Subprime Mortgages Making a Comeback with New Name

Yes, you read that headline right….subprime mortgages are making a comeback and they have a new name;  “nonprime.”  Realty Check’s Diana Olick is reporting that although the subprime mortgage industry vanished after the so-called Great Recession it is now being reinvented as the “nonprime” market.  In addition, she reports that Carrington Mortgage is now offering mortgages to borrowers with “less-than-perfect credit” and that demand from both borrowers & investors is exceeding expectations.  Indeed…..things might get weird, again…buckle up.

“California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.”

Click here to read the full story on CNBC’s Realty Check.

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Property Taxes by U.S. County

U.S. Property Taxes Levied on Single Family Homes in 2017 increased 6% to More Than $293 Billion,according to a recent report by ATTOM Data Solutions.  The conclusion was part of their annual property tax analysis covering more than 86 million single family homes across the U.S.  It shows that, in 2017, property taxes levied on single family homes totaled $293.4 billion.  This figures is 6% higher than 2016 and averages out to nearly $4k per home (an effective rate of 1.17%).  ATTOM’s report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels along with estimated market values of single family homes calculated using an automated valuation model (AVM). The effective tax rate was the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.

Key takeaways:

  • Average Property Tax Was $3,399, Up 3% and Effective Tax Rate of 1.17%
  • Highest Effective Tax Rates in New Jersey, Illinois, Vermont, Texas, New Hampshire
  • Average Property Taxes Nearly Twice as High in Politically Blue Counties as in Red Counties

Click on the map to view it interactively.

Click here to read the full report at attomdata.com.

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Are Rising Home Prices Pushing Borrowers Deeper in Debt?

BY  ON APRIL 12, 2018

Are rising home prices making homeownership more difficult for many potential buyers?  According to a recent article in the Wall Street Journal (reprinted on Realtor.com), roughly one in five conventional mortgage loans made this past winter went to borrowers spending more than 45% of their monthly incomes on mortgage payments and other debts, the highest proportion since the housing crisis.  In addition, they report economists are saying rising debt levels are a symptom of a market where home prices are sharply rising in relation to incomes, which they blame on a lack of supply.

“Economists warn that lenders must tread carefully in making credit more available, given the role easy mortgages played in creating the last housing bubble. The share of new buyers with debt-to-income levels in the 46% to 50% range remains well below the peak of just under 37% registered in 2007, but is nearing the levels of 2004-05, the years leading up to the bubble, CoreLogic data show.”

The Wall Street Journal

Click here to read the full story on Realtor.com.

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Nearly 8% of Millennials Rely on Family to Help Pay for Housing

BY  ON APRIL 11, 2018

We’ve had numerous posts about millennials, that generation born between 1982-2004.  It’s a fast moving demographic with a set of rules seemingly all their own.  With that in mind, a new report from ApartmentList.com found that 7.9% of non-student millennials receive help from parents with their monthly rent, and 17.1% expect help with a down payment when purchasing a home.  They got their numbers from over 13k respondents to a survey they conduct annually.  They also cited a recent USA Today/Bank of America poll where 40% of millennials received help from parents with everyday expenses, including rent, child care, phone bills and car payments.  Indeed….

“…Millennials face a housing market where rent and home prices have risen faster than incomes for decades. In cities such as Denver and Seattle, rents increased by over 70 percent from 2005 to 2016, and starter homes are in high demand but short supply. In order to keep up with rent and home prices, many millennials receive financial support from families…”

Click here to read the full report on ApartmentList.com.

