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It shouldn’t come as a big shock that as the cost of buying a home goes up, rents are also rising.

But what may come as a surprise are the cities seeing the largest rent hikes. The cost of leasing a roof over one’s head may be sky-high in the red-hot coastal cities of New York, San Francisco, and Miami—but the biggest month-over-month increase was in—wait for it—Milwaukee.

Yes, rents jumped 15% from June to July in the home of Harley-Davidson, reaching an average of $1,010 for a one-bedroom apartment, according to a recent report from rental listings firm Abodo. However, rental prices were down 7% year over year.

Abodo looked at rental property data from more than 1 million available apartments across the country to come up with its findings.

While Milwaukee prices still aren’t anywhere near the heights of aforementioned New York and San Francisco, it’s still a lot for the Wisconsin city. “There’s not a lot of rentals here. People usually just buy instead,” says real estate agent John Molitor of Coldwell Banker in the Milwaukee suburb of Glendale. “So prices are shooting up.” The problem is getting worse as more homeowners sell the houses they had been leasing out after the housing bust, now that prices have recovered. And local companies like Milwaukee Tool have been expanding recently, boosting local employment but straining the already tight supply of available rentals.

Milwaukee isn’t the only Midwestern mecca to earn a spot on the list. Columbus, OH, was next up as rents rose 13%, to $857 for a one-bedroom abode, from June to July.

The city was followed by Colorado Springs, CO, at 11%; Houston, at 9%; and Omaha, NE, at 8%. Another surprise was Staten Island, the sleepiest borough of New York City (by a wide margin), where rents rose 4%, earning the island the ninth place on the list (it was counted separately from the rest of the city). The largest annual hikes were, unsurprisingly, in Silicon Valley’s San Jose, where they soared to a coronary event–inducing 21% in July, to an average $2,721 a month. But that was down 8% from June. “With homeownership rates falling, it makes sense for landlords to continue to raise pricing on their rental units, especially in markets with tighter inventory,” says Abodo spokesman Sam Radbil. But “on the other side of the spectrum, many cities are actually experiencing rent decreases.” In a spot of good news for renters and bad news for landlords, rental prices dropped the furthest in Charlotte, NC. They fell 14% from June to July, to $1,016, according to Abodo. Rents were also down 4% from the same time a year ago.

The city was followed by Oakland, CA, at 11%, and Seattle, at 9%. However, prices are up annually by 8% in Oakland and a heart-stopping 27% in Seattle. “With construction at [higher levels] … we think that a steady decline in rent prices might be on the way,” Abodo’s Radbil says. “As vacancy rates increase and more rental units become available, prices should begin to decrease.”

Source: realestate_iq

The largest trade group in the country has requested that members of the House and Senate co-sponsor legislation to support qualified borrowers.
If hindsight’s 20/20, irresponsible lenders were the ones reflected in the rearview mirror of the subprime mortgage crisis.

Now that the economy’s reached a relative point of stability, have the barriers to obtaining a home loan been stacked unfairly against some Americans?

The National Association of Realtors (NAR) would say yes, and it has written two letters to Congress (one to the House, another to the Senate) urging the government to take legislative steps that would open the doors of opportunity for potential homebuyers. “Insufficient or non-existent credit histories are holding back buyers who have the means to responsibly purchase a home,” said NAR President Tom Salomone in an emailed statement. “Even if someone has years of on-time payments for utilities, rent, or other expenses, not all credit scoring models take those payments into account. “That’s holding back potential homebuyers, and it particularly affects young, minority, and first-time homebuyers. Some reasonable proposals to address this issue have been put forward, and we’re hopeful that they’ll continue to gather support as we spread the word about why this is so important.”

With a coalition of 13 additional organizations, including the Mortgage Bankers Association and the National Association of Hispanic Real Estate Professionals, NAR requested support from members of Congress for the following proposed pieces of legislation.

H.R. 4172, the “Credit Access and Inclusion Act of 2015” (Reps. Ellison (D-MN) & Fitzpatrick (R-PA)) S. 2355, the “Credit Access and Inclusion Act of 2015 (Senators Kirk (R-IL) and Manchin (D-WV)) These acts aim to bulk up the credit folders for “thin file” Americans, or those with low to moderate income who struggle to access affordable credit, by expanding the types of payments that go toward an individual’s credit history.

The legislation would amend the Federal Fair Credit Reporting Act by allowing gas, electric and telecommunication providers to report consumers’ payment histories to the credit bureaus.

H.R. 4211, the “Credit Score Competition Act of 2015” (Reps. Royce (R-CA) & Sewell (D-AL)) Fannie Mae and Freddie Mac still rely on credit scoring models from 1995 to 2000 that fail to take into account indicators such as on-time rent payments.

By allowing government-sponsored enterprises (GSEs) the ability to view borrowers through updated and alternative scoring lenses, The Credit Score Competition Act of 2015 would give qualified Americans, especially minorities and first-time buyers, a better chance at securing a loan.

H.R. 123, the “FHA Alternative Credit Pilot Program Reauthorization Act of 2015” (Rep. Green (D-TX)) H.R. 123 would extend the National Housing Act’s pilot program to automate the process for alternative credit rating information (such as rent and utility payments) from five to 10 years.

The Department of Housing and Urban Development was directed to create the program per section 2124 of the Housing and Economic Recovery Act of 2008 (HERA). “All of the legislative proposals listed above are not a ‘loosening or ‘weakening’ of lending standards; it is an acknowledgment that not all people come from the same backgrounds or practice the same financial activities,” NAR wrote. “Simply put, new models and the reporting of on-time payments would bring credit scoring into the 21st century, and more fairly and accurately score millions of Americans.”

Source: realestate_iq

Does student loan debt make it harder for most college grads to become homeowners? Here’s a shocker: Yeah, it sure does. Big time.

Those often-immense monthly bills are causing 71% of borrowers to delay buying a home—and more than half of them to put off that dream of homeownership by more than five years in order to save up for that pesky down payment, according to a recent National Association of Realtors® and SALT joint report. SALT is a consumer literacy program run by the nonprofit group American Student Assistance.

About 3,230 borrowers who made their student loan payments on time were surveyed in April for the report.
The burden of repaying the debt has led about four in 10 borrowers to postpone moving out of Casa de Mom y Dad as a result. “Along with rent, a car payment, and other large monthly expenses that can squeeze a household’s budget, paying a few hundred dollars every month on a student loan equates to thousands of dollars over several years that could otherwise go towards saving for a home purchase,” NAR Chief Economist Lawrence Yun said in a statement.

The most frustrated borrowers were those aged 26 through 35 and those with a towering $70,000 to $100,000 in debt, according to the report.

Eric Tyson, co-author of “Home Buying for Dummies,” recommends those having trouble scraping their piggy banks for down payment cash take a hard look at what they’re spending money on each month—and make some concerted cutbacks. “Come up with a plan,” Tyson says. “Don’t just wing it.”

Someone who borrowed a lot of money to pay for school may also have a harder time qualifying for a mortgage, according to Tyson. That’s because loan officers look at buyers’ income as well as their monthly debt payments such as credit card, car, and student loans. “If they’re too high, you’re not going to be able to borrow as much,” Tyson says.

And the burden isn’t just affecting those dreaming of buying their own abodes. The debt is also making it harder for some existing homeowners to put their properties on the market and trade up to larger residences, according to the report. That means fewer more affordable homes on the market for first-time buyers.

But hey, all of that gargantuan student debt probably won’t be nothing: At least you’ll make more money.

Grads 25 years old and up earned a median $59,124 a year in 2015, according to the U.S. Bureau of Labor Statistics. Those with a master’s degree made a median $69,732, and those with professional degrees (e.g., doctors and lawyers) made a median $89,960.

Meanwhile, folks who never attended college earned a median $35,256 in 2015, according to the bureau.

