Nearing Retirement? Three Reasons Why You Might Consider a ‘Reverse Mortgage’

July 10, 2014 by

Nearing Retirement? Three Reasons Why You Might Consider a 'Reverse Mortgage'If you are nearing retirement, a reverse mortgage might be right for you. This type of mortgage essentially allows you to turn your home equity into cash. If you find yourself with little money, a reverse mortgage could be the perfect solution, and here’s why.

No Worries About Monthly Payments

After taking on a mortgage, there are many costs that you have to worry about. One of these problems is mortgage insurance premiums. Add interest and fees from lender service providers to the mix, and you’ve got yourself many costs.

All of these fees can create tremendous headaches, as a large chunk of the loan amount goes into covering these costs.

When you undertake a reverse mortgage, you don’t have to worry about any of that. The loan is paid back with home equity, not ongoing cash flow, so monthly payments aren’t a worry.

Your Income Won’t Affect Your Eligibility, And The Income You’ll Get Won’t Create Problems

If the reason you’re hoping to get a reverse mortgage is your low income, the last thing you want is that income to be the deciding factor. With this type of loan, it’s not an issue. That’s because the thing that determines eligibility is your house’s value.

In fact, the income you’ll be getting from this loan is not taxable, which means you’ll be able to keep it in full. Plus, any benefits you get from Medicare will not be affected, and neither will your Social Security.

As such, what you’ll be getting is a loan that doesn’t take into account your current income. Rather, it adds on to it, without creating any issues for you. Plus, you’ll be able to get the money in several different ways, which means you’re in control.

Lastly, the money you get is fully yours. That means that you can use it for anything you want, whether that means you’ll be paying off other loans, or simply funding your day-to-day needs.

You Won’t Be Taken Away From Your Home

Your house is yours because it feels that way. It’s the place in which you’ve invested money and effort. It’s also the place where many loved memories were created, and where they’ll keep on being created.

One of the hardest things for the elderly is being removed from their loved homes and placed into care. They have to leave the place they’ve grown to love. Worse than that, they’re thrown into a world they don’t know.

With a reverse mortgage, this doesn’t need to happen. With this type of loan, you get additional income, and you get to stay in your own house.

Not only that, but you’re also keeping the title to that place until you move, pass away, or reach the end of the loan’s term. Your home will stay yours, both effectively and in the documents.

There are many more reasons why a reverse mortgage is a great idea. However, the fact that you’re in complete control of the income you’ll be getting is one of the most important things.

If you’d like to learn more about reverse mortgages, be sure to contact your mortgage professional.

Filed Under: Home Mortgage Tips Tagged With: , ,

A Quick Guide to Assessing Your Home’s Foundation for Cracks – And What to Do if You Find Them

July 9, 2014 by

A Quick Guide to Assessing Your Home's Foundation for Cracks - And What to Do if You Find Them When purchasing a home, there are a number of considerations that need to be taken into account. One of those considerations is the foundation of the home. No matter how perfect or suitable a property looks, taking the time to properly inspect the property for foundation problems can save you thousands of dollars in repairs later on.

While foundation cracks are usually present in older homes, that does not mean that newer and even brand new homes are not susceptible to them. When choosing a property, the following tips can help homebuyers find signs of foundation problems and take the right action if any are found.

Concrete Weakness

One of the easiest ways to check for a damaged foundation is to check the concrete of the home. When the foundation is strong and safe, the concrete is not brittle and breakable. To test this, when trying to poke the foundation with a screwdriver, the foundation should be rock solid. If it isn’t, then there may be a foundation issue.

Posts Should Be Sturdy

If the house has a basement, then the posts that hold up the basement and crawl space should stand firmly in place. The bottom of the post should be unmovable and the post should stand straight and tall. If the posts do not do so, then there might be a problem with the foundation.

Uneven Floors

The next component of the house that should be inspected is the floors. All of the floors within the house must be solid, straight, and not slanted. If the floor is slanted or separates from the wall in any place, then the foundation is unable to support the home properly and there is likely a serious issue.

Exterior Cracks

The walls are also a way to check for foundation issues. Take a tour around the outside of the home and inspect for any cracks to the exterior. Each wall on the outside of the home should be smooth, solid, and free of any cracks. However, if there is a crack, this may mean that the foundation has shifted and the home is uneven.

