Today’s News Synopsis:
The Commerce Department reports new home sales increased 11% in March. A study shows that short sales and foreclosures equally damage FICO scores. A survey from Pew shows 81% of adults believe purchasing a home is the best long-term investment a person can make. Morgan Stanley believes home prices will fall 6-11% this year.
In The News:
Mortgage Bankers Association – “Study Examines the Impact of Homebuyer Education and Counseling on Mortgage Performance” (4-26-11)
“Potential homeowners who participate in prepurchase education and counseling programs may be more likely to pay their mortgages on time, although the evidence on this point is not consistent and compelling, according to a study released today by the Mortgage Bankers Association (MBA). The study also finds that those who participate in default counseling are more likely to have their loans modified.”
MSNBC - “Housing reality trumps dogma for some in GOP” (4-26-11)
“leading proponents of doing away with Fannie and Freddie aren’t predicting victory. As a precaution, they’re advancing eight bills taking bite-sized swipes at the issue. In the Democratic-led Senate, a sister measure by 2008 presidential candidate Sen. John McCain, R-Ariz., faces long odds, and the Banking Committee’s top Democrat and Republican are wary of quickly reshaping the market for financing home purchases.”
CNN - “Home prices in ‘double dip’” (4-26-11)
“Home prices in February sank 3.3% to just above the post-crisis lows reached in April 2009. It was the seventh straight month of declines. Home values are down 32% from their peak set in May of 2006, according to the S&P/Case-Shiller index of home prices in 20 cities.”
Housing Wire – “Harvard finds dwindling housing supply abolishes affordable rentals” (4-26-11)
“The Harvard University Joint Center for Housing Studies released a report Tuesday, analyzing conditions in the housing market from 1999 to 2010. The study found the price to rent a home is trending inversely to renters’ annual income, just one of many factors hindering growth in the rental space.”
Housing Wire – “FHFA: 30-year fixed-rate mortgage passes 5%” (4-26-11)
“The average interest rate on a 30-year, fixed-rate mortgage reached 5.06% in March, an increase of 9 basis points from the previous month, according the Federal Housing Finance Agency.”
Housing Wire – “Study finds recent housing counseling cuts made in the dark” (4-26-11)
“Republicans and Democrats struck a late-hour deal in April on how to continue funding the U.S. government. But among the cuts, was $88 million used to fund nonprofit counseling groups approved by the Department of Housing and Urban Development.”
Housing Wire – “Freddie Mac mortgage purchases plummet 31%” (4-26-11)
“The amount of monthly mortgages purchased for securitization by Freddie Mac fell nearly 31% in March to $26.9 billion. The government-sponsored enterprise reported its total mortgage portfolio decreased at an annualized rate of 4.7% during the month to $2.14 trillion.”
Los Angeles Times - “New home sales rose in March after weak winter” (4-25-11)
“New-home sales rose 11 percent last month from February to a seasonally adjusted rate of 300,000 homes, the Commerce Department said Monday. That follows three straight monthly declines. Still, the pace remains far below the 700,000 homes a year that economists view as healthy.”
New York Times – “Stimulus by Fed Is Disappointing, Economists Say” (4-24-11)
“Mr. Bernanke and his supporters say that the purchases have improved economic conditions, all but erasing fears of deflation, a pattern of falling prices that can delay purchases and stall growth. Inflation, which is beneficial in moderation, has climbed closer to healthy levels since the Fed started buying bonds.”
Housing Wire – “Short sales and foreclosures equally degrade FICO scores” (4-25-11)
“homeowners that entered short-sales found themselves with FICO scores in the 575-to-595 range — the same range reported for parties with foreclosures on their records.”
Housing Wire – “Homeownership still considered best long-term investment: Pew” (4-25-11)
“The housing crash seems to have had little impact on consumer confidence, as 81% of adults believe buying a home is the best long-term investment a person can make”
Housing Wire – “Distressed property index rises in March: Campbell/Inside Mortgage Finance”
(4-25-11)
“A distressed property index rose to 48.6% in March – the second highest level in the past 12 months while owner-occupant home purchases slowed during the same time period according to another index.”
Housing Wire – “Wells economist: Foreclosure supply points to ‘long, arduous’ recovery” (4-25-11)
“Despite better-than-expected new home sales in March, a Wells Fargo (WFC: 28.56 +0.07%) economist said builders will continue to struggle until the foreclosure wave begins to recede.”
Bloomberg - “U.S. Home Prices May Decrease 6% to 11% This Year, Morgan Stanley Says” (4-25-11)
“U.S. home prices will fall 6 percent to 11 percent this year, more than previously forecast, as mortgages become harder to obtain and distressed sales drive down values, according to Morgan Stanley. ”
Bloomberg - “Fed Officials Count on Untested Tool to Hold Off Inflation” (4-25-11)
“Raising the rate, currently at 0.25 percent, is intended to entice banks to keep their money on deposit at the Fed instead of loaning it out and stoking inflation.”
Bloomberg - “Sales of New U.S. Homes Probably Rose From Record Low as Market Struggled” (4-25-11)
“New-home sales, tabulated when contracts are signed, climbed 12 percent to a 280,000 annual pace last month, according to the median estimate in a Bloomberg News survey of 64 economists. Purchases slumped 17 percent in February to a 250,000 rate, the weakest in data going back to 1963.”
Looking Back:
One year ago, the CIRB reported that permits were pulled for 3,714 total California housing units in March. Commercial mortgage delinquencies fell to 0.63% in Q1 of 2010. The MARI saw a 50 percent increase in appraisal fraud in 2009. Homeownership rates in Q1 of 2010 decreased to the lowest levels since 2000.
For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.