Mortgage applications to purchase homes increased 14.4 percent last week on an adjusted basis compared to the previous week, according to the Mortgage Bankers Association weekly survey.
The unadjusted Purchase Index increased 9.6 percent compared with the previous week and was down 7.4 percent compared to the same week a year ago.
On a seasonally adjusted basis, this is the highest Purchase Index recorded since the week ending May 7, 2010 in the middle of the tax-rebate push.
“The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation,” said Michael Fratantoni, the association’s vice president of research and economics.
“The level of purchase applications on a seasonally adjusted basis is now at its highest level since the expiration of the homebuyer tax credit,” Fratantoni concluded.
Interest rates were mixed, with 30-year fixed-rate mortgages rising to 4.50 percent from 4.46 percent and 15-year fixed-rate mortgages decreasing to 3.83 percent from 3.87 percent.
Source: Mortgage Bankers Association (11/24/2010)
Wednesday, November 24, 2010
7 Trends That Will Drive the Future of Housing
Hanley-Wood's ProSalesOnline.com identifies seven trends that the magazine’s editors believe will have the biggest impact on housing in 2011.
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
Today's Business and The Economy
Saw this quote and thought it was quite befitting...
Every morning in Africa, a Gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a Lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death.
It doesn't matter whether you are a Lion or a Gazelle... when the sun comes up, you'd better be running.
Every morning in Africa, a Gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a Lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death.
It doesn't matter whether you are a Lion or a Gazelle... when the sun comes up, you'd better be running.
Why Mortgage Lenders Want Tax Returns
Bankrate.com, By Marcie Geffner
September 27, 2010
Shopping for a home mortgage loan? Prepare to hand over real proof of your taxable income.
During the housing boom, lenders rarely required borrowers to provide copies of federal tax returns.
But today, lenders often ask borrowers to turn over entire tax returns, according to Brad Blackwell, national sales manager for Wells Fargo Home Mortgage.
Often people will think they can bring in the first two pages of the tax return, and what they need to bring is the full tax return and all schedules because a person's full income picture is contained in the entire set of documents, not just the first two pages," he says.
Borrowers generally also will be required to sign a Form 4506-T, which allows the lender to retrieve a tax transcript from the Internal Revenue Service.
Joe Metzler, a mortgage specialist at Mortgages Unlimited in St. Paul, Minn., says lenders use the 4506-T tax transcript to compare the borrower's W-2s to his or her reported income. If the numbers match, all is well. If not, the lender will dig deeper.
Why the sudden interest in borrowers' tax returns? The short answer is lenders are looking for income irregularities and evidence of loan fraud.
In most cases, "all aspects of the tax return (will be) examined to determine what the borrower's income is," Blackwell says.
That means the lender not only will look at reported income, but also at other items such as:
Unreimbursed employee business expenses. These so-called "2106 business expenses" typically are subtracted from income, according to Julie Miller, a sales manager at Prospect Mortgage in Irvine, Calif.
Examples include uniforms, union dues, mileage, expenses related to a cell phone used for business, marketing costs and training costs.
"If somebody makes $70,000 to $80,000 a year, but writes off $20,000 in business expenses, that is allowing them to reduce their taxable income, but we have to subtract that for qualifying purposes," she says.
Rental property income. This income must be documented and shown on the tax return, unless the property was purchased in the current calendar year. In that case, the rent must appear on consecutive monthly bank statements, Miller says.
"If you take in $1,000 a month in (rent), but you have $900 a month in expenses for owning the property, then you really only have $100 a month in positive rental income," she says. "And if you take in $1,000 a month, and you don't report that on your tax returns, you can't use that income at all."
Business losses. These include losses incurred by a spouse's business, according to Metzler.
For example, suppose one spouse earns $100,000 per year as an employee. The other spouse has a business that generated a $40,000 loss shown as a write-off on the couple's tax return. The lender will subtract $40,000 from $100,000 to yield a combined taxable income of $60,000. That might not be enough income to qualify for as large a loan as the borrower wanted.
