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An analysis of 1 million fixed-rate mortgages in the United States shows that millions of Americans failed to refinance when mortgage rates were at historical lows, which could have amounted to savings for the median home owner of more than $45,000 in payments over the life of their loan.

In December 2010, 20 percent of American households with fixed-rate mortgages could have refinanced but failed to do so, according to the study by the National Bureau of Economic Research. At the time, the average interest rate was around 4.3 percent.

The upfront cost of refinancing — which usually is a few thousand dollars, depending on the value of the loan — may have deterred some home owners. But even when taking into account such factors, researchers estimated that around 41 percent of these home owners still would have benefited from refinancing in December 2010.

Some home owners may have been concerned about qualifying. Lenders look at various factors when refinancing, such as the home’s value, payment history, credit scores, among other financial data. But even when the researchers decreased their study’s sample to those with just excellent credit histories who had never missed a payment, they still found that an estimated 20 percent of home owners stood to gain from refinancing and would have qualified for one too.

As such, the researchers partnered with Neighborhood Housing Services of Chicago, a lending nonprofit, to identify those who would qualify for and benefit from refinancing and mailed letters to offer to help with refinancing. Only about 17 percent of the home owners who received the letters ended up refinancing after the letters were sent, and the majority of home owners who received the letters never replied.

The researchers followed up with those who were sent letters, and a quarter of the home owners said they never opened the letter while another quarter said they did open the letter and meant to follow up but never got around to it.

The median savings for households of those who did not respond to the offer was $26,400 over the lifetime of the loan, or about $94 a month, according to the study.

Other studies have shown home owners leery about refinancing as well. A study by Fannie Mae had asked eligible borrowers why they chose not to refinance under the government’s HARP program, and 22 percent said it was because they did not trust the lender who contacted them, and 18 percent said they didn’t know they qualified.

In general, the researchers in the NBER study concluded that the results are “consistent with both behavioral explanations such as procrastination and inattention, as well as lack of information as possible reasons why households fail to respond to offers that appear to be in their financial best interest.”

One anecdotal reason, however, reveals that many financial institutions were less than genuine in their efforts to reduce interest on loans that were earning them a higher rate of return. A number of homeowners that explored refinancing were left with a distasteful experience of wading through barriers of red tape which served as a barrier to their success.

source:  Washington Post and® 


When it comes to space and upgrades, first-time home buyers are more willing to compromise than repeat buyers.  While they have big wish lists too, first-time buyers seem to be most driven by finding a home that offers a reasonable monthly mortgage payment.

"Single home buyers tend to value affordability above all when they are choosing a home and a neighborhood," says Jessica Lautz, NAR’s manager of member and consumer survey research. "They also focus more on living some place convenient to friends and family, as well as entertainment and leisure activities."

The median age of first-time home buyers is 31, and about 26 percent are married with children.

First-time home buyers tend to rate energy efficiency high on their wish list, as well as simple, no-hassle technology use in their house, the study finds.

But "even if they like the idea of solar panels, first-time buyers are not likely to spend an extra $20,000 to have them," says Stephen Melman, director of economic services for economics and housing policy for the National Association of Home Builders. 

First-time buyers also are willing to compromise on space: The median-size of a home purchased by a first-time buyer is 1,570 square feet.

Overall, "the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room," says Melman. "First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet."

But one thing first-time buyers aren’t as willing to compromise on: Buying a home that needs a lot of repairs. 

"Buyers that don't have any experience with home maintenance tend to be afraid of renovations, so home sellers should be sure to fix everything they can and make minor home improvements in order to appeal to first-time buyers," Melman says. 

source: and Fox Business News


The average completion time of a single-family home is about seven months, according to the Survey of Construction from the Census Bureau. That includes around 25 days from authorization to start and then another six months to finish the construction.

The average build time of single-family homes built for sale and built for rent has grown by one month longer in the latest data from 2014, compared to a prior 2012 analysis.

Homes constructed for sale took the shortest time to complete at six months, while homes built by owners averaged the longest time at 11.5 months. Homes built for rent averaged between nine and 10 months to completion.

