NAR: Pending home sales at 17-month high

WASHINGTON – April 29, 2015 – Pending home sales in March continued their recent momentum, rising for the third straight month and remaining at their highest level since June 2013, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, climbed 1.1 percent to 108.6 in March from an upward revision of 107.4 in February. It's now 11.1 percent above March 2014 (97.7).

The index has increased year-over-year for seven consecutive months and is at its highest level since June 2013 (109.4).

"Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year," says Lawrence Yun, NAR chief economist. "While (it's) certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term homeowners."

Yun expects a gradual improvement in home sales in the coming months, but he says insufficient supply and accelerating prices could be a speed bump.

"Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer," Yun says. "This in turn has pushed home prices to unhealthy levels – nearly four or more times above the pace of wage growth in some parts of the country.

"Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability," Yun adds.

The PHSI in the Northeast fell (1.5 percent) for the fourth straight month to 80.2 in March, but it's 0.6 percent above a year ago. In the Midwest, the index declined 2.5 percent to 107.5 in March, but it's 11.3 percent above March 2014.

Pending home sales in the South increased 4.0 percent to an index of 126.5 in March and they're 12.4 percent above last March. The index in the West rose 1.7 percent in March to 103.7, and it's now 15.6 percent above a year ago.

Source: Florida Realtors®

Why buy a home? The reasons have changed

IRVINE, Calif. – April 27, 2015 – The first quarterly Homeowner Sentiment Survey finds that people's perception of home value in the post-crash era runs deeper than standard measures of price and location. Today's owners and prospective buyers define value in broader terms – personal confidence in their housing investment and how a property will meet their family's needs now and in the future.

The study was conducted by Berkshire Hathaway HomeServices, part of the HSF Affiliates LLC family of real estate brokerage franchise networks.

"Homeowners today seem to have a longer-term perspective for their properties," says HSF Affiliates CEO Gino Blefari. "Owners are telling us a home is more than its price tag, and they're placing more value in a home's intrinsic qualities of wealth building, safety, satisfaction and a place to raise a family."

A large majority of owners (89 percent) expressed satisfaction with their home and current living situation; about a third said they've considered selling their home in the near future. Those selling their homes seek properties that better fit their changing lifestyles and life events, among other reasons.

Home-value perception varies through the lenses of different age groups. Boomers and Gen Xers embrace homeownership first as a "smart, long-term investment." By contrast, millennials are "thinking in the now" about real estate, placing highest priority on the "ease of a purchase decision," including the ability to close quickly on a property, secure financing and afford monthly payments.

Of homeownership's benefits, millennials want a place they're proud to show family and friends. They value a community with great schools, and they seek locations that encourage healthier lifestyles. They also want a lively neighborhood: 61 percent said it's important to live in a neighborhood with a variety of trendy dining and retail options.

"As millennials become a larger part of the home buying market, their preferences become better defined and seemingly more traditional," says Stephen Phillips, president of Berkshire Hathaway HomeServices. "We have always believed there is more similarity than difference among home buying groups, and this new data seems to support that view."

With an eye toward enhancing long-term value, 88 percent of current homeowners say it's important to update or renovate their home over time, and they want improvements that stress energy efficiency and eco-friendly systems and materials. More than 60 percent of current homeowners favored "green" improvements even before kitchen, bath and flooring projects. Millennials are most enthusiastic about renovating: 61 percent want a home they can upgrade to their preferences.

Overall, homeowners and prospective buyers believe housing has turned the corner. A full 94 percent said homeownership is important to their long-term financial planning. With interest rates hovering near historic lows and the economy and job market growing, respondents said today is a more ideal time to buy a home than a year ago.

Still, a strong majority of respondents expect more competition for homes as housing inventory remains tight in many U.S. markets. A skilled sales professional will help in the search: Of prospective homeowners who hired agent, 93 percent said the agent has been effective in that home-finding process.

"This magnifies the value of sound real estate guidance today," says Blefari. "Sales professionals are the local-market experts with a keen understanding of home value, availability and negotiation. All things considered, when your agent finds you a great home in the right location and price point, it's time to make your move."

Source: Florida Realtors®

Owning cheaper than renting in 76% of U.S. metros

IRVINE, Calif. – April 9, 2015 – RealtyTrac released its Residential Rental Property Analysis the first quarter of 2015 and found that the monthly house payment (median-priced three-bedroom home) is more affordable than the monthly fair market in 76 percent of U.S. counties included in the analysis.

The report also ranked the markets with the best – and worst – potential returns on residential rental properties from a real estate investor perspective, along with the most affordable – and least affordable – markets for renting from a renter perspective.

The analysis included 461 U.S. counties with a population of at least 100,000 and sufficient home price, income and rental data.

On average, fair market rents (set by the U.S. Department of Housing and Urban Development) were 28 percent of estimated median household income; monthly house payments on a median-priced home (10 percent downpayment with property taxes, home insurance and mortgage insurance included) were 24 percent of the estimated median income.

"From a purely affordability standpoint, renters who have saved enough to make a 10 percent downpayment are better off buying in the majority of markets across the country," says Daren Blomquist, vice president at RealtyTrac.

However, Blomquist says "factors other than affordability are keeping many renters from becoming buyers – a reality that means real estate investors buying residential properties as rentals still have the opportunity to make strong returns in many markets across the country." He also notes that the data RealtyTrac analyzed are not the only variables in a buy-versus-rent decision.

