Industry News

Todays Mortgage Financing & Real Estate News

National Median Sale Prices at Record High

The rise in buyer demand, combined with a limited number of homes for sale, pushed the national median sales price above its 2006 peak and to a record high, according to the National Association of Realtors®. The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400. Along with a boost in home prices last month, existing-home sales also reached the highest pace in more than eight years. Lawrence Yun, NAR’s chief economist, calls this year’s spring buying season the strongest since the downturn. “Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun says. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.” Yun says that June’s sales also likely got a boost by the spring’s initial phase of rising interest rates. That “usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,” Yun says. Total sales of completed single-family, townhome, condo, and co-op transactions ticked up 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million and are nearly 10 percent above year ago levels. Sales also are the highest pace since February 2007. Source: National Association of Realtors®

Could Rising Rents Hurt Ownership?

The prevailing opinion is that rising rents will cause more consumers to purchase homes. This is absolutely the case as you have seen statistics published time and time again that show it is actually cheaper to own in most areas of the country as opposed to renting. In addition, the stats continue to show rents rising from month-to-month and year-to-year. So how could rising rents hurt home ownership?

If you are a renter, you are likely spending a greater portion of your income towards your rent. Therefore, as rents rise, it is harder and harder to save for a down payment. That is why many Millennials are staying at home with their parents and when they move out, they are purchasing instead of renting. But for others, it gets harder.

What does this mean? For most, it means that the faster you become a homeowner, the better. Once you are a homeowner, you are protected from inflationary increases in payments as only a small portion of your payment (taxes and insurance and association fees) is subject to annual increases. Eventually, more apartments will be built and the rent/ownership equation should even out. For now, we are seeing first time homebuyers starting to awaken to the fact that sooner is better with regard to home ownership.

Existing-Home Sales Bounce Back Strongly as First-time Buyers Return

Fueled partly by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years, according to the National Association of Realtors®. Led by the Northeast, all major regions experienced sales increases in May.

Total existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now increased year-over-year for eight consecutive months and are 9.2 percent above a year ago (4.90 million).

Lawrence Yun, NAR chief economist, says May home sales rebounded strongly following April’s decline and are now at their highest pace since November 2009 (5.44 million). “Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” he said. “However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed in May to 3.84 percent from 3.67 percent in April but remained below 4.00 percent for the sixth straight month.

May existing-home sales in the Northeast jumped 11.3 percent to an annual rate of 690,000, and are now 11.3 percent above a year ago. The median price in the Northeast was $269,000, which is 4.8 percent higher than May 2014.

In the Midwest, existing-home sales rose 4.1 percent to an annual rate of 1.27 million in May, and are 12.4 percent above May 2014. The median price in the Midwest was $181,900, up 9.4 percent from a year ago.

Existing-home sales in the South increased 4.3 percent to an annual rate of 2.18 million in May, and are 6.9 percent above May 2014. The median price in the South was $198,300, up 8.2 percent from a year ago.

Existing-home sales in the West climbed 4.3 percent to an annual rate of 1.21 million in May, and are 9.0 percent above a year ago. The median price in the West was $324,000, which is 10.2 percent above May 2014.

CFPB Delays TRID Till October 1

Statement by CFPB Director Richard Cordray on Know Before You Owe Mortgage Disclosure Rule

WASHINGTON, D.C. – Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray issued the following statement on the Know Before You Owe mortgage disclosure rule:


Realtors® Applaud CFPB’s Proposed Extension of TRID Implementation

Media Contact: Sara Wiskerchen / 202-383-1013 / Email

polychron-chrisWASHINGTON (June 17, 2015) National Association of Realtors® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., released the following statement in response to the Consumer Financial Protection Bureau’s announcement  of a proposed two-month delay for the implementation of  the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation.