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Mortgage Applications Fall 11.7%

“The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 11.7% in the group’s seasonally adjusted composite index, following a drop of 3% for the previous week. Rates for all types of loans rose by more than 10 basis points during the week.

The seasonally adjusted purchase index decreased by 3% from the most recent report. On an unadjusted basis, the composite index dropped by 12% week-over-week. The unadjusted purchase index decreased by 4% for the week, and is up about 12% year-over-year.

The MBA’s refinance index fell 16% week-over-week to its lowest level since July 2011.

The share of refinancings fell from 67% to 64%, its lowest level since May 2011. Adjustable rate mortgage loans account for 8% of all applications, up from 7% last week….”


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U.S. Home Prices Melt Up the Most in 7 Years

“WASHINGTON (AP) — U.S. home prices jumped 12.2 percent in May from a year ago, the most in seven years. The increase suggests the housing recovery is strengthening.

Real estate data provider CoreLogic said Tuesday that home prices rose from a year ago in 48 states. They fell only in Delaware and Alabama. And all but three of the 100 largest cities reported price gains.

Prices rose 26 percent in Nevada to lead all states. It was followed by California (20.2 percent), Arizona (16.9 percent), Hawaii (16.1 percent) and Oregon (15.5 percent).

CoreLogic also says prices rose 2.6 percent in May from April, the fifteenth straight month-over-month increase.

Steady hiring and low mortgage rates have encouraged more Americans to buy homes. Greater demand, a limited number of homes for sale and fewer foreclosures have pushed prices higher. Prices are still 20 percent below the peak reached in April 2006, according to CoreLogic.

Sales of previously occupied homes topped the 5 million mark in May for the first time in 3 ½ years. And the proportion of those sales that were “distressed” was at the lowest level in more than four years for the second straight month. Distressed home sales include foreclosures and short sales. A short sale is when a home sells for less than what is owed on the mortgage.

Home sales are expected to increase in the coming months. That’s because the number of people who signed contracts to buy homes rose in June to the highest level since December 2006. There’s generally a one- to two-month lag between a signed contract and a completed sale….”

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U.S. Housing Starts Rise Less Than Expected

“U.S. housing starts rose less than expected in May, likely reflecting labor and material constraints, but the overall trend remained consistent with strength in the housing market.

Meanwhile, U.S. consumer prices rose in May and a gauge of underlying price pressures showed signs of stabilizing after a long decline, a potential comfort to Federal Reserve policymakers who would like to see stronger inflation.

Though permits for future home construction fell, that followed a surge in April, which hoisted them above the 1 million-unit mark. The pullback last month reflected a drop in the volatile multi-family sector, but permits for single-family construction touched their highest level in five years.

The Commerce Department said on Tuesday housing starts rose 6.8 percent to a seasonally adjusted annual rate of 914,000 units. April’s starts were revised up to show a 856,000-unit pace instead of the previously reported 853,000 units.

Economists polled by Reuters had expected groundbreaking to rise to a 950,000-unit rate last month.

Builders, who are ramping up construction to meet demand for housing against the backdrop very low inventory, have been complaining about labor shortages and increased material costs.

Sentiment among single-family home builders hit a seven-year high in June, a report showed on Monday, amid optimism over current and future home sales.

Lean inventories are pushing up home prices, which are in turn boosting consumer confidence and spurring consumption, helping soften the blow on the economy from tighter fiscal policy and slowing global demand….”

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Despite Many Curbs, Home Prices Rise Again in China

“Chinese property prices rose at the fastest pace in more than two years in major cities, defying tougher government curbs and constraining the ability of policy makers to ease credit in response to weakening economic growth.

New home prices in Beijing, Shanghai and Guangzhou posted the biggest gains in May since at least January 2011, and 69 of the 70 cities tracked by the government showed increases, the most since August 2011, National Bureau of Statistics data showed today in Beijing. Inbound non-financial investment rose 0.3 percent in May from a year earlier, the weakest in four months, according to the Ministry of Commerce.

The property gains limit the ability of Premier Li Keqiang to counter an economic slowdown that showed signs of deepening in May. The central bank today refrained from adding cash to the financial system and money-market rates reached the highest level in seven years this month, a liquidity squeeze that Fitch Ratings says may accelerate a banking crisis.

“The government is in a dilemma right now,” said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura Holdings Inc., who previously worked at the International Monetary Fund…..”

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The Fonz Says Reverse Mortgages are Cool, Consumers Get Stung

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“As America’s population ages, the hard sell is on for reverse mortgages. Promising happier days ahead, the former “Fonz,” actor Henry Winkler, is giving the hard sell in relentless television ads. But the housing crash and the fiscal state of today’s seniors are causing many of these loans to backfire.

Reverse mortgages were originally designed for seniors who wanted to take out their home equity to spend during retirement. Unlike a regular mortgage, they require no monthly payments, and the borrower can take out a lump sum or receive regular payments.

