Mildly disappointing?

Posted in Demographics, Economics, Employment, Housing Recovery | 30 Comments

From Bloomberg:

Home-Sales Winning Streak Ends, First-Time Buyers Go Missing 

A three-year winning streak for sales of previously owned homes in the U.S. ended in 2014 as some investors stepped out of the market and first-time buyers failed to fill the void.

Purchases totaled 4.93 million last year, down 3.1 percent from the 5.09 million houses sold in 2013, figures from the National Association of Realtors showed Friday in Washington.

The share of American homebuyers making their first purchase dropped in 2014 to its lowest level in almost three decades, according to the Realtors group. At the same time, employment gains, growing consumer confidence, mortgage rates at historically low levels and government efforts to lower purchasing costs probably will help bolster demand in 2015.

“Demand has been pretty sideways,” said Jay Feldman, an economist at Credit Suisse in New York. “There are various positives and I don’t see any big negatives for housing. The improving labor market and low mortgage rates will support the housing recovery.”

Purchases climbed a less-than-forecast 2.4 percent in December from the prior month to a 5.04 million annual rate, the report showed.

The median forecast of 76 economists in a Bloomberg survey called for sales of previously owned homes to rise to a 5.08 million pace in December. Estimates ranged from 4.93 million to 5.25 million. The November reading was revised down to 4.92 million from a previously reported 4.93 million.

First-time buyers accounted for 29 percent of all purchases in December, down from 31 percent a month earlier, the report showed. A separate survey from the group showed they made up 33 percent for all of 2014, the fewest since 1987.

“First-time buyers are still missing in action,” Lawrence Yun, NAR chief economist, said at a news conference today as the figures were released. The market in 2014 was “mildly disappointing.”

Falling interest rates, more jobs and higher levels of confidence indicate “pent-up demand continues to build,” he said. “2015 should be a better year.”

A lack of supply and rising prices are probably among reasons younger and first-time buyers have yet to enter the market. Those issues are also driving out investors, who led the early stages of the recovery.

The median price of an existing home advanced 6 percent in December from the same period a year earlier, to $209,500, the Realtors’ report showed. In 2014, it was the highest in seven years.

The number of previously owned homes on the market fell to 1.85 million, the second-smallest reading for any December since 1999.

Unemployment falls in December, but NJ still lags

Posted in Demographics, Economics, Employment | 103 Comments

From the Record:

NJ’s annual job growth slow, with some bright spots

Four years after New Jersey reached its post-recession employment low, figures released Thursday show the state’s economic recovery continues to be slow.

The state added a modest 29,000 jobs in 2014, leaving employment far below its pre-recession peak and lower even than the level 14 years ago, according to the monthly employment report released by the New Jersey Department of Labor and Workforce Development.

The report showed New Jersey shed 400 jobs last month, even as national employment forged ahead strongly, adding 252,000 jobs in December. And although the state’s jobless rate dropped from 6.4 percent to 6.2 percent, it remains above the national figure of 5.6 percent.

The report, nevertheless, contained some positive elements, including the fact that the state added more jobs in 2014 than the previous year, despite the loss of thousands of casino jobs in Atlantic City, a very harsh winter and the lingering effects of Superstorm Sandy.

“It was a sustained, moderate pace of growth,” said Patrick O’Keefe, director of economic research at the accounting firm CohnReznick.

The 29,000 jobs added last year were an improvement on 2013, when the state gained 18,800 jobs, but below the 2012 total of 43,900 and only slightly better than the figure of 25,200 in 2011.

Since the state’s employment reached a low point in January 2011, New Jersey has regained 48 percent of the 258,000 jobs lost in the downturn. State figures show employment at the end of 2014, 3,957,800 workers, is still below the 2000 total of 4,024,600.

Flight of the Millionaire

Posted in Demographics, Economics, New Jersey Real Estate | 127 Comments

From the Star Ledger:

Millionaire households fleeing N.J. by the thousands, study says

New Jersey, consistently one of the most affluent states in the country, has slipped a bit in a new ranking of the rich.