Windows and Doors

Next, inspect every window and door on the property. Each should be attached to the surrounding wall and they must also open and close without any difficulty. If there is a difficulty in opening and closing windows and doors, there may be a foundation problem like shifting or even ground that is unable to support the property.

Moist Ground Around the Property

Lastly, another sign that there is a foundation problem is if the ground around the property is moist. A strong foundation will usually be set upon ground that is completely solid. When the ground is moist, the dirt particles are porous and unable to bind together, leading to shifting, cracks, and major damage to the home.

Filed Under: Around The Home Tagged With: , ,

Mortgage Budgeting 101: How to Determine What You Can and Can’t Afford

July 8, 2014 by

Mortgage Budgeting 101: How to Determine What You Can and Can't AffordWhen taking on a new mortgage, it is important to know that you can afford to carry the debt load involved, as many people find themselves in financial trouble by spending more on real estate than they can comfortably maintain. Your mortgage budget can be calculated to determine just how much you should spend on your next mortgage.

Mortgage Rates And Today’s Market Conditions

Mortgage rates change every day, and in times of high volatility can even fluctuate more than once in a twenty-four hour period. The market reflects a number of economic variables, including relevant world news and events. Wall Street also directly affects the real estate market. By researching and watching mortgage rates closely you will be able to secure your mortgage at the best rate possible.

With so many different loan types, terms and interest can affect your monthly mortgage payment significantly. Shop around, and see which loan types will work for you. The rates available will be effected by the type of real estate you are purchasing, and your credit score.

Your Total Income

Your income helps give lenders an indicator of your ability to pay a mortgage. Your total income may include alimony, investment revenue, or other sources in addition to regular wages. Knowing this total and how it might change in the near future can help one get a sense of what is manageable.

Mortgage Expectations And Monthly Expense

Monthly expenses play a big role in your mortgage budget. Credit card debt, vehicles and other monthly commitments need to be factored in full to clearly understand your financial situation.

If you are carrying a large debt load, you may want to pay your debts down before adding more debt via a mortgage. Clearing up outstanding debts will help boost your credit score and in turn your appeal to lenders.

Expenditures that may be considered frivolous or redundant could be eating away at your mortgage budget. Try to cut out unnecessary spending to create some breathing room in your monthly budget. It is important to be more realistic when budgeting than one would be when goal setting, but it is always a good idea to ‘trim away the fat’.

The Amount You Put Down On The Debt

Another factor of affordability and eligibility will be your down payment. How much money you put as a down payment can and will affect the types of mortgage loans and interest rates accessible to you. The value of the down payment will vary depending on the type of property or investment that is being secured; higher value properties will require a larger down payment.

Real estate is a great way to invest in your future. Although some can turn a profit ‘flipping’ houses, most mortgages are long-term investments. The investment grows more beneficial over time as the principal is paid down.

By carefully considering your personal finances, you will be able to determine what you can and cannot afford. Researching the options available will build your confidence when choosing a loan. Contact your trusted mortgage professional for answers to any additional affordability questions.

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What’s Ahead For Mortgage Rates This Week – July 7, 2014

July 7, 2014 by

What's Ahead For Mortgage Rates This Week July 7 2014

Last week’s economic news was mixed, but economic reports for Non-Farm Payrolls and the National Unemployment rate suggest a strengthening labor sector. Pending Home Sales surpassed expectations in May and conversely, construction spending was lower than expected. Here are the details.

Pending Home Sales Reach Highest Level in Eight Months

The National Association of REALTORS® reported that pending home sales in May rose by 6.10 percent over April’s reading. May’s reading was 5.20 percent lower than for May 2013. The index reading for May reached 103.9 as compared to April’s index reading of 97.9. Results for all regions were positive for May:

– Northeast: 8.80%

– West 7.60%

– Midwest 6.30%

– South 4.40%

An index reading of 100 for pending home sales is equal to average contract activity in 2001; pending home sales are a gauge of upcoming closings and mortgage activity.

CoreLogic Home Price Index Reflects Slower Price Gains

National home prices rose by 1.40 percent in May and 10 states posted new month-to-month highs, while year-over-year reading slipped from 10.00 percent in April to 8.80 percent in May. Home prices remain about 13.50 percent lower than their 2006 peak.

