Housing affordability is increasing — here’s where it’s up the most

Reports show improving affordability

Homebuyers are enjoying increased affordability — at least according to two new reports released last week. Affordability is up most notably in some of the nation’s higher-priced markets, including many along the West Coast.

Verify your new rate (Feb 28th, 2021)

Housing is more affordable than buyers think

According to the latest Housing and Mortgage Market Review released by Arch MI, “housing isn’t as expensive as you think.”

“Housing affordability is actually better now than its historic norms in most states and remains far better than the worst point for each state since 1990,” explains Ralph DeFranco, Arch MI’s global chief economist. “This may be surprising because we tend to focus on home prices rather than affordability. Affordability accounts for the offsetting factors of low interest rates and a 28% increase in median household income since 2012.”

Analysis in the HaMMR shows the majority of U.S. states require homebuyers to spend less than the recommended 30% of their monthly income on housing costs. In states like Arkansas, Iowa, Oklahoma, and West Virginia, it’s less than 20% — the all-time most affordable level for most of them.

Affordable housing: These cities take the smallest salaries to buy a house

Top cities for affordability

But housing affordability hasn’t just improved in the long run. According to a second report from title insurance firm First American, there’s also been serious movement over the last year.

Buying a house in 2020? Here’s who you’re up against

The improvements were biggest in three cities in California: San Jose, Riverside, and San Francisco. It also became considerably more affordable to buy a house in Baltimore and Denver as well.

House-buying power jumped 22% in Baltimore and 21% in Riverside. It also improved in Los Angeles, Portland, Dallas, Boston, and Washington D.C. Overall affordability improved in all 44 markets tracked by First American.

Verify your new rate (Feb 28th, 2021)

Get today’s mortgage rates

Are you looking to buy a house in today’s affordable housing market? Then shop around and see what mortgage rates you qualify for today.

Verify your new rate (Feb 28th, 2021)

Source: themortgagereports.com

Sign up for the Self-Publishing Success Summit for FREE!

July 7, 2015 | Crystal Paine

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Sign up for the Self-Publishing Success Summit for FREE!

Have you ever considered writing a book? If so, you’ll want to sign up for the FREE Self-Publishing Success Online Summit being held July 12-23.

This Summit features interviews from 37 different authors and entrepreneurs and will give you lots of valuable information to help you write, market, and publish your book.

Here are the three main topics this online event covers:

Step 1 – Writing You Book – You’ll learn how to easily & effortlessly write your first book and how to overcome the doubts and fears that keep you from writing.

Step 2 – Marketing & Publishing – Learn how to successfully launch your book once it’s written…including revolutionary “outside of the box” tactics today’s top authors are using to sell more books.

Step 3 – Monetizing (Making Money) – Take your book to the bank. Speakers share their top strategies to build passive income, even a business, from your first book… including how to use a book to drive 1,000’s of leads & customers.

Sign up for this event for FREE here.

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Source: moneysavingmom.com

Rising Rates Damp Mortgage Applications Ahead of Spring Selling Season

Mortgage rates reached their highest level since November last week, cooling off home purchase and refinance applications ahead of the all-important spring selling season.

The average rate on the 30-year fixed-rate mortgage rose to 2.81% in the week ended Feb. 18, the highest since the second week of November, according to mortgage-finance giant Freddie Mac. A measure of mortgage applications fell 11.4% over the same week, according to the Mortgage Bankers Association.

Improving Covid-19 vaccination rates in the U.S. and expectations of a large federal stimulus package in the coming weeks drove benchmark 10-year Treasury note yields, which are closely tied to mortgage rates, to their largest weekly gains in more than a month last week. Demand in safe-haven assets such as government bonds weakens when investors feel optimistic about the economy.

“Higher rates are a signal of expectations of faster growth and a stronger job market ahead,” said Mike Fratantoni, the MBA’s chief economist. “This last week, rates have turned faster than many people had anticipated.”

Rising rates sometimes prompt borrowers to put their mortgage plans on hold for a few weeks, Mr. Fratantoni said. Measures of purchase and refinance activity fell 11.6% and 11.3%, respectively, in the week ended Feb. 19, according to MBA data.

If mortgage rates begin to increase at a faster pace, some borrowers could be discouraged from attempting to buy a home during the crucial home-selling months of March through June. In a typical year, more than 40% of annual home sales are made during this period, according to the National Association of Realtors.

Still, rates remain historically low, and more people are applying for purchase mortgages and refinances than at the same time in 2020. Last year was a banner one for the housing market, thanks in large part to mortgage rates, which fell below 3% for the first time last summer.