However, timelines for new-home construction fluctuate greatly depending on location. The Middle Atlantic region had the longest building times at 9.5 months, followed by New England at nine months, and Pacific and East North Central regions at eight months. On the other hand, the shortest construction times were found in the Mountain region of the U.S. at six months. That region also had the shortest amount of days from building permit to when construction started at an average of 15 days.

source:  National Association of Home Builders Eye on Housing


U.S. housing markets are the most affordable in the world, at least according to a recent study of more than 300 metro housing markets in nine countries conducted by the research group Demographia.

U.S. housing markets were found to be more affordable than Canada, the United Kingdom, Ireland, Australia, New Zealand, Singapore, Japan, and China. 

Researchers measured affordability by taking a look at median home prices and median household incomes. A market was rated "unaffordable" if it had a calculated value of higher than 3.0 and was "severely unaffordable" if above 5.1. 

The U.S. markets analyzed showed a lot of variation -- such as Detroit at the bottom with a 2.1 value while San Francisco had a 9.2 value. Still, the U.S. averaged 3.4 as a whole, making it more affordable than other countries. 

Hong Kong, on the other hand, was the priciest and at a record high on the survey. The survey found that even if a household could direct all of its household income toward buying a home, it would still take 17 years before the household could afford to buy. To live on Hong Kong Island alone, a resident would pay about $900 in U.S. currency for just a 150-square-foot apartment. Hong Kong is the most densely populated places across the globe; it holds 6,845 people per square kilometer. New York, as comparison, hold 2,050. 

Hong Kong also had the smallest homes in the study, with the average size of a new home at just 484 square feet. 

The study found the following major markets were the most unaffordable: 

  1. Hong Kong
  2. Vancouver
  3. Sydney
  4. San Francisco
  5. San Jose
  6. Melbourne
  7. London



The median age of inventory fell by 5.1 percent over the past 18 months, according to®’s National Housing Trend Report. Nationwide, the median age of inventory was 112 days in December of 2013, but in some metros, homes were selling in less than half that time today. 

The following are the 10 metros with the lowest medians for days on the market, according to®: 

  • Oakland, Calif.: 48 days
  • Stockton-Lodi, Calif.: 56
  • Honolulu: 64
  • San Jose, Calif.: 70
  • Sacramento, Calif.: 70
  • Fort Lauderdale, Fla.: 71
  • Boulder-Longmont, Colo: 71
  • Phoenix-Mesa, Ariz.: 71
  • Detroit: 71
  • San Francisco: 74



By 2040, commercial real estate is expected to be thriving. But over the next 25 years, it will be greatly influenced by changes in demographics, technology, globalization, and economic and environmental realities, according to CNBC. 

Commercial practitioners gave CNBC several “bold” predictions for the U.S. commercial real estate sector by 2040:

  • The fading away of shopping malls. Malls are expected to continue declining due to the rise in e-commerce. Rick Fedrizzi, president and CEO of the U.S. Green Building Council, expects some teardowns, but repurposing will give new lift to these spaces. “Established places like shopping malls will become like town centers, where people can come together, where their doctors and day care will be, where they can gather after major devastations.”
  • Baby boomers drive a construction boom. Several areas of commercial real estate will likely continue to see baby boomers’ influence, experts predict. For one, “we’re an aging population, so in 25 years, there’s going to be a heavy focus on medical-related facilities,” says Kenneth Riggs, president and CEO of Real Estate Research Corp. Riggs also predicts a shift toward affordable multigenerational housing, particularly near mass transit. Also, more boomers may turn to senior housing, and growth will be explosive, Riggs predicts. “Right now, senior housing is a food group in real estate, but it’s like vegan or something, not that established,” Riggs says. “In 25 years, it will be a major food group.”
  • Urbanization will boom. This trend will, in part, be driven by Gen Xers and Yers who have shown preferences for living and working in compact areas. The multifamily residential market is expected to show gains due to the growing preferences of urbanization, and more companies will be moving to downtown areas to aid in recruitment efforts, says Rick Cleveland, a managing director at Cushman & Wakefield. Suburbs will also remain important, but may look to replicate the city experience more with greater mixed-use projects that comprise rental, retail, and office. "The way most of the suburbs will evolve is that there's an interim step: They'll be connected to cities by high-speed or light rail, and they'll become walkable communities with a sense of place,” says Fedrizzi.
  • Green building continues to evolve. Efforts to meet environmental standards tend to be costly, but industries realize that they are important in the long-run. Commercial buildings 25 years from now will need to be up to the U.S. Green Building Council’s LEED standards, according to the commercial experts interviewed by CNBC. That may mean some existing structures will need to be torn down or undergo a retrofit.



