Minnesota Homes Today Local & National News

Buyer Foot Traffic Through New Construction Up Nearly Threefold Since 2009

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HMI 2000-2012

Home builder confidence in the newly-built, single-family housing market remains high.

In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.

When home builder confidence reads 50 or better, it reflects favorable builder conditions in the single-family, new home market. Readings below 50 suggest unfavorable builder conditions.

The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.

Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.

In March, home builders provided mixed replies to the survey questions :

  • Current Single-Family Sales : 29 (-1 from February)
  • Projected Single-Family Sales : 36 (+2 from February)
  • Buyer Foot Traffic : 22 (Unchanged from February)

It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. The reasons for this are several and should be of interest to today’s home buyers.

First, the jobs market is heating up. The U.S. economy has added more than 1 net new million jobs over the last 6 months and that is increasing the pool of potential home buyers in Minnesota and nationwide. 

Second, the housing market, in general, is improving. Home sales are brisk in many U.S. markets and home supplies are dropping. This creates pressure on home prices to rise.

And, third, low mortgage rates have helped pushed home affordability to all-time highs. More home buyers earning the national median income can afford a median-priced home than at any time in history. 

It’s all culminated in a monthly Buyer Foot Traffic reading which, at 22, is nearly triple the foot traffic reading from just three years ago. Home buyers — in St Paul and everywhere else — are out in full-force, capitalizing on today’s buyer-friendly market.

If you’re looking to buy new construction in the second half of 2012, consider moving up your time frame. Market conditions are constantly changing, and may move out of your favor. As builder optimism increases, the price you pay for your new home may increase, too.

Loans For Underwater Homeowners : HARP 2.0 Now Available

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Making Home Affordabie

The new, revamped HARP program is now available in Minnesota and   nationwide. It was officially released Saturday, March 17, 2012 by Fannie Mae and Freddie Mac.

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the conforming mortgage loan product meant for “underwater homeowners”. Under the HARP program, homeowners in Minneapolis can get access to today’s low mortgage rates despite having little or no equity whatsoever.

HARP is expected to reach up to 6 million U.S. homeowners who would otherwise be unable to refinance.

HARP is not a new program. It was originally launched in 2009. However, the program’s first iteration reached fewer than 1 million U.S. households because loan risks were high for banks, and loan costs were high for consumers.

With HARP’s re-release — dubbed HARP 2.0 — the government removed many of HARP’s hurdles.

In order to qualify for HARP, homeowners must first meet 3 qualifying criteria. 

First, their current mortgage must be backed either Fannie Mae or Freddie Mac. Loans backed by the FHA or VA are ineligible, as are loans backed by private entities. This means jumbo loans and most loans from community banks cannot be refinanced via HARP.

  • To check if your loan is Fannie Mae-backed, click here.
  • To check if your loan is Freddie Mac-backed, click here.

The second qualification standard for HARP is that all loans to be refinanced must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Mortgages securitized on, or after, June 1, 2009 are HARP-ineligible.

There are no exceptions to this rule.

And, lastly, the third HARP qualification standard is that the existing mortgage must be accompanied by a strong repayment history. Homeowners must have made the last 6 mortgage payments on-time, and may not have had more than one 30-day late within the last 12 months.

If the above three qualifiers are met, HARP applicants will find mortgage guidelines lenient overall :

  • Refinancing into a fixed rate mortgage allows for unlimited loan-to-value
  • The standard 7-year “waiting period” after a foreclosure is waived in full
  • Except in rare cases, home appraisals aren’t required for HARP

Furthermore, HARP mortgage rates are on par with non-HARP rates. This means that HARP applicants get access to the same mortgage rates and loan fees as non-HARP applicants. There’s no “penalty” for using HARP.

To apply for HARP, check with your loan officer today.

Foreclosure Volume Slated To Rise This Spring

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Foreclosure increases by state Feb 2012

After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac. 

In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.

A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.

Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.

This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance. 

Like all things in real estate, though, foreclosures remain local.

For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.  

  • Nevada : 1 foreclosure for every 278 housing units
  • California : 1 foreclosure for every 283 housing units
  • Arizona : 1 foreclosure for every 312 housing units
  • Georgia : 1 foreclosure for every 331 housing units
  • Florida : 1 foreclosure for every 341 housing units

Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include : 

  • Atlanta : 1 foreclosure for every 244 housing units
  • Chicago : 1 foreclosure for every 302 housing units
  • New York : 1 foreclosure for every 3,439 housing units
  • Seattle : 1 foreclosure for every 1,229 housing units
  • Washington : 1 foreclosure for every 1,198 housing units

One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It’s no wonder foreclosed homes are in high demand among today’s Minneapolis/St Paul home buyers. 

However, if you plan to buy a foreclosure in Minnesota, be sure to work with an experienced real estate agent. Foreclosed homes are often sold “as-is”, and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections. Minnesota Real Estate Today Properties and News

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