Hammers are coming down on the high end again, as the ritziest in real estate finally come out of hiding. Vacation homes in some of the most coveted locales are seeing price gains again, so potential buyers are now looking to builders.

The question is, where are you getting the most bang for your big bucks?

Not in Hawaii, according to a new study from real estate advisory firm Chris Pollack, Ltd, which looked at project costs per square foot in some of the swankiest summer and overall vacation destinations. The total project costs include not just construction, but building materials, architectural fees, and permitting.

Hawaii topped the list at $1300 per square foot for an ultra, high-end beach house. Malibu, California was a close second at $1,170 and Palm Beach, Florida rounded out the top three at $1,105 per square foot for the total project.

“The island locations are more expensive because of costs associated with importing materials and labor,” notes Chris Pollack. That put Nantucket, MA on the top ten most expensive list, but still lower at just $975 per square foot, according to the survey.

Labor costs are rising, up 13.8 percent from 2007 in these high-end markets, says Pollack, and that has many investors using “value engineering” to offset the costs.

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Article source: http://www.cnbc.com/id/48058654?__source=RSS*blog*&par=RSS

The one positive in all the uncertainty surrounding the nation’s debt was a plunge in Treasury yields, which in turn sent mortgage rates to record lows.

The 30 year fixed hit a near-low of 4.45 percent last week from 4.57 percent, and the 15 year made a new low of 3.52 percent, according to the Mortgage Bankers Association. Those low rates pushed refinance applications up 7.8 percent and purchase applications up 5.2 percent (both seasonally adjusted).

So are we housing geeks now jumping for joy? All good? Maybe not so much.

“Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year’s level. Factors such as negative equity and a weak job market continue to constrain borrowers,” notes the MBA’s VP of research and economics, Michael Fratantoni. “Purchase activity increased off of a low base, returning to levels of one month ago, but remains weak by historical standards.”

So even ridiculously low rates are not exactly boosting the housing recovery; that’s because rates have been historically low for a while.

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Article source: http://www.cnbc.com/id/44004035?__source=RSS*blog*&par=RSS

Forecasters expected sales of existing homes to rise in June because the pending home sales index, which measures signed contracts, rose in May. If you consider it takes 1-2 months to close, then there’s your indicator.

But that was not the case.

Sales fell, not by much, down 0.8% month-to-month, surprising even the Realtors, who thought May would be the weakest point. Sales were down 8.8 percent from June of last year, when most closings took place from the end of the home buyer tax credit.

What Realtors and prognosticators did not even consider was a strange phenomenon: June saw a spike in the contract cancellation rate to 16 percent. Existing home cancellation rates usually run under ten percent, and, in fact, in May were at just 4 percent. Cancellation rates for new home construction usually run higher than that, as buyers of newly built homes tend to be more volatile and put less (often nothing) down when signing a contract.

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Article source: http://www.cnbc.com/id/43824730?__source=RSS*blog*&par=RSS

The summer has barely started, but the fight is on against changes to loan limits that don’t take place until the first of October.

Today the National Association of Home Builders released its own study claiming that lowering the loan limits at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA), “will reduce housing demand and place downward pressure on home prices in major housing markets.”

The loan limits were raised when the mortgage market crashed, investors in mortgage backed securities ran for the hills, and the government-owned entities were the only ones left writing mortgages. Originally at $417,000 for a so-called “conforming loan,” they rose to as high as $729,000 in the nation’s higher-cost markets, in order to keep mortgages moving. That will drop to $625,000 in October in those markets, with the base limit remaining at $417,000.

The builders say that homes above those limits “would likely require financing with higher mortgage interest rates and other less favorable loan terms, such as higher required down payments and more stringent credit history thresholds.”

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As federal regulators clamp down on foreclosure procedures at the big banks, and the government sets new lender requirements for risk retention in residential mortgages, the cry from the industry is that this will only hamper the housing recovery and price more borrowers out of home ownership.

“High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates,” according to a statement from a coalition including the Mortgage Bankers Association and the National Association of Home Builders. “The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.”

On the one flank you have the industry fighting these new regulations and on another they are fighting a potential settlement with the state attorneys general that could involve fines that would go toward lowering mortgage principal for troubled borrowers. They in fact funded a study that found such a settlement would prolong the foreclosure crisis and drive up mortgage interest rates. That enraged consumer advocates. Iowa’s attorney general Tom Miller, heading up the 50 state group looking to impose penalties shot back:

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Article source: http://www.cnbc.com/id/42592108?__source=RSS*blog*&par=RSS