US long-term mortgage rates little changed; 30-year at 2.93%

WASHINGTON (AP) — U.S. average rates on long-term mortgages changed little this week, remaining at historically low levels that has sparked demand for homes.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan ticked up to 2.93% from 2.91% last week. By contrast, the rate averaged 3.49% a year ago.

The average rate on the 15-year fixed-rate mortgage declined, however, to 2.42% from 2.46% last week.

Housing demand continues as one of few bright spots in the pandemic-hobbled economy. Sales of new homes soared in July, rising nearly 14% as the market continued to gain traction following the spring downturn caused by pandemic-forced lockdowns.

In the wider economy, the government reported Thursday that the number of laid-off Americans applying for unemployment benefits fell to a still-elevated 881,000 last week — evidence that the pandemic keeps forcing many businesses to slash jobs.

Associated Press

US sales of existing homes jump 20% after a 3-month slump

BALTIMORE (AP) — Americans stepped up their home purchases in June by a robust 20.7% after the pandemic had caused sales to crater in the prior three months. But the housing market could struggle to rebound further in the face of the resurgent viral outbreak and a shrinking supply of homes for sale.

Sales of existing homes rose last month to a seasonally adjusted annual rate of 4.72 million, the National Association of Realtors said Wednesday. Despite the sharp gain, purchases are still down 11.3% from a year ago, when homes had sold at an annual pace of 5.32 million. And Lawerence Yun, the Realtors’ chief economist, noted that sales remain roughly 20% below their pre-pandemic levels.

At the same time, housing has managed to avoid a deeper slump from the severe recession caused by the coronavirus. Demand has remained strong among buyers who have managed to weather the downturn, while record-low mortgage rates have helped sustain affordability.

“Buyers are out in force, but new listings remain the key to housing’s recovery,” said Danielle Hale, chief economist at Realtor.com. “More sellers are needed before we’ll see year over year gains in home sales.”

The number of property listings has plunged 18.2% from a year ago to 1.57 million. It’s the 13th straight month of shrinking supply on an annual basis. The shortage of homes makes it unlikely that the housing industry can significantly boost the overall economy.

Home buyers typically purchase new furniture and fix up older properties. Their ability to deliver such a spending boost is constrained if they can’t find an available house. The limited supply is also forcing up prices just when many Americans are struggling with financial uncertainty because of the recession.

The combination of steady demand and falling mortgage rates has helped fuel a 3.5% rise in the median price of an existing home over the past year to $295,300.

Home sales rose in the Northeast, Midwest, South and West last month. But the increases were most dramatic in the West, with a 32% gain and the South with a 26% gain.

Associated Press

How Much Rent Can I Afford? How to Calculate a Rent You Can Afford

The question “how much rent can I afford”  is inevitable for those who plan to spend wisely. Your income is expected to be 40 times your rent. Before deciding on what apartment to rent, it’s advisable you deduct the tax payable on the income you earn. The money left after the deduction of the tax is what the planning should be based on.

The most important thing is that other expenses such as clothing, feeding etc. are put into consideration while determining how much rent one can afford. It’s also necessary to consider the bills that would accrue from the use of the apartment. Such bills include: electricity bills, gas bills, water bills, satellite TV subscription bills etc. It is also important to consider all other relevant bills

Finding It Difficult To Calculate Your Monthly Rent? Here’s How.

Are you having issues calculating your rent?

Do you wanna know the best rent calculation technique?

Don’t worry! This discourse proffers the necessary solutions to your housing problems.

Calculating your rent might seem difficult while looking at it superficially. But it’s one of the simplest tasks that you can ever attempt. In this write-up, you’ll be taken through the most convenient rent calculating method available.

Calculating your monthly rent from your weekly rent.

Most Tenants make the mistake of calculating their monthly rent by multiplying their weekly rent by 4 and their annual rent by 12. This approach is absolutely wrong.

Maybe this is the reason your calculations have always been different from your landlord’s. In calculating your monthly rent, the right approach is to multiply the weekly rent by 52. The result is then divided by 12. You’ve successfully calculated your monthly rent. Some examples shall be made to illustrate the points above.

