ARAMCO Report - The Mother of ALL Mortgage Blogs!

New home sales increase in July

Posted by Mehran Aram on Tue, Sep 10, 2019 @ 05:09 AM

Sales for newly built homes outpaced sales for existing homes in Southern California in July according to a new report. New home sales were 13 percent higher during the month than they were at the same time last year according to CoreLogic. In comparison, existing home sales increased just three percent during the same period. In total, 1,719 newly built homes were purchased across Southern California in July.

The demand for new homes doesn’t appear to have dwindled since last year despite prices rising. The price for a new home in San Diego County rose 21 percent over overall home prices in the region since last summer.

The median price tag for a newly constructed home in San Diego as of July: $701,250.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 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.

Topics: San Diego County, Housing Market, Southern California, existing home sales, new homes, new home sales, Mortgage rates, San Diego Housing Market, Existing Homes, San Diego Median Home Price

Americans purchasing fewer new homes

Posted by Mehran Aram on Thu, Jun 27, 2019 @ 05:06 AM

The rate at which homebuyers in the U.S. are purchasing new homes is currently at its lowest pace in over six months according to new data. Purchases of newly built single-family homes fell by 7.8 percent in May to a seasonally adjusted annual rate of 626,000, acording to the U.S. Department of Commerce. This is below economists’ expectations in a survey conducted by The Wall Street Journal who forecasted new home sales to be closer to 683,000.

As they sit on the market unsold, the supply of newly built homes on the market is increasing. New home inventory was approximately 6.4 months as of May, up from 5.6 months last year.

Sales of newly built homes have flatlined for most of the past year as builders failed to focus on entry level priced homes and instead flooded the market with larger, more expensive dwellings.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 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.

Topics: homebuyers, single family homes, new home sales, U.S. Department of Commerce, Mortgage rates

New home sales rise to 7-month high

Posted by Mehran Aram on Thu, Mar 7, 2019 @ 06:03 AM

Sales of new U.S. single-family homes rose in December, ending out a year that saw a slump in overall sales. According to the Commerce Department, new-home sales increased 3.7 percent in December on a month-over-month basis to a seasonally adjusted annual rate of 621,000 – the highest rate since May 2018. Economists surveyed by The Wall Street Journal had expected a decline to 605,000. Despite the surprising increase in December, new-home sales were down 2.4 percent in 2018 compared to the prior year.

Newly built home sales account for about 11.2 percent of the housing market’s overall sales. This latest report was released with a five-week lag, delayed by the partial government shutdown that ended January 25.

Although home price growth has slowed and mortgage rates have settled at 12-month lows, economists predict that a shortage of land and labor could weaken new-home sales for the coming months.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 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.

Topics: Housing Market, new home sales, U.S. Department of Commerce, Mortgage rates

New home sales climb higher

Posted by Mehran Aram on Sun, Feb 3, 2019 @ 05:02 AM

Sales of newly built homes, which had been sluggish for much of 2018, reversed course in November, rising a whopping 16.9 percent from the month prior. According to the U.S. Department of Commerce, new home sales climbed to an annual rate of 657,000. This beats the prediction of 571,000 made by economist in a survey conducted by The Wall Street Journal.

November’s increase was not enough to push new home sales into the black for the year where they remain 7.7 percent lower. Builders focusing primarily on the higher end of the market with larger, more expensive homes, is partly to blame for the annual decline.

November’s home sales report was released just last week after being delayed by the partial government shutdown.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 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.

Topics: home sales, new home sales, U.S. Department of Commerce, Mortgage rates, November New Home Sales

Is a Reverse Mortgage the Right Financing Plan for Your New Home?

Posted by The Aramco Group on Wed, Mar 21, 2018 @ 09:03 AM

Keys in a door handle with a keychain that looks like a home.

As you enter your golden years, you may be considering buying a new home. Many seniors look to purchase a new home during retirement, whether in order to right-size their lifestyle, live closer to family and friends, decrease the financial burden of their current home, or to move to a warmer climate.

For some, it makes sense to take advantage of using a reverse mortgage to finance a new home — this is known as a reverse mortgage for purchase (or, HECM for purchase). Read on to find out how the process works and whether it may be the right strategy for you to move into a home you love.

History of the Reverse Mortgage for Purchase

Prior to 2008, a senior who wanted to leverage a reverse mortgage to purchase a home would have to use a conventional mortgage to finance the purchase, then repay that mortgage using a reverse mortgage. For many, this meant that insufficient credit documentation or income would prevent the purchase of a dream home. That changed in 2008, when Congress authorized a program known as HECM for Purchase, which enables seniors to take out a reverse mortgage in order to purchase a new  home. This program not only allows seniors to sidestep the qualifications for conventional mortgages, but also condenses costs to just one loan.