Mortgage lenders originated a record $3.6 trillion worth of mortgages last year, according to the Mortgage Bankers Association, an increase of more than 50% from 2019. Refinances accounted for about 59% of that volume. With the 30-year rate near 2.81%, between 16.7 million and 18.1 million Americans could lower their monthly mortgage payments through a refinance, according to mortgage-data firm Black Knight Inc.

Lissette Gomez will close this week on a new loan that lowers the mortgage rate on her Cleveland-area condo to 2.75% from 4.125%. Ms. Gomez, a special-education teacher, said she decided to refinance after she watched her boyfriend get a much lower rate on his mortgage.

“Everybody was getting the word, especially in the second half of 2020, that the rates were super low,” Ms. Gomez said. “I wanted to refinance when people were jumping on it, and the numbers were as low as they’ve ever been.”

Source: realtor.com

Home-Builder Confidence Slips From Record High in December, as Buyers Get Cold Feet

The numbers: The construction industry’s outlook worsened slightly in December, according to research from a trade group released Wednesday.

The National Association of Home Builders’ monthly confidence index dropped four points to a reading of 86 in December, the trade group said. This was the first time that the index had dropped after three consecutive months of record highs. Even with December’s decline, the figure represents the second-highest reading in the index’s history.

Index readings over 50 are a sign of improving confidence. The index had fallen below 50 in April and May in the immediate wake of the pandemic.

What happened: The three main indicators that guide the overall index all decreased by four points from November’s reading.

The index that measures sentiment regarding prospective buyer traffic came in at 73. The index of expectations for future sales over the next six months dropped to 85, and the gauge of current single-family home sales slipped to 92.

Sentiment also declined across all parts of the country. The index fell by three points in Northeast, Midwest and South, and by two points in the West.

The big picture: The housing market has remained a bright spot in the economy throughout the pandemic, and despite the monthly decline in December the home-building industry remains on strong footing. That said, builders are responding to buyers who appear to be cooling on the market.

To some extent, this could be a reflection of buyers growing accustomed to low mortgage rates, meaning that cheap financing is no longer providing the same boost to the market. At the same time, rising home prices across the country could be negating some of the benefit of lower interest rates.

While the rollout of vaccines to combat the coronavirus is good news for the economy, it could end up causing a slowdown in the housing market. “As the economy improves with the deployment of a COVID-19 vaccine, interest rates will increase in 2021, further challenging housing affordability in the face of strong demand for single-family homes,” Robert Dietz, chief economist at the National Association of Home Builders, said in the report.

Dietz also noted that issues such as the availability of land and skilled labor “will continue to place upward pressure on construction costs,” which could price even more buyers out of the market.

What they’re saying: “There is still an immense undersupply of all types of housing, particularly affordable rental housing which may keep multifamily construction from slowing too much,” Sam Bullard, managing director and senior economist at Wells Fargo Corporate and Investment Banking, wrote in a research note earlier this week.

“Fewer builders are reporting improved [year-over-year] traffic quality than earlier in 2020, which may be a sign of decreased customer urgency, or builders may have worked through a significant number of highly-qualified customers already,” home-building analysts at BTIG wrote in their monthly home builder survey report.

Source: realtor.com

U.S. Existing Home Sales Rise in January as Buyers ‘Snatch Up’ Any New Listings

The numbers: U.S. existing home sales inched up 0.6% to a seasonally-adjusted annual rate of 6.69 million, the National Association of Realtors said Friday. Compared with a year ago, home sales were up 23.7%.

Economists polled by The Wall Street Journal had forecast that existing home sales would fall to a median rate of 6.66 million.

What happened: The median existing-home price rose to $303,900 in January, up 14.1% from a year ago.

The inventory of homes for sale fell to a record low 1.04 million units by the end of January. That’s a 25.7% decline year-over-year. The market had a 1.9-month supply of homes for sales. A 6-month supply is considered a sign of a balanced market.

The South and the Midwest showed an increase in sales in January.

Big picture: Sales have been moving sideways since setting a cycle high in October. Economists think that low mortgage rates will continue to boost housing demand in coming months. Buyers are also looking for more room and more remote locations in the wake of the pandemic.

What the NAR said: “Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market. Sales easily could have been even 20% higher if there had been more inventory and more choices,” said said Lawrence Yun, NAR’s chief economist.

What economists are saying? “In general, record low mortgage rates and families fleeing more crowded living situations are fueling demand for single family homes in spite of ongoing turmoil in the labor market and higher home prices. Indeed, this is one sector which is coming out of the crisis stronger than it went into it,” said Josh Shapiro, chief U.S. economist at MFR Inc.

