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The Aramco Group

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Housing market continues to grapple with eroding affordability

Posted by The Aramco Group on Sat, Jun 23, 2018 @ 14:06 PM

Home prices continued their upward climb during the second quarter of 2018, dropping affordability levels to their lowest point in nearly a decade. According to ATTOM Data Solutions, which released its Q2 2018 U.S. Home Affordability Report last week, which shows the median home price nationwide is up 4.7 percent from a year ago.

The report calculates an affordability index based on the percentage of income needed to buy a median-priced home relative to historic averages. The index fell to 95 from 103 during the same quarter last year – the lowest level recorded since 2008 when the index was 86.

Annual growth in home prices outpaced average wage growth in 275 counties, including San Diego. Locally, the affordability index currently sits at 91 with median home prices at $562,500. Wage growth in San Diego is only 2.8 percent for the year, compared to median price growth of 6.1 percent.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Past-due mortgages continue to hover near 11-year low

Posted by The Aramco Group on Fri, Jun 22, 2018 @ 14:06 PM

Nationwide, the number of homeowners who are behind on their mortgage is continuing to decline according to new data. CoreLogic reported last week that just 0.6 percent of mortgages were in some stage of the foreclosure process as of March 2018, the lowest rate since June 2007. Likewise, real estate industry analysts at ATTOM Data Solutions report that foreclosure filings in the U.S. have declined for 32 consecutive months.

In total, there were 71,949 properties with foreclosure filings last month – down 12 percent on a yearly basis. Banks initiated the foreclosure process on 33,623 U.S. properties in May, six percent less than the same month last year.

New, more strict lending standards that were put in place after the housing crisis of a decade ago are largely behind the plunge in foreclosures. Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Home sales decline for second month in a row

Posted by The Aramco Group on Thu, Jun 21, 2018 @ 14:06 PM

The housing market may have finally reached its tipping point as new figures show rising prices may be behind a decline in sales last month. Sales of previously owned homes dropped in May, the second consecutive month of declines. May is historically the kickoff month for the summer home buying season but the drop in sales may be a signal that rising prices and chronically low inventory are changing all of that.

According to the National Association of Realtors, existing home sales fell 0.4 percent in May from the prior month. This comes as a surprise to economists who had predicted in a survey by The Wall Street Journal that sales would actually post gains. Sales are down three percent on a year-over-year basis.

"Incredibly low supply continues to be the primary impediment to more sales," said Lawrence Yun, chief economist for the NAR. "But there's no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Hidden cost of selling a home

Posted by The Aramco Group on Wed, Jun 20, 2018 @ 14:06 PM

You've got to spend money to make money. That adage seems to be true in the housing market - at least according to a new report from Zillow and online housing guide Thumbtack. Homeowners in the U.S. spend, on average, $15,190 on extra or hidden costs associated with selling their home according to the analysis. In San Diego, it is $35,236.

Approximately eight out of 10 home sellers complete at least one home repair or improvement before listing. This includes staging, carpet cleaning, interior painting or lawn care among others. Other costs that will eat into a sellers' profits are closing costs. Agent commissions and sales or transfer taxes can add up to thousands of dollars. Nationally, sellers spend $12,532 on average on closing costs. This doesn't include title insurance and escrow fees.

Despite these costs that can add up quickly and creep up on those looking to sell, a Zillow poll shows that 73 percent are satisfied with the transaction. This may be due to rising values and homeowners netting record profits.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

CalHFA popularity grows even among the wealthy

Posted by The Aramco Group on Tue, Jun 19, 2018 @ 14:06 PM

The California Housing Finance Agency was established in 1975 during Jerry Brown's first term as governor. Designed to assist low and middle-income households purchase their first home, the program's popularity has seen booming growth as more families find themselves unable to afford the state's skyrocketing prices. During the 2016-17 fiscal year, CalHFA assisted in the financing of more than 7.200 single-family homes for Californians.

But as CalMatters data reporter Matt Levin notes, the number of of households making over $100,000 annually that obtained a loan through CalHFA has grown exponentially in the last two years. In 2016, only 124 borrowers through the state program make in excess of $100,000. During the first 11 months of fiscal year 2018, it is nearly 1,000.