Before you choose this strategy to finance your next home, you should understand the requirements and expectations associated with HECM reverse mortgages.

Qualifications and Eligibility

To qualify for HECM for Purchase, you must be 62 years or older, with no outstanding federal debt in delinquency, and the home you wish to purchase must be your principal residence.

As for the type of home you’re buying, HECM for Purchase applies to:

  • single-family homes
  • two- to four-unit homes with at least one unit occupied by you
  • U.S. Department of Housing and Urban Development-approved condominiums
  • federally approved manufactured homes

A recently passed law allows lenders to take applications for new-construction homes prior to certification of occupancy. All of the above properties must also pass federal standards and flood requirements.

Using a Reverse Mortgage for Purchase

One of the primary benefits of a reverse mortgage is that it gives you the option of choosing your monthly mortgage payments or making no monthly payments at all. In fact, the lender pays you (up to a predetermined percentage of your new home’s total value), either in a lump sum or as a line of credit. Many people prefer the line of credit to avoid the temptation of spending all the money at once.

When you die or move again to another home, the amount given to you from the lender becomes due, and your heirs will inherit the remaining equity after interest and fees when you sell your home. In theory, you could also live in this home long enough that once your estate sells the home there would be no equity left after paying off the lender. While this doesn’t happen often, it explains the need for FHA mortgage insurance, which protects you and your heirs from ever owing more than the sale price of the home.

A reverse mortgage will cover anywhere from around 38-71% of a new home’s purchase price; the remaining balance must be paid from the sale of your previous home, or from another source of income or savings. The amount the HECM for Purchase covers will vary from person to person, based on age, current interest rates, and the appraised value of the new home.

As with many other loan programs, borrowers can choose between a fixed rate and an adjustable rate. The former is a known quantity; the latter often starts at a lower interest rate than the fixed-rate offering, but is the only reverse mortgage program that allows for the line of credit feature.*

You should always speak to a professional to understand the options available to you and the requirements for your unique situation. A reverse mortgage can offer an affordable strategy to finance the purchase of your next home and ensure you can live out the rest of your golden years right where you want to be.

To learn more about the reverse mortgage for purchase, and whether it’s the right strategy for you, contact our knowledgeable team at ARAMCO.

Topics: new home sales, Reverse Mortgage for Purchase, financing

ARAMCO Report - Wednesday February 25, 2015

Posted by The Aramco Group on Thu, Feb 26, 2015 @ 09:02 AM

According to the U.S. Department of Commerce, sales of new homes in the U.S. in January were essentially unchanged. But year over year, sales were up by 5.3%. The median price for a new home was 9% and the inventory of new homes available for sale was unchanged at 5.4 months while delinquency rates for mortgage loans for 1 to 4 units fell to the lowest level since the third quarter of 2007. Meanwhile conforming no point 30 year fixed mortgage rates average 3 3/4s with 15 year rates closer to 3%. And now for something completely different… Did you know that the year 1835 was the only time in U.S. history when our country was debt free? That was when Andrew Jackson paid off what he called “The National Curse,” and it lasted exactly one year!

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: debt, inventory, 30 year fixed rates, new home sales, President Jackson, U.S. Department of Commerce

ARAMCO Report - Thursday June 19, 2014

Posted by Mehran Aram on Thu, Jun 19, 2014 @ 17:06 PM

According to Freddie Mac’s June 2014 economic and housing market outlook, at midyear existing home sales year over year are down by 7 % and new home sales are down by 3 %. Economists have lowered their overall forecast on home sales for 2014. Inventories of homes for sale remain limited and prices are on the rise but not as dramatic as last year. Conforming no point 30 year fixed mortgage rates average 4 1/4 % with 15 year rates closer to 3 1/4.

And now for something completely different: When it comes to historic ballparks, Dodger Stadium is the 3rd oldest park behind Fenway Park which is 100 years old and Wrigley Field in Chicago at 98 years old!

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at www.ARAMCO.Biz or call me at (877) 700-0942.

This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Aramco Report, and now for something completely different, Chicago, Mehran Aram, Los Angeles, Fenway Park, Wrigley Field, 30 year fixed rates, Freddie Mac, Baseball, new home sales, Mortgage rates, Dodger Stadium, Dodgers