Welcome to the "Z" Team!

More good news to share! Mortgage applications soared 9.2 percent last week, as more Americans sought to take advantage of record low mortgage rates, according to the Mortgage Bankers Association’s weekly report. 

The surge in mortgage applications last week was attributed to a jump in refinance applications, which rose 13 percent for the week. Refinance applications make up nearly 75 percent of all mortgage applications.

Surprisingly, mortgage applications for home purchases dropped 2.4 percent last week.

“Low rates have convinced many home owners to refinance their mortgages, though tougher lending requirements still keep many prospective home buyers from taking out new debt,” The Wall Street Journal reports. We agree, your thoughts?  

Source: “Mortgage Application Volume Rose 9.2% Last Week: MBA,” The Wall Street Journal (5/16/12)

Fixed-rate mortgages reached new all-time records lows, offering another big boost to home buyer affordability. Many believe rates will start increasing. Your guess? 

The 30-year fixed-rate mortgage averaged 3.83 percent for the week ending May 10, posting a new record low from last week’s 3.84 percent average. The 15-year fixed-rate mortgage also posted a new record, averaging 3.05 percent this week.

Here’s a closer look at mortgage rates for the past week:

30-year fixed-rate mortgages: averaged 3.83 percent, with an average 0.7 point, down from last week’s previous record of 3.84 percent. A year ago at this time, 30-year mortgages averaged 4.63 percent. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has averaged below 4 percent for nearly every week — except for one — since Dec. 8, 2011, according to Freddie Mac.

15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.07 percent. Last year at this time, the 15-year fixed-rate mortgage averaged 3.82 percent.

5-year adjustable-rate mortgages: averaged 2.81 percent, with a 0.5 point, dropping from last week’s 2.85 percent average. Last year, 5-year ARMs averaged 3.41 percent.

Source: Freddie Mac

We enjoy sharing good news like this report! Fannie Mae, which backs the most loans in the country, announced that it would not need taxpayer aid to cover losses for the first time since the federal government took control over the mortgage giant in 2008.

Fannie posted a profit in the first quarter of the year, reporting a net income of $2.7 billion compared to a $6.5 billion loss they reported in the first quarter of 2011.

“We expect our financial results for 2012 to be significantly better than 2011,” says Susan McFarland, Fannie Mae’s chief financial officer. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business, will drive our future results.”

Freddie Mac, also a government-sponsored enterprise and mortgage giant, recently reported a profit as well — a $577 million quarterly net income for the first quarter.

Our region is showing other signs of the housing market stabilizing: The decline in home prices is slowing, more are buying homes than a year ago, and housing starts have climbed in the last year. Comments about your local market conditions improving? 

Source: “Fannie Mae Profit Signals a Stabilizing Housing Market,” The New York Times (May 9, 2012)

Senior FHFA official Meg Burns has clarified that the only goal of a pilot foreclosure-to-rent program is to gauge whether housing supply can be reduced and neighborhoods stabilized through bulk sales. The aim is not to expand the supply of affordable rental housing or boost energy efficiency, she stressed, as some believe.

At the same congressional hearing, Michael Stegman — Treasury Secretary Timothy Geithner’s advisor on housing finance policy — said the initiative, if successful, could close a shortfall in owner-occupied housing demand and “serve as a model for private market participants.”

So what are their housing policies or real intentions? Please provide your comments!

Source: “FHFA Downplays Potential of Foreclosure-to-Rental Program,” American Banker (5/8/12)

Many housing experts have been warning a foreclosure wave would soon flood several markets. But was it all a false alarm? We think it was and want to share this with you!

Recent surveys have shown that foreclosure sales have dropped to their lowest point in more than two years. And while according to March data, 8 percent more homes did enter the foreclosure process from the previous month, that number is down more than 30 percent from a year ago, according to Lender Processing Services.

CNBC real estate reporter Diana Olick notes that it could be another delay in the foreclosure system “as banks try to modify more loans to meet some of the terms of the [$25 billion] servicing settlement . The foreclosure sales decline also appears to be exclusively in private and portfolio loans, which again points to the settlement.”

Meanwhile, banks are increasing their number of short-sale transactions, and some surveys have shown that short sales are actually now outpacing foreclosure sales— the first time that’s ever occurred.

“Lenders are increasingly recognizing that short sales may be a better alternative for them than foreclosure,” RealtyTrac’s Daren Blomquist told CNBC. “This trend began in markets with stronger demand and where the distressed inventory tends to be newer homes (Phoenix, Los Angeles, Las Vegas), but the trend appears to be spreading to other markets like Atlanta and Detroit.” Please provide thoughts about your local market.

Source: “Flood of Foreclosures Still Fails to Materialize,” CNBC (May 2, 2012)

With signs of a housing turnaround getting stronger, we’re seeing buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for home buyerclients:

1. Lowball offers won’t likely stick:  Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last few months are the most important.

