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Renting versus buying a conundrum in San Diego

Posted by The Aramco Group on Tue, Jan 16, 2018 @ 14:01 PM

Half of Americans live in cities where it is cheaper to buy a home than rent according to a new report from ATTOM Data Solutions. But rising home prices in San Diego have led to the point where mortgage payments eat up as much monthly income as a lease. While homeownership remains a key method to accruing long-term wealth, current market conditions in San Diego make it one of the nation's metropolitan areas where renting is more affordable than buying.

"Although buying is still more affordable than renting in the majority of U.S. housing markets, that majority is shrinking as home price appreciation continues to outpace rental growth in most areas," says Daren Blomquist, vice president at ATTOM. "Renting [is] more affordable than buying in 76 percent of counties that have a population of 1 million or more."

Buying a median-priced home is more affordable than renting a three-bedroom property In 54 percent of counties analyzed by ATTOM. Yet in the nation's top 14 most populated counties including San Diego and Los Angeles, home prices are growing faster than rents.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 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 remodels expected to rise in 2018

Posted by The Aramco Group on Mon, Jan 15, 2018 @ 14:01 PM

Rising home values and a growing number of homeowners choosing a cash-out refinance means more money can be spent on remodeling. According to the National Association of Homebuilders, renovations for owner-occupied single-family homes will climb nearly five percent this year.

Americans spent $152 billion on remodeling in 2017 according to the NAHB, not including the work done by investors. House hunters may also increase their spending on remodeling. Housing affordability struggles may lead to buyers purchasing more-affordable fixer-uppers.

Upgrading kitchens and bathrooms give home values the biggest boost. The National Association of the Remodeling Industry reports that such renovations garner an 85 percent return on investment.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 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.

Senior home buying easier with H4P

Posted by The Aramco Group on Sun, Jan 14, 2018 @ 14:01 PM

A recent study conducted by Georgetown University states that over 90 percent of senior citizens report wanting to stay in the family home after retirement. Being able to age in place may seem daunting particularly on a fixed income but financing options specifically designed for seniors can help make this desire possible.

HECM for Purchase (H4P) is a home loan insured by the Federal Housing Administration that allows those 62 or older to combine their down payment with loan proceeds from a reverse mortgage. Launched in 2008 by the FHA, the program helps seniors find a new home while also offering financial peace of mind.

H4P is easier to qualify for than conventional loans and can be used for the purchase of a single-family home, townhome and FHA-approved condominiums. The most appealing aspect is that they require no monthly mortgage payments which can help free up much need cash in retirement.

Meanwhile, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 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.

Mortgage applications start year off on high note

Posted by The Aramco Group on Sat, Jan 13, 2018 @ 14:01 PM

After a seasonal low in December, mortgage application activity saw a strong comeback last week, rising 8.3 percent on an adjusted basis. Applications increased for both refinancing and home purchases, bringing total volume to the highest level since July. This latest information comes from The Mortgage Bankers Association's Mark Composite Index for the week ended January 5.

The pent-up demand from the holidays led to an 11 percent weekly increase in refinance applications while homebuyers drove applications to purchase a home five percent higher. Worries about higher interest rates in 2018 may be driving the upswing.

Increasing home values and thus equity is also propelling an increase in cash-out refinances Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 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.

Millennials ripe for home buying but face obstacles

Posted by The Aramco Group on Fri, Jan 12, 2018 @ 14:01 PM

Ordinarily, the combination of steady job gains, historically low mortgage rates and soaring rent prices is a recipe for a strong home buying market. But record home prices and inventory shortages led to the share of first-time homebuyers to decrease in 2017 to 34 percent. This is down from the historical average of 39 percent, according to the National Association of Realtors.

"The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages," said NAR Chief Economist Lawrence Yun. "Solid economic conditions and millennials in their prime buying years should be translating to a lot more sales to first-timers, but the unfortunate reality is that the nation's homeownership rate will remain suppressed until entry-level conditions increase enough to improve overall affordability."

Still, a slight easing in lending standards and low-down payment options like FHA loans made obtaining a home loan easier for first-timers. The number of borrowers using an FHA loan increased to 34 percent in 2017, a one percent yearly gain. Such loans allow down-payments as low as 3.5 percent.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 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.