Florida

Only two metro areas and cities in Florida ranked in any of RealtyTrac's top 10 or bottom 10 lists for renting or investing. Miami-Dade (including Fort Lauderdale and Pompano Beach) ranked No. 4 nationwide in the "least affordable rental markets" list. The analysis finds it takes 45 percent of an owner's median income to rent, while it takes only 34 percent of median income to buy a home.

For real estate investors, only Pasco County made the top 10 list for annual investment return. According to RealtyTrac, the annual gross rental yield for a cash buyer in February 2015 at 19.20 percent compared to the nation's top investment city, Baltimore, Maryland, which saw 24.82 percent returns.

Nation

Among the 56 counties with most favorable conditions for buying, the most affordable for buying was Bay County, Michigan in the Bay City metro area, where it takes only 11 percent of the area's median income to make house payments on a median priced-home.

The top U.S. market for renting is Delaware County, Ohio, in the Columbus metro area, where it takes only 14 percent of the area's median income.

While the Miami-Dade area ranked fourth for high market rents, Bronx County, New York, led the list. In the Bronx, a median-income home pays 69 percent monthly in rent. However, the cost of ownership is so high that renting remains the preferred option there.

Investment returns

The average potential annual gross rental yield for homes purchased in February 2015 was 9.34 percent for all metro areas, calculated by annualizing the rental income and dividing that amount into the purchase price of the property.

Markets with the highest potential annual gross rental yields for homes purchased in February 2015 were:

Baltimore City, Maryland (24.82 percent),

Clayton County, Georgia (24.26 percent),

Wayne County, Michigan (21.08 percent)

Pasco County, Florida (19.20 percent)

Trumbull County, Ohio (18.36 percent)

Markets with lowest returns on residential rental properties:

New York County/Manhattan, New York (2.34 percent)

San Francisco County, California (3.20 percent)

Kings County/Brooklyn, New York (3.63 percent)

Marin County, California (3.84 percent)

Williamson County, Tennessee (3.89 percent)

Investment markets with rising rental returns

Douglas County, Oregon (potential returns up 119 basis points from a year ago)

 Linn County, Iowa (109 basis point increase)

Henderson County, North Carolina (109 basis point increase)

Kendall County, Illinois (89 basis point increase)

Sussex County, Delaware (80 basis point increase).

Cook County, Illinois (43 basis points increase)

King County, Washington (12 basis point increase)

Long Island, New York (49 basis point increase)

Nassau, New York (24 basis point increase)

Wake County, North Carolina (30 basis point increase)

Source: 2015 Florida Realtors®  

Vacation home sales rose to record high in 2014

WASHINGTON – April 2, 2015 – Vacation home sales boomed in 2014 to above their most recent peak level in 2006, while investment purchases fell for the fourth straight year, according to an annual survey of residential homebuyers released by the National Association of Realtors® (NAR).

NAR's 2015 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2014, shows vacation-home sales catapulted to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013.

Investment-home sales in 2014 decreased 7.4 percent to an estimated 1.02 million in 2014 from 1.10 million in 2013. Owner-occupied purchases fell 12.8 percent to 3.23 million last year from 3.70 million in 2013. The sales estimates are based on responses from nearly 2,000 U.S. adults who purchased a residential property in 2014, and exclude institutional investment activity.

NAR Chief Economist Lawrence Yun says vacation sales in 2014 showed astonishing growth, nearly doubling the combined total of the previous two years.

"Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment," he said. "Furthermore, last year's impressive increase also reflects long-term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years."

Vacation-home sales accounted for 21 percent of all transactions in 2014, their highest market share since the survey was first conducted. The portion of investment sales fell to 19 percent (20 percent in 2013); owner-occupied purchases declined to 60 percent (67 percent in 2013).

"Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals," says Yun.

The median sales price of both vacation and investment homes declined in 2014. The median vacation home price was $150,000, down 11.1 percent from $168,700 in 2013. The median investment-home sales price was $125,000, down 3.8 percent from $130,000 a year ago.

According to Yun, the decrease in vacation and investment sales prices is likely due to the increase in vacation and investment buyers purchasing condos and townhouses, which contributed to a decline in the median size of 200 square feet for both. Additionally, the rise in vacation buyers purchasing distressed properties and buying in the South, where home prices are often lower, contributed to the overall decline in the sales price of vacation homes.

The share of vacation buyers who paid in cash fell to 30 percent from 38 percent in 2013. Investment buyers who paid in cash decreased to 41 percent from 46 percent a year ago. Of buyers who financed their purchase with a mortgage, nearly half (48 percent) of vacation buyers and 41 percent of investment buyers financed less than 70 percent of the purchase price.

Forty-five percent of vacation homes and 44 percent of investment homes purchased in 2014 were distressed properties – either a home in foreclosure or a short sale. In 2013, 42 percent of vacation homes and 47 percent of investment home purchases were distressed.

Characteristics of Vacation-Home Purchases

The typical vacation-home buyer in 2014 had a higher median household income ($94,380) than those in 2013 ($85,600) and purchased a property that was further away (median distance of 200 miles) than a year ago (180 miles). Buyers plan to own their property for a median of 6 years, unchanged from 2013.