Source: realestate_iq

Sky-high apartment rents are finally heading back to Earth — slowly. After hitting record highs in 2015, rents grew at an annual rate of 3.7 percent in the second quarter of this year, according to Axiometrics, an apartment analytics firm. That is a healthy gain, but nowhere near the 5.1 percent rise in the same quarter of 2015. “Annual rent growth is moderating as delivery of new supply peaks and job gains are starting to decline,” wrote Jay Denton, Axiometrics’ senior vice president of analytics. Rent growth was positive in 49 of the nation’s 50 largest housing markets. Only Houston came in negative, owing to energy industry job losses there and excess construction. On the flip side, Sacramento, California, had the highest rent growth at just more than 10 percent annually. No. 2 was Seattle at nearly 8 percent. Phoenix, Portland, Oregon, Riverside, California, and Fort Worth, Texas, rounded out the top six.

National occupancy is still historically high, hitting 95.2 percent in the second quarter, the first time it’s been more than 95 percent in a year. Demand for rental housing is still very strong, but less so on the luxury side, where there is more supply.
“New graduates are heading into the workforce needing a place to live, and renter families want to get settled in time for the next school year,” noted Denton.

Newly started multifamily construction is less robust than it had been during the last few boom years in the apartment market. As the number of luxury units being delivered soars, the crunch for affordable rentals only increases.

“Because of the widening gap between market-rate rents and the amounts many households can afford at the 30-percent-of-income standard, the number of cost-burdened renters hit 21.3 million in 2014,” noted researchers at Harvard’s Joint Center for Housing Studies in a report released last week. “Even worse, 11.4 million of these households paid more than half their incomes for housing, a record high.”
Another study from the MacArthur Foundation found 4 out of 5 Americans today continue to believe that housing affordability is a problem. Less than one-third said they believe the housing crisis is over.

Source: realestate_iq

It’s official — the Brexit bonus to U.S. homeowners is well underway.
A sharp drop in mortgage interest rates is putting more money in their pockets. Total mortgage application volume surged 14 percent for the week ending July 1st from the previous week, according to the Mortgage Bankers Association (MBA). The measure is seasonally adjusted. Application volume is now 66 percent higher than one year ago.

Behind the surge is a refinance boomlet. Applications to refinance home loans jumped 21 percent for the week, and they are now 113.5 percent higher compared to one year ago, when rates were about three quarters of a percentage point higher. A drop in rates for larger, so-called jumbo loans, is leading the refi run. Some of these refinances are cash-out, as borrowers take advantage of higher home values. “Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance,” said Mike Fratantoni, chief economist for the MBA.

There was a small boost in mortgage applications to purchase a home, although they are far less sensitive to weekly rate moves. Purchase volume rose 4 percent for the week and was 23 percent higher than the same week one year ago. “Even though financial market volatility may be causing some anxiety, the combination of low rates and a still strong job market in the US outweighs those fears for these homebuyers,” opined Fratantoni.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.66 percent, from 3.75 percent, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since January 2011, 3.67 percent, from 3.74 percent, all according to the MBA.

Mortgage rates moved even lower Tuesday, as the yield on the 10-year Treasury, which rates loosely follow, fell through new lows. Some lenders were quoting 3.25 percent on the 30-year fixed for high quality borrowers, according to Mortgage News Daily. “For all intents and purposes, these rates are “all-time lows,” even though there were several occasions in late 2012 where some lenders offered lower rates,” said Matthew Graham, chief operating offficer ofMortgage News Daily. “If we’re talking about rates that were available for a few days here and there, then we’re not quite back to those yet. If we’re talking about the lowest stably-held rate for most top-tier quotes, we’re back.”

And the longer term trends, Graham notes, remain squarely in favor of lower rates. There would need to be some kind of major economic event, like an unexpected move by the Federal Reserve, to change the current trajectory, something like the announcement in 2013 that it would decrease its purchases of mortgage backed bonds.

“We just don’t have anything like that hanging over our head at the moment,” added Graham.

Source: realestate_iq