Mortgage rates slip again this week, hit 4.62%

WASHINGTON (AP) – Dec. 20, 2018 – U.S. long-term mortgage rates slipped this week, reflecting the stock market decline and rush by investors to Treasury notes.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year, fixed-rate mortgage fell slightly to 4.62 percent from to 4.63 percent last week. Rates averaged 3.94 percent a year ago.

The rate on 15-year fixed-rate loans held at 4.07 percent for the second straight week, up from 3.38 percent a year ago.

Higher mortgage rates over the past year have caused home sales to drop. But mortgage rates have declined in recent weeks as fears about an economic slowdown have caused more investors to sell stocks and buy Treasury notes.

Amid the purchases, the interest on a 10-year Treasury has fallen from 3 percent to under 2.8 percent in the past month. Mortgage rates generally correspond with the interest charged on U.S. government debt.

Sam Khater, Freddie Mac’s chief economist, said that lower rates should help to boost home sales.

“Given the further drop in rates we’ve seen this month, we expect to see a modest rebound in home sales as well,” he said.

Copyright © 2018 The Associated Press, Josh Boak. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

HUD: 55-and-older community can’t ban disabled child

WASHINGTON – Dec. 19, 2018 – The U.S. Department of Housing and Urban Development (HUD) announced that Tamaron Association – which represents residents of a 55-and-older condominium development in Waldwick, New Jersey – will pay $9,000 under an Initial Decision and Consent Order resolving allegations that the association refused to sell a condo to a man with disabilities and his wife because the couple planned to have their adult, disabled daughter live with them.

The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities and from refusing to make reasonable accommodations in policies or practices.

“No family whose members have disabilities should be denied the reasonable accommodations they need to make a home for themselves,” says Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Hopefully, today’s ruling will remind homeowner associations of their obligations under the Fair Housing Act and encourage them to follow the law.”

Under the terms of the Consent Order, entered by a HUD administrative law judge, Tamaron Association will pay a civil penalty of $9,000 to the United States, undergo fair housing training, and make changes to the associations’ bylaws as they relate to reasonable accommodations.

The wife, now a widow, is pursuing claims against Tamaron Association in New Jersey State Court. Tamaron Association denies that it discriminated against the family.

“HUD is committed to ensuring that housing providers, including homeowner associations, do not discriminate against individuals with disabilities,” said Paul Compton, HUD’s General Counsel. “This Consent Decree is a reminder to housing providers that making reasonable accommodations for persons with disabilities is an essential part of their legal obligation under the Fair Housing Act.”

FHA loan limits increased for 2019

WASHINGTON – Dec. 17, 2018 – The Federal Housing Administration (FHA) announced the agency’s new schedule of loan limits for 2019, with most areas in the country to experience an increase in loan limits in the coming year. These loan limits are effective for FHA case numbers assigned on or after Jan. 1, 2019 and mirror earlier limits announced by the Federal Housing Finance Administration (FHFA).

In high-cost areas of the country, FHA’s loan limit ceiling will increase to $726,525 from $679,650. FHA will also increase its floor to $314,827 from $294,515.

FHA says that increases in median housing prices required changes to FHA’s floor and ceiling limits, which are tied to the Federal Housing Finance Agency (FHFA)’s increase in the conventional mortgage loan limit for 2019.

Overall, the maximum loan limits for FHA forward mortgages will rise in 3,053 U.S. counties. In 181 counties, FHA’s loan limits will remain unchanged.

By statute, the median home price for a Metropolitan Statistical Area (MSA) is based on the county within the MSA having the highest median price. HUD has used the highest median price point for any year since the enactment of the Housing and Economic Recovery Act (HERA).

The cap for reverse mortgages – FHA-insured Home Equity Conversion Mortgages (HECMs) – will increase to $726,525 from $679,650. FHA’s current regulations implementing the National Housing Act’s HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county.

The National Housing Act, as amended by HERA, requires FHA to establish floor and ceiling loan limits based on the loan limit set by FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. FHA’s 2019 minimum national loan limit, or floor, of $314,827 is set at 65 percent of the national conforming loan limit of $484,350. This floor applies to those areas where 115 percent of the median home price is less than the floor limit.

Any areas where the loan limit exceeds this ‘floor’ is considered a high-cost area, and HERA requires FHA to set its maximum loan limit ‘ceiling’ for high-cost areas at 150 percent ($726,525) of the national conforming limit

More homes sell for less than asking price

MIAMI – Dec. 13, 2018 – According to the National Knock Deals Forecast, uses data for both predictive and historical analyses from ATTOM Data Solutions, the percent of home sellers who eventually sold for less-than-asking price in 2018 was about 2 in 3 (62 percent).

Of those homes that sold for less than asking price, six out of 10 are in the South, with Miami at No. 1, followed by New Orleans and Chicago.

As home values rise more slowly, Knock predicts that the trend of lower sale prices will continue into 2019, when 77 percent of on-the-market listings will sell for less than asking price, and half of the “top 10 markets for deals” will be in the South.

“Knock has developed six predictive algorithms to determine how much our Home Trade-in customers’ homes will sell for and when,” says Sean Black, co-founder and CEO of Knock. “By applying these algorithms … we hope to help more home buyers find and act on the best deals, and increase overall market fluidity.”

Knock analyzed on-market listings in the largest U.S. MSAs to determine the markets with the highest percentage of homes predicted to sell below their original list prices, what Knock defines as a “deal.” In November, Knock said that 80 percent of U.S. homes sold within 4 percent of its predicted final sale price, and 50 percent sold within 2 percent of the predicted final sale price.

The number one predicted MSA for deals heading into 2019, Miami, also saw the highest rate of deals in 2018.

“While there’s no denying that home prices have been steadily on the rise, list prices are clearly increasing above realistic levels, corroborated by the study’s findings that over 60 percent of homes sold well below their original list prices in 2018,” says Paul Habibi, economic advisor to Knock and Lecturer at UCLA Anderson School of Management.

The tendency to overprice

While the rate of home price increases has begun to slow, it’s still up 5.1 percent year-over-year, according to the S&P CoreLogic Case-Shiller Indices. As prices have gone up, so have home sellers’ expectations of their home values, and there’s a tendency to list a home for a bit more than recent nearby sales.

When sellers price homes aggressively, however, they can sometimes end up selling it not just below their original list price, but also below market value because buyers wonder about a home that has been on the market for a longer period of time.

For homes sold in November, Knock found that 92 percent of listings that had been on the market two months or more sold below their list prices – 22 percent more than the rate of all listings that sold below their original list prices in November. On average, these homes sold for 1.5 percent less than the overall market.

In Miami, for example: 76 percent of listings sold at least 2 percent below original list prices, compared to 3 percent of listings selling 2 percent or more above original list prices. The ratios are different in a market like San Francisco, where 58 percent of listings sold at least 2 percent above original list prices. But given that the majority of all U.S. listings still sold 2 percent or more below list price, underpriced markets appear to be the exception rather than the norm.

Based on predictions of all listings that hit the market in the past six weeks, five out of the 10 top markets for deals are in the Southern half of the U.S. Miami continues to top the list, with Houston, Texas, Jacksonville, Fla., New Orleans, La. and Tampa, Fla. also having some of the highest predicted rates of deals heading into 2019.

“Given that the slowdown of home price increases is just beginning to take hold, we can expect home sellers to continue to set their original list prices on the higher end, which has the potential to result in greater deals for home buyers,” Knock says it a news release. “Particularly as we head into January, which has historically been one of the best months for deals, the combination of seasonality and the slowing market make the perfect recipe for the increased rate of deals.”