Tag Archives: Zillow

One In 6 Homeowners Still Underwater

27 Aug

One in six U.S. homeowners with mortgages — or 8.7 million people — were still underwater on their mortgage in the second quarter of 2014, despite rising home values, Zillow finds in its latest Negative Equity Report.

The negative equity rate dropped to 17% in the second quarter of 2014 from 23.8% a year prior and 18.8% in the first quarter of 2014. Looking ahead, Zillow projects the rate to drop to 14.9% by the end of the second quarter of 2015.

Nationally, millennial homeowners held 19.6% of all underwater mortgages while Generation X held 18.7% and baby boomers held 10.9%.

The “effective” negative equity rate, or the percentage of homeowners who have less than 20% equity in their home, fell to 34.8% in the second quarter, down from 36.9% in the first quarter of 2014, and down from 41.9% last year a year prior. Those who have less than 20% equity in their current home may have a difficult time covering the costs on selling and purchasing a new property.

Overall, the rate continues to recede as home values keep growing, but the trend will likely move at a slower pace because the rate of home value growth is slowing and expected to continue to slow.

Previously, reports showed that about 80% of the nation’s real estate markets were projected to appreciate in value over the next 12 months, though the remaining 20% were expected to depreciate over the next year.

from ReverseMortgageDaily

Homeownership Down

4 Aug

The U.S. homeownership rate in the second quarter fell to its lowest point since 1995, and many experts say they expect it to drop even lower in the coming years as forward-looking mortgage interest rates rise and continue to impact home sale volume, a Zillow survey shows.

The seasonally adjusted homeownership rate fell to 64.7% in the second quarter, according to the Census Bureau, slightly lower than the first quarter’s rate of 64.8%.

This continued downward trajectory is attributed both to rising mortgage rates that impact mobility and home affordability, and to Millennials, who are increasingly delaying home purchases, experts suggest in the most recent Zillow Home Price Expectations Survey.

About 62% of survey panelists expected rising mortgage interest rates to have a “somewhat negative” or “significantly negative” impact on the number of home sales going forward.

On average, they expected interest rates on a 30-year, fixed-rate mortgage to reach 5.28% by July 2016. In comparison, the rate as of June 2014 averaged 4.16% for a 30-year, fixed-rate mortgage.

Survey panelists expected U.S. median home values to end 2014 up 4.6% to $177,895, on average, and to exceed their 2007 peak levels by the end of 2017, roughly a decade after the housing bust and ensuing recession began, Zillow says.

Home values are expected to show an annual increase, on average, between 3.7% and 5.6%, the survey’s experts predict.

“Although one would expect to observe trends like this in a calming housing market, it’s way too soon to conclude that the market has healed and returned to the old normal,” said Terry Loebs, founder of Pulsenomics LLC, an independent research firm that conducts the survey quarterly.

from this week’s RMD blog

Home Value Appreciation Strong in November

26 Dec

Zillow’s November Real Estate Market Reports, released December 19, show that national home values rose 0.6% from October to November to $168,900 (Figure 1). On a year-over-year basis, home values were up 7.1% (Figure 2) from November 2012. The last time national home values were at this level was in November 2004. Rents were up 2% on a year-over-year basis (Figure 3), as they continue their steady upward climb. The Zillow Home Value Forecast calls for 4.6% appreciation nationally from November 2013 to November 2014 – a marked slowdown from the more than 7% appreciation seen in the past year.

118 out of the 291 markets covered are forecasted to experience home value appreciation of 3% or higher. Of the nation’s 35 largest metro areas covered by Zillow, all but St. Louis experienced year-over-year home value increases in November, with nearly half up by double-digit percentages. Metros with notable annual increases in November include Las Vegas (30.9%), Riverside (29.2%) and Sacramento (25%).

These annual and monthly trends are in line with a broad and robust housing recovery that is starting to slow down as home value appreciation rates fall back to more sustainable growth levels. Some markets will experience volatility in the coming years fueled by decreasing affordability, as mortgage rates rise, and increased supply of for-sale homes, as negative equity recedes and new construction increases.

Figure1

Figure2

Home Values
The November Zillow Real Estate Market Reports cover 485 metropolitan and micropolitan areas. In November, 374 (77.1%) of the 485 markets showed monthly home value appreciation, and 427 (88%) of the 485 markets saw annual home value appreciation. Among the 35 largest metro areas covered by Zillow, 7 exhibited monthly depreciation in November. The biggest declines were in St. Louis (-0.8%), Indianapolis (-0.7%), Dallas (-0.5%) and Phoenix (-0.3%). Overall, national home values are still down 14% from their peak in April 2007.

Figure3

Rents
The Zillow Rent Index (ZRI) covers 517 metropolitan and micropolitan areas and shows year-over-year gains for 379 metropolitan areas covered by the ZRI. Currently national rents are up 2% on a year-over-year basis, which is a significant slowdown from 5% to 6% annual appreciation during summer of 2012 (Figure 3). Large markets that saw extremely strong annual rent appreciation include Denver (8.5%), Cincinnati (7.6%), Columbus (7.6%) and Seattle (7.2%).

Figure4

Foreclosures
The rate of homes foreclosed continued to decline in November with 5.09 out of every 10,000 homes in the country being liquidated. The last time it was at this rate was in December 2007. Nationally, foreclosure resales also continued to fall, making up 8.92% of all sales in November (Figure 4). This is down 1.4 percentage points from November 2012 and down 11.2 percentage points from its peak level of 19.9% in March 2009. The foreclosure pipeline is slowly being cleared out; however, judicial foreclosure states, such as New York, New Jersey and Connecticut, are much slower in clearing the foreclosed home backlog.

Outlook
2013 ends on a positive note and certainly brought with it a few surprises. We had double-digit increases in home values with some markets, especially in the West, saw 20-30% annual appreciation. At the depth of the recession, we never could’ve guessed home values would skyrocket off the bottom so quickly. Mortgage rates were below 4% for quite some time, and demand – both from consumers and investors – really ramped up. We saw bidding wars, and first-time home buyers were pushed out of the market with little for-sale inventory. 2014 will be different, but in a good way. Decreasing negative equity rates will increase available inventory. This increase in supply will contribute to the undergoing slowdown in appreciation – as November data has already hinted at – and we will turn to more sustainable rates of appreciation. This will allow for more consumers to enter the market and buy homes. After a year of double-digit appreciation, home value growth in places such as San Francisco, San Jose and Phoenix will slow down, though they will still be outpacing historic norms. Despite these slowdowns, 2014 will see more expensive homes with affordability becoming an issue in many California markets and higher mortgage rates. We expect that the 30-year fixed mortgage rates will pass the 5% mark later in 2014. Our forecast calls for another 4.6% appreciation from November 2013 to November 2014, which is more in line with historical appreciation rates.

Read the entire Zillow blog post here:

http://www.zillow.com/blog/research/2013/12/19/nov-home-value-appreciation-strong/

New York Home Prices & Values

20 Dec

from Zillow dot com

The median home value in New York is $245,900. New York home values have gone up 3.0% over the past year and Zillow predicts they will rise 2.6% within the next year. The median price of homes currently listed in New York is $320,000. The median rent price in New York is $2,750.

Foreclosures will be a factor impacting home values in the next several years. In New York 1.1 homes are foreclosed (per 10,000). This is lower than the national value of 5.1

See how NY compares with national values:

US Zillow Home Value Index

Increase in Median Home Prices, Many Borrowers Still Underwater

24 Aug

Median home prices are up 9.4% from the same time last year, the greatest improvement since the beginning of the housing recovery.   This year’s second quarter saw the largest quarterly growth in home prices in nearly seven years, according to FHFA’s purchase-only home price index (HPI).

In addition, a data sample of 12 metro areas across the country showed that the share of distressed sales in the market fell to 29.1 percent, a sharp drop from the first quarter’s 38.3 percent share.

The share of homeowners with underwater mortgages continued its decline in the second quarter, according to the Zillow Negative Equity Report.  About 15.3 million homeowners with a mortgage were underwater, or 30.9 percent, a drop from 15.7 million or 31.4 percent.

Many of these borrowers are taking advantage of the HARP program.  Created in 2009 as part of that year’s economic stimulus program, the Home Affordable Refinance Program (HARP) is a government-backed program for homeowners whose homes have dropped in value since 2009.

HARP allows for unlimited loan-to-value and, more than 3 years after launching, the program is finally building its momentum. Through the first six months of 2012, more than 422,000 U.S. homeowners used HARP.

The pace at which HARP loans are closing is quickening, too.

  • March 2009 – June 2012 : 37,046 HARP loan completions per month, on average
  • January – June 2012 :  70,495 HARP loan completions per month, on average
  • June 2012 : 125,865 HARP loan completions

ZILLOW HOME VALUE INDEX SHOWS IMPROVEMENT IN MAY

22 Jun

Home values rose in May month-over-month and quarter-over-quarter, but fell on a yearly basis, according to Zillow’s Real Estate Market Reports.   The upside to the yearly decline is it’s the smallest year-over-year drop since October 2007.

In the New York Metro area, the monthly gain was 0.3%, quarterly gain was 0.5%, but the year-over-year values were down 3.3 %.

Sale prices rose in the NY area as well, up 1.2% month-over-month, 2.3% for the quarter although for the year there was a drop of 4.7%.

The number of foreclosures dropped in May, with 6.3 out of every 10,000 homes being foreclosed nationwide compared to 7.2 out of every 10,000 in April.

With such a slight increase in the picture, other analysts say we should not get too optimistic.