The most cheerful news for housing industry is probably that Fannie Mae announced a net income of $5.1 Billion in the second quarter (and a combined net income of $7.8 Billion for the first half of 2012). It is a big turn around for the entity battered by the housing collapse and delinquent mortgages.
Through the end of July, foreclosure activity continued to drop on an annual basis by 10% from a year ago with varying foreclosure activity patterns from state to state. California still tops the number of foreclosures. Many Californian investors had acquired investment properties in the past hoping for price appreciation.
Home prices increased by 2.5% on a year-over-year increase in June 2012 as reported by CoreLogic. NAHB/First American Improving Market Index reported a total of 80 Metropolitan Statistical Areas across 32 states as improving markets. This index is based upon Employment growth reported by BLS, Single family housing permit growth reported by the US Census Bureau, and Home price appreciation reported by Freddie Mac. The average closing cost in June has dropped by 7% to $3,754 compared to last year as reported by bankrate.com.
Despite all this encouraging news, there is a decline in weekly mortgage applications for both refinance and home purchase. This is can be attributed to stricter mortgage lending standards, as well as a preference for cash purchases. The cash sales was at 29% in June, according to National Association of Realtors. While we encourage our investors to depend on professional property managers for property and tenant management, it is good to be knowledgeable about renters’ preferences and issues. According to National Apartment Association, the renters put the highest value on online payments without a convenience fee and the least on car sharing services!
Freddie Mac released a 2 minute video addressing the concern of home prices and housing inventory. Investors should not miss out on this video.