Applications to refinance are already down nearly 60 percent from a year ago, according to the Mortgage Bankers Association. Mortgage rates on the 30-year fixed rose from 3.5 percent in May to nearly 5 percent in July, settling now around 4.5 percent.

The government’s Home Affordable Refinance Program has been successful, allowing more than 2 million borrowers, some with negative home equity, to take advantage of lower rat, but only borrowers with government-backed mortgages qualify.

That has left millions of borrowers out. Obama has pushed for more refinancing in the private mortgage market and will call for it once again. Senior administration officials, however, admit that “the window is closing given interest rates coming up over the last few months.”

(Read more: Homeownership may be for the few rather than the many)

The president will also push for more community-based assistance to help first-time homebuyers get into vacant, foreclosed homes.

Phoenix perhaps is not the best backdrop for this. The recovery there was driven more by private investors in distressed homes than by any government-backed mortgage rescue. Investors bought these homes in bulk and are now renting them for profit.

These same investors, largely using all-cash, pushed first-time buyers out of the Phoenix market and continue to do so in several other markets across the nation, where lower-income buyers might have been able to take advantage of distressed homes.

Obama will offer “targeted ways to make sure first-time buyers have a fair shot competing,” an administration official said.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Article source: http://www.cnbc.com/id/100940811

Applications to refinance are already down nearly 60 percent from a year ago, according to the Mortgage Bankers Association. Mortgage rates on the 30-year fixed rose from 3.5 percent in May to nearly 5 percent in July, settling now around 4.5 percent.

The government’s Home Affordable Refinance Program has been successful, allowing more than 2 million borrowers, some with negative home equity, to take advantage of lower rat, but only borrowers with government-backed mortgages qualify.

That has left millions of borrowers out. Obama has pushed for more refinancing in the private mortgage market and will call for it once again. Senior administration officials, however, admit that “the window is closing given interest rates coming up over the last few months.”

(Read more: Homeownership may be for the few rather than the many)

The president will also push for more community-based assistance to help first-time homebuyers get into vacant, foreclosed homes.

Phoenix perhaps is not the best backdrop for this. The recovery there was driven more by private investors in distressed homes than by any government-backed mortgage rescue. Investors bought these homes in bulk and are now renting them for profit.

These same investors, largely using all-cash, pushed first-time buyers out of the Phoenix market and continue to do so in several other markets across the nation, where lower-income buyers might have been able to take advantage of distressed homes.

Obama will offer “targeted ways to make sure first-time buyers have a fair shot competing,” an administration official said.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Article source: http://www.cnbc.com/id/100940811

Earlier in the year, home buying was still considered to be the more pricey route to go when compared with renting in most parts of the Bay Area.  But the tables seem to have turned recently, as both the buying and rental market have heated up all around the bay the last few months.

Real estate site Trulia recently dug into data on both rental prices and homes for sale across the U.S. in the months of June, July and August and based on their analysis, it’s cheaper to buy than to rent a comparable property everywhere in the U.S., including the bay area.

In the San Francisco metro area, it was 28% cheaper to buy than rent.  It was 31% less expensive to be a homeowner in the San Jose metro area and in the Oakland metro area, a homeowner would save 41% over renting.

Courtesy of Trulia.com

Trulia’s report made several assumptions:

Cost of homeownership assumes that the home is sold after 7 years and includes closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters insurance. Monthly cost is based on net present value of costs over 7 years. Monthly costs are based on the average across all properties listed in the metro area, including those for sale and those for rent, in summer 2012.

They also assumed that a homebuyer was able to secure a 3.5% mortgage rate, was in the 25% tax bracket and was able to put a down payment of 20%.  Any change in these assumptions, such as having a higher mortgage rate, a lower tax bracket and selling sooner could significantly change the outcome.  With a mortgage rate of 4.5%, being in the 15% tax rate and only a 3 year window, the tables turn once again and it is 28% cheaper to rent than to buy in the SF metro area.

And while buying may be the way to go in the long run, many are held back by the difficulty in saving for that 20% down payment (especially in the bay area where homes are pricey) and you’re much less flexible in relocating once you’ve got a mortgage.

You can play around with different assumptions on Trulia’s fun interactive infographic here to see what how your particulars work out.  Is it better to rent or buy for you?