Depreciation expenses. On the flip side, depreciation expense taken on a home office, business equipment or other asset could increase a borrower's loan-qualifying income, according to Blackwell.
"I want to stress 'may,'" Blackwell says. "An underwriter may be able to add that back."
Capital gains. These also may be counted as income -- or not.
"If the capital gain is a one-time event, we probably won't count it as income because the borrower can't show it to be sustainable," Blackwell says.
Too many tax deductions
Lenders' scrutiny of tax returns can present a big challenge for borrowers who are self-employed, according to Peter Ogilvie, president of First Residential Mortgage Corp. in Santa Cruz, Calif.
"Many self-employed borrowers -- real estate agents to shoe store owners -- are having a really difficult time getting loans because their accountants and bookkeepers are trained to minimize their income to save them on taxes," he says.
The solution isn't easy: Taxpayers need to "bite the bullet," to use Ogilvie's expression, and build up their taxable income for two years before they can qualify for a loan. Some may have to forgo deductions to which they believe they are entitled and pay more income tax so they can show more income on their tax return to qualify for a loan.
Borrowers who try to amend a prior year's tax return to show more income after the fact may be disappointed to learn this strategy won't work. Instead, an amended tax return can trigger a loan denial, according to Metzler.
"The very creative loan officer would say, 'Go back and amend your tax return to show some income, so you can qualify,'" he says. "So now there is a new rule that says you cannot qualify for a mortgage if your tax return has been amended."
September 27, 2010
Shopping for a home mortgage loan? Prepare to hand over real proof of your taxable income.
During the housing boom, lenders rarely required borrowers to provide copies of federal tax returns.
But today, lenders often ask borrowers to turn over entire tax returns, according to Brad Blackwell, national sales manager for Wells Fargo Home Mortgage.
Often people will think they can bring in the first two pages of the tax return, and what they need to bring is the full tax return and all schedules because a person's full income picture is contained in the entire set of documents, not just the first two pages," he says.
Borrowers generally also will be required to sign a Form 4506-T, which allows the lender to retrieve a tax transcript from the Internal Revenue Service.
Joe Metzler, a mortgage specialist at Mortgages Unlimited in St. Paul, Minn., says lenders use the 4506-T tax transcript to compare the borrower's W-2s to his or her reported income. If the numbers match, all is well. If not, the lender will dig deeper.
Why the sudden interest in borrowers' tax returns? The short answer is lenders are looking for income irregularities and evidence of loan fraud.
In most cases, "all aspects of the tax return (will be) examined to determine what the borrower's income is," Blackwell says.
That means the lender not only will look at reported income, but also at other items such as:
Unreimbursed employee business expenses. These so-called "2106 business expenses" typically are subtracted from income, according to Julie Miller, a sales manager at Prospect Mortgage in Irvine, Calif.
Examples include uniforms, union dues, mileage, expenses related to a cell phone used for business, marketing costs and training costs.
"If somebody makes $70,000 to $80,000 a year, but writes off $20,000 in business expenses, that is allowing them to reduce their taxable income, but we have to subtract that for qualifying purposes," she says.
Rental property income. This income must be documented and shown on the tax return, unless the property was purchased in the current calendar year. In that case, the rent must appear on consecutive monthly bank statements, Miller says.
"If you take in $1,000 a month in (rent), but you have $900 a month in expenses for owning the property, then you really only have $100 a month in positive rental income," she says. "And if you take in $1,000 a month, and you don't report that on your tax returns, you can't use that income at all."
Business losses. These include losses incurred by a spouse's business, according to Metzler.
For example, suppose one spouse earns $100,000 per year as an employee. The other spouse has a business that generated a $40,000 loss shown as a write-off on the couple's tax return. The lender will subtract $40,000 from $100,000 to yield a combined taxable income of $60,000. That might not be enough income to qualify for as large a loan as the borrower wanted.
Depreciation expenses. On the flip side, depreciation expense taken on a home office, business equipment or other asset could increase a borrower's loan-qualifying income, according to Blackwell.
"I want to stress 'may,'" Blackwell says. "An underwriter may be able to add that back."