The Garden State fell from second to third in millionaire households per capita, according to a ranking released today by Phoenix Marketing International.

New Jersey lost roughly 10,000 millionaire households, but those affluent families who remain still account for 7 percent of the whole state, the researchers said.

The state had climbed to second last year for the first time since 2010, but was edged out by Connecticut in the 2014 ranking.

A high tax rate for top earners may have led to some migration out of the state, according to David Thompson, the lead researcher.

By losing those 10,000 millionaire households, the Garden State returns to third, where it was ranked from 2010 through 2012. Since the last report, Connecticut lost only 1,000 millionaire households, as it vaulted to the second spot, the group said.

Some groups doubt the millionaire-migration theory. Jon Whiten, a deputy director of New Jersey Policy Perspective, said long-term statistics show that tax rates do not cause the rich to flee.

“If millionaires were truly trying to flee NJ’s top income tax rate, we probably would have lost a lot more when the rates were higher,” Whiten said. “But during the 2000s NJ almost doubled the number of tax filers above $500K at a time when the tax rate was increased on them, twice.”

Last year, a report by the Morristown-based Regent Atlantic wealth management firm released a report entitled “Exodus on the Parkway” that claimed so-called “tax migration” began in 2004, with the state’s passage of the “millionaire’s tax.” The report found that a couple with an income of $650,000 who moved to Pennsylvania would save some $21,000 per year in taxes, adding up to $1.65 million over 25 years, if invested. Most families with incomes of $500,000 per year or more were departing New Jersey for either the Keystone State or Florida, the Regent Atlantic authors added.

“The phenomena is there, that people are leaving – but people in New Jersey have high incomes,” said Joseph Seneca, professor of economics at the Edward Bloustein School of Planning and Public Policy at Rutgers University.

The cause-and-effect is nuanced, Seneca said. Retirement, people seeking better climates, sale of businesses, stock market decreases, and other factors mean that this year’s millionaires might not be next year’s millionaires, he said. But taxes have been shown to be a factor. For instance, Florida has no estate tax, while New Jersey’s is costly, Seneca said.

“New Jersey has been, and remains, a high-income state,” the economist said.

Sorry, couldn’t help myself…

Posted in Humor, New Development, New Jersey Real Estate | 144 Comments

From the Star Ledger:

Snooki buys new $2.6M Florham Park home

Nicole “Snooki” Polizzi is expanding her real estate portfolio.

The “Jersey Shore” alum purchased a $2.6 million home in Florham Park with her husband Jionni LaValle, property records show.

The three-story colonial home on 165 Summit Road sold for $2,589,786. It features a brick facade and beige siding. It’s unclear if Polizzi plans to use the new construction as a second home. The property is one of a handful of new homes built by RNJ Contracting, an area real estate agent told NJ Advance Media today.

Zoning police coming to JC

Posted in New Jersey Real Estate, Politics | 77 Comments

From the Jersey Journal:

Jersey City says new plan would crack down on code violators; real-estate agents aghast

City officials are looking to embark on an aggressive new plan to ensure homes are compliant with local zoning rules.

But the measure, up for initial approval at tomorrow night’s Planning Board meeting, would be a “disaster” if implemented, according to critics who say it would bring the city’s real-estate market to a standstill.

The plan would require most property owners to obtain a zoning certificate of compliance before they can sell their properties, obtain building or demolition permits or perform any kind of site improvements. The certificate would be issued by a zoning officer who certifies that the property complies with city zoning codes.

Ward B City Councilman Khemraj “Chico” Ramchal is pushing for the measure, saying it would help the city to locate illegal apartments and other code violations, as well as offer consumer protection for home buyers.

Ramchal told The Jersey Journal the plan would halt what he says is a widespread practice of home owners duping buyers into purchasing homes without telling them about code violations like illegal parking spots or rental units.

“If John is selling a house to Tom, John must not misrepresent himself or what he’s selling to Tom,” he said.