Article source: http://blog.sfgate.com/ontheblock/2012/09/19/what-its-cheaper-to-buy-than-rent-in-the-bay-area/

Compared to second-quarter data from 2010, rents rose 8.6 percent in San Francisco and 9.3 percent in San Mateo County, for monthly averages of $2,400 and $1,800 respectively.

The trend can be pegged to a dwindling rental supply and increasing demand from new workers with high-paying jobs, according to RealFacts owner Sarah Bridge.

“Talent is coming into the area. It’s not that there are so many jobs, but the ones out there are paying well,” Bridge said, adding that although the new tech boom is similar to the dot-com bubble of 2000, it is bringing workers with a more experiential, less materialistic mindset. “They’re not big into being tied down to a big piece of real estate.”

According to the real estate data aggregator Zillow.com, 480 homes were sold in San Francisco in May, down 22 percent in a year-over-year comparison. Meanwhile, RealFacts data show supply running out in San Francisco and San Mateo County, both with a 96 percent occupancy rate, up 6 percent and 1 percent, respectively.

The factors are helping San Francisco maintain its status as one of the most expensive big-city rental markets in the country, which has advocates for current tenants taking notice.

“It’s making it a landlord’s market,” said Ted Gullicksen, executive director of the San Francisco Tenants Union. “We could see more evictions, more tenant buyouts.”

Gullicksen said although The City’s rent-control standards keep some costs in check for renters, state law prevents the controls from being applied to units themselves. Like in 2000, Gullicksen said, he fears without cheaper options, residents could be pushed to the outskirts of the Bay Area.

“I think we’re headed back in that direction,” he said.

Of the 43 markets examined by RealFacts, 41 posted rent increases, with the biggest gains seen in the Bay Area. San Jose, the unofficial capital of Silicon Valley, experienced the largest increase at 6.6 percent, up from $1,650 to $1,759 per month.

dschreiber@sfexaminer.com

Average rent per unit type

Average rent increase

Source: RealFacts

Article source: http://www.sfexaminer.com/local/peninsula/2011/07/influx-workers-drives-rental-rates-san-francisco-and-san-mateo-county

What does the consumer price index (CPI) have to tell us about the future of the housing market?

Apparently a lot.

Let me first explain a few things for those of you housing types who don’t follow this monthly number. The CPI is the most common way to measure inflation. There’s the big number and then what’s called the “core” number, which is the big number minus food and energy costs (gas prices obviously skewing things a lot these days). The big number was pushed down thanks to a drop in gasoline prices, but the core number was higher than expected, thanks to housing.

One component of the CPI is the “Owners Equivalent Rent,” (OER) measures the amount of money it costs to live somewhere, anywhere, be it a rental apartment or your own home.

“The key factor in the higher than expected core rate was a .2 percent rise in Owners Equivalent Rent, the biggest gain since March ’09,” writes Peter Boockvar of Miller Tabak. “This figure is important because it makes up 25 percent of CPI and 40 percent of the core. Apartment landlords are gaining pricing power as vacancies fall as the homeownership continues its decline. This is a secular trend and will result in a further lift in core inflation going forward.”

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Article source: http://www.cnbc.com/id/43769306?__source=RSS*blog*&par=RSS

It’s no surprise that the private mortgage insurance industry is fighting hard against proposed new risk retention rules for the mortgage industry.

They are already trying to pick themselves up and dust themselves off from the near knockout punch the Federal Housing Administration (FHA) gave them, when the government mortgage insurer took over their market share while saving the housing market from complete and total bust.

The FHA became the only game in town for the less credit-worthy borrowers with lower down payments. Now, just when the private guys are trying to get back in the game, they’re getting battered again.

The proposal for a “Qualified Residential Mortgage,” which would be exempt from 5 percent risk retention by the banks, which of course the banks don’t want to retain, requires, among many things, that the buyer put 20 percent down on the home.

“We do not believe that affordability and sustainability are mutually exclusive goals,” Kevin Schneider, president of the Mortgage Insurance Companies of America testified before Congress yesterday (he’s also CEO of U.S. Mortgage Insurance of Genworth Financial [ GNW 12.26  +0.00 (+0.00%) ]). “We understand the drivers of sustainable, affordable homeownership because the private MI industry has a vested interest in assuring that low down payment homebuyers purchase homes with loans that they can afford to pay over time.”

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Article source: http://www.cnbc.com/id/42613396?__source=RSS*blog*&par=RSS