Social Security turned 80 this month, and the massive retirement and disability program is showing its age.

Social Security’s disability fund is projected to run dry next year. The retirement fund has enough money to pay full benefits until 2035. But once the fund is depleted, the shortfalls are enormous.

The stakes are huge: Nearly 60 million retirees, disabled workers, spouses and children get monthly Social Security payments, a number that is projected to grow to 90 million over the next two decades.

And the timing is bad: Social Security faces these problems as fewer employers are offering traditional pensions, forcing older workers to think hard about how they will afford retirement.

“This is a program that’s been immensely popular since it began,” said Nancy LeaMond, executive vice president of AARP. “Increasingly, people recognize that saving for retirement is becoming harder and harder, and Social Security is becoming even more important.”

President Franklin Delano Roosevelt signed the Social Security Act on Aug. 14, 1935. Here are things to know about the federal government’s largest program on its 80th birthday:

WHY IS SOCIAL SECURITY AT RISK? Social Security’s long-term financial problems are largely a result of demographic changes. Every day, about 10,000 people in the U.S. turn 65. These are the baby boomers.

Typical boomers, however, didn’t have as many children as their parents did. As a result, relatively fewer workers are left to pay taxes.

In 1960, there were more than five workers for every person receiving Social Security. Today there are fewer than three. In 20 years, there will be about two workers for every person getting benefits.

Americans are also living longer. In 1940, someone who was 65 could be expected to live about 14 more years, on average. Today, they can expect to live an additional 20 years, on average.

BENEFITS Last year, Social Security paid nearly $850 billion in benefits – about a quarter of all federal spending. The average monthly payment is $1,221. That comes to about $14,700 a year.

For most retirees, Social Security accounts for the majority of their income, according to the Social Security Administration.

WHAT HAPPENS IN 2016? The trust fund that supports Social Security’s disability program is projected to run dry in late 2016 – right in the middle of a presidential election. If Congress allows that to happen, it would trigger an automatic 19 percent cut in benefits to the 11 million people who receive Social Security disability.

Congress has an easy fix available. Lawmakers could redirect tax revenue from Social Security’s much bigger retirement program, as it has done in the past.

If Congress redirects the tax revenue, the retirement fund would lose one year of solvency, so both the retirement program and the disability program would have enough money to pay full benefits until 2034. At that point, Social Security would collect enough in taxes to pay 79 percent of benefits, according to the program’s trustees.

Republicans are balking at the fix. They see the funding crisis as an opportunity to improve a disability program that they believe is plagued by waste and abuse. They want to change the disability program to reduce fraud and to encourage disabled workers to re-enter the workforce.

Democrats are much more eager to defend the disability program, noting that its modest benefits keep millions of disabled workers and their families out of poverty. They say Republicans are manufacturing a crisis by refusing to redirect tax revenue between the trust funds.

HOW BIG IS THE LONG-TERM PROBLEM? The numbers are beyond comprehension.

Social Security uses a 75-year window to foreits finances, so the projections cover the life expectancy of every worker paying into the system. Over the next 75 years, Social Security is projected to pay out $159 trillion more in benefits than it will collect in taxes, according to agency data.

That’s not a typo.

Adjusted for inflation, it comes to $35.3 trillion in 2015 dollars. That’s nearly twice the national debt, which took the entire federal government 239 years to accumulate.

DID CONGRESS ALREADY SPEND THE TRUST FUNDS? Yes. For much of the past three decades, Social Security produced big surpluses, collecting more in taxes than it paid in benefits. Social Security invested those surpluses in special U.S. Treasury bonds, which are backed by the full faith and credit of the U.S. government.

They are now valued at $2.8 trillion.

But as Social Security was generating surpluses, the rest of the federal government was running deficits, for all but a few years around the turn of the century.

