, as the market continues to recover.

According to the NAHB, 28 percent of metro areas (out of 350 nationwide) saw their score rise this month and 83 percent of them have shown improvement over the past year. Chief Economist David Crowe shared an optimistic perspective, “It’s a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers.”

One continuously promising metro is Baton Rouge, LA, which scored 1.42 (42 percent better than its normal market levels). Honolulu, Oklahoma City, and Austin also topped the list. As the weather improves this Spring, CF Funding expects to see more metro areas reaching and exceeding their normal economic levels.

In other housing news, The Bureau of Labor Statistics has shared employment data revealing an increase in construction employment. The most recent report showed a 2.6 percent increase nationwide for February on a year-over-year basis. 73 percent of states had year-over-year increases as of February. Corelogic stated recently on their blog, “94 percent of states had increases in construction employment [during the housing boom], but that share fell to zero in the depths of the housing and financial crisis in 2009… while these year-over-year increases look tepid, they are strong when compared to the period of double-digit increases in construction employment from January 2009 to March 2010.” The state of Florida showed the largest year-over-year increase this February, improving by 11 percent. West Virginia showed the least improvement, with a 6.5 percent decrease in construction employment.

For more daily mortgage news, follow CF Funding on Facebook at www.facebook.com/cffundingcorp. CF Funding is now licensed in the state of Florida ! See all states where our services are available on our Facebook page or visit www.cffunding.com.

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.

Foreclosures Down 35 Percent from Last Year

CF Funding is happy to share that foreclosures and shadow inventory continue to decrease, according to the February 2014 National Foreclosure Report by Corelogic. Foreclosure inventory is down 35 percent nationally from last year, and less than 1.9 million mortgages are in “serious delinquency.” CF Funding has shared previously that “foreclosures have decreased 31 percent nationally from December 2012 to December 2013” and “the U.S. has now seen over two years of declines in foreclosure inventory.” The lender hopes to see this trend continue into the rest of 2014.

The number of completed foreclosures in February 2014 was 43,000, which is down 15 percent in comparison to February 2013. February’s foreclosures are also down 13.1 percent in comparison to January 2014. As a point of comparison, Corelogic points out that “before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.” CF Funding hopes to see a continued decline to surpass previous foreclosure levels as the housing market improves. Fortunately, February marks the 14^th consecutive month of a 20 percent or more year-over-year decrease in the inventory of foreclosed homes.

The five states with the highest foreclosure inventory in the February 2014 report were New Jersey (6.2 percent), Florida (6.0 percent), New York (4.7 percent), Maine (3.4 percent), and Connecticut (3.2 percent). The five states with the lowest foreclosure inventory were Wyoming (0.3 percent), Alaska (0.4 percent), North Dakota (0.5 percent), Nebraska (0.5 percent), and Colorado (0.6 percent). The state of Illinois currently has a foreclosure inventory of 2.7 percent (-1.8 percent from a year ago) and had 24,210 completed foreclosures in the past 12 months as of February. The serious delinquency rate for Illinois is 6.3 percent. 34 states have shown year-over-year foreclosure inventory decreases of more than 30 percent (with Arizona showing more than 50 percent declines).

CF Funding is very optimistic about the future of the housing industry, as Corelogic reported that “the 12-month sum of completed foreclosures is at [the] lowest point since December 2007 and has declined every month for the past 26 consecutive months.” Shadow inventory, defined as “properties that are more than 90 days delinquent, in foreclosure and held as real estate owned (REO) by mortgage servicers,” has decreased 22 percent from January 2013 to January 2014. Almost half of the current shadow inventory (about 1.7 million) are homes that are not yet foreclosed. As seen in the chart above, the shadow inventory has continued to decrease since about January 2011.

For more mortgage news and CF Funding updates, follow the lender on Facebook at www.facebook.com/cffundingcorp or on twitter at www.twitter.com/CF_Funding .

Consumer Attitudes are Positive in March 2014 Housing Survey

Last month, CF Funding reported positive results from the February Fannie Mae National Housing Survey, sharing that home price expectations rose 7 points and 68 percent of respondents said it is a good time to buy a home. This month the lender is happy to share more good news, as 69 percent of respondents now believe it is a good time to buy a home, and 68 percent said they would buy if they were going to move (up 2 points from February). The percent of respondents who believe it would be easy to get a home mortgage has increased by 7 points to a score of 52, an all-time survey high that has only been matched in January of this year.

CF Funding is happy to share that the average 12-month home price change expectation decreased from 3.2 percent to 2.7 percent. Those who expected home prices to stay the same increased by 4 points to 42 percent. The lender agrees with Mortgage News Daily’s prediction of a “pickup in home buying and selling activity this spring” due to positive consumer attitudes in the survey. As Jann Swanson reported in today’s article “Fannie Survey Hints at Warmer Spring for Housing,” over 50 percent of respondents expect mortgage rates to increase over the next year, yet most believe it will be easy to get a mortgage.

The survey also revealed an improvement in personal finances, as 40 percent of respondents said their financial situation improved during the past year, and those who expect their finances to worsen in the next 12 months decreased from 15 to 12 percent. Unfortunately, the number of respondents who believe the economy is on the right track decreased slightly from 35 percent in February to 33 percent in March.  The share of respondents who said their household expenses are significantly higher than 12 months ago decreased from 36 to 33 percent, and most respondents (58 percent) said their household expenses are about the same.

CF Funding would like to remind readers that although home prices are expected to rise, rental prices are also expected to rise. In regards to home rental attitudes, the expected 12 month rental price change was 4.2 percent, a slight decrease from last month’s 4.3 percent. The percent of respondents who believe home rental prices will increase over the next year was 52, up slightly from 51 in February. 41 percent believe rental prices will stay the same, and 4 percent believe they will go down.

According to Fannie Mae, the Monthly National Housing Survey polled a nationally representative sample of 1005 respondents between March 1 and March 23 for the results of this survey.

To keep up with mortgage news updates be sure to follow CF Funding on Facebook at www.facebook.com/cffundingcorp.