By The Numbers, vol8

alpineThe July housing statistics in Las Vegas once again came in pretty much as we expected. Most of the data we track (daily, weekly, and monthly) indicates the housing market is still on a steady upward trend. It has not been at a rapid pace, but rather a slow, stable positive trek, trying to get to a level where we might classify it as a “normal” housing market. However, in our opinion that is still months and maybe years away.

We are on the cusp of the Fed finally raising short term interest rates, which will inevitably result in mortgage rates following that movement. The print economic media has been beating up that subject almost on a daily basis. Will the increases begin at the next September meeting, or be delayed until December? Recently it seemed most of the economists and analysts believe it will happen in September, however recent monetary and economic news from China, as well as lesser concern about inflation, has led others to believe the Fed will wait until the end of the year before opening the door to higher interest rates. We don’t think housing demand will react much to the looming change, as it will probably be a very small increase. Many of the consumers who have been “on the fence” have already made their decision, so we don’t expect the sales figures to change much due to small rate changes. There has also been a lot written and discussed about what can be done to attract more millennial consumers to the housing market. Raising rates too much will NOT be conducive to getting younger customers feeling good about buying a new home.

We sorted through 583 new home recorded sales (all product types) in July. It placed the 2015 total at 3,576, a year to year increase of 378 transactions, or 11.8 percent. The monthly new home closings should rise a little going through the 3rd quarter, based on the recent net sales and permit activity. We don’t foresee any significant improvement, and the monthly figures will probably recede a little during the 4th quarter.

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The median price of the new home closings in July was $305,928. This is a year to year change of $15,928, or 5.4 percent. We think the monthly year to year comparisons of the new home median prices should stay in the single digits for the rest of 2015. Again, we see that slow, steady increase continuing.

The permit total for the metropolitan area in July was 680. It puts the 2015 sum at 4,810 permits, a year to year increase of 648 units, or 15.5 percent. The monthly permit tally should also stay pretty consistent as we progress into 2016. The current pace of gross / net sales suggests that the pace of monthly permits will remain near 600 – 650 per month entering the 4th quarter and into 2016.

According to the recorded sales data from the Clark County Recorder’s Office, there were 4,174 resale closings in July. The total for 2015 is now 25,774, a year to year increase of 3,225 transactions, or 14.3 percent. If this pace remains, it now looks like the number of recorded resales could reach approximately 43,000 in 2015.

The median price of the resale closings in July was $193,000, a year to year increase of $18,000, or 10.3 percent. There has been a small downward tendency the last 3 months, but we believe that will be short lived.

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13.4 percent of the resale closings in July were condos, a number that has been pretty consistent so far in 2015. The median price of the condo closings in July was $105,000. We assume that the number of condo resales will continue rising as the overall market conditions improve. The condo median has ranged $98,000 – $100,000 during the first half of the year, but has started to increase very slowly during the past 2 – 3 months.

Word On The Street, vol8

The Mortgage Reports: Fannie Mae Lowers Mandatory Waiting Period After Bankruptcy, Short Sale, & Pre-Foreclosure

Mandatory Waiting Period Reduced To 2 Years

It’s getting easier to get approved for a mortgage. Following in the FHA’s footsteps, Fannie Mae has reduced the mandatory waiting period for a mortgage after bankruptcy, short sale, or pre-foreclosure. Borrowers no longer need to wait 4 years before re-applying to get a mortgage.

Borrowers can now re-apply for a loan just two years after a bankruptcy, short sale, or pre-foreclosure. This is one year longer than the FHA’s minimum waiting period via its FHA Back to Work program, and a major improvement for conforming mortgage borrowers nationwide.

Mortgage guidelines are loosening across all loans and Fannie Mae is now the most recent government group to help borrowers who have a history of poor credit because of bankruptcy, short sale, and pre-foreclosure.

New Fannie Mae Rules For Bankruptcy, Pre-Foreclosure, & Short Sales

Recently, Fannie Mae changed its mortgage rules for borrowers with a recent bankruptcy, pre-foreclosure, or short sale. The group has reduced its mandatory waiting period after such an event from four years to 2 years.

The change nearly mirrors a similar update from the FHA as part of that group’s Back to Work program. Via FHA Back to Work, certain mortgage borrowers are eligible to apply for a loan just 12 months after a significant derogatory event.

“Significant derogatory event” is defined as any one of the following which may appear on a person’s mortgage credit report:

  1. A pre-foreclosure
  2. A short sale
  3. A deed-in-lieu of foreclosure
  4. A bankruptcy
  5. A mortgage loan charge-off

A significant derogatory events will typically affect a person’s credit score by 100 points or more. For this reason, before selecting a loan program, it’s important to compare conforming mortgage rates via Fannie Mae against FHA mortgage rates via the Federal Housing Administration.

FHA mortgage rates are typically lower than comparable conforming rates; and don’t penalize for credit scores below 740. However, FHA mortgage insurance premiums can be costly on an upfront and ongoing basis.

Any mortgage lender can help you decide which loan program best suits your needs. Explore all available options — you never know how much you might save.

New Fannie Mae Guidelines For Derogatory Events

Fannie Mae has reduced its mandatory waiting period after a pre-foreclosure, short sale, or bankruptcy.

