Americans More Optimistic About Housing, Economy

Americans’ concerns over housing and the economy are subsiding, according to Fannie Mae’s National Housing Survey from February.

An improving job market is a big part of what’s behind Americans feeling more confident about the housing market and the direction of the economy, according to the survey.

“The pickup in the pace of hiring over the past few months has helped soothe consumer concerns, lifting their moods regarding their personal finances, the direction of the economy, and their views on the housing market,” says Doug Duncan, chief economist of Fannie Mae. “As a result, we’ve seen more potential for economic upside, creating a more balanced near-term outlook.”

The survey found that 28 percent of Americans expect home prices to increase over the next 12 months while 53 percent say prices will likely stay the same. Fifteen percent say they expect home prices to decline.

Meanwhile, the majority of those surveyed see rental prices continuing to increase over the next year.

Sixty-five percent of those surveyed say that if they were going to move they’d buy their next home; 29 percent say they would rent.

With low mortgage rates and falling home prices, 70 percent of those surveyed say now is a good time to purchase a home. Also, more Americans surveyed say now is a good time to sell, rising to 13 percent in February, which is the highest level in more than a year but still low by historic standards.

Overall, Americans expressed more confidence about their personal financial situation, with only 12 percent saying they expected their personal financial situation to worsen in the next 12 months — which is the lowest number in more than a year.

Source: Fannie Mae

OMG! PA law banning texting while driving takes effect Thursday

Pennsylvania’s new law prohibiting texting while driving will take effect at 12:01 a.m. Thursday, making texting while driving a primary offense carrying a $50 fine, according to the state department of transportation.

“Your most important job when behind the wheel is to focus only on driving,” said PennDOT secretary Barry J. Schoch in a news release. “Most people would never close their eyes for five seconds while driving but that’s how long you take your eyes off the road, or even longer, every time you send or read a text message.”

Governor Corbett signed legislation last November making Pennsylvania the 35^th state to ban texting while driving. The law makes texting while driving a primary offense, which means police may pull over a driver for texting alone. Officers may not seize cell phones from drivers.

The texting ban includes no reading or sending of emails and no web surfing. Drivers will still be permitted to talk on their handheld phones.

The new law specifically does the following:

• Makes it a primary offense to use an interactive wireless communication device (IWCD) to send, read or write a text-based message.
• Defines an IWCD as a wireless phone, personal digital assistant, smartphone, portable or mobile computer or similar devices that can be used for texting, instant messaging, emailing or browsing the internet.
• Defines a text-based message as a text message, instant message, email or other written communication composed or received on an IWCD.
• Institutes a $50 fine for convictions.
• Makes clear that this law supersedes and preempts any local ordinances restricting the use of interactive wireless devices by drivers.

The ban does NOT include the use of a GPS device, a system or device that is physically or electronically integrated into the vehicle, or a communications device that is attached to a mass transit vehicle, bus or school bus.

According to the National Transportation Safety Board, over 3,000 people in the United States died last year due to distraction-related car accidents. In 2010, there were nearly 14,000 crashes in Pennsylvania where distracted driving played a role, with 68 people dying in those crashes.

Visit PennDot’s website and choose “Anti-Texting Law” to learn more information.

About Diana Dietz:
Diana Dietz is the Multimedia Journalist at the PA Association of Realtors(R).

FHA Hikes Fees on Mortgages

Home buyers with mortgages backed by the Federal Housing Administration will soon see a rise in fees, the agency announced Monday.

The agency is raising its fees in an effort to try to recoup some of its depleted reserves*, which suffered from the rising number of home owners who defaulted on their mortgages. The agency also says it’s raising fees to try to encourage the return of more private capital to the market.

FHA loans allow for smaller down payments, as low as 3.5 percent compared to traditional loans, and they often have less stringent credit requirements, which have made them soar in popularity in recent years. (The agency insures loans but doesn’t issue them.) About 40 percent of all new mortgages for home purchases in 2010 were FHA-backed mortgages.

In particular, FHA will increase two fees that borrowers pay. Starting April 1, it will increase its annual mortgage insurance premium for loans under $625,500,  bringing the total cost from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, larger loan premiums will see an increase of 0.35 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount, The New York Times reports.

FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount.

