Banks: Positive for Housing Rebound

JPMorgan Chase & Co. and Wells Fargo & Co., the nation's largest home lenders, said America's long-suffering housing market may be on the mend.

The big jump in profit was thanks largely to a surge in their mortgage businesses, fueled by low interest rates and waves of refinancing.

It led JPMorgan Chief Executive Jamie Dimon, considered one of Wall Street's most high-profile bankers, to declare: "We believe the housing market has turned the corner."

Home lending is booming. The banks said profits on the sale of home loans were twice as high as traditional levels as the Federal Reserve kept interest rates at historical lows to help stimulate the economy.

JPMorgan and Wells Fargo, which emerged from the financial crisis as two of the strongest U.S. banks, control nearly half of the nation's mortgage volume. They reported a surge in revenue from mortgage origination and servicing during the last three months.

Wells said it issued $139 billion in mortgages from July through September, compared with $89 billion in the same period last year. JPMorgan wrote $47 billion in mortgages, compared with $37 billion last year.

There were some signs, though, that the boom isn't as strong as it might seem. The large majority of mortgage lending was driven not by people buying new homes but by owners refinancing mortgages, which is less helpful to the housing market.

Still, the numbers were eye-catching.

At Wells Fargo, mortgage business revenue rose 55% to $2.8 billion during the third quarter from $1.8 billion in the year-earlier period. The San Francisco bank posted an overall profit of $3.94 billion, which easily surpassed Wall Street projections.

Economists have been predicting that any lift in the housing market could boost the broader economy. When homeowners have more equity in their homes or gain extra cash from a refinancing, it tends to free up more money — and that boosts consumer spending.

The top executives of JPMorgan and Wells Fargo said housing still has room to recover further.

Source: latimes.com

Do you want to work with a Realtor who never fails to keep his clients updated about Real Estate trends? Call me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the subdivisions of Rosemary Hills, Rock Creek Forest, East Bethesda and Whitehall Condominium.   

 

Has housing reached the 'new normal'?

Big home-sale and housing-start increases are sparking optimism, but will the good news last through the winter?

It was a great day for the Real Estate market the moment news about home sales increasing 7.8% in August and housing starts rising to 2.3% came out.

According to The Wall Street Journal, those were the latest numbers in a series that showed that the housing market seems to be finally making its way out of the doldrums. And the numbers are real.

But tucked into the bottom of most of those happy little stories are the hurdles that housing still needs to leap before this becomes any kind of a normal market. And just what will the new "normal" look like? It's safe to say it won't look like the go-go market of the mid-2000s.

The number of existing homes sold in August was 9.3% above the same time last year, the highest rate since May 2010, when a tax credit spurred sales, the National Association of Realtors reported.  The number of single-family homes upon which construction started was up 27% from last August and at its highest rate since April 2010, according to figures from the Census Bureau.

• Feds' move and the housing market? Ho-hum

The trends look good, but will the trends hold? One looming question is whether the gains of the summer will all be lost during the winter, historically a slower time for home sales.

 Then there are the problems that are lingering nationwide: tight credit, job insecurity, high unemployment. In many cities, there are actually more buyers than there are homes to buy, which could also put a dent in some of those happy numbers in upcoming reports.

• Trulia: Buying costs 45% less than renting

"Total sales this year will be 8% to 10% above 2011, but some buyers are frustrated with mortgage availability," NAR President Moe Veissi, broker-owner of Veissi & Associates in Miami, said in a news release. "If most of the financially qualified buyers could obtain financing, home sales would be about 10% to 15% stronger, and the related economic activity would create several hundred thousand jobs over the period of a year."

• Number of improving markets up almost 25%

The national median price for an existing home in August was $187,400, an increase of 9.5% from August 2011.  

A few highlights from home-sale numbers:

• The percentage of distressed homes (foreclosures and short sales) was down from 31% of all sales in August 2011 to 22% this past August.
• First-time buyers accounted for 31% of sales, compared with 32% in August 2011.
• A total of 27% of transactions were all cash, up from 22% in August 2011.
• Investors bought 18% of the homes sold in August, down from 22% in August 2011.

So, what do you all think the NEW NORMAL would look like?

Source: realestate.msn.com

Do you want to work with a Realtor who never fails to keep his clients updated about Real Estate trends? Call me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the subdivisions of Rosemary Hills, Rock Creek Forest, East Bethesda and Whitehall Condominium. 

Real Estate "Dark Age" finally over?

Our economy has finally picked up. Yes, it’s not a statement wrapped in hope but figures are actually showing us that we are indeed on the rise. According to a recent article by The Wall Street Journal, it is great news for us, Realtors – the housing market has turned, finally.

According to S&P’s David Blitzer, most indexes of house prices are bending up made apparent by the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after a seven-month slump.

Nearly 10% more existing homes were sold in May than of the same month last year. Most of the homes were bought by investors who plan to rent them for now and sell them later, an important sign of an inflection point. The number of vacant homes is at its lowest since 2006.

Mark Fleming, chief economist at CoreLogic (housing data-analysis firm), stated that reduced inventory of unsold homes is key. Few years back, house prices have increased in the spring but then slumped onwards. He is positive that this won’t happen again this year as the declining supply of houses currently in the market indicates the trend.

Economists from Wells Fargo Securities have hinted that although the general economy is slowing, the budding recovery in the housing market appear to be gradually gaining momentum.

According to this article, housing is still far from healthy despite the Federal Reserve's efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac's latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans' equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.

Despite the figures not as good as we actually want them to be, we can still consider the upturn in housing a huge milestone, particularly with the unemployment rate we’re facing currently. Though housing has been notorious for being one of the causes of economic weakness, it has now moved to a more positive light.
A lot of other factors can be put into the equation but we can all breathe normally now --- the housing bust is over.

Do you want to work with a Realtor who's always in the know about the latest Real Estate trends and gives his clients essential information about the best ways to deal with the current market?  Call me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the subdivisions of Rosemary Hills, Rock Creek Forest, East Bethesda and Whitehall Condominium.