The overall rate of construction spending slowed in May to an increase of 0.10 percent from April’s reading of 0.80 percent and against expectations of 0.70 percent. Residential construction spending dropped by 1.50 percent in May.

Freddie Mac’s weekly survey of average mortgage rates brought good news as the rate for a 30-year fixed rate mortgage dropped by two basis points to 4.12 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.22 percent, as was the average rate for a 5/1 adjustable rate mortgage at 2.98 percent. Discount points were unchanged at 0.50 percent for a 30-year fixed rate mortgage and 15-year fixed rate mortgages. Discount rates rose from 0.30 to 0.40 percent for 5/1 adjustable rate mortgages.

Jobs Up, Unemployment Rate Lower

ADP payrolls, which measures private-sector job growth, reported 281,000 new jobs in June as compared to a reading of 179,000 new private-sector jobs in May. The Bureau of Labor Statistics’ Non-Farm Payrolls report for June surpassed expectations of 215,000 jobs added with an increase of 288,000 jobs against May’s reading of 224,000 jobs added.

The national unemployment rate fell to 6.10 percent against predictions of 6.30 percent and May’s reading of 6.30 percent. 

No news was released on Friday, which was a national holiday.

What’s Ahead

This week’s scheduled economic is lean with no events set for Monday. Job Openings, the minutes from the most recent FOMC meeting, along with regularly scheduled weekly reports on mortgage rates and new jobless claims round out the week’s economic news.

Filed Under: Market Outlook Tagged With: , ,

Buying or Selling, Here Are Three Traits You’ll Want in Your Real Estate Agent

July 3, 2014 by

Buying or Selling, Here Are Three Traits You'll Want in Your Real Estate AgentFor both buyers and sellers, choosing the right real estate agent is an important and difficult decision, but making the right selection is critical. Consider the following essential characteristics for a real estate agent before signing a contract:

Experience

An agent must understand the real estate market as well as the practices and processes of buying and selling. While a new agent may have energy and desire, experienced agents will be able to offer insights and experiences which are likely to give their clients the edge in their deal. Experience also indicates negotiating skill.

Of course an agent must be licensed, but they must also be knowledgeable about the specific neighborhoods and types of property their clients are interested in buying or selling. Commercial properties are much different than residential properties, for example, so find an agent with the experience you need.

Creativity

Since a variety of problems can happen at any point in a real estate deal, a real estate agent should be able to solve problems creatively. An agent who helps their clients think through problems, offers reasonable alternatives or finds a way to overcome obstacles is invaluable to both buyers and sellers.

Marketing is essential in the real estate world, so an agent who knows how to creatively use technology to entice buyers or to locate homes is a benefit. Buyers usually start their search online, so an appealing, user-friendly and updated website is essential. For sellers, videos are often the best way to display the best features of a home. These are today’s real estate tools, so an agent who knows how to use them has a better chance of making an effective deal for their clients.

Honesty

Home sellers need someone who will be realistic with them about the value of their home, no matter what other homes in the neighborhood are selling for or what the sellers think their home is worth. Home buyers need an agent who will tell them, for example, that consistently under-bidding in order to get more home for their money is not a viable strategy. These conversations are difficult, but an honest agent will have them in order to achieve a successful result.

Another aspect of honesty is maintaining consistent communication in whatever form suits their clients. Even if there is nothing new to discuss, a quick update to say that nothing is happening is essential to maintaining trust. Silence is a sign of denial or worse, so an agent who communicates regularly is being honest with their clients.

Finally, an agent should be honest enough to put their client’s interest ahead of their own, showing the client every house that fits the criteria and not just those that will get the agent the biggest commission. An effective seller’s agent will give their clients the feedback they receive from potential buyers, even if the news is discouraging. Keeping problem areas from a seller may keep the relationship friendly, but it does not put the seller’s interest above the agent’s.

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Giving and Getting: Why the Terms of a Home’s Sale Are Far More Important Than the Price Paid

July 2, 2014 by

Giving and Getting: Why the Terms of a Home's Sale Are Far More Important Than the Price PaidOne of the most significant factors home buyers and sellers focus on when buying real estate is the negotiated sales price in the purchase contract. While the sales price is undeniably important, the reality is that other terms in the sales contract may have more far-reaching and significant effects on the transaction.

In fact, with a closer look at some of the most important terms, you will see why you and your agent should actively negotiate for improved terms rather than a lower sales price.