Mortgage rates inch up

Posted by The Aramco Group on Thu, Jan 11, 2018 @ 14:01 PM

The average rate on a 30-year fixed mortgage climbed an eighth of a point this week according to a survey of rates conducted by Mortgage News Daily. Higher yields on 10-year Treasuries, rising oil prices and concerns about less bond buying by the Federal Reserve and foreign investors, drove the increase, bringing current rates to a 6-month high.

Currently, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent and 15-year rates are near 3.5 percent. While rates remain low in absolute terms, the recent uptick has market analysts speculating that further increases are on the horizon.

"Yields are still at their highest since March and rates are still trending up," read a report from Mortgage News Daily. "So, it's not time to relax just yet, [not] until we see far more evidence that rates' recent swoon has passed."

Although mortgage rates aren't based directly on Treasury yields, they serve as a benchmark for longer-term interest rates in the U.S.

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.

HUD delays Obama-era fair housing policy

Posted by The Aramco Group on Wed, Jan 10, 2018 @ 14:01 PM

The U.S. Department of Housing and Urban Development announced last week that it plans on postponing the implementation of an Obama Administration rule mandating the communities address racial segregation in their housing policies. Known as the Affirmatively Furthering Fair Housing policy, it requires cities to assess local housing trends to uncover any racial biases and if so, to offer plans to address such disparities.

HUD issued a statement stating the localities that have submitted plans have struggled to meet the requirements and need more time to and help completing the paperwork.

"HUD stands by the Fair Housing Act's requirement to affirmatively furthering fair housing, but we must make certain that the tools we provide to our grantees work in the real world," read the statement. Implementation of the policy has been suspended until 2020.

The Trump Administration has previously halted other Obama-era mandates related to housing. Within his first hour of being sworn-in last year, President Trump signed an executive order rolling back a reduction on mortgage insurance premiums on federally insured home loans.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.375 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 average age of home buyers trends older

Posted by The Aramco Group on Tue, Jan 9, 2018 @ 14:01 PM

Today's home buyers are older than they were three decades ago, according to the National Association of Realtors. The NAR's 2017 Profile of Home Buyers and Sellers reports that while the median age of first-time buyers held steady from last year at 32 years old, the age of repeat buyers has increased to an all-time high. In 2017 the median age of repeat home buyers climbed to 54 years old, up from 52 in 2016.

NAR suggests that the older age of buyers suggests they intend on staying in the workforce longer, perhaps allowing them to feel more comfortable about buying. Elder buyers did not shy away from using the internet as tool in their home search, however. Overall, 95 percent of home buyers in 2017 utilized the web to find the right property.

Repeat buyers cited the proceeds from the sale of their previous home as the largest source of their down payment, surpassing personal savings.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.375 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.

Average age of home buyers trends older

Posted by The Aramco Group on Mon, Jan 8, 2018 @ 21:01 PM

Today's home buyers are older than they were three decades ago, according to the National Association of Realtors. The NAR's 2017 Profile of Home Buyers and Sellers reports that while the median age of first-time buyers held steady from last year at 32 years old, the age of repeat buyers has increased to an all-time high. In 2017 the median age of repeat home buyers climbed to 54 years old, up from 52 in 2016. 

NAR suggests that the older age of buyers suggests they intend on staying in the workforce longer, perhaps allowing them to feel more comfortable about buying. Elder buyers did not shy away from using  the internet as tool in their home search, however. Overall, 95 percent of home buyers in 2017 utilized the web to find the right property.  

Repeat buyers cited the proceeds from the sale of their previous home as the largest source of their down payment, surpassing personal savings.  

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.375 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. 

Sizeable number of Calif. homes worth more than $1 million

Posted by The Aramco Group on Sun, Jan 7, 2018 @ 14:01 PM

Not all California residents live in a million-dollar home but a growing number live near one. According to information from the U.S. Census Bureau analyzed by Overflow Data, 13.6 percent of owner-occupied homes in the state are valued at more than $1 million.

The seven-figure price tags are not deterring buyers. CoreLogic previously reported that the number of California homes that sold for more than a million dollars continues to increase. The all-time high was reached as recently as 2016 when over 15,000 properties sold for $1 million-plus. Nearly a third of homes that sell near this price are purchased with cash.

Among the areas with the highest number of million-dollar-plus home sales are San Diego's Carmel Valley and La Jolla. Meanwhile, those needing to finance their home purchase will find conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.375 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.