Although a majority (54 percent) of vacation buyers bought a single-family home, the share of those buying a condo (27 percent) or a townhouse or row house (18 percent) increased from a year ago. Forty-percent of vacation buyers purchased in a beach area, 19 percent purchased in the country and 17 percent purchased a vacation home in the mountains.

One-third of vacation buyers plan to use their property for vacations or as a family retreat, 19 percent plan to convert their vacation home into their primary residence in the future, and 13 percent bought for potential price appreciation; the same share purchased because of low real estate prices and because the buyer found a good deal.

Forty-six percent of vacation homes purchased last year were in the South (41 percent in 2013), 25 percent in the West (28 percent in 2013), 15 percent in the Northeast (18 percent in 2013) and 14 percent in the Midwest (unchanged from a year ago).

NAR released a study in late 2014 that identified the top housing markets likely to see a boost in home sales to leading-edge baby boomers. The findings revealed that metro areas – including many in the South and Southwest – with a lower cost of living and sunnier weather are poised to see an increased number of baby boomers moving in and buying a home in coming years.

Characteristics of Investment-Home Purchases

Investment-home buyers in 2014 had a median household income of $87,680 ($111,400 in 2013) and typically bought a detached single-family home (61 percent) that was a median distance of 24 miles from their primary residence (20 miles in 2013).

Thirty-seven percent of investment buyers last year purchased a property in the South, 26 percent in the West, 20 percent in the Midwest and 17 percent in the Northeast. Investors were most likely (32 percent) to buy in a suburban area, followed by an urban or central city (26 percent), rural area (21 percent) and small town (16 percent). Five percent of investment buyers bought in a resort area.

Investment buyers purchased property for a variety of reasons, including for rental income (37 percent), because of low prices and the buyer found a good deal (17 percent) and for potential price appreciation (15 percent). Overall, investment buyers plan to hold onto the property for a median of five years (unchanged from a year ago), and a majority (68 percent) are very or somewhat likely to buy another investment property in the next two years.

The bulk of investment buyers (86 percent) and vacation buyers (85 percent) reported that now is a good time to purchase real estate.

NAR's 2015 Investment and Vacation Home Buyers Survey, conducted in March 2015, surveyed a sample of adults that had purchased any type of residential real estate during 2014. The survey sample was drawn from a representative panel of U.S. adults monitored and maintained by an established survey research firm. A total of 1,971 qualified adults responded to the survey. Consumers were sampled to meet age and income quotas representative of all home buyers drawn from NAR's 2014 Profile of Home Buyers and Sellers.

Source: Florida Realtors®

A pivotal age for real estate marketing: 61 years

NEW YORK – March 25, 2015 – By age 61, most people feel free to choose where they most want to live, according to a new study by Merrill Lynch, "Home in Retirement: More Freedom, New Choices."

"Throughout most of people's lives, where they live is determined by their responsibilities," according to the report. "Most careers demand that people live within a reasonable commuting distance from where they and/or their spouse work. However, as people enter their 50s and 60s, they begin to cross what this study reveals to be the 'Freedom Threshold'" – the age when most people say they have the freedom to choose where they'd prefer to live, according to the survey of more than 3,600 people who have already retired.

In the survey, two-thirds of the retirees surveyed say they're currently living in the best home of their lives.

Most retirees move at least once during retirement, but only half downsize into a smaller home, and three in 10 retirees upsize into a larger home. The top reason to upsize: They want to have a home that's comfortable enough for family members to visit and stay with them, according to the survey.

"Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations," according to the report. In addition, some choose to upsize so that family members can live with them.

Retirees say the ideal place allows them to spend time with adults their own age, yet also give them access to a diverse age group. Compared to younger people, older Americans are far more likely to want diversity in age and generation among their communities and neighbors. As such, just 7 percent of retirees surveyed opted to move into age-restricted retirement communities.

Source: "Home in Retirement: More Freedom, New Choices," Merrill Lynch

Surprise Tops Owners' List of Needed Features

Energy efficiency is highly important to a growing number of households — so much so that the Demand Institute found that on a list of 52 housing and community concerns that more than 10,000 households were asked to rank in importance, households said energy efficiency had great importance even though only a fraction said they had actually improved it in their home. Energy efficiency was the biggest satisfaction gap, defined by what people say they want but don’t have, found in the survey.

Seventy-one percent of the households polled said energy efficiency was "highly important" to them, but only 35 percent of households said they felt their homes were very efficient with low monthly utility costs. Energy efficiency was the housing concern with the largest gap between the rate of importance and satisfaction – even topping other needs and desires like updated kitchens, storage space, safe neighborhoods, affordability, landlord responsiveness, and other issues, according to the survey.

"Utilities are as significant and regular part of households’ budgets, and spending on utilities has risen more quickly than overall consumer spending – 56 percent versus 38 percent growth since 2000," says Louise Kelly, president of the Demand Institute.

Still, 90 percent of the households polled said they have taken measures to reduce energy use in the last five years. In particular:

67% say they have changed their energy-use habits;

63% have switched to CFL or LED bulbs;

38% have sealed air leaks;

34% have replaced old, inefficient appliances;

28% have installed a programmable thermostat.