Market reaction: U.S. stocks opened higher Friday with the S&P 500 index up 12.48 points in mid-day trading after declining in the past three trading sessions.

Source: realtor.com

Home Builder Confidence Improves, but High Construction Costs Remain a Concern

The numbers: The construction industry’s outlook improved in February amid better foot traffic from home buyers, even as the cost of building homes increased.

The National Association of Home Builders’ monthly confidence index rose one point to a reading of 84 in February, the trade group said this week. The modest increase comes after two consecutive months where the index has dropped.

Index readings over 50 are a sign of improving confidence. Last spring, the index dropped below 50 as concerns regarding the coronavirus pandemic grew, but the index rebounded and later hit a series of record highs in the fall.

What happened: The index that measures sentiment traffic of prospective buyers increased four points to 72. Comparatively, the outlook regarding current sales activity held steady between January and February, while the index of expectations for future sales over the next six months declined by three points to 80.

On a regional basis, builders’ confidence regarding the housing market in the Northeast improved dramatically, rising from 68 in January to 89 in February. Builders also grew more confident about the state of the market in the Midwest and maintained their positive outlook on the South. Confidence worsened slightly in the West, however.

The big picture: Demand for new homes remains extremely high. The lack of existing homes for sale, plus renewed interest in suburban living amid the pandemic, is pushing buyers further out from major cities and toward newly-constructed developments. But price pressures could begin to affect builders and buyers alike in the coming months.

“Lumber prices have been steadily rising this year and hit a record high in mid-February, adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are already at all-time lows,” Chuck Fowke, who is the current chairman of the National Association of Home Builders and a custom home builder from Tampa, Fla., said in the report.

“Builders remain very focused on regulatory and other policy issues that could price out households seeking new homes in a tight market this year,” Fowke added.

What they’re saying: “Housing starts and permits should moderate, but from the highest levels since 2006, as building activity continues to be supported by strong demand for homes — especially single-family construction — and low inventories,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note.

Market reaction: The Dow Jones Industrial Average and the S&P 500 index were both down slightly Wednesday morning.

Source: realtor.com

Biden Administration Extends Forbearance and Foreclosure Protections Through June

Good news for Americans who are forced to skip their mortgage payments amid rising unemployment.

The White House is extending the foreclosure moratorium until the end of June for homeowners with mortgages backed by the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture. Homeowners will also have until the end of June to request forbearance, which allows them to pause monthly payments.

Originally, both protections were set to disappear at the end of March. The Trump administration put the protections in place almost a year ago as the coronavirus pandemic upended the nation’s economy.

Additionally, the White House announced that homeowners who had entered forbearance before June 30, 2020 will be entitled to an additional six months of mortgage-payment forbearance, broken up into three-month increments. Originally, mortgage borrowers could only receive up to 12 months of forbearance, split up into six-month segments.

The move by the White House comes roughly a week after the Federal Housing Finance Agency announced it would extend the forbearance period for borrowers with loans backed by Fannie Mae and Freddie Mac by three months. All told, the deadlines for forbearance were pushed back for nearly three-quarters of all borrowers with single-family mortgages, the Biden Administration said.

Thus far, the forbearance program has helped to prevent many Americans from becoming delinquent on their home loans, which would have put them at risk of foreclosure. Extending the protections is important, according to economic experts.

“The year-long forbearance initially afforded through the CARES Act seemed sufficient at the time, but the pandemic and its economic fallout is dragging on far longer than had been expected,” said Greg McBride, chief financial analyst at Bankrate.com. He added that the extra six months of forbearance “reflects the reality that long-term unemployment will be an ongoing issue.”

Currently, roughly 5.4% of mortgages across the country are still in forbearance, according to the Mortgage Bankers Association. That level is down from the peak reached last June, when the figure reached well above 8%. However, this winter the number of people exiting forbearance and resuming making their monthly mortgage payments has stagnated in tandem with the bounce-back in employment.

Currently, roughly 5.4% of mortgages nationwide are in forbearance, but around a quarter of these borrowers continue to make monthly payments.

Of the roughly 2.7 million borrowers who are in forbearance, around a quarter have continued to make their monthly payments, according to real-estate data firm Black Knight. There are also around 1.1 million borrowers who are delinquent but did not enter forbearance.

What will happen to all these mortgages when forbearance ends remains an open-ended question. But researchers at the Urban Institute, a think-tank based in Washington, D.C., projected that many people will be able to avoid foreclosure.

“Loss mitigation policies and substantial housing equity can keep foreclosures at bay in most states,” the researchers wrote.

