Gary Pierpont Blog

Mortgage rates increased this week with the 15-year fixed-rate mortgage rising .02%, Averaging 3.35%, and the 30-year fixed-rate mortgage increasing .05%, Averaging 4.33%. According to many experts, mortgage rates are expected to continue rising this year as the economy gains strength. Home prices and sales are expected to increase by approximately 5% over the coming months. Additionally, Home construction and homebuilder confidence fell this month due to severe winter weather that covered a large part of the U.S. More here

Reverse mortgages have become increasingly popular over the years helping many adults, age 62 and older, keep their homes. Columbia Business School professor and reverse mortgage expert, Christopher Mayer, explains why reverse mortgages can help many seniors through retirement debt-free. “You have $3 trillion in housing wealth among older Americans. You have large institutions exiting the market, and more and more elderly with housing debt coming out of the crisis as well as other kinds of debt,” Mayer said. The Federal Housing Administration instated new rules that limit equity borrowers from lump-sum withdrawal, allowing borrowers access to only 60 percent of their equity at closing or during the first year of the loan, protecting seniors from future debt problems. The new rules will also require reverse mortgage borrowers to provide information showing that they can afford to pay insurance and property taxes. Mayer was drawn to the reverse mortgage businesses after the rule changes saying, “those changes all make this a much more attractive business, and the product is a better product.” More here

According to the U.S. Census Bureau, Last month’s housing index decreased showing a 16% drop in home construction, while the National Association of Home Builders released data showing that builder confidence has also fallen. Supply and demand continue on a positive track according to certain experts. Sterne Agee chief economist, Lindsey Piegza said, “the decline was pretty evenly divided with single family starts down 15.9% from 681k to 573k, while multifamily starts fell 16.3% from 367k to 307k in January. On an annual basis, starts are off 7% for single family but remain in the black for multifamily units up 8.1%. Housing permits fell 5.4% in January from 991k to a 937k unit pace, up 2.4% on an annual basis. On a three-month average, permits slipped from 1016k to 982k.” More here

New data suggests that 2014 is the prime time to take out jumbo mortgages. This year, jumbo mortgage rates decreased and are now nearly as low as rates for conventional mortgages and in some cases lower. The drop in jumbo mortgage rates is a result of lower economic conditions, according to experts. Also, new federal regulations that were made to conventional mortgages last month do not apply to jumbo mortgages, making them much more popular among buyers who have high net worth or want interest-only loans. More here

Recent data suggests that the economy has declined in certain areas due to the severe winter weather conditions. The National Association of Home Builders has stated that the housing market took a hit this month, decreasing 10 points and averaging 46, the lowest number seen since May of 2013. Kevin Kelly, NAHB Chairman said, “significant weather conditions across most of the country led to a decline in buyer traffic last month, builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.” More here

According to data released by CoreLogic, completed foreclosures decreased to 45,000 units in December 2013, a 14% fall from the previous year, but still considered high when compared to pre-recession foreclosure rates. The president and chief executive officer of CoreLogic, Anand Nallathambi said, “clearly, 2013 was a transitional year for residential property in the United States. Higher home prices and lower shadow inventory levels, together with a slowly improving economy, are hopeful signals that we are turning a long-awaited corner.” The National Foreclosure Inventory listed 12 states with the lowest foreclosure rates. Wyoming, Alaska, and North Dakota were the top three states with the lowest foreclosure rates. More here

New data from the Zillow Home Price Expectations Survey suggests that housing market demand will decrease over the coming years as large-scale investors run out of inventory. Experts expect the change to help first-time homebuyers and others looking for single-family rentals. Dr. Stan Humphries, Zillow’s Chief Economist said, “buyers entering the market in the next few months will not be competing with cash-rich investors like they were last year which should be some small solace given the higher prices and mortgage rates that they will encounter.” More here

According to new housing market research, baby boomer homeowners may be pushing young homebuyers out of the market. As home values and prices continue to increase, many younger Americans are unable to afford down payments due to low income jobs and school debt. Home builders are now targeting an older generation, age 55 and up, who are more likely to have equity. Older homeowners are expected to help home sales this year as it is a prime time for the age group to buy, according to experts. More here

According to the National Association of Realtors, many metropolitan areas are experiencing strong year-over-year home price increases. The median single-family existing home price jumped in 73% of the measured markets. Approximately 119 metropolitan areas experienced price gains in the fourth quarter of last year when compared to the fourth quarter of 2012. Data states that  26% of metros saw double digit increases, and while this new data is positive, many experts express concern that housing affordability may fall. More here

The housing market has made significant strides toward recovery since the recession, but experts say there is still room for improvement. Home prices have slightly increased according to the S&P Case-Shiller home price index. Sales of existing homes fell from 408,300 last year to 405,800. New home sales have increased from the end of 2012 averaging 33,000. Additionally, delinquency rates and foreclosure starts have also fallen from last year. More here