Consumer Sentiment: Moving Forward!

Consumer Sentiment: Moving Forward!

Consumer confidence declined in September, rebounded in October and jumped more than two points in a preliminary November estimate, beating economic forecasts and hitting a more than seven-year high.

The Thomson Reuters/University of Michigan Index of Consumer Sentiment registered 89.4 in a mid-month reading, the best showing since July 2007. Economists had forecast the measure would hit 87.5, with some predicting as high as 89.

What factor have contributed to this improvement? The declining of oil prices and an improving job market were probably the main factors that led to this surge in consumer sentiment. A more favorable business conditions perhaps also helped the consumers’ view of the present situation. This solid increase suggests consumers have largely dismissed concerns about slowing global growth and have ignored the sharp swings in financial markets earlier this month

US consumers expect better economic growth and rising incomes in the coming months and overall positive growth in our economy, leading to a stronger dollar and making other investments more attractive. Consumers regained confidence and are more optimistic now about their future earnings potential, and with the holiday season getting closer and closer, we may see ever higher numbers in consumer’s confidence.

What about the Housing Market? Considering that the Federal Financing Housing Agency has recently opened more doors for eligibility criteria in the purchase of  homes, we expect to continue with good news about the economic outlook in general.

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HELOCs the next home credit product?

HELOCs the next home credit product?

HELOCs the next thing home credit product?

HELOCs the next thing home credit product?

Highest level of home equity loans since June 2009. A total of 797,865 home equity lines of credit were originated nationwide, up 20.6% from a year ago and the highest level since the 12 months ending June 2009, according to RealtyTrac.

The report also shows HELOC originations accounted for 15.4% of all loan originations nationwide during the first eight months of 2014, the highest percentage since 2008.

“This recent rise in HELOC originations indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist.

Among the nation’s 50 largest metropolitan statistical areas with HELOC data available, 49 posted year-over-year increases in HELOC originations in the 12 months ending in June 2014.

Metro areas with the biggest year-over-year increase in HELOC originations were Riverside-San Bernardino in Southern California (87.7% increase), Las Vegas (85.1% increase), Cincinnati (81.0% increase), Sacramento (65.1% increase), and Phoenix (60.1% increase).

Home sales show encouraging stats

Home sales show encouraging stats

Existing home sales, excluding distressed sales, are the most encouraging stats at the moment. These, according to Trulia and the National Association of Realtors, were 80 percent back to normal in August.

home-salesTrulia’s Bubble Watch also showed that prices were 3.4 percent undervalued in the third quarter, which is a marked improvement over the 13.5 percent undervaluation at the worst of the housing bust. That means prices are three-fourths of the way back to normal.

Delinquency and foreclosure rates also were much improved. According to Trulia and Black Knight, the national delinquency and foreclosure rate was 74 percent back to normal in August, the same as one quarter ago and up from 56 percent one year ago. The decline in defaults and foreclosures has helped stabilize the financial system and hard-hit neighborhoods.

September:  Highest Consumer Confidence

September: Highest Consumer Confidence

Consumer confidence reached its highest level since the Great Recession in September, according to the Thomson Reuters and University of Michigan Surveys of Consumers.

consumer-confidenceSeptember’s increase in consumer confidence is the result of optimistic outlooks on the overall economy and personal incomes.  The consumer expectations index rose 5.8 percent over the month of September, while the current conditions index fell 0.9 percent.

Additionally, a growing number of consumers expect their incomes to increase over the next year. The median income growth expectation reported in September was 1.1 percent, which is the highest expectation since late 2008. At the same time, more households anticipate income growth now than at any time since September 2008.

The renewal of income growth is particularly important for sparking consumer spending, and adding pending changes to monetary policy will make income gains prompt to boost even more consumer’s confidence.

FHFA outreaching more Homeowners

FHFA outreaching more Homeowners

In an effort to sign more eligible homeowners up for the Home Affordablefhfa Refinance Program (HARP), the Federal Housing Finance Agency (FHFA)   is holding its third HARP outreach event in October, 2014.

The goal is to get the word out about HARP to borrowers who are current but underwater, and help borrowers who are either delinquent or at risk of losing their home recognize that they too have options.

  • Borrowers are eligible for a HARP loan if they meet the following requirements:
  • Their loan must be owned or guaranteed by Fannie Mae or Freddie Mac;
  • The loan must have been originated on or before May 21, 2009;
  • LTV ratio must be greater than 80 percent;
  • Borrower must be current on mortgage payments.

Borrowers who could benefit from HARP are referred to as “in the money” borrowers; they are “in the money” if they meet all the HARP eligibility requirements, have a remaining balance on their loan of greater than $50,000 with more than 10 years left on their term, and have an interest rate of more than 1.5 percent more than current market rates.

As of June 2014, about 3.1 million homeowners have refinanced through HARP since it was introduced by FHFA and Treasury in 2009 as part of the Making Home Affordable Program.

New homes sales see biggest monthly jump!

New homes sales see biggest monthly jump!

Sales of new single family houses in August 2014 were at a seasonally adjusted annual rate of 504,000, up from July’s printing of 427,000, the fastest rate in six years and the biggest monthly jump since January 1992.

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The biggest gains and by far the reason for the big increase were new home sales in the West, one of the two largest housing markets, along with the South.

New home sales in the West were up 50% over July.

The South saw an 8% increase. The South is by far the largest region for new home sales, outdistancing all other regions combined.

The median sales price of new houses sold in August 2014 was $275,600; the average sales price was $347,900.

Jumbo Loans Cheaper and Easier to Get!

Jumbo Loans Cheaper and Easier to Get!

bigstock-Resort-collage-made-of-Cyprus--14454446Wealthy home buyers are paying lower average rates on high dollar loans, and in some cases, they don’t even have to worry about a large down payment or mortgage insurance.

For months, lenders of jumbo mortgages have been charging interest rates that are lower  than what average borrowers pay. Jumbo loans are mortgages that above $417,000 or $625,000 or more in high-priced markets.

Many lenders also have requiring as little as 10 percent, which is about half the normal rate, waiving the private mortgage insurance, and even lowered their credit standards for jumbo loan originations.

Luxury homes are selling faster than last year, according to data through July from Realtor.com.   The median age of listings ranged from 80 days  for homes listed at $1 million or more.

Orange County the third and Los Angeles the ninth most expensive housing market in the U.S.

Orange County the third and Los Angeles the ninth most expensive housing market in the U.S.

According to the newest report from the National Assn. of Realtors, Orange County is considered the third and Los Angeles the ninth most expensive housing markets in the U.S., this measured the open space with fire placemedian price of homes sold in the second quarter.    Orange County’s median —          the point at which half of homes sold for more and half for less — hit $691,900 in the quarter, trailing only the San Jose and San Francisco metro areas.

The San Diego area ranked fifth at $504,200 and metro Los Angeles, Los Angeles County ranked ninth at $420,300.  Even the relatively inexpensive Inland Empire sat 21st pricier than Miami; Austin, Texas; or Chicago with a median of $274,600.

While this may seem reasonable to some, these statistics should raise concern considering the median household income in Orange County is $75,566, according to the Census Bureau. In Los Angeles County it is $56,241.

Why this is a great time to sell your home?

Why this is a great time to sell your home?

Selling a house is a big decision, and there will be many factors in your decision to put your house on the market. The key is to not have to sell your house until the timing is right, at a time of the year when the market is hotter.

Home For Sale Signs In Front Of Beautiful New Homes.

When is a great time to sell your house? When you will get the most value for the property!

 

Several factors contribute to this, but always remember that time is the most important factor in achieving maximum value for your property.

While there is no way to tell when the housing market is at its top, the housing market we have seen does have some troubling similarities.  The idea to cash into your house and make a tidy profit while hoping the market to cool with the intention to find some bargains later is at a high stakes bet. Real estate market has a cyclical trend with ups and downs. However, it is not an excellent idea to speculate for most people as they’re not dealing with just money but with a real asset with real value.

Prices surged more than 10% in many markets last year, bidding wars are once again common, and homes are routinely going for well over the asking price in some cities. These trends make it seem like a return to the days of the housing boom.

The turnaround comes roughly seven years after the housing bust and signs that the economic recovery is picking up. As the unemployment rate drops and consumer confidence increases, more buyers are entering the housing market and sellers are finding that they have more leverage in negotiating the going prices of their homes.

More homes are expected to hit the market, and you will probably see that the number of “For Sale” homes will rise, with much of the extra supply coming from home builders. Since the recession, investment firms, including private-equity firms and hedge funds, have been purchasing large numbers of single family homes and turning them into rentals. Some analysts say that the supply & demand imbalance has helped to create this seller’s market by following this trend.

Before you start looking for a home!

Get pre-qualified!

Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lender will take an application, process the loan documents, and see the loan through to the funding stage.

If you have less than perfect credit, talk to your lender.

A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan.

You will need a down payment. blog21

Down payment requirements vary depending on the type of loan. However, down payment assistance programs are available for First time buyers. These programs may loan or grant you the funds necessary for the down payment.

Funds for closing costs.

Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to:

  • Escrow fees charged by the company handling the transaction
  • Title policy issuance fees charged by the title insurance company
  • Mortgage insurance fees
  • Fire and homeowners insurance
  • County Recorder fees for recording your deed
  • Loan origination fees

Some loans have “points” and some do not.

A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to comparison shop lenders to make sure your loan is at a competitive yield.

  Be aware of the two main types of loan categories:

  • Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.
  • Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan, USDA (United State Department of Agriculture).

Always keep in mind that buying a house is the best deal investment you can make!