When borrowers exit forbearance, they are not required to pay back all of their missed payments at once in a balloon payment, though loan servicers do offer that as an option. Instead, they can request that the forborne amount be moved to the end of their loan’s duration. That will allow borrowers to resume making payments at the amount they were paying before the pandemic, without incurring extra costs.

Of course, many borrowers will find homeownership unaffordable overall and may not be able to resume making their monthly payments ever because of extended job loss. For most of these borrowers, the higher level of equity built in their homes, especially compared with the foreclosure crisis that preceded the Great Recession, will serve as a buffer.

Researchers at the Urban Institute calculated that less than 1% of mortgages nationwide have negative equity, meaning the loan is larger than the home is worthy. And only 5.5% of loans were found to be near-negative equity. Following the Great Recession, nearly a third of homes were in negative or near-negative equity, they said.

Home-price gains over the past year have meant that most homeowners could sell their property and come out ahead on the sale — though home prices in some parts of the county, such as Chicago and Baltimore, remain below their record peaks.

As a result, most homeowners in forbearance could afford to sell their home rather than go into foreclosure. Of course, these homeowners may struggle to find other housing. And if foreclosure numbers were to increase, that could begin to have an impact on home values across the country and push more people into negative equity.

“A further extension may well be necessary,” the Urban Institute researchers wrote.

Source: realtor.com

How Do You Build a Stockpile on a Budget?

“I love all of your tips! But I’m curious if you had a larger budget when you first started meal planning backwards? How did you start building your stockpile?”

I got this great question on Instagram a few days ago and I answered it a bit on Instagram stories. But I thought it was deserving of a full post with more explanation.

First off, if you’re new around here, I do something called “Reverse Meal Planning”. Basically, that instead of deciding what sounds good and planning a menu and grocery list based upon that, I plan our menu based upon what we already have on hand and what is on sale at the store.

This saves us a lot of money because it allows us to plan our groceries around rock bottom sales, deals, and markdowns. Yes, it means we sometimes get creative and I often tweak recipes or make them up altogether based upon what ingredients we have, but I view it as a fun game!

How to Start a Stockpile on a Budget

To plan your menu based upon what you have on hand, you first need to, well, have some stuff on hand to work with and plan for! How do you build up that stockpile — especially if you are on a tight budget? Here are my suggestions:

1. Set Aside $3-$5 to Put Toward Buying Ahead

Every week, look at the store sales flier or the clearance/markdown section of your store and determine what you’re going to invest your $3-$5 in. Look for items that are shelf-stable or can be frozen (if you have freezer space) and are at least 50% off their regular price. In addition, make sure they are items you very regularly use (it’s not really saving you anything to stock up on stuff you won’t eat or use!)

How Does This Practically Work?

For instance, let’s say that this week, the kind of deodorant you usually buy is just $0.75 by combining a sale and a coupon. You don’t need to buy deodorant yet, but it’s regularly priced at $2. So, you spend $0.75 of your stockpile budget on deodorant and put it on the stockpile shelf in your bathroom cupboard to save for when you run out of deodorant. Then, bread is on sale for $1/loaf and it’s usually $2/loaf. You go ahead and buy an extra loaf and stick it in the freezer for next week. Finally, pasta that is usually $1.50/box is on sale for $0.75/box with a coupon and sale. You buy two extra boxes and stick them in your pantry.

You’ve spent $3.25 and saved $4.75 — and you’ve added 4 items to your cupboard/freezer for the weeks to come. It might not seem like much, but if you do this every week, pretty soon, you will have built up a nice stash of extra items that you’ve purchased for at least half the price you’d regularly pay.

Thank you to JennyOntheRidge for sharing this via Instagram

2. Gradually Increase That Amount

After 4-6 weeks of buy items ahead, you should be able to plan some of your menu based upon what you have on hand. This should also free up more room in your grocery budget for you to put toward buying more items ahead. So maybe instead of allocating $3-$5/week, you could now set aside $8-$10/week. This could allow you to buy 8-12 extra items and you can then even more quickly stock your pantry/freezer!

Best of all, in each case, you are saving at least 50% of the price of what you would typically pay! The more you do this, the more bang for your grocery buck you’ll get.

Thank you to Kimberlee at The Peaceful Mom for sharing this tip.

3. Eventually Work Toward Buying 40-50% Ahead

As you continue to practice Reverse Meal Planning and build your stockpile, you’ll gradually get to the place where you can spend at least 40-50% of your grocery budget on building your stockpile with rock bottom deals! In fact, there are some weeks when 60-70% of my grocery purchases are for the stockpile!! This is when you’ll really start to see the savings add up — because you’re buying most everything when it’s at its lowest price.