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Top 10 Affordable Small Towns

Logansport, Indiana (www.cityoflogansport.org)

Everybody loves a “small town,” right?  The charm, the people, you name it.  A lot of those notions are pure romanticized imagination but there are some aspects of small towns that make them attractive and therefore a great place to live and invest.  The folks over at Realtor.com put pen to paper and sent their folks out to find the best small towns in America where you can find affordable, good-looking housing, safe communities and fun things to do.   They looked at over 500 U.S. cities with populations between 10k-50k and came up with rankings based on items which  include:  median home price, unemployment rate, crime rate, overall housing costs and unique things (food, culture, activities, etc).  Indeed…

Here are Realtor.com’s top 10 “affordable” small towns:

  1. Logansport, IN
  2. Mexico, MO
  3. Guymon, OK
  4. Defiance, OH
  5. Albert Lea, MN
  6. Emporia, KS
  7. Lexington, NE
  8. Shewano, WI
  9. Dumas, TX
  10. Spencer, IA

Click here to read the full story on Realtor.com.

 

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Nearly 60k Tear-Down Housing Starts in 2017

According to the NAHB’s Eye on Housing Blog, nearly 6.8% of single-family homes started (close to 60k) in 2017 qualified as “tear-down starts.”  While this estimated number is down 10.2% from 2016, it is significant because of an ongoing shortage of new entry-level housing, more and more homes that might be considered starter are being knocked down due to the increased value in land.  A tear-down start is defined as a home built on a site where a previous structure or evidence of a previous structure was present before the new home was started.

“Between 2016 and 2017, the number of single-family tear-down starts remained relatively constant in the Midwest and South Census regions, nearly doubled in the Northeast, and declined by nearly 75 percent in the West (after increasing by more than 200 percent the year before).”

Click here to read the full report on the NAHB’s Eye on Housing.

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American Homeowner Equity Continues to Grow

According to recent data published by the Mortgage Bankers Association, U.S. homeowners are seeing a dramatic increase in the amount of equity in their homes while at the same time seeing a big decline in the amount borrowed through home equity lines of credit (HELOCs) – the lowest since 2008.  Using data from the Federal Reserve, they report that estimates owners’ equity is $14.1 trillion.  However, they do suggest that as interest rates rise, HELOC’s might become more attractive to potential borrowers seeking to preserve the low rate of interest in their current mortgage.

 

MBA Source: Federal Reserve

Click here to read the full story on MBA.org.

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Complete Guide to Electrical for the House Flipper

Anyone who has ever flipped a house knows about the potential perils of what kind of wiring the house has and when was it last upgraded.  Depending on the age & condition of the house it could be extremely costly or maybe just a cheap fix.  However, you have to know what to look for and what you’re looking at.  Today’s infographic from John K McCraw Electrical discusses common items in older homes, what you might need a permit for, and some general due diligence items when flipping a home.   Happy Friday!!

 

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Airbnb Income Can Now be Counted When Refinancing

A new initiative being developed by Airbnb, in partnership with Fannie Mae and several lenders, would allow homeowners wishing to refinance their homes the ability to count, as income, funds generated from their properties listed on the homesharing site.  According to a recent article on Curbed, Airbnb will supply a Proof of Income statement that hosts can now include when applying with Quicken Loans, Citizens Bank, and Better Mortgage in order to  refinance an existing mortgage.

“This initiative was developed with Fannie Mae to identify new ways of recognizing home-sharing income, making it possible for homeowners to maximize their investment to better reach their financial goals,” Airbnb said in a statement. “The project is part of Fannie Mae’s work to find new, innovative ways to expand the availability of affordable mortgage credit.”

Click here to read the full story on Curbed.com.

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Hempcrete Being Used as Building Material

In a recent episode of Real Estate News for Investors, Kathy Fettke talks about a corner of the hemp market that she says is “shaking up the construction industry.”  It’s called hempcrete (that’s right hemp + concrete) and it’s a green building material that dates back to the Roman times that is starting to become popular in the U.S.  And, before you ask, industrial hemp contains less than .03% THC (the stuff that gets you high)….marijuana typically contains between 5% and 35% THC.

“Not only is hemp used to create a concrete-like building material, it’s also a fast-growing, sustainable plant. Crops mature in about 4 months. The woody fibers are then mixed with water and lime. When they cure, the result is a strong, lightweight material that is resistant to fire, mold and bugs. It’s also breathable and non-toxic with no off-gassing, and provides exceptional insulation.”

Click here to read the transcript on RealWeathNetwork.com.

 

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