CoreLogic: More than 1 million homeowners regained equity in 2014

5.4M properties still underwater as of 4Q14

Some 1.2 million borrowers regained equity in 2014, bringing the total number of mortgaged residential properties with equity at the end of Q4 2014 to approximately 44.5 million or 89% of all mortgaged properties, according to CoreLogic (CLGX).

Nationwide, borrower equity increased year over year by $656 billion in 4Q14. The CoreLogic analysis also indicates approximately 172,000 U.S. homes slipped into negative equity in the fourth quarter of 2014 from the third quarter 2014, increasing the total number of mortgaged residential properties with negative equity to 5.4 million, or 10.8% of all mortgaged properties.

This compares to 5.2 million homes, or 10.4%, that were reported with negative equity in Q3 2014, a quarter-over-quarter increase of 3.3%. Compared to 6.6 million homes, or 13.4%, reported for Q4 2013, the number of underwater homes has decreased year over year by 1.2 million or 18.9%.

“The share of homeowners that had negative equity increased slightly in the fourth quarter of 2014, reflecting the typical weakness in home values during the final quarter of the year,” said Frank Nothaft, chief economist for CoreLogic. “Our CoreLogic HPI dipped 0.7% from September to December, and the% of owners ‘underwater’ increased to 10.8%. However, from December-to-December, the CoreLogic index was up 4.8%, and the negative equity share fell by 2.6 percentage points.”

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

For the homes in negative equity status, the national aggregate value of negative equity was $349 billion at the end of Q4 2014. Negative equity value increased approximately $7 billion from $341.8 billion in Q3 2014 to $348.8 billion in Q4 2014.

On a year-over-year basis, however, the value of negative equity declined overall from $403 billion in Q4 2013, representing a decrease of 13.4% in 12 months.

Of the 49.9 million residential properties with a mortgage, approximately 10 million, or 20%, have less than 20% equity (referred to as “under-equitied”) and 1.4 million of those have less than 5-percent equity (referred to as near-negative equity). Borrowers who are “under-equitied” may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall. In contrast, if home prices rose by as little as 5%, an additional 1 million homeowners now in negative equity would regain equity.

“Negative equity continued to be a serious issue for the housing market and the U.S. economy at the end of 2014 with 5.4 million homeowners still ‘underwater’,” said Anand Nallathambi, president and CEO of CoreLogic. “We expect the situation to improve over the course of  2015. We project that the CoreLogic Home Price Index will rise 5% in 2015, which will lift about 1 million homeowners out of negative equity.”

Here are some highlights:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 24.2%; followed by Florida (23.2%); Arizona (18.7%); Illinois (16.2%) and Rhode Island (15.8%). These top five states combined account for 31.7% of negative equity in the United States.
  • Texas had the highest percentage of mortgaged residential properties in an equity position at 97.4%, followed by Alaska (97.2%), Montana (97.0%), Hawaii (96.3%) and North Dakota (96.2%).
  • Of the 25 largest Core Based Statistical Areas (CBSAs) based on mortgage count, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of mortgaged properties in negative equity at 24.8%, followed by Phoenix-Mesa-Scottsdale, Ariz. (18.8%), Chicago-Naperville-Arlington Heights, Ill. (18.5%), Riverside-San Bernardino-Ontario, Calif. (14.8%) and Atlanta-Sandy Springs-Roswell, Ga. (14.6%).
  • Of the same largest 25 CBSAs, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of mortgaged properties in an equity position at 97.7%, followed by Dallas-Plano-Irving, TX (97.1%), Anaheim-Santa Ana-Irvine, Calif. (96.4%), Portland-Vancouver-Hillsboro, Ore. (96.4%) and Denver-Aurora-Lakewood, Col. (96.2%).
  • Of the total $349 billion in negative equity, first liens without home equity loans accounted for $185 billion aggregate negative equity, while first liens with home equity loans accounted for $164 billion, or 47%.
  • Approximately 3.2 million underwater borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $228,000. The average underwater amount is $57,000.
  • Approximately 2.1 million underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $295,000.The average underwater amount is $77,000.
  • The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market. For example, 94% of homes valued at greater than $200,000 have equity compared with 84% of homes valued at less than $200,000.