Each certificate would cost $150. City spokeswoman Jennifer Morrill declined to answer when asked how much revenue the city believes would be generated. Ramchal estimates the added revenue would exceed $250,000 annually.

Real-estate agents are hoping to halt approval of the measure, saying it would create an unacceptable “lag” during a house sale.

“It would reduce the number of sales in Jersey City by maybe 25, 30 percent,” said Hottendorf said.

Both Hottendorf and Laura Skolar, Liberty Board’s president, also doubt that the city’s outdated record-keeping will help. A certificate of compliance may not be issued quickly enough to prevent a mortgage commitment from expiring, they said.

“Using the sale of a property to trigger this sort of thing creates problems,” Skolar said.

Mayor Steve Fulop is a supporter of the measure. Asked to comment, Morrill said “there is no reason that someone should make money by breaking the law.”

“Chico has been a strong voice against illegal apartments that can put a tremendous drain on residents of the city,” she said. “His proposal is consistent with what is done in other cities.”

Bulldoze it all, turn it into a nature preserve

Posted in Economics, Employment, Politics, Property Taxes | 78 Comments

From the Philly Inquirer:

Casino closings have big impact on A.C. property-tax base

The loss of 8,000 jobs in Atlantic City’s casino industry in the last 12 months has sent shock waves through the region’s economy, but an even more precipitous collapse is underway in the city’s property-tax base.

Eight or nine years ago, casinos owned 85 percent of Atlantic City’s real estate, based on assessed values, Mayor Don Guardian said last week. Now, they account for about 55 percent of the assessed values and are expected to keep falling, he said.

A proposal by New Jersey Senate President Stephen Sweeney (D., Gloucester) to stabilize Atlantic City’s tax base by allowing the casinos, in aggregate, to pay a flat rate of $150 million this year and next year instead of volatile property taxes gained traction Wednesday when Atlantic City and Atlantic County agreed on how to split that money.

County Executive Dennis Levinson scheduled a meeting Monday to discuss the revenue agreement with Atlantic County mayors, who have had to raise property taxes to make up for declines in casino assessments.

A 2007 revaluation boosted the assessed value of all Atlantic City real estate to $20.5 billion from $8.2 billion, with casinos accounting for the bulk of the increase. But since 2010, appeals by casinos hurt by sagging revenue have gutted the tax rolls, which totaled just $11.3 billion in 2014, according to Atlantic County Board of Taxation records.

“We’re going to continue to spiral down with assessed values, probably more than $3 billion this year. We’re eventually going to get down to $7 billion before we level off,” Guardian said of the city’s overall assessments.

Casinos’ assessments have plummeted since 2010 from about $15 billion to less than $6 billion, based on values won on appeals. For example, New Jersey Tax Court in October 2013 slashed Borgata’s 2010 assessment to $870 million from $2.3 billion.

The collapsing value of casinos has forced a massive shift in taxes to residents, who for years benefited from the flow of out-of-staters’ gambling losses into the city’s coffers.

“New Jersey has been struggling.”

Posted in Demographics, Economics, Employment, Housing Recovery, New Jersey Real Estate | 34 Comments

From the Star Ledger:

N.J. home prices, jobs struggling to rebound from recession

A new report shows the economic recovery remains a struggle in many parts of the country, including New Jersey, where more than half of the state’s counties have not yet returned to pre-recession levels on any of four key economic indicators.

While the country as a whole boasts more jobs than it did prior to the most recent economic downturn, the study from the National Association of Counties found only about a quarter of counties throughout the nation have been able to close the gap on four indicators — gross domestic product, employment, unemployment rates and home prices.
..
“The national story masks the reality on the ground,” Istrate said. “It does not tell you the full picture of what’s happening.”

While nearly three-quarters of county economies nationwide had recovered to pre-recession levels on at least one of the four indicators analyzed, 13 of the New Jersey’s 21 counties had not bounced back by any of those measures. None had reached previous levels in home prices or unemployment rates, according to the report.