4. Expect some competition. Housing inventories are dropping in many of our areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like.  Other important efforts nowadays: we recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by various sources, have been made.

Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (5/1/12)

As housing inventories shrink, more buyers are reportedly finding their perfect home in properties that haven’t even been listed on the market yet. Our “Buyers Broker/Agent” objectives when working with clients are to seek and show these, FSBO’s, etc!

“Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush,” The Star Tribune reports. “But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.”

As real estate professionals we are helping buyers sniff out these unlisted homes by working to identify sellers who would like to sell but are unsure if the market will give them enough on a sale. We find these sellers through referrals and also by home owners who once listed their homes for sale but removed their homes from the MLS after they lingered on the market. Please provide your objectives and we’ll work for you!

Source: “Impatient Buyers Target Homes Before They go on Sale,” Star Tribune (Minneapolis) (April 28, 2012)

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Great news to know about home affordability! Fixed-rate mortgages dropped slightly this week, nearing their average all-time lows and helping to lift home buyers’ purchasing power, Freddie Mac reports in its weekly mortgage market survey. 

For every week but one this year, the 30-year fixed-rate mortgage, the most popular choice among home buyers, has been below 4 percent. We recommend you check with a couple of  local lenders to see what your qualifying guidelines are before rates go up! 

Here’s a closer look at average rates for the “week ending” April 26: 

• 30-year fixed-rate mortgages averaged 3.88 percent, with an average 0.7 point, dropping from last week’s 3.90 percent average. A year ago at this time, 30-year rates averaged 4.78 percent. The record low for 30-year rates averaged 3.87 percent, a record reached in February. 
• 15-year fixed-rate mortgage averaged 3.12 percent, with an average 0.6 point, dropping from last week’s 3.13 percent. Last year at this time, 15-year rates averaged 3.97 percent. The all-time record low is 3.11 percent, a record reached recently during the week ending April 12. 
• 5-year adjustable-rate mortgages averaged 2.85 percent this week, with an average 0.6 point, rising slightly from last week’s 2.78 percent average. Last year at this time, 5-year ARMs averaged 3.51 percent.

Source: Freddie Mac

24/7 Wall St. asked real estate experts and real estate organizations to weigh in on how sellers can get their house sold at the best price and in the shortest amount of time.

Here’s what they had to say as  the best ways to get the “sold” sign out this spring:

1.Pay attention to “curb appeal”: First impressions are critical, and homes with inviting landscapes and exteriors tend to sell better, my first recommendation. Pay attention that the driveway is in good condition, lawn well-kept, and the house looks freshly painted.

2.Set the right price: Real estate professionals know how to set the price and prepare a home for sale. We use comparable sales of homes sold in the last 90 days to help set the most realistic price for the sales price of a home. By setting a realistic price from the beginning, sellers should be reminded that this will prevent having to drop the price of the home several times before getting it sold and having it linger on the market.

3.Talk about energy efficiency: Many buyers don’t fully understand “green” homes but they understand savings. Sellers agents should point out these features — such as energy-efficient windows or appliances — that could save buyers money with utility costs.

4.Give the home Web appeal: Good photographs make a home stand-out online and help lure more potential buyers. Realtor.com says that more than 6,300 photos are viewed per minute on listings posted at its site. We use 12+ photos per listing!

5.Make it move-in ready: Fix any needed repairs, such as water stains, creaky doors, and windows that don’t shut. Flaws in the home — even if relatively minor — can distract buyers, and should be fixed before the home is even listed. Agents should recommend that sellers get a home inspection prior to putting the home up for sale, this helps sellers identifying any potential problems that could potentially derail a sale later on. Once a problem is uncovered, sellers or their agents are obligated to disclose it!

Read more ideas at 24/7 Wall St or visit: www.sierraproperties.com

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Let’s look at the total picture of reality as it relates to today’s family home dreams!

 About 8 million children have been hurt by foreclosure, according to a newly-released report by First Focus, a bipartisan advocacy group for families. “Children are the often invisible victims of the foreclosure crisis,” says Julia Isaacs, the author of the report.

The report highlights the widespread affect the foreclosure crisis has had on the nation’s children: About 2.3 million children have lived in homes lost to foreclosure; 3 million have lived in homes at-risk of foreclosure; and another 3 million have lived in rental homes lost to foreclosure or currently live in rentals that are at-risk of foreclosure.

The foreclosure impact has been greatest on children in Nevada, where nearly one in five — or 20 percent — of children lived or live in a home that was lost to foreclosure or is at-risk of being lost to foreclosure. In Florida, 15 percent of children have been affected by foreclosure, followed by Arizona (14%) and California (12%).

Foreclosures have been found to hamper children’s performance at school. Children who have been affected by foreclosure often see math and reading scores drop as much as if they’d missed school for a month, Isaacs says. Please provide your comments.

Source: “Report Estimates 8 Million Children Hurt by Foreclosures”  USA Today (4/18/12)