Source: "Poll: Energy Efficiency Is America’s No. 1 Housing Concern," TriplePundit.com (Jan. 21, 2015) and The Demand Institute

Shift mindset when selling to vacation-rental buyers

MIAMI – Feb. 18, 2015 – Second-home purchases are again on an upswing, and a poll by HomeAway Inc. indicates that nearly eight in 10 buyers factor potential rental income into their decision to such property.

As a result, real estate agents targeting vacation-rental buyers should embrace a different mentality. There are rewards in catering to customers who tend to be repeat buyers and make referrals, but it isn't always as simple as first-time or move-up buyers.

Practitioners should be prepared to spend as long as two years cultivating leads, for example – and they must be understand everything from patterns and trends in inbound tourism to current zoning laws governing rental properties and potential future changes to those regulations.

Agents should also expect to refer vacation homeowners to local property management companies, and know what local vacation-home renters look for in a property.

It's also helpful to know a little accounting math in order to help buyers calculate profit-and-loss and cash flow projections that gauge a vacation-home's income potential.

Source: Inman News (02/17/15) Bayer, Heather

Home Prices Are Up, Supply Is Down—Expect Bidding Wars

It’s getting more expensive to buy a house. Prices rose 6% in the fourth quarter of 2014 as buyers competed for fewer and fewer available homes for sale, according to new data from the National Association of Realtors®.

The NAR report shows most cities (86%) are experiencing rising prices, with fewer available homes to choose from. Just 24 cities, or 14%, recorded lower median prices in 2014 than in 2013.

“Home prices in metro areas throughout the country continue to show solid price growth, up 25% over the past three years on average,” said Lawrence Yun, chief economist at NAR. “This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages.”

Still, as more jobs are created, consumer confidence rises, driving the demand for housing. But with fewer sellers putting their homes on the market, the housing market just chugs along.

“This should signal existing home owners, who may have been slow to think of selling, to consider now a great time to list,” said Jonathan Smoke, chief economist at realtor.com®. With prices rising by double digits in 24 areas across the country, according to the report, many sellers would find a pool of buyers vying for their homes.

To be sure, Smoke scoured 200 of the largest metro areas across the country on realtor.com and found that the prices in 98 of them had increased by 6% or more. In 66 of those markets, houses are spending 8% less time on the market, he said.

Prices and inventory go hand in hand. The average supply of available homes for sale was 4.9 months’ worth, according to the report. In a normal market, there would be a six- to seven-month supply of available homes.

“This is a clear sign that demand is growing faster than supply,” said Smoke. Once more homes are listed, prices would moderate, he said.

The NAR wants more new construction. “Unless homebuilders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring,” said Yun.

The five most expensive housing markets in the fourth quarter of 2014, according to the report, were:

San Jose, CA, $855,000

San Francisco, CA, $742,000

Honolulu, HI, $701,300

Anaheim-Santa Ana, CA, $688,500

San Diego, CA, $493,100

The five lowest-cost metro areas were:

Youngstown-Warren-Boardman, OH, $78,000

Rockford, IL, $86,800

Toledo, OH $87,100

Decatur, IL $90,400

Cumberland, MD, $90,500

Housing demand is rising as buyers look to take advantage of low interest rates and a slight uptick in median income ($65,782). To afford a single-family home at the national median price of $208,700, a buyer making a 5% down payment would need an income of $45,863, while a 10% down payment would require an income of $43,449 and $38,621 for a 20% down payment, according to the report.

Regional breakdown

In the Northeast, sales rose 2.5% in the fourth quarter of 2014 but are 4.1% below the fourth quarter of 2013, according to the report. The median price of the home rose 2.2% to $246,300.

In the Midwest, sales of existing homes declined 4.7% in the fourth quarter and are 0.6% below their 2013 level. The median price of an existing single-family home in the Midwest increased 6.2% to $162,000.

In the South, sales climbed 2.7% in the fourth quarter of 2014 and were 5.8% over 2013 levels. Median prices also increased 6.2% to $183,000, according to the report.

In the West, sales fell 6%; however, the median price of a home jumped 4.8% to $299,500 in the fourth quarter.

Source: Realtor.com - By: Chrystal Caruthers

America’s housing stock: Who holds it and who’s buying?

NEW YORK – Feb. 9, 2015 – Analysts expect the nation's housing recovery to push onward in 2015, supported by new types of investors and more traditional sales. At the same time, the still-sizable foreclosure inventory will continue to influence home pricing in surprising ways.

Guy Cecala, publisher of Inside Mortgage Finance, confirms that the sector is returning "to a much more traditional housing market, where investors play a much smaller role and the market is more dependent on regular buyers."

RealtyTrac data shows that 421,164 residential properties are still bank-owned, with another 642,927 in default and in the foreclosure process but not yet repossessed.

Daren Blomquist, vice president at RealtyTrac, states, "So there's a lot of property still in the foreclosure pipeline."

At the same time, much of the "shadow inventory" of foreclosures -- residences in various stages of foreclosure, but not yet on the market -- never ended up on the multiple listing service (MLS).

Instead, lenders have been able to sell off inventory in bulk to large REITs and other investors. As a result, these "sales" did not result in as much price drag as some analysts projected.