Closing Costs

Some buyers and sellers will haggle over a few thousand dollars in the sales price without paying attention to the closing costs, but the fact is that the closing costs for a typical transaction may cost the buyer between two to five percent of the sales price on average.

A sales contract may be negotiated so that the seller assumes some or most of the closing costs, and this can result in considerable savings the buyer. Likewise, when a contract is negotiated in the interest of the seller, the seller may save thousands of dollars at closing if the contract states that the buyer is responsible for these costs.

The Appraised Value

In an ideal world, a home would appraise for the contracted sales price, but this is not always the case. A sales contract may be written with terms that allow for the sales price to be renegotiated after the appraised value is confirmed, and this may benefit both parties. Some sales contracts, however, state that the negotiated sales price is final regardless of the appraised value.

The Property Inspection

Many home buyers opt to obtain a property inspection to determine if there are hidden issues with the property structure, foundation, roof, air quality and other components. Some inspections reveal that a home is in fairly good condition, but others may reveal that a property needs thousands or even tens of thousands of dollars’ worth of repairs.

Some sales contracts may be written so that the buyer may back out of a contract within a certain period of time after receiving the property inspection report or so that the terms of the sales contract may be renegotiated once the property inspection report has been completed.

Special Contingencies

A real estate transaction may extend for several weeks or even months while the buyer contracts with a lender, an appraiser, a property inspector and other third parties. During this period of time, many events can occur that may adjust the interest level or even the ability of the buyer and seller to fulfill the contract.

Some sales contracts are written so that the buyer may opt out of the contract within a certain period of time with minimal expense and regardless of other factors related to the appraisal and inspection.

Generally, there are standard terms found in many real estate sales contracts, but these terms can be adjusted by either party to benefit buyers or sellers. Those who are preparing to buy or sell property should actively communicate their needs and desires with their real estate agent so that the contract may be negotiated with terms most favorable to their needs.

Filed Under: Home Seller Tips Tagged With: , ,

Understanding the ‘Qualified Mortgage’ or QM and Why It’s Important to New Home Buyers

July 1, 2014 by

Understanding the 'Qualified Mortgage' or QM and Why It's Important to New Home BuyersAre you shopping for a home or a new mortgage? If you are interested in finding the best possible financial product, it is important to consider the benefits of selecting a Qualified Mortgage. With so many different types of loan products to choose from and financial terms to learn, schooling yourself on the mortgage market before you buy your first home or apply for your first refinance mortgage may seem like a daunting task.

Luckily, there are resources that are designed to help you learn the basics of products and terms so that all consumers have the power to inform themselves before securing a loan.

What is a Qualified Mortgage?

There are many different categories of home loans that individual loan products can fall into and one of these categories is simply referred to as a Qualified Mortgage. Qualified Mortgages, also referred to as the QM in the industry, is a product that has been approved as a qualified product because it has stable features that benefit you as a borrower.

All lenders who are interested in offering a Qualified Mortgage must make a good-faith effort to assess your income and your debt-to-income ratio to ensure that you are able to repay the loan before you take the loan out. All lenders must meet a long list of certain requirements that are free of harmful features that could affect a borrower’s ability to pay.

Common Requirements of Qualified Mortgages

The main purpose of a qualified mortgage is to protect borrowers from forms of predatory lending. The standards that the loan must meet are set by the Federal government. In addition to assessing the borrower’s ability to pay before approving an application, lenders must meet loan product requirements that are very specific in nature. Some of the harmful features that a QM product is not permitted to have include:

– Negative Amortization: This feature affects consumers by allowing principal to increase over time.

– Interest-only Periods: Where payments are only applied to interest on the money borrowed.

– Balloon payment requirement: A requirement where borrowers must pay a large payment at the end of the loan term.

– Long Terms: Loans cannot have terms longer than 30 years.

– A Large Debt-to-Income Ratio: There is a limit in how much income that can go to monthly debt payments. This limit is 43% for a QM.


How Can a QM Benefit a New Home Buyer?

As you can see, there are safeguards built into a Qualified Mortgage that are designed to protect you from entering into a long-term binding loan contract that puts you in an unfair position. There are also legal protections that are designed to protect lenders who are committed to designing qualified mortgage products. You can sign a loan that you can afford to repay, have payments applied to your principal as well as interest, and become a homeowner without unnecessary stress. If you are interested in learning more, contact your mortgage professional to review interest rates and loan terms.