“The wealth in the home is, in most cases, wealth that is sitting idly when people have a hard time making ends meet on a day-to- day basis, so having access to that allows people to basically tap that cash to pay needs or to do more comprehensive financial planning,” said Peter Bell, of the National Reverse Mortgage Association….”

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U.S. Home Prices Rise the Most in Seven Years

“WASHINGTON (AP) — U.S. home prices soared 12.1 percent in April from a year earlier, the biggest gain since February 2006, as more buyers competed for fewer homes.

Real estate data provider CoreLogic says prices rose in April from the previous April in 48 states. Price also rose 3.2 percent in April from March, much better than the previous month-to-month gain of 1.9 percent.

Prices in Nevada jumped 24.6 percent from a year earlier….”

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Tightening Curbs Prove Not Enough as Home Prices Jump in China

China’s new home prices jumped in May by the most since they reversed declines in December, as the government’s efforts to tighten property curbs this year fail to deter buyers.

Prices surged 6.9 percent from a year earlier to 10,180 yuan ($1,659) per square meter (10.76 square feet), SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in a statement today after a survey of 100 cities. The costs rose 0.81 percent from April, the 12th month of gains on a month-on-month basis.

China will widen property tax trials, which have only been imposed in Shanghai and Chongqing, the State Council said in a statement posted on the central government’s website on May 24. The government stepped up a three-year campaign to cool home prices in March, with only the capital city of Beijing issuing the toughest measures among 35 provincial-level cities, according to Centaline Property Agency Ltd., the country’s biggest real estate agency.

“Against the backdrop of rising land prices, supply shortages in key cities and expectations of looser monetary policy, the expectations for further home-price gains going forward remain relatively strong,” SouFun said in the statement.

The average price in the 10 biggest cities, including Beijing and Shanghai, jumped 9.7 percent from a year earlier to 17,202 yuan per square meter, up 1.1 percent from April, SouFun said….”

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On the Matter of a Lethal Brew of Rising Home Prices and Mortgages

“A sharp rise in mortgage rates over the last few weeks means it may already be too late for many homeowners to benefit from a refinance.

This just as thousands were gaining equity in their homes and finally becoming eligible.

At the same time, it is pushing some renters off the fence, fearing they too will miss the boat on the best conditions for home buying.

Refinances dropped 12 percent last week, while mortgage applications to purchase a home rose 3 percent and are now up 14 percent from a year ago, according to the Mortgage Bankers Association…..”

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Worries of Tapering Send Mortgage Rates Through the Roof, Refinancing Begins to Fall

“Worries the Federal Reserve may begin to slow its stimulus efforts sent mortgage rates last week to their highest level in a year, drying up demand for home refinancings, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said interest rates on fixed 30-year mortgage rates surged 12 basis points to average 3.9 percent in the week ended May 24. It was the highest level since May 2012 and the biggest jump in 14 months.

The rise sent the seasonally adjusted index of mortgage application activity down 8.8 percent as refinancing applications tumbled 12.3 percent. It was the biggest drop in refinance applications this year as demand fell to the lowest level since December.

The refinance share of total mortgage activity decreased to 71 percent of applications from 74 percent the week before.

Still, the gauge of loan requests for home purchases, a leading indicator of home sales, rose 2.6 percent, suggesting potential homeowners may have sought to lock in a still-low rate….”

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CoreLogic: Foreclosures Hold Steady, Pipeline Dwindling

“NEW YORK (Reuters) – The number of foreclosed homes held steady in April, while there were fewer properties sitting in the pipeline, fresh signs the housing recovery is on track, data from CoreLogicshowed on Wednesday.

There were 52,000 foreclosures completed last month, the same amount as in March, but down about 16 percent from 62,000 in April last year, CoreLogic said .

Before the housing crisis, foreclosures averaged 21,000 a month between 2000 and 2006. There have been about 4.4 million completed foreclosures since the financial crisis began in September 2008.

There were about 1.1 million homes in some stage of foreclosure in April, down 2 percent from the month before and a drop of 24 percent from a year ago.

Foreclosure inventory accounts for 2.8 percent of all mortgaged homes….”

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Home Prices Continue to Inflate

“Nationwide home prices including distressed sales were up 10.5% year-over-year in March, according to CoreLogic’s latest home price report. On a monthly basis home prices were up 1.9%.

This was the thirteenth straight monthly rise, and the fastest pace of increase since March 2006. Ex-distressed sales, home prices were up 10.7% year-over-year and 2.4% on the month.

“For the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10 percent year over year,” said Dr. Mark Fleming, chief economist at CoreLogic in a press release. Home prices are being driven by demand from investors and homebuyers even as supply stays tight.

Here are some details from the report…”

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Easy Money Helps Investors While Hurting Real Home Buyers

“Michael Marchillo, a plumber, has been trying and failing for months to buy a bigger home for his family here in Sin City. He was pre-qualified by a bank for a $130,000 mortgage, which a year ago would have landed a typical three-bedroom home in the area. No more. Now, the 36-year-old says, it’s hard to compete with “greedy investors” who come to the table flush with cash for quick deals.