Incorrect: 
Weekly rent = $200
Monthly rent = $200 X 4
Monthly rent = $800

Correct:
Weekly rent = $200
Annual rent = $200 X 52
Annual rent = $10,400
Monthly rent = Annual rent / 12
Monthly rent = $10,400 / 12
Monthly rent = $866.67

You can see there’s a great disparity between the results of the first and second approach. There’s a difference of $66.67 in the two approaches.

In some cases, the year has 53 weeks. It then follows that the weekly rent would be multiplied by 53.

Monthly Rent Calculator

Determining your monthly rent, as already established above, depends on how much you can reasonably spend per month. You need to factor things like utilities, renter’s insurance and transportation cost while using a monthly rent calculator. Apply the rule of thumb, which states that no one should spend more than 1/3 of your after-tax salary on rent.

For example, if your annual salary is $50,000, that leaves you with $4,166/month. After taxes, you should have around $3,270. One third of 3270 is about $980, and that is what your monthly rent should be on $50,000 a year.

Going by this logic, the $980 should include extra-costs you’d incur for amenities your apartment does not possess.

Rent-to-Income-Ratio Calculator

How much of my income should I spend for rent? To answer this, you’ve got to figure out the rest of your monthly budgeting. Since the largest percent of your monthly income goes to rent, it’s easiest to figure out the rest of your budgeting once you determine how much rent you can afford by using our Rent-to-income-ratio calculator.

A common budgeting strategy follows the 50-30-20 rule. Applying this strategy to your finances is a great way to maintain a focus on controlling your monthly spending while also planning out your future’s finances.

The 50: The 50 of the 50-30-20 rule means that you should aim to pay no more than 50% of your income towards your monthly necessities. These necessities include expenses such as:

The cost of your groceries per month
Your utility bills like your phone bill, water, and electricity
The cost of renter’s insurance
Driver’s insurance
Health & dental insurance
And of course, how much you should spend on rent
As given above, figuring out the amount of money you should to pay for rent gets you off to a good start on budgeting for the rest of your monthly expenses and helps you lay the foundation for figuring out the rest of your finances. If you’re looking at two different apartments and one is 40% of your income and the other is 25%, you might want to calculate how that slight difference will affect the rest of your monthly budgeting for your necessary costs.

The 30: The 30 represents how much of your income should go to discretionary spending. Basically, you should allocate 30% of your monthly income to cover entertainment, dining, the gas needed for out of town trips, the costs of your hobbies, and anything else that you can live without if you had to.

The 20: The last, and often what feels like the most distant, is the 20. The last 20, according to the 50/30/20 rule, is the percentage of income that should to go towards your financial goals. Whether that is putting down money for your retirement, paying off a car loan or student loan, or saving money for a down payment for your home.

Final thoughts

With this knowledge, I hope you’ll be able to independently determine your rent and make proper housing decisions.

Thanks for reading.

source: usa.inquirer.net

Hard-hit Vallejo, Calif. property market now on an upswing

VALLEJO, California — The housing market in this city with a large Filipino American community is on the upswing, a sharp contrast to the market’s slide in 2008.

There are more buyers than available homes. Demand exceeds supply. So prices are increasing – considerably. Prices are currently 28 percent higher than this time last year. But buyers are still willing to buy.

Rod Nubla, a Filipino-American realtor, explains: “Buyers are offering to pay more than the asking price, and that drives prices up. If a house goes on the market on a Friday, there are eighteen offers by Monday.”

This is a complete turn-around for the Vallejo housing market, which went into decline three times in succession: when the Naval Shipyard closed in 1996; when the recession hit; and when the City declared bankruptcy in 2008.

The bankruptcy led to a brief upswing in the housing market, because it caused house prices to plummet, and the new very low prices attracted people to move to Vallejo from San Francisco, Oakland and Berkeley.

But the market soon went back into decline -– until late 2012, when demand and prices began their continuing increase.

Nubla explains the reasons for the new increase in demand: “One factor is that ‘wealthy millennials’ are driving up prices in San Francisco and other nearby communities, and this is forcing other people to look further afield for more affordable homes.”

He added, “There are also people who grew up in Vallejo, or have other connections here, and so want to settle here.”

An additional very important factor is the new low lending rates, which are benefiting the housing market just as much in Vallejo as in other cities.

Nubla gives the reasons for the decrease in available homes in Vallejo (which also pushes up the demand): “A lot of homes were foreclosed in recent years, and people bought them all up at discount prices, creating a scarcity. Investors have been buying up homes, leaving fewer available for individuals who want homes to live in. Right now there are 107 homes for sale in Vallejo. That is not many considering the size of the population (120,000). That scarcity is pushing up prices.”

Vallejo’s well-known problems with crime and school performance are apparently not deterring homebuyers.

Nubla says that “buyers realize that high crime is in certain pockets of the city, and they steer away from those areas, choosing the neighborhoods with better reputations.”

There is a particular downside to the price-increases and home scarcity for people who are economically less advantaged. Filipino-American Vallejo City Council Member Jess Malgapo, sees one of the results of this situation from another angle.

Malgapo, who is on the City’s Housing Committee, reports that their 2,600 “housing vouchers” for subsidized rental properties (formerly known as ‘Section 8’) are “maxed-out…we have a waiting list in the thousands.”

How do Filipino-Americans fit into the picture? Nubla says that some Fil-Ams have had an especially hard time with foreclosures in recent years. “Filipinos tend to be investors, and some have bought multiple homes as investments. When the recession hit, each had to foreclose several homes.”

But the current upswing in Vallejo’s housing market should impact Filipino-Americans in the same way that it does all citizens, whether buying or selling.

source: business.inquirer.net

US home prices rose 9.7% in January, most in nearly 7 years

WASHINGTON (AP) - US home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.

Home prices rose 9.7 per cent in January from a year ago, according to data released on Tuesday by CoreLogic. The figure is up from an 8.3 per cent increase in December and the biggest annual gain since April 2006.

Prices rose in all states except Delaware and Illinois. They also registered increases in 92 of the 100 largest metro areas, up from 87 in December.

Home prices also rose 0.7 per cent in January from December. That is a considerable increase given that sales usually slow over the winter months.

source: straitstimes.com

New Rules for Renters

Look for the next housing bubble in the rental market. Apartment rents will rise 5% in 2012, says commercial real estate brokerage Marcus & Millichap. Landlords report receiving multiple applications for each listing and are picky about tenants. The market for single-family rentals is just as competitive. In Minneapolis–St. Paul, Renters Warehouse broker Brenton Hayden calls demand "insatiable."

Rachel LeBlanc scoured online listings for an apartment in Boston’s Back Bay but couldn’t find much that was affordable—or even available by the time she requested a showing. LeBlanc called Charlesgate Realty, a brokerage specializing in rental properties. An agent helped her find a studio for $1,600 a month (the fee was one month’s rent). LeBlanc leased the apartment the same day she saw it and will move in September.

With a pro or on your own, it’s best to start your search at least two months before you want to move. Expect to supply proof that you earn two to three times the monthly rent. Landlords might set a minimum credit score (680 is common in Boston). Landlords probably won't negotiate on rent but may be flexible on pet deposits or utility costs. Or you may get a deal in exchange for signing a longer lease or helping to maintain the property. Hot markets have attracted scammers. Beware listings that sound too good to be true, and don’t pay anything until you’ve seen the place in person.

This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.

source: kiplinger.com

Mortgage delinquencies rose in second quarter, trade group says

The Mortgage Bankers Assn. says home loans with at least one missed payment but not yet in foreclosure rose to 7.58% in the second quarter from 7.4% in the first quarter.

The nation's slowly improving housing market hit another bump last quarter, with more borrowers missing payments amid continued high unemployment, a report from a trade group shows.

The Mortgage Bankers Assn., in a quarterly delinquency survey issued Thursday, said home loans with at least one missed payment but not yet in foreclosure increased in the second quarter to 7.58% of all mortgages. That's up slightly from 7.4% in the first quarter.