The future of Zillow and Trulia is here

18 MLSs, Realogy and Keller Williams to provide data to both Zillow and Trulia

http://www.housingwire.com/articles/33268

March 17, 2015

Anyone who was wondering what the future ofZillow (Z) and Trulia was going to look like needn’t wonder any longer, thanks to an announcement from the newly formed Zillow Group.

It looks like the sharing of rental data between Zillow and Trulia is indeed a harbinger of the future of the Zillow Group. The Zillow Group announced Monday thatRealogy (RLGY), Keller Williams and 18 multiple listing services, including the California Regional MLS, signed agreements with the Zillow Group to provide listing data to both Zillow and Trulia.

Under the agreements, the 18 MLSs, Realogy and Keller Williams will establish direct feeds that will push listing data to both sites.

The future of the Zillow Group is here and it’s shared listing data between the sites.

The need to establish direct relationships with brokerages and MLSs is critically important for Zillow and Trulia since any listing provided by ListHub will disappear from the sites on April 7.

Move-owned ListHub and the Zillow Group have been at war over listing data provided to Zillow and Trulia for months. It began in January, when Zillow announced its decision to cancel its listing agreement with ListHub, which is owned Move, which is owned by News Corp (NWS) and operates Realtor.com for the National Association of Realtors.

After ListHub tried to terminate its listing agreementwith Trulia, the companies went to court over the continued flow of listings from ListHub to Trulia.

But on March 12, the two parties met in court where the judge ruled to lift the temporary restraining order but not grant the permanent injunction. Zillow Group and Move then agreed ListHub would continue to provide listing data to Trulia until April 7.

With the ListHub data now weeks from disappearing from Zillow and Trulia, the Zillow Group has been hard at worksigning listing agreements to mitigate any potential loss of listing data.

But this most recent announcement is the most significant series of agreements the Zillow Group has secured thus far.

With the agreements in place, Zillow and Trulia will now receive direct feeds from the Realogy family of brokerages, which includes Better Homes and Gardens Real Estate,Century 21 Real EstateColdwell BankerERASotheby’s International Realty andZipRealty – plus Keller Williams, which boasts 110,000 associates and “nearly 700 market centers” across the globe.

The 18 new MLSs that signed on with Zillow Group will boost the sites’ listings significantly as well, especially the California Regional MLS, which is the country’s largest MLS.

“It’s great to see so many of our MLS partners appreciate the value in building a relationship with Zillow and Trulia,” said Greg Schwartz, Zillow Group chief revenue officer. “We’ve already been able to create a total of more than 20 new direct agreements with MLSs, which means they are guaranteed uninterrupted service to two of the most trafficked real estate websites and suites of mobile apps just as home shopping season is getting underway.”

Additionally, the Zillow Group signed listing agreements with:

  • Alaska MLS – Anchorage, Alaska
  • Golden Isles Association of Realtors – Brunswick, Georgia
  • Greater Lansing Association of Realtors – Greater Lansing, Michigan
  • Greater Las Vegas Association of Realtors – Las Vegas, Nevada
  • Gulf Coast MLS – Mobile, Alabama
  • MIBOR Service Corporation - Indianapolis, Indiana
  • Middle Georgia MLS – Macon, Georgia
  • North Central Mississippi Realtors – Oxford, Mississippi
  • North Carolina Mountains MLS – Fletcher, North Carolina
  • Northern New England Real Estate Network- Concord, New Hampshire
  • Northwest Mississippi Association of Realtors – Nesbit, Mississippi
  • Russellville BOR – Russellville, Arkansas
  • Santa Fe Association of Realtors – Santa Fe, New Mexico
  • South Central Board of Realtors  – Rolla, Missouri
  • Tillamook County MLS – Tillamook, Oregon
  • Western Arizona Realtors Data Exchange – Lake Havasu City, Arizona
  • West Central Association of Realtors MN - Willmar, Minnesota

Despite the loss of the ListHub data, the Zillow Group said it is not concerned with how many listings are actually going to disappear from Zillow and Trulia, especially given this announcement.

“We are working hard to ensure home sellers and their agents can easily continue to market homes on Trulia, which attracts one of the largest audiences of homebuyers in the country, and we are having tremendous success signing contracts for direct MLS feeds,” Zillow Group Spokeswoman Katie Curnutte said last week.