Capital gains. These also may be counted as income -- or not.
"If the capital gain is a one-time event, we probably won't count it as income because the borrower can't show it to be sustainable," Blackwell says.
Too many tax deductions
Lenders' scrutiny of tax returns can present a big challenge for borrowers who are self-employed, according to Peter Ogilvie, president of First Residential Mortgage Corp. in Santa Cruz, Calif.
"Many self-employed borrowers -- real estate agents to shoe store owners -- are having a really difficult time getting loans because their accountants and bookkeepers are trained to minimize their income to save them on taxes," he says.
The solution isn't easy: Taxpayers need to "bite the bullet," to use Ogilvie's expression, and build up their taxable income for two years before they can qualify for a loan. Some may have to forgo deductions to which they believe they are entitled and pay more income tax so they can show more income on their tax return to qualify for a loan.
Borrowers who try to amend a prior year's tax return to show more income after the fact may be disappointed to learn this strategy won't work. Instead, an amended tax return can trigger a loan denial, according to Metzler.
"The very creative loan officer would say, 'Go back and amend your tax return to show some income, so you can qualify,'" he says. "So now there is a new rule that says you cannot qualify for a mortgage if your tax return has been amended."
Good USA Today Article, Stable Home Prices, Low Rates Could Gas Economy
USA Today, By Stephanie Armour
November 12, 2010
Mortgage rates are hitting another record low just as home prices are firming in more parts of the country, two trends that could help boost the economy.
Potential recovery fuel:
*Rates on 30-year fixed loans averaged 4.17%, down from 4.24% a week ago, Freddie Mac reported Thursday. They've been below 5% since early May.
*Median home prices in the third quarter were up from last year's third period in 77 of 155 metro areas, the National Association of Realtors reports. In 2009's third quarter, only 30 areas showed year- over-year growth.
The improvements in prices came despite a sharp drop-off in sales after the federal home buyers' tax credit expired in the spring.
Low mortgage rates, and at least flat home prices, could give more homeowners the confidence to refinance. If they spend some of what they save on their mortgages, that strengthens the economy.
"In most markets, the crash is over and stability is beginning," says Joel Naroff at Naroff Economic Advisors. "Realtors are saying it isn't great, but it's better than last year. If refinancings get going, that will help consumer confidence."
Prices are rising in areas where foreclosures have not hit very hard, Naroff says.
Still, the housing market is a long way from easy street. Median home prices fell in almost as many metro areas as they rose in NAR's survey. The national median, $177,900, was down 0.2% from 2009's third quarter.
Foreclosures and short sales -- where homes are sold for less than the mortgage balance -- were 34% of third-quarter sales, up from 30% a year ago.
Foreclosures tapered off last month as lenders announced temporary suspensions in the face of legal challenges. But they're likely to accelerate in the first quarter, says Rick Sharga of RealtyTrac.
Mortgage rates follow 10-year Treasury bond yields, and they've been falling since summer when the Federal Reserve began hinting it would buy long-term Treasury bonds to drive down long-term rates and stimulate the economy. The Fed said Nov. 3 it would buy $600 billion in Treasuries by June 30.
Mark Zandi, chief economist of Moody's Analytics, says lower mortgage rates should increase refinancings but won't forestall further price declines. Many homeowners still aren't benefiting from low rates, he says, because they have spotty credit or little equity in their homes.
"The housing market is still really fragile," Zandi says.
November 12, 2010
Mortgage rates are hitting another record low just as home prices are firming in more parts of the country, two trends that could help boost the economy.
Potential recovery fuel:
*Rates on 30-year fixed loans averaged 4.17%, down from 4.24% a week ago, Freddie Mac reported Thursday. They've been below 5% since early May.
*Median home prices in the third quarter were up from last year's third period in 77 of 155 metro areas, the National Association of Realtors reports. In 2009's third quarter, only 30 areas showed year- over-year growth.
The improvements in prices came despite a sharp drop-off in sales after the federal home buyers' tax credit expired in the spring.