A separate survey from foreclosure listing firm RealtyTrac Inc. said the number of homes going into foreclosure rose 6% in July compared with a year earlier, the third straight month of year-over-year increases.

That trend reflected the fact that last year many foreclosures were on hold as banks focused on cleaning up flawed processes for seizing homes after the "robo-signing" scandals.

The Mortgage Bankers Assn. survey said the quarter-to-quarter increase in delinquencies appeared to result instead from a fundamental change: The slowing of the economy's recovery during the first half of the year.

Although in no way reversing the longer-term trend of declining delinquencies — the missed-payment rate was 8.44% a year earlier — the increase raised eyebrows at the lender group.

"It's not the direction you would want to see," Mortgage Bankers Assn. economist Michael Fratantoni said in an interview. The key determinant, he said, will be the job market, which has shown signs of improvement lately.

In a brighter sign, the percentage of loans in all stages of the foreclosure process, or at least 90 days past due, dropped to 7.31% in the second quarter from 7.44% in the first quarter and 7.85% a year earlier.

The slow decline in this "seriously delinquent" category shows that lenders are gradually working through the huge backlog of soured loans made during the housing boom, Fratantoni said.

Federal Housing Administration loans entering foreclosure were a notable exception. The percentage of loans in foreclosure soared to 4.23% in the second quarter to a record high. Foreclosure starts for FHA loans also increased to 1.53%, also a record high.

The increase was due to major lenders, particularly Bank of America Corp., starting up foreclosures on loans that had been delinquent but held up because of to the federal government's investigations into faulty foreclosure practices, said Shaun Donovan, secretary of Housing and Urban Development, which oversees the FHA.

"We had a significant period of time where Bank of America was not starting foreclosures or completing foreclosures for FHA loans," Donovan said in an interview with The Times. "What you are seeing is basically many, many months-long backlog of particularly Bank of America claims that are being submitted, and have caused artificially that rate to rise."

"It doesn't reflect an underlying trend overall for the broader portfolio," he added.

The report confirmed signs that California, once the poster child for collapsing housing markets, is generally in recovery mode.

Across the nation, 4.27% of all home loans were in the foreclosure process at the end of the second quarter, the home lenders group said. In California, 3.1% of residential mortgages were in foreclosure.

That compared with 13.7% in Florida, 7.7% in New Jersey and 6.5% in New York, all states in which foreclosures are processed through the courts, resulting in huge legal entanglements. Most foreclosures in California are processed more quickly without judicial reviews.

Fratantoni said that with home prices rising again in many California markets, more struggling homeowners are finding it possible to sell their homes rather than see them taken away in foreclosures.

source: latimes.com

Seniors struggle as land rent for manufactured homes rises

Terrence Thudium sits at a bluish-gray “almost-granite” countertop in his recently refurbished kitchen. He speaks with a combination of fear and fight. The disabled Vietnam War veteran uses words such as “extortion,” “ridiculous” and “exhausted.”

Thudium lives in Mountain View Community, a manufactured housing park for seniors in Henderson. He signed a 20-year lease for land there and settled in a manufactured home he purchased for $75,000. Over the next five years, he spent another $75,000 transforming it into his home. He tore down a hall wall for circulation, added ceramic tiles in the kitchen and redesigned just about every feature to make it perfect.

Thudium is proud of the investment but faces a dilemma. The rent for the land his house sits on has jumped from $680 to $747 in four years. He pays almost the same amount in land rent as his neighbors pay to rent land and a home.

When Thudium settled in Mountain View, park owner Hometown America Communities allowed only homeowners to rent land. When Equity Lifestyle Properties, Inc., took over the park earlier this year, they opened it up to renters.

Thudium can move his home off the lot, but that would cost him more than $5,000. For a 67-year-old, that’s not practical.

“If you try and pay $1,000 per month in mortgages and $800 in rent, you got no money,” Thudium said. “It’s ridiculous. It shouldn’t be this bad. It’s not like renting the house and the land ... which is going for the same dollar figure I’m paying for land. Isn’t that extortion?”

Thudium’s lease dictates that park owners can raise the land rent a minimum of 3.5 percent as long as they give 90 days notice. Thudium signed the lease believing that would only happen in inflation emergencies. He was wrong.