“Trulia already receives a majority of their listings directly from brokers and MLSs, and many others are taking steps to create direct relationship with Trulia if they haven’t already,” Curnutte added. “By the time ListHub stops sending listings to Trulia on April 7, we expect a small percentage of Trulia’s overall listing count to be affected.”

Southern California Home Sales Dip Year Over Year Again; Median Price Edges Higher

March 17, 2015
http://dqnewspressreleases.blogspot.com/2015/03/february-southland-home-sales-press.html

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released its February 2015 Southern California housing market report, which shows the number of homes sold rose slightly from January but hit the lowest level for a February in seven years. Also according to the report, the median price paid for a home, which hasn’t changed much since last fall, inched up from January and rose year over year for the 35th consecutive month.

A total of 13,650 new and existing houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February 2015. That was up 0.7 percent month over month from 13,560 sales in January 2015, and down 2.7 percent year over year from 14,027 sales in February 2014, according to CoreLogic DataQuick data.

On average, Southern California home sales have increased 0.7 percent between the months of January and February since 1988, when CoreLogic DataQuick data began. Sales have fallen on a year-over-year basis in 15 out of the last 17 months.

February home sales have ranged from a low of 10,777 in 2008 to a high of 26,587 in 2004. February 2015 sales were 21.6 percent below the February average of 17,420 sales since 1988.

“This feels a lot like early 2014, with home sales off to a slow start as many would-be home buyers struggle with inventory constraints, credit hurdles and reduced affordability,” said Andrew LePage, data analyst for CoreLogic DataQuick. “And just like a year ago, one of the big questions hanging over the market is whether we’ll see a sizeable jump in inventory this spring and summer. A nearly three-year stretch of price appreciation has given many more owners enough equity to sell their homes and buy another. Recent job growth has helped fuel housing demand and if that’s met with only a modest rise in the supply of homes for sale it will put upward pressure on prices. Of course, the direction of mortgage rates, among other factors, will also play a role in determining how the housing market shapes up this year.”

The median price paid for all new and existing houses and condos sold in the six-county Southern California region in February 2015 was $415,000, up 1.5 percent month over month from $409,000 in January 2015 and up 8.4 percent year over year from $383,000 in February 2014. The median hasn’t changed significantly since September 2014, when it was $413,000. The median’s 2014 peak was $420,000 in August.

The median sale price in Southern California has risen on a year-over-year basis each month since April 2012. In the 22 months between August 2012 and May 2014 those annual gains were double digit, as high as 28.3 percent in June 2013. Since then, the year-over-year increases in the median sale price have been single-digit. The February 2014 median price rose 19.7 percent compared with February 2013 – more than double the 8.4 percent gain when comparing February 2015 with February 2014.

The February 2015 median sale price was 17.8 percent below the peak median price of $505,000 reached in March, April, May and July of 2007. Among the region’s six counties, the February 2015 median in Orange County ($590,750) was the closest – within 8.4 percent – to its peak of $645,000 in June 2007.

The number of Southern California homes that sold for $500,000 or more in February 2015 rose 3.9 percent compared with February 2014. Sales below $500,000 fell 9.4 percent year over year, and sales below $200,000 dropped 26.1 percent.

Other Southern California housing market highlights from February 2015 include the following:

• Foreclosure resales represented 6.0 percent of the resale market in February. That was up from a revised 5.7 percent in January 2015 and down from 6.7 percent in February 2014. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009. Foreclosure resales are purchased homes that have been previously foreclosed upon in the prior 12 months.

• Short sales made up an estimated 6.1 percent of resales in February, down from a revised 6.6 in January 2015 and down from 9.0 percent in February 2014. Short sales are transactions in which the sale price fell short of what was owed on the property.

• Absentee buyers – mostly investors – bought 26.7 percent of the homes sold in February. That was up from a revised 26.3 percent in January 2015 and down from 28.9 percent in February 2014. The peak absentee share was 32.4 percent in January 2013, and the monthly average since 2000, when CoreLogic DataQuick absentee data began, is about 19 percent. Absentee buyers include those who purchase vacation homes or other properties that public property records suggest are not used as primary residences.

• Cash buyers accounted for 28.0 percent of February home sales, up from a revised 26.4 percent in January 2015 and down from 31.0 percent in February 2014. The peak cash share was 36.9 percent in February 2013, and the monthly average since 1988 is about 17 percent.