Six counties — Bergen, Burlington, Hudson, Middlesex, Ocean and Somerset — have seen their gross domestic product recover from pre-recession peaks and Mercer County did not experience a recession by that indicator. Meanwhile, Hudson, Mercer, Middlesex, Ocean and Union counties had recouped more jobs than they had before the most recent recession.

Joseph Seneca, an economics professor at the Bloustein School of Planning and Public Policy at Rutgers University, said he was not surprised to see counties had not rebounded because “employment recovery in New Jersey as a whole from the Great Recession has been tepid at best.”

Patrick O’Keefe, a director of economic research at CohnReznick in Roseland, said New Jersey isn’t faring as well as the nation as a whole for several reasons. New Jersey is an expensive, highly regulated state with mature development patterns and slow population growth, he said.

“Those are constraints on the pace of growth anywhere in New Jersey,” he said.

71%? We need a 710% increase in foreclosures.

Posted in Demographics, Economics, Foreclosures, New Jersey Real Estate | 114 Comments

From the Record:

Foreclosure activity up 71% in NJ, RealtyTrac says

Foreclosure activity rose 71 percent in New Jersey last year, as lenders continued to deal with a backlog of troubled properties, according to a report released Thursday.

At the same time, foreclosures nationwide dropped 18 percent, to the lowest level since before the recession.

About 1.9 percent of New Jersey housing units had foreclosure filings last year, compared with 0.85 percent in the nation, according to RealtyTrac, a California company that follows the distressed housing market.

New Jersey ranked second in the nation in the rate of all foreclosure filings, just behind Florida. The state ranked fifth in completed foreclosures – in which homes are repossessed by banks – which were up 34 percent.

Lenders are dealing with troubled Garden State properties that piled up when foreclosure activity slowed to a trickle in 2011, while courts and the mortgage industry dealt with reports of industry abuses. In addition, New Jersey is one of two dozen states that require that foreclosures go through the courts, which also slows the process.

In Bergen County, about 4,267 housing units faced foreclosure filings last year, ranging from a lender’s notice that the homeowner is in default on the mortgage all the way through to sale of the property at sheriff’s auction. That’s up 59 percent from the previous year. In Passaic, 3,741 units had filings, up 65 percent, RealtyTrac said.

Atlantic City had the highest rate of foreclosure filings of any metropolitan area of over 200,000 population in the nation, at 3 percent of housing units. The city has been hard hit by the recent closings of four of its casinos, resulting in the loss of thousands of jobs.

2015 – Will the big foreclosure clean out begin?

Posted in Foreclosures, New Jersey Real Estate | 65 Comments

From the Philly Inquirer:

Foreclosures down nationwide, still increasing in Phila. region

Foreclosure filings nationwide last year fell to their lowest level since 2006 and were down by more than a million properties from 2010′s recession-aftermath peak of roughly 2.87 million.

RealtyTrac, an Irvine, Calif., housing data and analytics provider that tracks filings across the United States, reported Thursday that last year’s 1,117,426 total filings, while down considerably from that peak, still represented an increase of 400,000 since the housing boom of the last decade began to go bust.

The company has said it considers the 500,000 foreclosure filings in 2005 a normal year. A single property may be represented by several filings as the financial and legal aspects of a foreclosure are worked out.

Despite the national decline in filings in 2014, portions of the housing market in the eight-county Philadelphia region are still mired in foreclosures, short sales, and bank repossessions, the RealtyTrac data show.

According to RealtyTrac, “The list of states with increased activity in the last months of 2014 includes those with judicial foreclosure backlogs, such as Massachusetts, New Jersey, Pennsylvania, and New York.”

Such backlogs mean that in New Jersey and Pennsylvania, the foreclosure process often takes three years or more. Many mortgage lenders deferred pursuing foreclosures because of the backlogs, and the 2014 increase reflected attempts to catch up.

Last year, New Jersey had the second-highest increase nationally in filings, RealtyTrac said, and was No. 2 among the 50 states in number of filings.