To finance deficit spending, the Treasury borrowed from the public and from other federal programs, including Social Security.

DIDN'T CONGRESS FIX SOCIAL SECURITY UNDER REAGAN? Yes. Social Security was on the brink of insolvency in the early 1980s when Congress and President Ronald Reagan agreed to gradually increase payroll taxes and to reduce benefits, in part by gradually raising the retirement age. Those changes didn’t permanently fix Social Security, but they provided enough revenue to pay full benefits for about 50 years.

In today’s political climate, another feat like that would be historic.

source:  Associated Press




More home owners have planned to renovate their houses this year, according to Houzz, a remodeling Web site. The company surveyed approximately 100,000 home owners, and 53 percent of them reported that now is a good time to remodel. 

More home owners getting motivated to increasing the values of their houses by improving the “look, flow, and layout” of these residences.

The most popular renovation projects were centered around bathrooms and kitchens. Twenty-eight percent said they were planning a bathroom remodel or addition, while 23 percent of those surveyed said they were planning a kitchen remodel or addition in the next two years. Over the last six years, home owners have spent $28,030 on average to remodel their kitchens, according to the Houzz survey.

Top 10 Remodeling Projects That Offer the Biggest Returns

source:  Inman News


Where are the biggest increases in rental rates likely to occur this year?

Georgia, Maryland, Virginia, and Michigan may offer some of the highest returns for investors, according to a new analysis by RealtyTrac, which recently analyzed the markets most likely to offer the best returns in buying residential rental properties.

“With home ownership rates at their lowest level in 20 years, historically low levels of housing starts and relatively low home prices in many parts of the country, there is still plenty of opportunity in the U.S. housing market for single family rental investors employing a variety of investing strategies,” says Daren Blomquist, vice president at RealtyTrac. “Whether focusing on markets where home ownership-shy Millennials are migrating, markets where recovering Gen X home owners-turned-renters are prevalent, or markets Baby Boomers are testing for retirement, investors can find good options with solid potential rental returns.”

Best Markets for Overall Rental Returns

RealtyTrac analyzed median sales prices for single-family homes and condos and average fair market rents for three-bedroom properties, along with unemployment rates and demographic trends, among 516 U.S. counties. RealtyTrac found the following markets had the highest overall potential rental returns:

  1. Clayton County, Ga. (Atlanta metro area)
  2. Bibb County, Ga. (Macon, Ga. metro)
  3. Baltimore City, Md. (Baltimore-Towson, Md. area)
  4. Richmond City, Va.
  5. Wayne County, Mich.

Best Markets for Renting to Millennials

RealtyTrac analyzed where the millennial share of the population was above the national average and where potential annual returns on residential properties were 9 percent or higher. It identified the following millennial markets as having the highest annual rental returns:

  1. Baltimore City, Md.
  2. Richmond City, Va.
  3. Philadelphia County, Pa.
  4. Wyandotte County, Kan.
  5. Richmond County, Ga.

Best Markets for Renting to GenXers

  1. Atlanta
  2. Chicago
  3. Jacksonville, Fla.
  4. Little Rock, Ark.
  5. Orlando

Best Counties for Renting to Baby Boomers

  1. Tampa, Fla.
  2. Ocala, Fla.
  3. East Stroudsburg, Penn.
  4. Homosassa Springs, N.Y.
  5. Binghamton, N.Y.

source:  RealtyTrac


The Penske Truck Rental’s list of top moving destinations has plenty of sunny locales.

Here is the list of some of their top cities:

1. Atlanta
2. Phoenix
3. Orlando, Fla.
4. Dallas/Fort Worth
5. Chicago
6. Houston
7. Denver
8. Seattle
9. Sarasota, Fla.
10. Charlotte, N.C.

There are no new market entries.

No region moved up or down more than two positions, with Dallas/Fort Worth dropping two places, from second to fourth. Half the list (Atlanta, Chicago, Houston, Sarasota, Fla., and Charlotte, N.C.,) remained in identical positions.

“As this list indicates, U.S. residents continue migrating primarily toward warm weather areas,” noted Don Mikes, Penske’s vice president of rental. “The list is compiled through online consumer truck rental reservations and through our call centers.”