• The typical monthly mortgage payment for Southern California home buyers in February was $1,530, up from $1,501 in January 2015 and up from $1,516 in February 2014. Adjusted for inflation, the February 2015 typical payment was 36.1 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was also 47.7 percent below the current cycle’s peak in July 2007.

To view the county-by-county home sale chart, please visit DQNews.com.

Goldman Sachs just nailed millennial homebuying

Publishes animated graph day before housing conference

Wow. Credit where credit is due.

Anyone need to know everything about millennials, homebuying, and their spending profiles?

Oh, but you only have less than 60 seconds?

Head to this hugely educational, animated graph on theGoldman Sachs (GS) website.

It’s full of helpful tidbits. For example, did you know millennials are the biggest generation in America, ever?

Here’s what the Wall Street investment bank writes about the low-earning, highly indebted generation proclivity to homebuying:

“As millennials enter their peak home-buying years, their reluctance to enter the housing market could change. The cohort’s sheer size, plus its desire to settle down in the future, could lead to a surge in home sales.”

Goldman may not seem the most-obvious place for digging for first-time homebuyers, but that’s not giving their initiatives, like this one, enough credit. And the bank is not stopping there, read on for more information.

First, here is that millenial homebuying info, displayed neatly (clicking below will take you to the graph on Goldman’s website):

Goldman Millennials

In fact, HousingWire reporter Brena Swanson is now on her way, Winter Storm Thorwilling, to an exclusive Goldman Sachs Housing Finance Conference in New York City.

Speakers include the co-head of the investment bank division of Goldman itself, along with mortgage banking representatives from Loandepot, PennyMac and Wells Fargo. Our friend Mel Watt, the director of the Federal Housing Finance Agency will also pop round to deliver the luncheon keynote.

She’ll deliver some coverage for HousingWire.com readers tomorrow, so watch this space.

Freddie Mac: Mortgage rates at 21-month low

Economic factors push rates down

Average fixed mortgage rates moved lower for the first time in four weeks and remaining near late May, 2013 lows, according to the weekly Freddie Mac survey.

It seemed to have little impact on mortgage applications.

The 30-year fixed-rate mortgage averaged 3.75% with an average 0.6 point for the week ending March 5, 2015, down from last week when it averaged 3.80%. A year ago at this time, the 30-year FRM averaged 4.28%.

“Mortgage rates fell across the board, with the 30-year fixed rate mortgage reading 3.75% this week,” said Len Kiefer, deputy chief economist, Freddie Mac. “Real GDP growth for the fourth quarter was revised down to 2.2%. Consumer prices fell more than expected in January, tumbling 0.7%.”

The 15-year FRM this week averaged 3.03% with an average 0.6 point, down from last week when it averaged 3.07%. A year ago at this time, the 15-year FRM averaged 3.32%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.96% this week with an average 0.5 point, down from last week when it averaged 2.99%. A year ago, the 5-year ARM averaged 3.03%.

The 1-year Treasury-indexed ARM averaged 2.44% this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.52%.

California January Home Sales

February 18, 2015

http://dqnewspressreleases.blogspot.com/2015/02/january-california-home-sales-press.html

An estimated 25,325 new and resale houses and condos sold in California in January 2015. That was down month over month by 30.6 percent from 36,468 sales in December 2014 and down year over year by 2.0 percent from 25,832 sales in January 2014.

January home sales have varied from a low of 19,145 sales in 2008 to a high of 47,138 sales in 2004. The January 2015 sales were 18.8 percent lower than the January average of 31,177 sales since 1988, when CoreLogic DataQuick data began. California sales haven’t been above average for any particular month in more than eight years.

The median price paid for a home in California in January 2015 was $376,000, down month over month by 3.1 percent from $388,000 in December 2014 and up year over year by 6.5 percent from $353,000 in January 2014.

January 2015 marked the 35th consecutive month in which the state’s median sale price has increased on a year-over-year basis. The peak year-over-year price gain during that period was 29.2 percent in July 2013. Since then price gains have trended lower and since July 2014 the year-over-year increases have been single-digit – between about 6 percent and 7 percent from October 2014 through January 2015.