Low mortgage rates, and at least flat home prices, could give more homeowners the confidence to refinance. If they spend some of what they save on their mortgages, that strengthens the economy.
"In most markets, the crash is over and stability is beginning," says Joel Naroff at Naroff Economic Advisors. "Realtors are saying it isn't great, but it's better than last year. If refinancings get going, that will help consumer confidence."
Prices are rising in areas where foreclosures have not hit very hard, Naroff says.
Still, the housing market is a long way from easy street. Median home prices fell in almost as many metro areas as they rose in NAR's survey. The national median, $177,900, was down 0.2% from 2009's third quarter.
Foreclosures and short sales -- where homes are sold for less than the mortgage balance -- were 34% of third-quarter sales, up from 30% a year ago.
Foreclosures tapered off last month as lenders announced temporary suspensions in the face of legal challenges. But they're likely to accelerate in the first quarter, says Rick Sharga of RealtyTrac.
Mortgage rates follow 10-year Treasury bond yields, and they've been falling since summer when the Federal Reserve began hinting it would buy long-term Treasury bonds to drive down long-term rates and stimulate the economy. The Fed said Nov. 3 it would buy $600 billion in Treasuries by June 30.
Mark Zandi, chief economist of Moody's Analytics, says lower mortgage rates should increase refinancings but won't forestall further price declines. Many homeowners still aren't benefiting from low rates, he says, because they have spotty credit or little equity in their homes.
"The housing market is still really fragile," Zandi says.
Sunday, November 14, 2010
Sun may set on child’s treehouse
Golden cites safety, illegal construction
By Electa Draper The Denver Post
GOLDEN» Monday is the showdown: A confrontation the creator of a one-of-a-kind treehouse is billing the “Battle of Luna’s Blue Moon Lagoon.”
“We’re going to get confrontational for art,” said Duncan Foss, a sculptor who considers the kids’ hangout he’s constructed for his daughter over a decade to be an art installation.
The city of Golden’s chief building official, Gerry George, begs to differ.
He considers the rambling series of bright blue decks and elevated boardwalks “illegal structures,” not “art.”
The planking wends down a short cliff behind the Foss backyard, past the deck with its fish-filled pond, and still lower to a “hammock hideout” hut nestled among slender trees at the edge of a field.
“She was in diapers when I started building this,” Foss said.
His daughter, Azulluna “Luna” Sincere, is now 11 and is also an artist — a painter.
Their backyard project began as a pirate ship and later evolved into the Tiki Village, which partially burned down in late December because of an exploding tiki torch.
The city first told him to take the whole thing down shortly after the fire, Foss said. He said he’s since removed 80 percent of it, and Luna is now down to one hut.
“We compromised,” Foss said.
The “Blue Lagoon” decks are still replete with painted sharks and starfish, carved seahorses, shells, pink flamingo, nets, lanterns, potted palms and many a nautical flourish.
Over this mutiny-inspiring bounty waves a flag inscribed, “Don’t tread on me.”
Foss said George recently told him that his removal efforts weren’t enough, and if the rest of it wasn’t all gone by 4 p.m. Monday, the city would take action to tear it down.
Foss said he isn’t tearing it down.
“It’s really disturbing to me that it would all be gone,” said Luna, clutching her ferret Carmel while Kelly the dog and “pond guardian” sat at her feet.
“It’s so beautiful,” Luna said. “People can hang out and have fun here — good, old fun outside.”
The city has cited concerns about safety and lack of permits. Golden spokeswoman Karlyn Tilley said Saturday that the structures don’t meet code or safety standards.
She said the city has explained to Foss how to meet code, but he hasn't done so.
Foss said he believes his neighbors will stand beside him Monday. Neighborhood children hang out here in droves — adults, too.
“The world has enough vidiots — kids who only play indoors with video games,” Foss said. “There’s still a few kids with Tom Sawyer and Huck Finn childhoods.”
By Electa Draper The Denver Post
GOLDEN» Monday is the showdown: A confrontation the creator of a one-of-a-kind treehouse is billing the “Battle of Luna’s Blue Moon Lagoon.”