Fewer distressed sales will actually boost prices overall in 2015, states Tom Popik, research director of the HousingPulse Tracking Survey. He reasons that REOs (real estate owned, an industry term for lender-owned properties), short sales and damaged REOs all trade at a discount of 25 percent to 40 percent of regular home prices.

HousingPulse calculates that distressed sales were 23 percent of total sales last month, a slight increase from the lowest level in four years.

Source: Investor's Business Daily (01/30/15) P. A10; Doler, Kathleen

Homebuyers need to act now

CHICAGO – Feb. 4, 2015 – Homebuyers need to move fast if they want to spend less, according to Jonathan Smoke, chief economist at realtor.com.

"Delayed purchases will only result in higher monthly mortgage payments as prices and rates rise," Smoke writes. Realtor.com forecasts that affordability may decline as much as 10 percent over the year.

The Federal Reserve continues to remind the financial markets that it plans to raise its target federal funds rate this year, which will cause mortgage rates to rise. Many economists predict that 30-year fixed-rate mortgages will average near 5 percent by the end of the year.

For now, mortgage rates are near historical lows for homebuyers and homeowners. Freddie Mac reported last week that the 30-year fixed-rate mortgage averaged 3.66 percent (last year at this time it averaged 4.32 percent), and 15-year fixed-rate mortgages averaged 2.98 percent (a year ago, it averaged 3.40 percent).

"Right now, the Fed is using the word 'patient' to describe its approach to picking the time to raise the target rate," Smoke notes. "However, when the Fed 'loses patience,' rates will go up at least 20 to 40 basis points in anticipation of the target rate officially going up. … So, buyers beware: The clock on these low mortgage rates may be ticking."

Source: "2015: Buy Now, Before the Fed's Patience Ends," realtor.com® (Jan. 30, 2015)

Freddie Mac advises buyers to move quickly

WASHINGTON – Jan. 28, 2015 – Freddie Mac recently cited a number of favorable opportunities for the housing sector but stressed the need for consumers and businesses to take advantage of them sooner rather than later – they may be limited.

According to Freddie Mac's January 2015 U.S. Economic and Housing Market Outlook, one big positive for housing currently is the attractive potential for refinancing. Looking at conventional 30-year fixed mortgage agency mortgage-backed securities (MBS), approximately $361 billion had a 4.5 percent coupon while another $479 billion had a coupon higher than 4.5 percent. Many had a rate higher than 5 percent, providing borrowers with plenty of incentive to refinance at current 30-year fixed annual rates.

Job growth, though, is the most important positive tailwind for housing cited in Freddie Mac's report. Payrolls expanded by an average of 246,000 a month last year versus just 194,000 a month in 2013, the Bureau of Labor Statistics (BLS) reports. The unemployment rate, meanwhile, dipped 1.1 percentage points from January through December to 5.6 percent – the lowest level it has been in six and a half years. That drop reduced the amount of unemployed persons in the United States by 1.7 million, notes BLS researchers.

Source: DSNews (01/20/2015) Honea, Brian

‘Boomerang buyers’ to help shape housing market

MIAMI – Jan. 27, 2015 – More than 300,000 South Floridians who lost their homes during the housing bust could be eligible to own again over the next eight years, a new report shows.

In Palm Beach, Broward and Miami-Dade counties, 322,141 homeowners have completed short sales or foreclosures since 2007, when the housing downturn intensified, according to RealtyTrac Inc. But those people are gradually jumping back into the market as "boomerang buyers."

Among major metros nationwide, only the Phoenix area could have more potential boomerang buyers with 348,329, RealtyTrac said.

A large supply of former homeowners looking to buy again portends well for housing demand in the coming years, said Daren Blomquist, vice president of RealtyTrac, a foreclosure listing firm in Irvine, Calif.

"Certainly, first-time homebuyers are an important part of what will happen with housing, but another big piece that will shape the market going forward is those boomerang buyers," he said.

Fannie Mae and Freddie Mac, the government agencies that back more than half of all home loans, used to require a two-year wait after a short sale before a borrower could qualify for another mortgage. The guidelines now call for a four-year wait. A foreclosure still requires a seven-year wait.

But credit unions and community banks don't necessarily follow those guidelines and may qualify a borrower for a mortgage sooner than the prescribed waiting periods.

Ryan Paton, president of Capitol Lending Group in Fort Lauderdale, said he's working with plenty of former homeowners who want back into the market. They're making 20 percent downpayments and have fixed credit and financial problems that forced them into short sales or foreclosures, Paton said.

Some people bought more than they could afford or sucked the equity out of their homes during the housing boom, but others were responsible and just caught a bad break, Paton said.

"We were one of the hardest-hit areas in the country, and many people did nothing wrong and still lost 60 percent of their home value," he said. "They just happened to purchase at the wrong time."

Because of the lessons they learned, those who lost their homes during the crisis often are considered ideal buyers today, mortgage brokers and lenders say.

"It's kind of like a fresh start," said Doug Leever, mortgage sales manager for Tropical Financial Credit Union in Miramar.

Source: The Sun Sentinel (Fort Lauderdale, Fla.), Paul Owers. Distributed by Tribune Content Agency, LLC.

55-plus housing market ‘one of healthiest segments’

LAS VEGAS – Jan. 23, 2015 – The 55+ housing market fared quite well in 2014, and 2015 should be no different, according to industry experts at a press conference held today at the National Association of Home Builders (NAHB) International Builders' Show (IBS) in Las Vegas.

