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Rates Remain Low – The Mortgage Bankers Association reported that rates dropped to the lowest averages in a month last week. Additionally, total mortgage application volume posted a 0.4 percent increase on a week-over-week, seasonally adjusted basis with rates averaging 4.22 percent. “As the number of borrowers who could still benefit from a refinance continues to decline, it will take larger and larger rate drops to make a significant impact in refinancing volume,” says Mike Fratantoni, chief economist for the MBA. Refinance applications, however, did increase 3 percent last week the MBA reports.
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Freddie Mac: Housing Is Still Affordable – According to Freddie Mac’s latest Insight report for July, home prices surpassed their peak at the end of the last housing boom. Since 2012, prices have increased, on average, 6 percent per year. However, per capita incomes have risen only 2.4 percent, on average, per year. The limited number of homes for sale has increased the perception that homes are unaffordable, according to Freddie Mac’s report. But consumers may be surprised to find that homes are still more affordable than they may seem. “Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices,” says Sean Becketti, Freddie Mac’s chief economist.
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Best Year for New Construction in a Decade? – A shortage of homes for sale combined with growing buyer demands will likely spark home builders to construct the most homes this year than in the last decade, economists told HousingWire. “Most likely a result of the trending imbalance between homes for sale and demand for new homes to purchase, housing starts finally edged up in the month of June to 8.3 percent,” says Greg Parsons, Semper Capital Management CEO. “The need to balance the growing demand for housing with a dwindling supply, coupled with a strong economy, has given builders an opportunity to break ground and build more homes.”
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Foreclosures Now ‘Unicorns’ of Housing Market – According to the Midyear 2017 U.S. Foreclosure Market Report from ATTOM Data Solutions Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, are down 20 percent from the same period a year ago. “With a few local market exceptions, foreclosures have become the unicorns of the housing market: hard to find but highly sought after,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. Foreclosures are fading overall, but there has been a notable uptick in some areas. “These divergent foreclosure trends are likely the result of the big banks and government agencies selling off distressed loans over the past few years to non-bank entities” Blomquist says.