“We’re going to get confrontational for art,” said Duncan Foss, a sculptor who considers the kids’ hangout he’s constructed for his daughter over a decade to be an art installation.
The city of Golden’s chief building official, Gerry George, begs to differ.
He considers the rambling series of bright blue decks and elevated boardwalks “illegal structures,” not “art.”
The planking wends down a short cliff behind the Foss backyard, past the deck with its fish-filled pond, and still lower to a “hammock hideout” hut nestled among slender trees at the edge of a field.
“She was in diapers when I started building this,” Foss said.
His daughter, Azulluna “Luna” Sincere, is now 11 and is also an artist — a painter.
Their backyard project began as a pirate ship and later evolved into the Tiki Village, which partially burned down in late December because of an exploding tiki torch.
The city first told him to take the whole thing down shortly after the fire, Foss said. He said he’s since removed 80 percent of it, and Luna is now down to one hut.
“We compromised,” Foss said.
The “Blue Lagoon” decks are still replete with painted sharks and starfish, carved seahorses, shells, pink flamingo, nets, lanterns, potted palms and many a nautical flourish.
Over this mutiny-inspiring bounty waves a flag inscribed, “Don’t tread on me.”
Foss said George recently told him that his removal efforts weren’t enough, and if the rest of it wasn’t all gone by 4 p.m. Monday, the city would take action to tear it down.
Foss said he isn’t tearing it down.
“It’s really disturbing to me that it would all be gone,” said Luna, clutching her ferret Carmel while Kelly the dog and “pond guardian” sat at her feet.
“It’s so beautiful,” Luna said. “People can hang out and have fun here — good, old fun outside.”
The city has cited concerns about safety and lack of permits. Golden spokeswoman Karlyn Tilley said Saturday that the structures don’t meet code or safety standards.
She said the city has explained to Foss how to meet code, but he hasn't done so.
Foss said he believes his neighbors will stand beside him Monday. Neighborhood children hang out here in droves — adults, too.
“The world has enough vidiots — kids who only play indoors with video games,” Foss said. “There’s still a few kids with Tom Sawyer and Huck Finn childhoods.”
Metro-area apartment-vacancy rates hit 3-year low
Apartment vacancies in metro Denver fell to a
three-year low of 5.3 percent during the third quarter,
according to a report released Wednesday.
The highest vacancy rates were in Arapahoe
County, where rates fell year-over-year from 8.5
percent to 6.7 percent. Rates were lowest in the
Boulder-Broomfield area, where they fell from
5.5 percent a year ago to 3.5 percent during the
third quarter.
Vacancy rates in other counties were Adams,
4.4 percent; Denver, 5.3 percent; Douglas, 4.4 percent;
and Jefferson, 3.9 percent.
Rents increased for the third consecutive quarter,
averaging $913. All counties in the metro
area reported year-over-year increases in average
rents.
Average rents for all counties were: Adams,
$915; Arapahoe, $882; Boulder-Broomfield, $993;
Denver, $905; Douglas, $1,113; and Jefferson, $864.
The Denver Post; Denver Post file photo
three-year low of 5.3 percent during the third quarter,
according to a report released Wednesday.
The highest vacancy rates were in Arapahoe
County, where rates fell year-over-year from 8.5
percent to 6.7 percent. Rates were lowest in the
Boulder-Broomfield area, where they fell from
5.5 percent a year ago to 3.5 percent during the
third quarter.
Vacancy rates in other counties were Adams,
4.4 percent; Denver, 5.3 percent; Douglas, 4.4 percent;
and Jefferson, 3.9 percent.
Rents increased for the third consecutive quarter,
averaging $913. All counties in the metro
area reported year-over-year increases in average
rents.
Average rents for all counties were: Adams,
$915; Arapahoe, $882; Boulder-Broomfield, $993;
Denver, $905; Douglas, $1,113; and Jefferson, $864.
The Denver Post; Denver Post file photo
Subscribe to:
Posts (Atom)
Posts