"The 55+ housing market has been one of the healthiest segments of the overall housing market, and is likely to remain that way over the next several years," said Paul Emrath, NAHB's vice president of survey and housing policy research. "When you look at age-restricted single-family starts, there were as many in the first half of 2014 as in all of 2012. And going forward, the steady rise in the 55-and-over population will signal an increased need for housing to accommodate that group."

According to Emrath, builder confidence has steadily increased over the past several years. "NAHB's 55+ Housing Market Index (HMI), a survey of members that measures builder and developer confidence for that market, has regularly posted year-over-year gains."

"We're seeing more consumers actually make the decision to buy a new home as they are able to sell their current home at an acceptable price," said Steve Bomberger, chairman of NAHB's 50+ Housing Council. "We are busier now than ever before. And I don't think it's going to slow down anytime soon."

"Consumers in this market are looking for a home that accommodates their specific needs, and 55+ builders and developers are able to create homes and communities that address these needs," said Timothy McCarthy, vice chairman of NAHB's 50+ Housing Council. "As the economy continues to improve, so does our overall business. Builders in this market have the opportunity to have tremendous success since the population we are serving is so vast."

Source: Florida Realtors®

Price Gap Widens Between New and Old Homes

Buyers who purchase new homes are paying much more than those who buy existing homes. The price gap between the two types of homes, which historically has been in the 15 percent to 20 percent range, has ballooned to between 30 percent and 40 percent in recent years, according to data from the National Association of REALTORS®.

"That suggests either existing-home prices are much cheaper in relation to the newly built homes and/or that there is just not enough new homes being produced," notes NAR Chief Economist Lawrence Yun at NAR's Economists' Outlook blog.

In November, the median home price of a new home was $280,900. In comparison, the median price of an existing home was $206,200, representing a gap of 36 percent.

New-home construction has been at low levels the last few years. Single-family housing starts this year reached 650,000, but a more normal rate for the sector is considered to be 1 million.

A shortage of new-home construction is putting higher premiums on new homes, Yun notes.

"Persistent underproduction of new homes is one key reason for pushing up prices," Yun writes on NAR's blog. "From 2004 to 2014, the price of a typical newly constructed home will have risen by 27 percent."

The price premium could widen more if housing starts do not rebound soon. NAR projects single-family housing starts to rise to 820,000 in 2015, which is still under the historical average.

Source: “Home Price Comparison: New Versus Existing,” National Association of REALTORS® Economists’ Outlook Blog (Dec. 30, 2014)

65+ adults are real estate’s most loyal age group

NEW YORK – Dec. 15, 2014 – Americans age 65 and over are holding onto homeownership instead of downsizing into rentals or moving to senior centers, Bloomberg Businessweek reports.

Indeed, the largest jump in buyers this year was among people between the ages of 65 and 74. This age segment increased to 13 percent of all buyers from 10 percent a year earlier, according to National Association of Realtors® data.

"They want to remain as homeowners now because it represents stability, so they don't have to deal with generating fluctuating payments for rent," says Chris Mayer, a real estate professor at Columbia University Business School in New York.

Even during the housing crisis, the homeownership rate for Americans 65 and over stayed around 80 percent when it dropped for every other age group, according to Census Bureau data. Since then, Americans under 35 have seen the largest decline in homeownership, falling to 36 percent from 48 percent, Census data shows.

In 1982, the homeownership rate for every age group was higher than it was in 2013 – except for those 65 and over.

"This group has been a ballast for the market," says Chris Herbert, acting managing director at Harvard's Joint Center for Housing Studies. "If not for them, we would have seen a much lower homeownership rate overall, more homes on the market and more weakness."

Seniors usually have less mortgage debt than younger homeowners, greater wealth than they had four years ago, and longer lifespans than previous generations. For those aged 65 to 74, their median net worth rose 5 percent to $232,100, which is the largest gain for any age group from 2010 to 2013, according to the Federal Reserve's Survey of Consumer Finances.

"They have a quadruple bonus: They benefited from real estate, the best in equity and bond returns, plus higher GDP per capita growth well before the crisis during the 1980s and 1990s," says Amlan Roy, head of global demographics and pension research for Credit Suisse Group AG's investment bank in London. "It's unlikely to repeat."

While older Americans are staying in real estate, they're carrying more mortgage debt than previous generations, according to the Consumer Financial Protection Bureau. In 2010, about 40 percent of those over 65 were still making house payments, compared to more than 70 percent of those 50 to 64, according to a report earlier this year by the Joint Center for Housing Studies.

Source: "Older Americans a Pillar of Housing Market With High Ownership Rate," Bloomberg Businessweek (Dec. 8, 2014)

Owners and appraisers are almost on the same page

NEW YORK – Dec. 12, 2014 – The discrepancy between appraisers' and homeowners' opinions of home values is narrowing. In November, appraisers valued homes 1.56 percent higher than homeowners, according to Quicken Loans' Home Price Perception Index.

"Mortgage financing often hinges on whether the appraised value coincides with the home values agreed upon by the home buyer and seller in the case of a home purchase, and the homeowner's estimated value in the case of a refinance," says Quicken Loans Chief Economist Bob Walters. He called it "reassuring to see the gap between appraiser opinions and homeowner opinions" draw closer.