The number of bank-owned repossessions – houses that went all the way through New Jersey’s lengthy foreclosure process – rose 34 percent statewide, to 5,780, over 2013′s level, the RealtyTrac report said. Camden, Burlington, and Gloucester Counties accounted for about 18 percent of 2014 filings statewide.

Nunnenkamp added that “there are still numerous abandoned homes that have not come to the market yet, which could increase the percentage.”

These are “zombie houses” – more than 6,100 in the eight-county region – vacated by borrowers at the start of never-completed foreclosure proceedings.

Bubble or bargain?

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 98 Comments

From MarketWatch:

Where house prices are most undervalued (and overvalued)

U.S. house prices are only undervalued by around 2% on average, according to the latest research, but they’re still overvalued — and undervalued — by double-digit percentages in some metro areas.

American house prices are on average almost back to normal in the fourth quarter of 2014, after being undervalued by as much as 5% one year ago and 3% in the previous quarter, but the extent they’re undervalued or overvalued still varies dramatically among the 100 largest metro areas, according to real-estate website Trulia. In the first quarter of 2006 at the peak of the housing market bubble, U.S. house prices were overvalued by 34% before dropping to 14% in the first quarter of 2012.

“The more prices are overvalued, the greater the chance that a bubble might be forming,” says Jed Kolko, chief economist at Trulia. Overvalued doesn’t necessarily mean those homes are unaffordable. New York and Boston both look several percentage points undervalued relative to long-term fundamentals, but they’re far more expensive than Houston or Austin. Trulia analyzed home prices in 100 metro areas relative to fundamentals such as jobs, income growth and household formation and rents.

Home prices in 70 of the 100 largest metros are less than 10% over- or undervalued, Trulia found, the highest number since the recovery began. Home buyers making the U.S. median income and purchasing the typical U.S. home spend 15% of their income on their monthly house payment (excluding insurance and taxes) down from the historical norm of 22% during the pre-bubble boom of 1985 to 1999, according to separate data released in December by housing website Zillow.

In Trulia’s latest report, the most overvalued market in the U.S. was Austin, Texas (overvalued by 16%), followed by Orange County, Calif. (15%), Los Angeles (13%), Honolulu (13%) and San Francisco (12%). In fact, the median price for single-family homes in Austin was $245,000 in November 2014 versus $189,300 in November 2011, while the average price was $251,838 in 2014 versus $311,222 in 2011, according to data released last week by the Austin Board of Realtors.

Almost all of the most undervalued metro areas are in the Midwest and New England, and almost all were either in Ohio or Connecticut, Kolko says. Cleveland was undervalued by 20% (versus 13% 2006), Akron was undervalued by 17% (versus 12% in 2006) and Dayton was undervalued by 17% (compared with just 8% in 2006). Hartford was 15% undervalued in the fourth quarter of 2014 (versus 20% in 2006) while Fairfield County was undervalued by 14% (versus 30% in 2006).

2015 – Year of the first-timer?

Posted in Demographics, Economics, Employment, Housing Recovery | 93 Comments

From the Record:

First-time buyers key to housing

Joy Abma, 23, and Dan Charnesky, 24, expected to rent an apartment after their wedding this spring.

But when they looked at the high rents — and the difficulty of finding a place that would take their three dogs — they decided to try to buy a home instead. “We had been saving for a very long time, so we ended up with enough money for a down payment,” said Abma, a nurse who lives in Wyckoff.

After several months of looking, she and Charnesky, a landscaper, are to close on an Oakland split-level house this month. “We thought, ‘We might as well do it while we’re young,’ ” Abma said.

But buying a home when you’re young is more difficult than ever. Thanks to high student debt, stricter mortgage standards and years of slow employment and income growth, people in their 20s and 30s have found it tough to get their first toehold in homeownership — and that’s a problem for the whole real estate market. Without enough first-timers to jump-start a chain of purchases, homeowners can’t trade up to their second and third homes.

