Home prices show one of the strongest annual price gains in 8 years

Existing-home sales in August reached their highest level in six years according to the National Association of Realtors (NAR).

 

Total existing-home sales rose 1.7% to a seasonally adjusted annual rate of 5.48 million in August. This was an increase from July’s 5.39 million, and 13.2% higher year-over-year compared to August 2012.

 

Total housing inventory at the end of August increased 0.4% to 2.25 million existing homes available for sale. This figure represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July.

 

Meanwhile, the national average commitment rate for a 30-year conventional fixed-rate mortgage rose to 4.46% in August, and is the highest since July 2011 when it was 4.55%. In August 2012, the rate was 3.60%.

The national median existing-home price for all housing types was $212,100 in August, up 14.7% from year ago levels, and the strongest year-over-year appreciation since October 2005, when the median price rose 16.6%.

 

August’s home price increase was also the ninth consecutive month of double-digit year-over-year increases, and marks 18 consecutive months of annual gains.

 

Rising home values will encourage more people to sell as homeowners’ equity continues to improve, says NAR President Gary Thomas.

 

“Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels,” he said.

Clarification of Mortgage Rules Comes From CFPB

The Consumer Financial Protection Bureau (CFPB) this month finalized amendments and clarifications to its January 2013 mortgage rules to help the industry comply and to better protect consumers.

In January of this year the CFPB introduced the Ability-to-Repay rule, requiring lenders to make a “reasonable, good-faith determination” that prospective borrowers have the ability to repay their loans.

 

On June 24, 2013, the CFPB proposed several amendments and clarifications to the mortgage rules adopted in the final rule, which is intended to clarify interpretive issues and facilitate compliance. One of the Bureau’s modifications is to clarify what servicer actives are prohibited in the first 120 days of delinquency. This rule prohibits servicers from making the “first notice or filing” under state law during the first 120 days a borrower is delinquent.

 

Under the rule, servicers will be allowed to send certain early delinquency notices required under state law to borrowers that may provide beneficial information about legal aid, counseling or other resources.

 

Another rule the CFPB aims to clarify is the definition of a loan originator.  Under the CFPB’s new rules, persons classified as loan originators are required to meet qualification requirements and are also subject to certain restrictions on compensation practices.

 

The provisions of the CFPB’s loan originator compensation rules that have not yet gone into effect were scheduled to take effect on January 10, 2014.  The  CFPB has changed the effective date for certain provisions of the rule to January 1, 2014.

“Our mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace,” said CFPB Director Richard Cordray. “Today’s rule amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers.”

What homebuyers need to know about title insurance

At some point during your homebuying process, the topic of title insurance is likely to come up. Like most types of insurance, title insurance is better to have and not use than need it and not have it available. But what is it, why do you need it, and how does it work?

 

What is title insurance?

 

Title insurance is a specialized insurance policy that protects you and your mortgage lender against mistakes made in a title search. If you find a home and there’s not a clear title to it, title insurance protects the bank – and you – if there’s a problem. A clear title means you’ll be able to occupy and use the property the way you want, and that you’re able to sell or pledge your property as security for a loan.

 

There are generally two types of title insurance: lender’s and owner’s title insurance. The lender’s policy is usually based on the dollar amount of your loan and protects the lender’s interests in the property against a problem with the title. The policy coverage decreases each year and goes away as the loan is paid off.

 

As its name suggests, the homeowner buys owner’s title insurance, which is in the amount of the real estate purchase, for a one-time fee at closing. It lasts as long as you own or have an interest in the property. Owner’s title insurance fully protects the homeowner in the event that there’s a problem with the title that wasn’t discovered during the title search. This type of insurance also pays for any legal fees involved in defending a claim to your title. Think of owner’s title insurance as helping to protect your equity, or your investment, in a home.

 

 

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

 

For example, one of the most common title-insurance claims is for the cost of back property taxes that the title company missed in researching a sale. Another example is when there’s not a clear title to the house, especially in cases of divorce. These scenarios might sound minor, but they can cost thousands in fees without title insurance.

 

Are you buying a newly built home and think there’s a clear title? Many consumers think they’re the first owner if they’re building a home on a lot, but it’s just as likely there were prior owners of the land. A title search will uncover any existing liens, and a survey can determine the boundaries of the property you’re buying for your new house.

 

In honor of Georgia, the finest first mate you could ask for, this month Tradition Title has donated to the North Shore Animal League.

CoreLogic Home Price Index July Report Shows Nationwide Increase

 

The increase of 12.4% over 2012, which includes distressed sales, represents the seventeenth straight month where national home prices rose on an annual basis. Home prices also saw monthly gains, up 1.8% from June 2013.

 

 

 

Excluding distressed sales, home prices were up 11.4% in July compared to the same month in 2012 and rose 1.7% from June.

 

Price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand.

 

August home prices, including distressed sales, are expected to rise by 12.3% year-over-year, according to the CoreLogic Pending HPI. On a monthly basis, prices will increase 0.4% from July, the index predicts.

 

 

The five states with the highest home price appreciation, including distressed sales, were Nevada (up 27%), California (up 23.2%), Arizona (up 17%), Wyoming (up 16.4%), and Oregon (up 15%).

 

 

Nevada, Florida, Arizona, Rhode Island, and Michigan are the five states with the largest peak-to-current declines, ranging from 27.7% to 43%.

Read the entire CoreLogic HPI report for July 2013 here.