"If we had to choose a side of the fence, it makes for a much smoother mortgage process if appraisers are valuing homes above homeowners' estimates like we're seeing, as compared to the opposite," Walters adds.

In three-quarters of the metro areas Quicken Loans analyzed, appraiser opinions were higher than homeowners' estimates, though the difference varies widely among those metro areas. For example, in San Jose, Calif., appraisers valued homes 6 percent higher than homeowners on average, while in San Francisco, appraisers valued homes 4.35 percent higher. In Dallas, it was 4.22 percent.

On the other end of the spectrum, in Kansas City, Mo., appraisers' opinions were found to be 2.53 percent lower than homeowners' estimates.

On a national scale, real estate professionals reported fewer appraisal issues as the cause of derailed deals. Realtors® blamed appraisals for only 2 percent of failures to close a deal, according to the November Realtors® Confidence Index survey.

Instead, the top closing challenges cited by Realtors were difficulty obtaining credit and a lack of affordable homes. About 15 percent of Realtors cited clients who could not obtain financing, while about 13 percent say the buyer and seller couldn't agree on the price.

Eight percent reported that the buyer lost out in a multiple-offer situation.

Will 3% down payments boost millennial homeownership?

WEST PALM BEACH, Fla. – Dec. 10, 2014 – Millennials and Americans who survived the Great Recession by siphoning from savings accounts are the targets of a new program that allows first-time homebuyers to get a loan with as little as 3 percent down.

The Federal Housing Finance Agency announced the mortgage guideline change Monday, hoping the rock-bottom downpayments will boost homeownership rates, which dropped during the housing bust.

Federal officials called the new mortgage product a "significant milestone" in a call with reporters, but acknowledged they are not sure how many people will be impacted by the change – or which lenders will participate.

Some South Florida mortgage brokers said the new guidelines could be of particular benefit in the Sunshine State where residents still recovering from the financial crisis may have jobs, but little reserve money to put down for a mortgage.

"There is a whole wave of buyers who have wiped out their savings to survive the bust," said Kimber White, membership chairman for the Florida Association of Mortgage Professionals and president of its Broward County chapter. "These are good, qualified people who just don't have the cash after coming out of one of worst recessions in our history."

The new guidelines affect loans backed by Fannie Mae and Freddie Mac. The two government-sponsored entities don't make loans, but buy up qualified home mortgages from lenders, bundle them with a guarantee against default and sell them to investors worldwide.

Fannie Mae considers a first-time homebuyer someone who has not owned a home in the past three years. Freddie Mac's definition for first-time homebuyer is someone who has never owned a home.

There is concern that allowing just 3 percent down will lead to more defaults as borrowers have less to lose by walking away from payments.

Both Bank of America and JPMorgan Chase said Monday they are still considering whether they will participate.

"It was just announced today and, like everyone else, we want to look at the details, evaluate it and determine what is involved," said Bank of America spokesman Terry Francisco.

The 3 percent down loans are geared for low to moderate-income buyers, but require borrowers to undergo similar financial scrutiny as in current loan programs, including documented and verified income levels. Only fixed-interest rate, conventional mortgages are considered, and borrowers must get private mortgage insurance.

Freddie Mac is requiring all borrowers to participate in housing counseling, while Fannie Mae doesn't require counseling for all loans.

A mortgage can already be obtained with 5 percent down, but White said the difference between three and five percent can be the difference of whether a person can buy a home. On a $200,000 home, five percent down would be $10,000. Three percent down is $6,000.

"The number one hurdle to increasing homeownership is the downpayment," said Skip McDonough, president of Jupiter-based Family Mortgage. "If you tried to accumulate a downpayment during the past few years, and you're not getting any raises, it's very difficult."

Florida's rate of homeownership fell to 66 percent last year, after reaching a high of 72.4 percent in 2005 and 2006.

Nationally, homeownership was at 65 percent last year, down from 69.9 percent in 2005.

"I think this will bring people back into the market," White said about the 3 percent downpayment.

3 Florida cities poised for baby boomers sales

WASHINGTON – Dec. 10, 2014 – Metro areas with a lower cost of living and sunny weather should see an increasing number of baby boomer homebuyers, according to new research by the National Association of Realtors® (NAR). It identified the top 10 U.S. cities based on baby boomer attraction, and three Florida cities – Fort Myers, Orlando and Sarasota – made the list.

To calculate future boomer demand, NAR analyzed population trends, housing affordability and local economic conditions in metropolitan statistical areas across the U.S. Boise, Idaho and Raleigh, North Carolina were identified as top standouts for baby boomers for their solid job growth, share of self-employed workers and affordable home prices.

"A broadly improving economy and rebounding home prices are giving baby boomers the opportunity to sell and move to support their retirement lifestyle," says Lawrence Yun, NAR chief economist.

NAR's research reviewed 100 metro areas that have lower state taxes, solid job market conditions and strong migration patterns. Cost of living, housing affordability and inventory availability were also considered.

In addition to the three Florida cities, the top 10 for baby boomer demand includes Albuquerque, New Mexico; Boise, Idaho; Denver; Greenville, South Carolina; Phoenix; Raleigh, North Carolina; and Tucson, Arizona.