First-timers may return to the market in greater numbers this year, however, according to some analysts, who point to low interest rates, a stronger job market and high rents, all of which make buying more attractive.

But in 2014, first-timers made up about 33 percent of buyers — the lowest share in nearly three decades, and well below the historic average of about 40 percent, according to a survey by the National Association of Realtors.

A recent study by the Federal Reserve Bank of New York found that only 32 percent of 30-year-olds owned their homes in 2013, down from 44 percent in 2006-07, before the recession hit. The drop is especially notable among people with student debt, the New York Fed said.

The millennial generation is “not entering the housing market as purchasers or renters at anywhere near where prior cohorts have done,” said Patrick O’Keefe, an economist with CohnReznick, an accounting firm in New York and Roseland. “One of the reasons is the soft job market, and relatively little income growth for those who have jobs.” In addition, he said, they’re “burdened with significant debt, primarily student debt.”

But recent research suggests that young adults would be very interested in homeownership — if they could afford it. A recent survey of people age 18 to 29 by the Demand Institute, which studies consumer demand around the world, found that 24 percent already owned their homes, and 60 percent plan to buy someday. And three in four believe ownership is an excellent investment. But 44 percent think it will be difficult to qualify for a mortgage.

Who they are, what they did

First-timer median age was 31.
One in 10 bought a condo or town house.
One in four said saving for a down payment was difficult.
Of those, 57 percent said student loans delayed saving.
Four out of five used their own savings.
One in four received a gift from a friend or relative.
More than nine out of 10 chose a fixed-rate mortgage.

Lowest priced homes not sharing in the recovery

Posted in Housing Recovery, National Real Estate | 71 Comments

From HousingWire:

Black Knight: Affordable homes lagging behind in home price recovery

In the 10 states where prices are still furthest from their pre-crisis peaks, homes in the bottom 20% value tier are lagging – sometimes considerably – in recovery as compared to the highest valued properties, according to Black Knight’s November Mortgage Monitor.

In California, for example, properties in the top 20% price tier are now just over 3% behind their pre-crisis peaks; the lowest 20% are still 32% off those peaks.

In many cases, these disparities boil down to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties, then fell harder and further when the bubble broke.

According to Trey Barnes, Black Knight’s senior vice president of Loan Data Products, home price recovery for the lowest 20% of property values has lagged behind those at the top in America’s hardest hit states.

“We looked at HPI appreciation from pre-crisis peaks to today in the 10 states currently trailing the furthest behind their pre-crisis housing maximums,” said Barnes. “The data showed a clear difference in the levels of recovery among home price tiers. The Black Knight HPI separates home values for every geographical division into five equal tiers; those in the lowest 20% of home values have been lagging behind their higher-valued counterparts in recovery to pre-crisis peaks, sometimes considerably.

“For example, in Nevada – overall, still more than 39% off its pre-crisis peak – properties in the lowest tier are nearly 47% off their peaks, as compared to 36% for those in the highest tier. In California, an even starker contrast emerges: properties in the highest tier have now come within just over 3% of their pre-crisis peak, while those in the lowest 20% are still almost 32% down. In many cases, these disparities between price tiers can be attributed to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties and likewise fell harder and further when the bubble broke.”

The future belongs to them

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 61 Comments

From the Atlantic:

Can Immigrants Save the Housing Market?

Since the recession, there’s been concern over the lack of new households formed and the decreased rate of homeownership in the U.S. And while some suggest that the share of people who choose to buy instead of rent should never ratchet up to the nearly 70 percent seen at the height of the bubble, many lament the loss of the American Dream,which promoted buying a home as a symbol of success and adulthood.

But in some groups the dream, at least of homeownership, is alive and well. During the past two decades, immigrants have accounted for 27.5 percent of all household growth, according to the Harvard Joint Center for Housing Studies. When it comes to growth among younger generations, the foreign-born population is even more significant, accounting for nearly all the household growth for those under the age of 45.

