Category Archives: Investing

FHFA: Home prices continue climbing in first quarter

Home prices rose during each month of the first quarter, continuing a climb that began in the early part of this decade, a new report from the Federal Housing Finance Agency showed.

The FHFA’s House Price Index for March, which is the most recent data available, showed that seasonally adjusted monthly index for March was up 0.6% from February.

Overall, house prices rose 1.4% during the first quarter of 2017, the FHFA report showed. On a year-over-year basis, house prices rose 6% from the first quarter of 2016 to the first quarter of 2017.

“The steep, multi-year rise in U.S. home prices continued in the first quarter,” FHFA Deputy Chief Economist Andrew Leventis said.

“Mortgage rates during the quarter remained slightly elevated relative to most of last year, but demand for homes remained very strong,” Leventis added. “With housing inventories still languishing at extremely low levels, the strong demand led to another exceptionally large quarterly price increase.”

Low inventory is also a concern of the National Association of Realtors, as its latest existing home sales report showed that home sales fell in April and homes flew off the market at a rate not seen since 2011.

The FHFA report also showed that home prices rose in 48 states and the District of Columbia between the first quarter of 2016 and the first quarter of 2017. 

FHFA monthly home price index March 2017

(Click the image to enlarge. Image courtesy of the FHFA.)

According to the FHFA report, the top five areas in annual appreciation were: District of Columbia at 13.9% Colorado at 10.7%; Idaho at 10.3%; Washington at 10.2%; and New Hampshire at 9.5%.

The FHFA report also showed that among the 100 largest metropolitan areas in the U.S., the annual price increase in Grand Rapids-Wyoming, Michigan was the highest in the nation, at 13.7%.

Prices were weakest in San Francisco-Redwood City-South San Francisco, California, where prices fell by 2.5%.

Of the nine census divisions, the Pacific division showed the strongest increase in the first quarter, with a 2% quarterly increase and a 7.7% increase since the first quarter of 2016, the FHFA report showed. 

Additionally, the report showed that house price appreciation was weakest in the Middle Atlantic division, where prices rose by just 1% from the last quarter.

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Fannie Mae rolls out Healthier Housing Rewards for multifamily properties

Fannie Mae this week rolled out a new program designed to boost the development of healthy living options for residents of affordable, multifamily rental properties.

The program, called Healthy Housing Rewards, is an initiative that targets the developers and offers them an incentive to include healthy design features for newly constructed or rehabilitated affordable, multifamily rental properties.

In the first phase of the program, Fannie Mae will provide borrowers with a price break if they include design features that “improve air quality, encourage physical activity, and incorporate common space, community gardens, and playgrounds into newly constructed or rehabilitated affordable rental properties,” the government-sponsored enterprise said in a release.

“Incorporating healthy design features in affordable multifamily properties can have a big impact on residents – from increasing physical activity and social interaction to reducing environmental triggers for asthma,” said Jeffery Hayward, Executive Vice President, Multifamily, Fannie Mae.

“When we strengthen the connection between affordable housing and the long-term health and stability of the people and families who live there, we help create more sustainable communities across the country,” Hayward added. “This new initiative will provide a financial incentive to borrowers who invest in the health and stability of the people who live in their affordable housing properties.”

Fannie Mae said that the Healthy Housing Rewards program is one of several partnerships that Fannie Mae is pursuing as part of a corporate-wide effort called “Sustainable Communities Partnerships and Innovation.”

Fannie Mae said that it plans to provide below-market-rate financing for properties that meet its Healthy Housing standards.

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MBA: Mortgage application rollercoaster continues

Mortgage applications continued a trend this week, bouncing back after falling the week before, the newest data from the Mortgage Bankers Association shows.

The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 19, 2017, released Wednesday morning, shows that mortgage applications increased by 4.4% over the week prior, when applications dropped 4.1% from the week before that.

Per the MBA’s data, the Market Composite Index, a measure of mortgage loan application volume, increased 4.4% on a seasonally adjusted basis from one week earlier.

On an unadjusted basis, the Index increased 3% when compared with the previous week, while the Refinance Index increased 11% from the previous week, reaching its highest level since March 2017.

The share of refinance applications climbed back up in the last week, after the previous report showed that the refinance share of mortgage activity decreased to 41.1% of total applications, which is the lowest level since September 2008.

In this latest report, the refinance share of mortgage activity climbed back up to 43.9% of total applications from 41.1% the previous week. The adjustable-rate mortgage share of activity increased to 8.2% of total applications.

Broken down by loan product, the Federal Housing Administration’s share of total applications increased to 10.8% from 10.6% the week prior. The Veterans Affairs’ share of total applications decreased to 10.5% from 10.7% the week prior. The Department of Agriculture’s share of total applications remained unchanged at 0.8% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) fell to its lowest level since November 2016, 4.17%.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) also declined to its lowest level since November 2016, reaching 4.11%.

Additionally, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell from 4.11% from 4.07%, while the average contract interest rate for 15-year fixed-rate mortgages declined from 3.51% to 3.45%.  

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