The New York Times illustrates the impact of the increase in a recent article: For example, a borrower with a 3.5 percent down payment with a mortgage of $193,000 can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930. That can be rolled into the mortgage.

The new fees will also apply to home owners who want to refinance their mortgages, the agency announced.

The raise in fees is expected to bring in $1.25 billion in additional revenue to the agency through September 2013.

Market TRENDs: Chester County, January 2012

Market History
Chester County had a large increase in Settled units, 13.2%, in January 2012 as compared to January 2011. Using that same time frame, Pending units also saw a large increase, at just over 26%.

For more county specific data, check out the Market History Report, which details current and historical information for Single-Family and Condo listings over the last 10 years in Chester County. Single-Family Jan. ’11 Jan. ’12
Inventory 3,278 3,124
Settled Units 242 274
Median Price $300,000 $280,000
Stl Price/Orig Price 91.2% 90.7%
Get this info anytime you login on the Info Center.

• Chester Single-Family Report
• Chester Condo Report

Single-Family YTD Jan. ’11 Jan. ’12
Settled Units 242 274
Average Price $374,000 $321,000
Median Price $300,000 $280,000
Stl Price/Orig Price 91.2% 90.1%

• Single-Family Year-to-Date Report
• Condo Year-to-Date Report
Year-to-Date Market Snapshot
Through January 2012, Chester County has settled 274 units at an average price of $321,000.

This information and more can be found in
the Year-to-Date Snapshot, which contains statistical information for Single-Family and Condo listings recorded within TREND’s 13 primary counties over the last 3 years.

Fed Officials Call for More Housing Fixes

New programs and “housing policy interventions” are needed to help the real estate market rebound and boost growth in the overall economy, three Federal Reserve policymakers said Friday.

The latest statements join a range of calls by the Federal Reserve in the last week urging for more government intervention to help the housing market. Last week, the Fed released a 26-page white paper providing an outline on how the government needs to take more aggressive action to prevent home values from falling further, seek solutions to the foreclosure crisis, and loosen stringent underwriting standards that are keeping borrowers from securing mortgages or refinancing.

New York Fed President William Dudley said on Friday that the housing market is “only one factor behind the frustratingly slow” economic recovery, but it’s an “important one that deserves our attention.”

Dudley said that it’s important for monetary policy to complement actions taken by lawmakers in order to help stabilize home prices and bring about a recovery to the housing sector within the next year or two. He said programs are needed that are aimed at preventing additional foreclosures, easing burdens for home owners in refinancing mortgages, and getting more renters into REO properties.

“Forceful and effective housing policies have the potential to significantly influence the speed and strength of our recovery,” Fed Governor Elizabeth Duke said in separate comments made last week at an event in Virginia.

The Fed will hold its next policy-setting meeting Jan. 24-25.

Source: “Fed Officials Focus on Housing ; Emphasis put on Importance of Sector to Overall Economy,” Bloomberg News (Jan. 9, 2012) and “Fed Officials Push More Stimulus for Housing,” Reuters News (Jan. 9. 2012)

The doom and gloom hanging over the real estate market over the last several years has put downward pressure on home prices throughout the country.  While Florida and the Southwestern United States were hit the hardest in this real estate downturn the Northeast had its fair share of turmoil as well.  If one were to read the prevailing headlines from across the country it would be difficult to gain any positive perspective on the real estate industry as a whole, however, if you narrow your vision to our local market in Southeastern PA and more specifically, Chester County, there has been some very positive signs in the last year which may point to stronger 2012.

Consider the following statistics and their corresponding sources:

• Overall sales activity for Residential properties in TREND’s MLS Coverage Area increased 10% in November 2011 compared to November 2010.  www.Trendmls.com
• In Chester County PA the 3^rd quarter of 2011 saw 15% more sales than the 3^rd quarter of 2010.  www.Trendmls.com
• In Delaware County PA the 3^rd quarter of 2011 saw 19.4% more home sales than the 3^rd quarter of 2010.  www.Trendmls.com
• In Montgomery County PA there was a 24.5% increase year over year for the 3^rd quarter home sales. www.Trendmls.com
• Confidence among U.S. homebuilders rose in December for a third consecutive month, a sign of stabilization in the housing market. www.Bloomberg.com