In CalHFA's newsletter Housing Matters, executive director Tia Boatman stated: "Even those making 120 percent of their area's median income are having trouble finding an affordable place to live."

Earlier this year the organization increased the income limit to qualify for down payment assistance to $150,000 for residents of San Diego.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Home builder sentiment retreats amid rising costs

Posted by The Aramco Group on Mon, Jun 18, 2018 @ 14:06 PM

The National Association of Home Builders reported this week that the sentiment among the association fell two points to a reading of 68 in June. While readings above 50 constitute positive sentiment, this latest report shows a far fall from the 18-year high seen earlier this year.

NAHB cites recent spikes in material costs and concerns about new tariffs as the culprit behind the drop in sentiment.

"Builders are optimistic about housing market conditions as consumer demand continues to grow," said NAHB Chairman Randy Noel. "However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability."

The shortage of properties on the market is putting pressure on builders to bring new homes on-line as quickly as possible. However, builders passing along higher construction costs onto consumers may result in an even costlier housing prices.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

More homeowners utilizing home equity

Posted by The Aramco Group on Sun, Jun 17, 2018 @ 14:06 PM

Today's homeowners have more equity than at any time in the last decade and they are making the most of it. According to ATTOM Data Solutions' First Quarter U.S. Residential Property Loan Origination Report, more Americans are choosing a home equity line of credit (HELOC) than a cash-out refinance.

"Putting home equity to work is the name of the game in the 2018 housing market," said Daren Blomquist, senior vice president at ATTOM. "With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit rather than refinances to tap their home's equity."

Similar to a credit card in which borrowers only pay interest on the funds used, the equity borrowed can be used for any purpose. But unlike a credit card, which can have interest rates over 17 percent, homeowners can obtain a HELOC for less than six percent in today's market.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

The California exodus worsens

Posted by The Aramco Group on Sat, Jun 16, 2018 @ 14:06 PM

Over the last decade, more than six million people moved out of the state of California. This is more than the five million people that moved in. According to a statewide study by Next 10 and Beacon Economics, the Golden State's average home price, which is nearly double the nationwide average, is directly responsible for the mass exodus.

A Trulia report shows that former Californians are choosing Las Vegas as their new home more than any other major city. More than eight percent of people who left California in the first quarter of 2017 decided Nevada's top tourist destination would be a good place to live.

As of last year the median home price in Las Vegas was $260,000 compared to $720,000 in the top California job markets like Los Angeles and San Francisco.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Housing boom diminishes possible baby boom

Posted by The Aramco Group on Fri, Jun 15, 2018 @ 14:06 PM

High home prices may be causing some would-be parents to re-think adding more limbs to their family tree. According to a report released this week by online real estate site Zillow, double-digit increases in home prices over the past year are linked to a 1.5 percent drop in birth rates among women aged 25 to 29.

The drop in new babies was seen most in the state with the highest home prices: California. The correlation between lower birth rates and higher home prices was most in Los Angeles County where 2,588 fewer babies were born in 2016 than the year prior. In San Diego County, where home values have risen over 30 percent in some areas since the recession, the birth rate has dropped by 19 percent.

Women who fall into the age range mentioned in Zillow's report are considered a part of the millennial generation which have delayed other key life events like marriage and buying a first home.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Ulta-competitive housing market leads to ultra-fast sales

Posted by The Aramco Group on Thu, Jun 14, 2018 @ 14:06 PM

The time homes spend on the market for sale is currently at its shortest period since the recession. According new data from real-estate website Trulia, the median list-to-sale time – the period of time between an official listing to when the home is officially sold – is down to just 64 days, compared to 77 days a year ago. The length of time homes are listed for sale has dropped every year since 2010. 

In highly desirable and competitive markets like San Diego, turnaround times are even shorter. The Greater San Diego Association of Realtors shows that single-family homes in the region are selling within 26 days as of May.  

"Prospective home buyers should expect a competitive housing market throughout the summer," Association President Steve Fraioli said. "Fortunately, the low inventory of homes for sale doesn't seem to be dampening their demand." 

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent. 

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.