Marchillo is on to something. The once-beleaguered Las Vegas housing market has been on fire since investment firms led by Blackstone GroupColony Capital, and American Homes 4 Rent began buying homes here some eight months ago, backed by $8 billion in investor cash to spend nationally.

These big investors and a handful of others have bought at least 55,000 single-family homes across the U.S. in the past year. In the Vegas area alone, they have accounted for at least 10 percent of the homes sold since January 2012, according to a Reuters analysis of housing transactions.

(Read MoreUS Pending Home Sales Tick Upward in March)

That added firepower helps explain why home prices in this metropolitan area of 2 million people are up 30 percent over a year ago, far more than the national average of 10 percent. Permits for new home construction are up 50 percent, twice the national average.

Local real-estate broker Fafie Moore says private-equity firms and hedge funds have largely “crowded out” local buyers like Marchillo. That’s because the investment firms have broadened beyond their initial focus —buying homes at foreclosure auctions. Now, they are also bidding for homes listed by private owners and banks.

In a sign of how freely the money is flowing, Moore notes around 60 percent of all sales are in cash these days.

Fellow broker Trish Nash said she has seen cases where a home gets listed and quickly draws a dozen bids, many in cash. Realtors are talking about a mini-bubble forming here.

“There is an artificial appreciation in our market,” says Nash. “I know (the big investors) say they aren’t going to be flippers, but for them it is all about the bottom line.” …”

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Mortgage Applications Rose Last Week

“Applications for U.S. home mortgages rose last week, fueled by demand for refinancings as interest rates dropped, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 1.8 percent in the week ended April 26.

The MBA’s seasonally adjusted index of refinancing applications climbed 2.8 percent. But the gauge of loan requests for home purchases, a leading indicator of home sales, slipped 1.4 percent…..”

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Pending Home Sales Beat Expectations

“The March reading of pending home sales is out.

Sales jumped 1.5% from last month.  Economists were looking for a 1.0% gain.

However, February’s reading was revised down to -1.0% from an initial reading of -0.4%…”

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New Home Prices Rise in March Helping to Further China’s Property Rebound

China’s property rebound gathered pace in March as new home prices in the southern city of Guangzhou jumped the most in more than two years, underscoring concerns that a bubble may be building.

Guangzhou prices rose 11.1 percent from a year earlier while those in Beijing climbed 8.6 percent and Shanghai posted a 6.4 percent increase, the National Bureau of Statistics said in a statement today, all showing the biggest gains since January 2011 when the government changed its methodology for the data. Prices rose in 68 of 70 cities tracked by the government, the most since September 2011….”

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HARP To Be Extended for Two More Years

“The federal regulator for Fannie Mae FNMA -6.79% and Freddie Mac FMCC -9.09%will extend a popular refinancing program for two more years.

The Home Affordable Refinance Program, or HARP, allows homeowners with loans backed by the mortgage-finance companies to refinance even if they don’t have any equity. So far, more than two million homeowners have refinanced under the program. HARP had been set to expire at the end of this year, but the Federal Housing Finance Agency said Thursday that the program would now run through 2015.

“We are extending the program so more underwater borrowers can benefit from lower interest rates,” said Edward DeMarco, the acting director of the FHFA.

The Obama administration rolled out HARP in early 2009, and the program was initially set to end on June 10, 2010. In addition to extending the end date of HARP several times, the program has undergone a series of overhauls in a bid to reach more borrowers amid disappointing initial results….”

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RealtyTrac: US Home Repossessions Fell in March

“LOS ANGELES (AP) — The number of U.S. homes repossessed by lenders last month fell to the lowest level in more than five years, the latest evidence that the nation’s foreclosure crisis is abating amid an improving housing market.

While some states still saw increases in homes taken back by banks, nationally home repossessions fell 3 percent in March from the previous month and were down 21 percent from a year earlier,foreclosure listing firm RealtyTrac Inc. said Thursday.

Thirty-four states posted annual declines in completed foreclosures. Among those bucking that trend: Arkansas, Maryland, Washington and Pennsylvania.

All told, lenders repossessed 43,597 homes last month, the lowest level since September 2007.

At the current monthly pace, completed foreclosures will total roughly 550,000 this year, down from 671,000 last year, RealtyTrac said.

An uptick in homes that entered the foreclosure process last month, however, may end up pushing that total to 600,000, said Daren Blomquist, a vice president at RealtyTrac.

Several factors are contributing to the decline in completed foreclosures: Steady job growth and ultra-low mortgage rates are helping the once-battered housing market recover, driving demand for homes and prices upward.

Higher home values help restore equity to homeowners, which can help those at risk of foreclosureby improving their chances of refinancing their mortgage to a lower payment or place them in a better position to sell their home.

Meanwhile, states like California, Nevada and others have passed laws to increase homeowners’ protections from foreclosure. Those laws have effectively delayed the pace of homes entering the foreclosure process, which has helped to thin the pipeline of completed foreclosures in those states.

Even so, the number of foreclosure starts, or homes that entered the foreclosure process, edged higher for the second month in a row in March….”

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