NAR cited five other markets that also have a "strong potential for attracting baby boomer homebuyers." Those include one Florida metro, Tampa, along with Chattanooga, Tennessee; Dallas; McAllen, Texas; and Riverside, California.

More people think it’s a good time to buy

WASHINGTON, DC – Dec. 9, 2014 – While the real estate market continues to improve slowly, Fannie Mae's November 2014 National Housing Survey finds some subtle shifts in consumers' attitudes.

Overall, buyers seems to be more optimistic about whether or not it's time to jump into the market; however, fewer homeowners think it's a good time to sell.

According to the survey, consumers' personal financial outlook has increased fairly steadily during the year, lending support to the ongoing housing market recovery. In addition, the share of respondents who expect mortgage rates to go up in the next 12 months decreased again to 45 percent. The overall trend seems to be empowering buyers.

However, the share who believe it's a good time to buy and sell a home moved further apart. Sixty-eight percent of consumers now say it's a good time buy, a 3 percentage point increase; but only 39 percent say it's a good time to sell – a 5 percentage point drop.

"November's National Housing Survey results support the 2014 trend of gradual, but often sporadic and unspectacular, improvement across a range of indicators measuring consumer attitudes toward housing – mirroring the uneven recovery in housing activity this year," says Doug Duncan, senior vice president and chief economist at Fannie Mae.

Still, Duncan says potential buyers have a more optimistic outlook.

"More encouraging is the steady upward trend this year in consumers' assessment of their personal finances, with 46 percent of Americans – near the survey's high – expecting their personal financial situation to improve over the next 12 months," Duncan adds. "We expect consumer attitudes toward housing to improve … However, a sustained improvement … that could support a robust housing recovery … will require meaningful gains in household income."

Homeownership and renting

- The average 12-month home price change expectation fell to 2.6%

- 44% of respondents expect home prices to go up over the next 12 months, while 6% expect them to go down

- Fewer Americans (45%, a drop of 3 points) expect mortgage rates to go up in the next 12 months

- 53% of respondents expect home rental prices to go up in the next 12 months – a 4 point increase

- The share who think it would be difficult to get a home mortgage today decreased by 3 percentage points

- The share who would buy a home if they moved fell to 62 percent, while the share who would rent increased to 31 percent

The economy and household finances

- 36% say the economy is on the right track, a 4-percentage points drop

- 46%, an increase, expect their personal financial situation to get better over the next 12 months

- 25% say their household income is significantly higher today than it was 12 months ago

- 36% say their household expenses are significantly higher than they were 12 months ago

Realtor.com 2015 forecast: More first-time buyers

SAN JOSE, Calif. – Dec. 8, 2014 – First-time buyers will return to the market next year, according to realtor.com's 2015 Housing Forecast.

The first-timers rebound is among several key developments projected for the coming year by realtor.com, the website of the National Association of Realtors® (NAR) operated by News Corp's subsidiary Move Inc.

"The residual financial effects of recession-driven job losses and subsequent unemployment have impeded millennials' entry into the home-owning market," says Jonathan Smoke, chief economist for realtor.com. "In 2015, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery. If access to credit improves, we could see substantially larger numbers of young buyers in the market."

Smoke offers one caveat, however: "Given a high dependency on financial qualifications, (first-time homebuyers) activity will be skewed to geographic areas with higher affordability, such as the Midwest and South."

Realtor.com's top 5 housing predictions for 2015

1. Millennials will drive household formations: Both population and households have grown at a slightly higher pace in 2014, and this trend will continue in 2015 with modest improvement over this year's increases. Households headed by millennials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. Next year's addition of 2.75 million jobs and increased household formation will be the two key factors driving first-time buyer sales.

2. Existing home sales will increase +8%: Existing home sales will grow as more buyers enter the market motivated by a clear belief that both rates and prices will continue to rise. The increase in home sales year-over-year will be similar to 2012, but this time the composition of properties sold will be more normal with minimal levels of distressed properties. While the majority of housing activity next year will be driven by baby boomers preparing for retirement, millennials will account for 65 percent of first-time homebuyer sales in 2015.

3. Home prices will gain +4-5%: Low inventory levels and demand driven by improved employment opportunities will push home prices up next year. While first-time homebuyers have many economic factors working in their favor, increasing home prices will make it more difficult to get into high priced markets such as San Francisco and San Jose, Calif. As a result, first-time homebuyer activity is expected to concentrate in markets with strong employment and affordability, such as Des Moines, Iowa; Atlanta and Houston.

4. Mortgage rates will end the year at 5%: Mortgage rates will increase in the middle of 2015, as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. Thirty year fixed rate mortgages will reach 5 percent by the end of 2015. One year adjustable rate mortgages (ARMs) will rise minimally. Lower ARM interest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages. While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and be another factor pushing them to less expensive locales.

5. Home affordability will decrease 5-10%: Affordability will decline in 2015 by 5-10 percent, based on home price appreciation and increasing mortgage interest rates. This decline will be somewhat offset by increasing incomes. When considering historical norms, housing affordability will continue to remain strong next year.

Realtor.com's outlook for gross domestic product (GDP) and home sales and prices is more optimistic than NAR's forecast, which projects existing-home sales to rise 5 to 7 percent and home prices to increase 3 to 4 percent, based on GDP growth of 2.5 to 2.8 percent.