Filed Under: Home Mortgage Tips Tagged With: , ,

What’s Ahead For Mortgage Rates This Week – June 30, 2014

June 30, 2014 by

What's Ahead For Mortgage Rates This Week June 30 2014Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac’s weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday.

Existing Home Sales Stronger than Expected! 

Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April’s reading of 4.65 million existing homes sold; April’s reading was later adjusted to 4.66 million. May’s reading represented a monthly increase of 4.90 percent over April’s reading and was the second consecutive monthly increase in previously owned home sales.

The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.

May’s reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.

Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders “need more clarity” as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.

Case-Shiller, FHFA Report Slower Pace for Home Price Growth

The S&P Case-Shiller Home Price Index and FHFA’s House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.

Analysts noted that home price growth is leveling out after last year’s steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing markets. First-time buyers provide a foundation for home sales; if they cannot buy homes, then homeowners can’t sell existing homes and buy new homes. A slower but consistent rate of home price growth allows homeowners to build home equity, but won’t likely lead to housing “bubble.”

New Home Sales Blast Past Expectations, Mortgage Rates Fall

The U.S. Department of Commerce reported that new home sales for May reached a six-year high with a reading of 504,000 new homes sold on an annual basis. April’s reading exceeded expectations of 440,000 new homes sold as well as April’s adjusted reading of 425,000 new homes sold. The month-to-month increase in new home sales from April to May was the largest monthly increase in home sales in 22 years.

Although analysts caution that month-to-month seasonally-adjusted sales reports are volatile, this uptick in new home sales may help bolster builder confidence in housing markets. May prices for new homes also rose with the median home price at $282,000. This reading represents a year-over-year increase of 6.0 percent for new home prices.

The Northeast led regional results for new home sales with its reading of 54.50 percent; The West reported an increase of 34.00 percent. New home prices in the Southeast rose at an annual rate of 14.20 percent, and the Midwest region reported a 1.40 percent increase in new home prices. While analysts characterized the Northeast region’s May reading as exaggerated, overall results for new home prices indicate a comeback for new home prices.

Freddie Mac put some icing on the good news cake with its weekly mortgage rates report. Average rates for a 30-year fixed rate mortgage dropped to 4.14 percent with discount points lowered to 0.50 percent. The average rate for a 15-year fixed rate mortgage fell by eight basis points to 3.22 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.98 percent with discount points lower at 0.40 percent.

Thursday’s Weekly Jobless Claims Report reading fell by 2000 new claims to a seasonally adjusted reading of 312,000 new claims filed. Analysts had expected a reading of 310,000 new jobless claims. 214,000 per month have been added to the economy from January to May 2014.

Positive economic developments were not lost on consumers. The Consumer Sentiment Index for June posted a reading of 82.5 against an expected reading of 81.9 and May’s reading of 81.2.

This Week’s News

Scheduled economic news includes Pending Home Sales, Construction Spending, the ADP Employment report, and the Non-farm Payrolls Report. The National Unemployment Rate report along with Freddie Mac’s PMMS and Weekly Jobless Claims round out the week. No news is scheduled for Friday’s Independence Day holiday.

Filed Under: Market Outlook Tagged With: , ,

A Guide to Selecting a Home and Property That Will Suit Your Growing Family

June 27, 2014 by

A Guide to Selecting a Home and Property That Will Suit Your Growing FamilyBoth seasoned homeowners and first-time buyers know making the decision to purchase a new home is not one that is taken lightly. There are so many things to consider, from choosing a home with growth potential to finding a community to support a family’s interests and lifestyle.

While the decisions may seem endless, don’t be discouraged. Develop a strategic approach to buying a home with our definitive guide to selecting a home and property that will suit a growing family’s needs. Use this guide, along with advice from a trusted real estate professional in your area, to get started on the path to home ownership.

Look For Neighborhoods With Growth Potential

Choosing the right location is one of the most grappled with decisions when it comes to buying a home. While some home-buyers aspire to “keep up with the Joneses,” purchasing a home in the “trendy” neighborhood of the moment, savvy home-buyers know the best bargains can be found in “up-and-coming” locales.

