Weekly State of Market

Speculation is a major part of real estate investing. Whether you’re looking to purchase a property or if you’re watching the market for mortgage rates to drop.

In a recent article written by Neal J. Leitereg for Realtor.com, he highlighted the issues with the current mortgage rates and the speculation as to when the buyback program would come to an end therefore cause a slowing of buyers getting first time mortgages.

I found this article on CNN money. It's good information to keep tabs on as we see the market start to rise.

That is the highest level for the 30-year in more than two years, since it hit 4.6% on July 7, 2011, according to Freddie Mac spokesman Chad Wandler.

Wandler attributed the increase to an improving housing market. He also cited investor concerns about when the Federal Reserve will taper its government bond-buying program, which could affect interest rates.

Related: How much house can you afford?

Rising rates could also affect the housing market going forward. A recent survey by real estate company Trulia found that an increase in mortgage rates was the prime concerns among 41% consumers, who worried about that more than price increases.

Over the last few years, there has been a variety of foreclosure settlement agreements that were designed to help compensate wrongful foreclosure victims and encourage lenders to seek alternatives to repossession, such as home loan modifications.

Despite the agreements, there have continued to be complaints about unethical actions from lenders, including lying to homeowners in regards mortgage modifications and intentionally pushing these struggling homeowners into foreclosure.

With lenders having very little oversight and those facing the possibility of losing their homes having to rely on these banks to help them settle their mortgage issues, there is no wonder that mortgage modifications and other efforts to avoid foreclosure have been less than successful over the years.

Fannie & Freddie Bailouts May Turn a Profit

The $187 billion bailout of Fannie Mae and Freddie Mac could soon actually turn profitable for the taxpayer. This week, Fannie Mae reported a quarterly profit of $10 billion, and Freddie Mac also did well with a $5 billion profit. Accounting changes also help, and another $25 billion could be repaid to the Treasury soon, bringing the total repayments to $66 billion.

Surprising Foreclosure Hot Spots

Government Sues Bank of America

The Department of Justice announced this week that a lawsuit has been filed against Bank of America for defrauding buyers of mortgage backed securities. In the real estate runup to the market crash beginning in 2006, the sale of mortgage backed securities was a major activity and many believe contributory to the market collapse.

Closing Costs Going Up

Based on a $200,000 mortgage with good credit and a 20% down payment, closing costs are up 6% on average nationally. Closing costs rose from an average $2264 to $2402 in the latest survey.

Is Another Housing Bubble Coming?

Massive Price Recovery First Half of Year

Housing prices rallied in the first half of this year at their greatest increase rate since the beginning of the crash in 2006. Analysts are hesitant to predict a continuation of this trend however. Rising mortgage interest rates and anticipated increases in foreclosure inventories could stall or dampen recovery.

IPO Of Major Homes for Rent Company

We may see just how much average investors believe in the rental real estate market with the public offering of stock in American Homes 4 Rent coming soon. This company owns 19,000 homes and is going public to raise money to purchase more rental property. The shares are being priced somewhere around $16 to $18 each.

First Bond Offering Based on Rent Payments Coming Soon

When the real estate market crashed, some areas of the country were hit harder than others. Arizona was among the states that suffered the most. In fact, the state is among 18 that were given emergency funds designed to help struggling homeowners avoid foreclosure in an effort to help with recovery efforts. However, it appears as though Arizona is failing to distribute these funds to those in need.

Just behind Florida, Nevada comes in second in terms of foreclosure activity. However, the state is actually making progress toward recovery. For example, there was an 84% decline in foreclosure starts from May to June of this year, in addition to a 58% decline in foreclosure activity during the same time.

Housing Starts Slump

Analysts were disappointed when their predictions for June housing starts were not fulfilled. The Census Bureau and HUD announced a downward adjustment in housing starts for the month. Starts fell to a seasonally adjusted rate of 836,000, the lowest level since August 2012. That number was down by 9.9% from May.

Commercial Lease Rule Changes Coming

Mortgage Rates Take Big Jump

This week mortgage interest rates took their biggest percentage jump in 26 years. The 30-year fixed rate mortgage spiked by 0.53 percent to 4.46 percent this week. The 15-year rate jumped 0.46% to 3.5 percent.

Rising Pending Home Sales

According to the National Association of Realtors® (NAR), in May pending home sales rose to their highest level since late 2006. NAR’s Pending Home Sales Index increased 6.7% to 112.3 in May, up from 105.2 in April.

Rising Interest Rates and Real Estate Investment

As we approach the mid-point of 2013, market circumstances have changed from downturn to upturn through much of the country. Certain areas, most notably those that were disproportionately affected by the downturn like Detroit, Phoenix, and Las Vegas are seeing some impressive increases, along with several areas in California, such as the Bay area, SoCal, and Sacramento.
Investors in the hot areas are troubled that they are having difficulty getting sellers to accept reduced prices, investors in slower areas are troubled that their areas are not showing big gains. It seems that once again, many people would rather complain rather than finding a way to work with the marketplace.