Equity Lifestyle Properties agreed to freeze land rent for the next two years. But there is nothing preventing the company from increasing rent afterward.

So Thudium is trapped at the mercy of the park owners, hoping his rent doesn’t extend beyond what his disabled veterans benefits and social security income can afford. He has already been forced to put off any vacations or trips home to Chicago. He dreads the day rent creeps above $900, the maximum he can afford.

“Look at all I got invested,” Thudium said. “I’m 67, I can’t do this crap again another time. I’m exhausted, and I’m not done with (fixing the house).”

Equity Lifestyle Properties did not comment.

For the past 13 legislative sessions, the Nevada Association of Manufactured Homeowners (NAMH), which represents manufactured home owners, has proposed a rent justification bill to help homeowners like Thudium.

The bill would require park owners to justify raises in rent to a board if rent is increased more than a certain percentage. Each time, it failed.

Doris Green, president of the NAMH, said land rent at many manufactured home parks in Clark County has skyrocketed since the recession.

If owners, often seniors, become sick or lose a spouse, many are forced to move out. That opens the door for the park to take ownership of the homes and rent them new tenants. Green said she sees it frequently at Cabana Park, where she lives.

“Now what we have in our own park is people who have moved out or abandoned their home, and now (the park owners) are renting it (out),” Green said. “We have about one-third of the park out to renters.”

Pat McHugh, 74, has lived in Mountain View for the past 14 years. As the economy faltered and rent increased, she watched friends leave the mobile home park as their savings dried up. McHugh, who runs Pat’s Sunshine Shuttle service for her neighbors but barely breaks even with the business, fears that when her lease is up, she will suffer a similar fate.

“I am very fearful that in another four years I will not be able to afford to live here,” McHugh said. “I love living here, but I may not be able to afford it.”

Still, not everyone in Mountain View worries about rent. Joanne Miller, 78, said she has had no issues but also knows she’s lucky to continue to work.

A rent justification bill could help allay residents’ fears. Bob Varallo, a consultant for the NAMH since 1997, said members will try again to get the bill passed. He has little hope they’ll succeed.

Outside Thudium’s home, a moat of red rocks surrounds the walkway. Visitors are forced to trek up his driveway and around the corner of his house to ring his doorbell.

He wants to put eight cement steps in place to make access easier, but paying $1,200 for it makes no sense to him.

Improving the land around his house is pointless, Thudium said. If he decides to move his home to a new lot, it won’t go with him. If he abandons the home, it only will make it a more attractive property for the park to rent out.

Thudium sees no way out of his predicament. He has tried writing letters to park owners, but they just scan back the page of the lease he signed agreeing to accept land rent increases.

Thudium beamed with pride the day he signed those documents. Now, he’s not so sure.

“First time I owned a house,” Thudium said. “Boy did I get stuck.”

source: lasvegassun.com

Obama urges passage of mortgage relief

WASHINGTON - US President Barack Obama on Saturday urged Congress to approve his plan to provide relief to millions of homeowners who are having trouble paying mortgages.

"In order to lower mortgage payments for millions of Americans, we need Congress to act," Obama said in his weekly radio and Internet address. "They're the ones who have to pass this plan."

The $5-10-billion plan, showcased by Obama this past week, would be financed by a portion of a fee on the most wealthy US banks.

The blueprint is intended to help borrowers who are up to date on their mortgages to refinance and take advantage of low interest rates, which could save an average of $3,000 a year.

It will simplify mortgage disclosure forms, so people can better understand the loans they take out and offer support to help those facing foreclosure to stay in their homes.

The plan also includes a government-led effort to make foreclosed properties that cannot be sold available to renters.

Obama urged people who agree with this plan to call, email or visit their representatives in Congress and demand its passage.

"Tell them to pass this plan," the president said. "Tell them to help more families keep their homes, and more neighborhoods stay vibrant and whole."

He cautioned, however, that "it will take time" for the US housing market to recover and for the economy to fully bounce back. — Agence France Presse

source: gmanetwork.com