Skip the higher property values and congestion and search for a home in an unincorporated area with growth potential. This might require driving a few extra blocks for that morning Starbucks coffee, but this will easily be overlooked once the community grows (and your home value with it).

Unfinished Basements Are Your Friend

Sure, most home-buyers cringe when they enter the sometimes scary, always dark and lonely, unfinished basement. But the savvy home-buyer knows unfinished basements are their friend.

A basic renovation can take the space from ghastly to awesome. Unfinished basements provide a number of options for growing families and are a great way to add bathrooms, bedrooms and common areas for kids and teens.

Choose A Home With Income Potential

While the average buyer is interested in a single-family home, don’t discount homes with basement apartments or mother-in-law suites. These types of home configurations can lead to significant income potential and can help to offset the cost of a monthly mortgage payment.

Income potential doesn’t just include garage apartments and mother-in-law suites; it encompasses open space as well. Build a duplex or a guesthouse on extra land for a significant return on investment. Or, take advantage of special land grants to grow crops or house bees on unused acreage.

Think Long-Term When Choosing Schools

When choosing schools, think macro not micro. Remember to evaluate school districts at all levels: elementary, middle and high schools. Don’t choose a community based on the elementary school, if the middle and high schools are not as impressive.

A young child might be an elementary school student upon purchasing the home, but will matriculate through the school district during the course of a 30-year mortgage. Be sure to select a home in a community with a school district that can support youngsters at every level.

For more information about finding a home for a growing family, contact a real estate agent in your area.

Filed Under: Real Estate Tips Tagged With: , ,

Case-Shiller: Home Price Growth Slows in April

June 26, 2014 by

Case Shiller Home Price Growth Slows in AprilThe S&P Case-Shiller Index for April shows that while home prices continue to grow, they are doing so at a slower pace as compared to April 2013. The Case-Shiller 20 city index reports that home prices expanded at a year-over-year annual rate of 10.80 percent as compared to 12.40 percent in April 2013.

Month-to-month data showed that home prices rose for the second consecutive month. The seasonally- adjusted month-to-month growth rate for the 20 city home price index was 0.20 percent against March’s month-to-month home price growth rate of 1.20 percent.

Slower Home Price Growth: A Silver Lining?

According to the Case-Shiller 20-City Home Price Index 19 of 20 cities posted slower growth rates for home prices in April. Analysts say that this may not be all bad news as rapidly rising home prices, a shortage of available homes and stringent mortgage credit requirements have caused would-be buyers to be sidelined. Inventories of available homes are increasing which should help more buyers enter the market.

David M. Blitzer, chair of the S & P Dow Jones Indices Committee said that last year, some sun belt cities posted annual home price growth rates near 30 percent, but this year, the maximum annual home price growth rates are lower than 20 percent for all cities on a seasonally adjusted annual basis.

Month-to-month price growth was described as seasonally strong. Five cities posted month-to-month price gains of two percent or more.

Seven of the 20 cities included in the 20-city index posted slower rates of home price growth in April than for March: Cleveland, Ohio, Las Vegas, Nevada, Los Angeles California, Miami, Florida, Phoenix, Arizona and San Diego, California were included in this group. Boston, Massachusetts posted a 2.70 percent gain in home prices between March and April; this was the city’s largest month-to-month gain since the inception of the 20-City Index.

Lower mortgage rates, more homes on the market, and a recent statement by the Federal Reserve that it did not expect to raise its target federal funds rate until mid-2015 are seen as factors that are helping to stabilize housing markets.

FHFA Reports Home Price Gain Rate Unchanged in April

The Federal Housing Finance Agency (FHFA) that oversees Fannie Mae and Freddie Mac reported that home prices connected with mortgages owned or backed by Fannie Mae and Freddie Mac rose by 0.70 percent, which was the same pace in month-to-month home price growth as for March. Year-over-year, home prices rose by 5.90 percent.

On a seasonally-adjusted month-to-month basis, home prices ranged from -1.3 percent in the New England division to +0.60 percent in the East South Central division. Year-over-year, home prices in the nine census divisions increased at rates between 1.70 percent for the Mid-Atlantic division to 10.70 percent for the Pacific division.

The peak home-buying season during spring and summer months and labor market performance will likely be strong influences on home price growth in the coming months.

Filed Under: Mortgage Rates Tagged With: , ,