Plus, you’ll have a lot of variety to work from! I’ve found that when we have a good stockpile built up, it’s easy to practice hospitality or take food to an event without needing to run to the store… because I already have a lot of options on hand!

Another benefit is that you’re often able to use some of your stockpile to bless others with hygiene products or other things they might need, all while on a tight budget!

What tips and suggestions do you have for building a stockpile on a budget?

P.S. Have a question you’d love for me to answer in a future post? Drop me an email through our contact form here with the subject “Question”.

Source: moneysavingmom.com

Borrowers With Fannie Mae, Freddie Mac Mortgages Can Get Additional Forbearance, Regulator Says

The Federal Housing Finance Agency is extending the length of time that borrowers can be in a COVID-related forbearance on mortgages back by Fannie Mae and Freddie Mac.

Originally, Fannie Mae and Freddie Mac instructed loan servicers that mortgage borrowers could request up to 12 months of forbearance on their mortgages as a result of the coronavirus pandemic.

Now, the FHFA is allowing these borrowers to request a forbearance extension of up to three months, the agency announced Tuesday.

While in forbearance, mortgage borrowers are not required to make their monthly mortgage payments. When forbearance ends, these borrowers have a range of options to choose from to pay back the owed amount, including tacking the missed payments onto the end of the mortgage’s duration.

Homeowners must already be in forbearance on their mortgage by Feb. 28 to qualify for the three-month extension.

Separately, the FHFA is extending the moratorium on single-family foreclosures and evictions for properties with mortgages backed by Fannie and Freddie by one month until March 31. FHFA Director Mark Calabria said the steps were being taken “to keep families in their home during the pandemic.”

The FHFA expects that Fannie and Freddie will bear between $1.5 billion and $2 billion in expenses as a result of the COVID-19 foreclosure moratorium.

As of Jan. 31, 3.07% of Fannie Mae and Freddie Mac loans are in forbearance, according to recently-released data from the Mortgage Bankers Association. That’s better than the overall forbearance rate for all mortgages nationwide, which stands at 5.35%.

The number of loans in forbearance decreased at the end of January, the Mortgage Bankers Association reported. “While new forbearance requests increased slightly at the end of January, the rate of exits picked up somewhat but remained much lower than in recent months,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Fratantoni had expected the rate of exits from forbearance to pick up in March and April as people came up against the original 12-month deadline to resume making payments. He warned that, given the employment situation nationwide, homeowners who are unemployed and still in forbearance would “need additional support until the job market recovers to a greater extent.”

Source: realtor.com

It’s your last chance to try Stitch Fix for FREE!

This post may contain affiliate links. Read my disclosure policy here.

Have you been wanting to try Stitch Fix, but you didn’t want to pay the $20 styling fee out of pocket?

Through tomorrow evening (January 31, 2018), Stitch Fix is waiving the styling fee for all new customers when you sign up through this link! I’ve never seen them offer this kind of deal!

Here’s how it works:

1. Sign up for a new Stitch Fix account.

2. Fill out your style profile. You’ll give very specific details on sizes you wear, styles you like, colors you like, types of clothes you like, and what types of clothing you are specifically looking for (more casual, all business, a mix of both, etc.) You can be very detailed in your descriptions and even share a Pinterest board with them to give Stitch Fix some ideas of your tastes in clothing. Also, I recommend leaving your stylist a note with specifics on your budget preferences and any other preferences you have (colors/what you’d really like for them to send/an occasion you’d like to be styled for, etc.)

3. Go to checkout and pay nothing out of pocket (you will need to add a method of payment but you won’t be charged).

4. One of the Stitch Fix stylists will take your style profile, sizes, and preferences and put together a box of clothing based upon what they think you’ll like and what they think will work well for you.

5. They’ll send you this box in the mail. You’ll have a few days to go through the box, try on the clothes, and then choose to keep any that you liked and ship back any that didn’t work (they provide a postage-paid envelope for you to use).

That’s it! If you decide to keep something, you’ll pay for what you keep. If you decide not to keep anything, you can just stick everything back into the postage-paid envelope and pop it in your mailbox and you’ll pay nothing out of pocket!

This outfit came in my latest box and I absolutely love it! (I took this late at night at our hotel last night. Jesse and I are on a quick getaway/business trip to NYC! I’ll share more details on what we were up to later this week!)

Go here to sign up for your first Fix for FREE! Remember, this deal ends on January 31, 2018!

P.S. This is your last chance to get in on this offer to try out Stitch Fix with no strings attached! You won’t be signed up for a subscription or anything. If you’ve always wanted to try it out, now’s your chance!

Source: moneysavingmom.com