The January 2015 median price was 22.3 percent lower than California’s peak median price of $484,000, reached in March/April/May 2007, and it was 70.1 percent higher than the post-peak trough of $221,000 in April 2009. That trough was reached during a period when distressed property sales were at unusually high levels and sales of mid- to high-end homes were at relatively low levels.

Of the existing homes sold statewide in January 2015, 6.7 percent were properties that had been foreclosed on during the past year. That was up from a revised 6.0 percent in December 2014 and down from 7.7 percent in January 2014. Foreclosure resales peaked at 58.8 percent in February 2009.

Short sales made up an estimated 6.4 percent of homes that resold in January 2015, up slightly month over month from 6.3 percent in December 2014 and down year over year from 10.7 percent in January 2014. Short sales are transactions in which the sale price fell short of what was owed on the property.

The typical monthly mortgage payment for California homebuyers in January 2015 was $1,379, down from $1,457 in December 2014 and down from $1,426 in January 2014. Adjusted for inflation, the January 2015 typical payment was 40.6 percent below the typical payment in the spring of 1989, which was the peak of the prior real estate cycle. It was 51.8 percent below the current cycle’s peak in June 2006 and 49.0 percent above the January 2012 trough of the current cycle.

1 in 3 FHA borrowers would benefit from refinancing

FHA premium cut could benefit 2.4 million homeowners

One in three Federal Housing Administration borrowers would benefit from refinancing.

That’s the conclusion of a study conducted by theHousing Finance Policy Center at the Urban Institute.

The Center’s Laurie Goodman, Karan Kaul and Jun Zhu took a closer look at the impact of the premium cut on FHA refinance volumes and have concluded that roughly 2.4 million current FHA borrowers could benefit from refinancing.

They started with 6.6 million existing FHA loans and excluded the following three categories of loans:

  • 1.1 million loans originated prior to June 2009: Borrowers with FHA mortgages that were originated prior to June 1, 2009 are eligible for FHA’s Streamlined Refinance program. This program allows grandfathering of the pre-June 2009 annual MIP of 0.55%, and also reduces the upfront MIP to just 0.01% for these borrowers. Because these rates are significantly lower than FHA’s current premiums, pre-June 2009 FHA borrowers are essentially unaffected by the latest premium cut and are therefore excluded from our analysis.
  • 0.8 million delinquent and modified loans: We also excluded 0.5 million borrowers who we estimated to be delinquent, and an additional 0.3 million with modified mortgages.
  • 0.3 million loans with a term of 15 years of less: FHA’s latest premium cut does not apply to mortgages with a term of 15 years or less. These mortgages are also excluded from our analysis.

After excluding pre-June 2009 originated, delinquent, modified and mortgages with a maximum term of 15 years, (total 2.2 million), they estimated that roughly 4.4 million FHA borrowers could be candidates for refinancing.

In general, they found, borrowers stand to save money by refinancing if the new mortgage rate and the new FHA premiums, combined, result in a 0.75% reduction or more in annual mortgage costs.

“We used this as the base for our final estimate, assuming that the majority of borrowers would adopt this threshold,” they write. “Some borrowers are more conservative, of course, and might wait until their annual mortgage cost savings hits 1% to refinance, resulting in less refinance activity. Other borrowers are aggressive and might jump in when they stand to gain only 0.5%, which would result in more refinance activity. We’ve estimated these higher and lower triggers as well to give a clearer sense of the full range of potential refinance activity.

“Under our 0.75% threshold which we expect the majority of borrowers to adhere to, we estimate that roughly 2.4 million FHA borrowers could lower their mortgage payments even after accounting for refinancing costs. This represents over a third of the 6.6 million FHA borrowers,” they write.

Using a more conservative threshold of 1%, roughly 1.7 million borrowers could save money by refinancing.

At the more aggressive 0.5% threshold, their estimate rises to over 3 million.

“Our estimates are also based on the current FHA mortgage rate. A continued decline in rates could make refinancing appealing to a greater number of borrowers and would raise our estimates, whereas an increase in rates would lower them,” they write. “Other unknowns such as borrowers’ expectations of future mortgage rates can also affect refinance activity. If a large number of borrowers decide to wait in anticipation of even lower rates in the future, that would further reduce refinance volumes. Given what we know today, however, one in three FHA borrowers could certainly lower their monthly payments by refinancing.”