Last year, immigrant households made up 11.2 percent of owner-occupied housing according to the JCHS—that’s up from only 6.8 percent in 1994.

The exact rate of homeownership varies among different immigrant groups, but overall the share of immigrants who own homes is growing. In 2000, the rate of homeownership among immigrants stood at 49.8 percent, according to a study by the Research Housing Institute of America. By 2010 the rate was 52.4 percent, and by 2020 that number will climb to about 55.7 percent, the study predicts. In the third quarter of 2014 the overall homeownership rate in the U.S. was 64.4 percent, according to the Census Bureau.

There are several reasons behind the growth rate in homeownership for immigrants, but part of the impetus may be that many immigrant populations are less cynical about the idea of homeownership than their American-born counterparts. “They view homeownership as a piece of the rock. It’s a benchmark of being settled,” says Dowell Myers, a professor at the Sol Price School of Public Policy at USC. “They view homeownership as the American Dream and they buy into that.”

Even more compelling are the possibilities for homeownership among the children of immigrants. “When you look at the children of immigrants they actually exceed the native born on a lot of measures: on income, on education, on homeownership,” says Masnick.

Sound familiar?

Posted in Mortgages, Politics, Risky Lending | 224 Comments

From Bloomberg:

Obama to Cut FHA Mortgage Insurance Premiums to Boost Homeownership

In an effort to expand homeownership among lower-income buyers, President Barack Obama plans to cut mortgage-insurance premiums charged by a government agency.

The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance, Julian Castro, secretary of the Department of Housing and Urban Development, said today during a conference call with reporters. Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes.

The FHA has been increasing premiums since 2011 to offset losses caused by defaults on mortgages it backed after the housing bubble burst. Housing industry participants say the increases in annual fees, which are now at 1.35 percent of the loan balance, are squeezing buyers with modest incomes out of the market.

“Lots of people have been locked out of the market, particularly lower-wealth borrowers and borrowers of color, by the high prices at FHA,” said Julia Gordon, director of housing finance and policy at the Center for American Progress, a group affiliated with Democrats. The premium cut “does put homeownership within the reach of more people.”

The FHA estimates that 250,000 first-time homebuyers will enter the market after the premium reductions.

Democrats and housing groups say reducing FHA fees will help the agency’s bottom line because it will boost the volume of lending, which declined when homebuyers had to pay more to obtain loans. A December study by the Mortgage Bankers Association said the premium increases had reduced the value of the insurance fund by $4.4 billion as higher costs drove away creditworthy borrowers.

Where to find the most and least expensive 4 bedroom in NJ

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 171 Comments

From the Daily Record:

N.J. homes among priciest, but S.J. offers some bargains

Coldwell Banker Residential Brokerage has released its 2014 Home Listing Report, which found New Jersey to have the fourth highest average listing price in the nation, at $440,354 for a four-bedroom, two-bathroom home.

However, half of the state’s 10 most affordable real-estate markets are in South Jersey, according to the Coldwell Banker Home Listing Report.

The report, which additionally ranked 128 real estate markets within New Jersey, named Chatham Township as having the highest average listing price, at $892,489 for a four-bedroom, two-bathroom home, while East Orange ranked as the most affordable market in the state, with an average listing price of $120,000.

The top 10 most expensive New Jersey real estate markets, based on average listing price, are: Chatham Township, $892,489; Bernards Township, $832,878; Madison Borough, $777,490; Mountain Lakes Borough, $724,490; Princeton Junction/West Windsor Township, $722,912; Livingston Township, $720,787; Westfield Town, $720,221; Warren Township, $718,909; Alexandria Township, $712,433 and Woodcliff Lake Borough, $678,623.

The top 10 most affordable New Jersey real estate markets, based on average listing price, are: East Orange, $120,000; Newark, $147,981; Roselle, $173,419; Paterson, $178,156; Deptford, W. Deptford, Woodbury, $181,6396; Atco, $186,380; Glassboro, $206,900; Elizabeth, $210,000; Sicklerville, $217,479; Millville, $219,052.