Majority of Home Buyers Unaware of Down Payment Assistance Programs
Although there are hundreds of millions of dollars available for down payment assistance, 70 percent of U.S. adults are unaware of these programs for middle-income home buyers in their community, according to findings from the second annual America at Home survey commissioned by NeighborWorks America.
NeighborWorks organizations provided 6,000 people with more than $100 million in such assistance last year, and expect to make even more available this year.
Down payment assistance is especially helpful for home buyers who are unsure about affordability because of student loan debt.
C.A.R. offers a resource to help buyers find down payment assistance programs. In California alone, there are more than 300 homeownership programs available, including direct down payment and closing costs assistance as well as mortgage credits of up to $2,000 for the life of the loan. Visit downpayment.car.org to see if your clients qualify.
C.A.R. applauds Fannie Mae and Freddie Mac’s 3 percent down payment option
C.A.R. recently issued the following statement in response to Fannie Mae and Freddie Mac’s move to lower down payments to as little as 3 percent for first-time home buyers and permit refinancing borrowers to reduce equity to 3 percent to cover closing costs.
“C.A.R. commends Fannie Mae and Freddie Mac for expanding access to credit for well-qualified first-time buyers struggling to enter the housing market,” said C.A.R. President Chris Kutzkey. “Saving enough money for a down payment is the biggest hurdle for most first-time home buyers, but this program will help remove that barrier, and at the same time, lenders can be assured they are providing a safe, affordable loan to creditworthy borrowers.”
Mortgage Delinquency Rate Continues to Drop Across All Age Groups
The mortgage delinquency rate (the rate of borrowers 60 days or more delinquent on their mortgages) declined for the 10th consecutive quarter to 3.46 percent at the end of Q2 2014, according to TransUnion’s latest mortgage report. The mortgage delinquency rate has declined nearly 20 percent in the last year (down from 4.32% in Q2 2013).
TransUnion data indicate that declines in the mortgage delinquency rate are occurring across all age groups. The youngest mortgage borrowers, those below the age of 30, have both the lowest mortgage delinquency rate (2.34 percent), and have experienced the steepest decline in the last year (down 28.6 percent). However, this age group also represents a small share of all mortgage accounts — 4.16 percent.
All 50 states and the District of Columbia experienced declines in their mortgage delinquency rates between Q2 2013 and Q2 2014. Most major markets also saw yearly drops in their mortgage delinquency rates, including: San Francisco (-29.3%), Phoenix (-28.7%), Miami (-26.7%), Los Angeles (-24.1%), and Chicago (-20.6%).
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||Buying Twice as Affordable as Renting
It’s more affordable to buy a home now in most U.S. metros than it was 15 years ago, according to an analysis of third quarter income and home value data by Zillow. Renters, however, continue to pay an increasing share of their income to their landlords as rents soar and incomes remain flat.
On average, U.S. home buyers making the nation’s median income and purchasing the typical U.S. home spend 15.3 percent of their income on their monthly house payment, down from the historical norm of 22.1 percent during the pre-bubble period from 1985 to 1999. On average, U.S. renters spent 29.9 percent of their monthly income on rent in the third quarter of 2014, up from 24.9 percent historically.
Continuously rising rents across the country could drive more people into the home-buying market, but they also make it more difficult for first-time buyers to save for a down payment.
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Webinar: Make C.A.R. Content Work for Your Marketing
Join C.A.R.’s Chief Technology Officer, Josh Sharfman, on Thursday, Dec. 18, at 10 a.m., for the second webinar in the Tech & Tools in 30 webinar series, “Making C.A.R. Content Work for Your Marketing.”
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Freddie Mac Announces Holiday Eviction Moratorium
Freddie Mac recently announced a nationwide suspension of eviction lockouts between Dec. 17, 2014, and Jan. 2, 2015. The moratorium applies to all foreclosed occupied single family homes and 2-4 unit properties that had Freddie Mac owned-or guaranteed mortgages.
Important facts about the moratorium:
- The holiday suspension will apply to eviction lockouts on Freddie Mac-owned REO homes but will not affect other pre- or post-foreclosure activities.
- Companies managing local evictions for Freddie Mac may continue to file documentation as needed during the suspension period.
NMLS License Renewal Reminder! CalBRE requires MLOs to take 8-hours of NMLS-approved CE before 12/31/14. Learn the new rules of the Consumer Protection Act before it is too late! Learn More.
CoreLogic Reports 41,000 Completed Foreclosures in October
According to CoreLogic’s October National Foreclosure Report, for the month of October 2014, there were 41,000 completed foreclosures nationally, down from 55,000 in October 2013, a year-over-year decrease of 26.4 percent and down 65 percent from the peak of completed foreclosures in September 2010. On a month-over-month basis, completed foreclosures were down by 34.1 percent from the 62,000 reported in September 2014. As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
As of October 2014, approximately 605,000 homes nationally were in some stage of foreclosure, known as the foreclosure inventory, compared to 875,000 in October 2013, a year-over-year decrease of 30.9 percent and representing 36 consecutive months of year-over-year declines. The foreclosure inventory as of October 2014 made up 1.6 percent of all homes with a mortgage, compared to 2.2 percent in October 2013. On a month-over-month basis, the foreclosure inventory was down 2.1 percent from September 2014. The current foreclosure rate of 1.6 percent is the lowest inventory level since May 2008.
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Calif. median home price: October 2014:
- California: $450,620
- Calif. highest median home price by region/county October 2014:
San Mateo, $1.07 million
- Calif. lowest median home price by region/county October 2014:
Calif. Pending Home Sales Index:
October 2014: Increased 2 percent from 102.6 in September to 104.6 in October.
Calif. Traditional Housing Affordability Index: Second Quarter 2014: 30 percent (Source: C.A.R.)
Mortgage rates: Week ending 12/4/2014 (Source: Freddie Mac)
- 30-yr. fixed: 3.89 % fees/points: 0.5%
- 15-yr. fixed: 3.10% fees/points: 0.5%
- 1-yr. adjustable: 2.41% Fees/points: 0.4%