Prior to the change, which is effective immediately for all loan applications, Fannie Mae required borrowers to wait four years after a significant derogatory credit event before re-applying for a home loan.

That mandatory waiting period is now just 2 years.

The table below compares Fannie Mae prior policy against its current one; and against the FHA Back to Work program which may be more suitable for borrowers with less available down payment.

FHA loans permit home down payments of just 3.5 percent. Fannie Mae loans typically require 5 percent or more.

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For a Fannie Mae loan, “extenuating circumstances” are situations which (1) occur one-time only; (2) are beyond the borrower’s control; and, (3) result in a sudden, significant, and prolonged reduction in income.

The label of “extenuating circumstances” may also be applied to situations in which a borrower is subject to a catastrophic increase in financial obligations.

Examples of extenuating circumstances may include divorce, illness, sudden loss of household income, and/or job loss.

Mortgage applicants wishing to apply for a loan using Fannie Mae’s Extenuating Circumstances program should be prepared to provide documentation in support of the claim. Valid documentation may include a copy of a divorce decree; medical bills; and, notice of job loss or job severance papers.

Borrowers should also be prepared to write a brief letter describing the hardship and how it directly led to the bankruptcy, pre-foreclosure, or short sale. The letter should make it clear that default was the borrower’s only reasonable course of action, given the circumstances.

Borrowers should also make it clear that the derogatory event was a one-time event, and that financial obligations have been paid on-time in the months since.

Fannie Mae Mortgage Rates Remain Near 2015 Lows

Along with softening mortgage guidelines, today’s mortgage loans are easier for which to qualify. This is because low mortgage rates lower a homeowner’s expected monthly payment, which reduces debt-to-income ratios.

The conventional 30-year fixed rate mortgage rate has averaged less than 4 percent every month since last November and many mortgage applicants report receiving rate quotes in mid-3 percents.

When mortgage rates are low, purchasing power is extended and refinance opportunities increase.

As compared to last January, 30-year mortgage rates are lower by approximately 87.5 basis points (0.875%) which has increased the maximum purchase price for today’s buyers by close to $11,000 for every $100,000 borrowed.

This 11-percent boost can mean the difference between buying a 2-bedroom home or a 3-bedroom one; a home with 3 bathrooms or 4 bathrooms; or, a home with an upgraded kitchen, for example.

Extra purchasing power can also mean the difference between buying in a top-rated school district or a second-tier one.

For existing homeowners, when mortgage rates drop, there’s an opportunity to lower your monthly mortgage payment via a home loan refinance.

Via a refinance, your home’s existing mortgage is replaced with a new one with new, different terms. For many people, these new terms include a reduction in their mortgage rate which, in turn, results in a lower monthly payment.

Refinances are also an opportunity to take “cash out” from a home for home repairs or other needs; or to reduce a loan’s length from 30 years to something shorter.

Get A Live Rate Quote Now

Fannie Mae is loosening its mortgage guidelines and making it easier for mortgage applicants to get mortgage-approved. Even better, while that’s happening, mortgage rates are trolling near all-time lows. It’s an excellent time to compare today’s mortgage rates.

Rate quotes are available online at no cost, with no social security number required to get started, and with no obligation to proceed.

 

Show Me Today’s Rates.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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View From The Top, vol8

By Nat Hodgson
Executive Director
Southern Nevada Home Builders Association

 

There are numerous benefits buying a new home – lower costs for energy and maintenance and the latest design, technology and safety features.

Analysis by the National Association of Home Builders, using data from the Census Bureau’s latest Residential Energy Consumption Survey, shows that on a per-square foot basis, the newer the home, the less energy it uses.

Compared to homes built before 1950, the average consumption of energy is 46 percent lower in homes built after 2000.

Today’s new homes are built with environmentally-friendly features such as energy-efficient tankless water heaters, Energy Star appliances, HVAC systems, insulation and windows and doors that make the home more comfortable and can save home owners money over the long term.

The Census Bureau’s American Housing Survey shows that maintenance costs on average were 56 percent lower in new homes; $241 a year for all single family homes compared with $547 for homes built before 2008.

New homes feature floor plans that suit modern lifestyles, with open space layouts, high ceilings, large windows and design features such as information centers in kitchens, laundry rooms located near bedrooms, walk-in closets and pantries and other features for convenience and comfort.

New home buyers enjoy the ability to choose finishes, fixtures, flooring, paint colors and more that suit their preferences, without the hassle or cost of changing the previous owner’s tastes.

New homes are safer, with electrical wiring systems that can accommodate modern appliances and components such as high-definition televisions, security systems, fire alarms and complex lighting and audio setups.

As the housing industry continues to shows signs of recovery, today’s low interest rates combined with the benefits of new construction make it an ideal time to achieve the American dream of homeownership in a brand-new home.

The best source for information about the new homes in metropolitan Las Vegas is www.VegasNewHome.com, a joint effort of the Southern Nevada Home Builders Association and the Builders Digital Experience (BDX.) You will find a wealth of information about new homes in our community, and there are numerous ways to filter and search for specifics such as price range, neighborhoods, builders, green features, immediate move-in, ‘hot deals’ and much more.