The Rise and Fall of Property Values

The Rise and Fall of Property Values

The 100 metropolitan areas with the largest populations in the U.S. are expected to experience a 4.5 percent appreciation of property value over the next year, according to the Veros Real Estate Solutions’ most recent quarterly forecast. This prediction is seen as highly favorable by Veros, with 97 percent of all metropolitan statistical areas (MSAs) in the U.S. experiencing appreciation and only 3 percent experiencing a decline in value.

Washington and Nevada top the list of metro areas with the highest expected appreciation rates, with Washington having four in the top 10 and Nevada having three. The Western region of the U.S. dominates the list, with Idaho, California, and Colorado also having MSAs in the top 10. Utah and Oregon are expected to see a healthy rise in value too. In fact, all these western states in general are projected to experience a half-percentage point increase overall since Veros’ last forecast, giving them an appreciation rate over the next year between 9 and 12 percent.

In Texas, Midland and Odessa are anticipated to see a healthy rise in value also, although larger MSAs in the Lone Star State like Dallas and College Station—while still expected to see a rise in value—are expected to see a slowdown in the total rate. This is true also in San Jose, California, where the appreciation rate is predicted to drop from over 10 percent to 8.5 percent.

Although states clustered in the west are expected to see the highest rate of appreciation, other regions of the country are expected to perform well too. North Carolina is expected to see property values rising overall, as are a few cities in the Great Lakes Region, specifically in the states Michigan and Indiana. The Indianapolis-Carmel area, for example, is also projected to appreciate 8.5 percent.

On the other hand, Illinois stands out with three MSAs predicted to lose value. At the bottom of the list is Farmington, New Mexico, which is expected to see a drop of 2.2 percent by September 2019. Housing inventory is seen as underpinning these numbers, with the top forecast markets all having a lower supply in comparison to those more slowly growing areas.


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Housing and Economic Activity: National Update

Housing and Economic Activity: National Update

 shutterstock_336270911On Monday, the Federal Reserve Bank of Chicago released its monthly index for October 2017—the Chicago Fed National Activity Index (CFNAI)— reporting the overall economic activity across the U.S.

The index, which was constructed using data available as of October 19, 2017, analyzes economic activity based on summarizing variation in 85 data series classified into four main categories.

So how does the Chicago Fed organize this data? The CFNAI is designed so that periods of economic expansion have values of above negative 0.70. Meanwhile, periods of economic contraction have values below negative 0.70.

According to the index, the overall economic activity reported an increase in growth with a positive 0.17 in September, compared to a negative 0.37 in August.

However, despite this slight increase in September, the index reports that month-to-month movements are volatile. Therefore, the index also evaluates a three-month moving average to provide a more consistent picture of national economic growth—the most recent three-month moving average was unchanged at negative 0.16 in September.

The contribution of the housing category to the CFNAI is combined with personal consumption—representing an increase to negative 0.07 in September from negative 0.11 in August.

However, housing starts decreased to about 1.13 million annualized units in September from about 1.2 million in August. In addition, the index notes that housing permits decreased to about 1.23 million in annualized units in September, which is a decrease from 1.27 million in the previous month. Conversely, consumption indicators improved, which increased the category’s overall contribution to the economy.

In addition, the report’s job-market gauge was a positive contributor to the economy, increasing to positive 0.06 from positive 0.01 in the previous month.

To view the full report and other indicators impacting the U.S. economy, click here.

Delinquencies Forcasted to Rise in Coming Months

Delinquencies Forcasted to Rise in Coming Months

delinquent-noticeNext month could bring a new outlook to regional delinquency rates due to the aftermath of recent storms. Nationally, however, they remained relatively unchanged in August, according to Black Knight’s August 2017 Mortgage Data First Look. The effects of Hurricane Harvey are already being felt in areas of Houston, as delinquency rates rose 16 percent month-over-month.

According to the report, 6,700 new delinquencies 30 days overdue were recorded in August, and an additional 1,000 borrowers missed an additional payment during the month, placing them in the 60-plus day threshold. Black Knight predicts that the true fallout of Hurricane Harvey on the housing market will likely be realized in September 2017’s numbers.

There was a total of 54,700 new foreclosure starts in the month of August, which is an increase month-over-month of 2.63 percent, but a year-over-year decrease of 20.49 percent. The number of total national properties 30 or more days delinquent, but not yet in foreclosure, amounted to 2.003 million, and increase of 17,000 from the month prior but a decrease of 148,000 year-over-year. The number of properties 90 days past due, yet still not in foreclosure also declined year-over-year by 112,000, but rose month-over-month by 2,000 to a figure of 557,000.

The only figure reported by Black Knight that decreased in both metrics was the number of foreclosed properties in the industry’s pre-sale inventory, dropping 13,000 from July to 385,000. That is a difference of 142,000 a year ago.

As of August 2017, the top five states by non-current percentages were Mississippi, at 10.47 percent; Louisiana at 8.82 percent; Alabama at 7.22 percent; West Virginia at 6.95 percent; and Maine at 6.52 percent.

The bottom five states by non-current percentages were Montana at 2.69 percent; Oregon at 2.58 percent; Minnesota at 2.53 percent; North Dakota at 2.31 percent, and Colorado at 2.11 percent.

To see the full results of Black Knight’s First Look at August 2017 Mortgage Data, click here.

Wells Fargo Announces Fee Refunds

Wells Fargo Announces Fee Refunds

Screen Shot 2017-10-04 at 3.26.25 PMAfter intense questioning of its CEO Tuesday at the U.S. Senate Committee on Banking, Housing, and Urban Affairs full committee hearing titled “Wells Fargo: One Year Later,” Wells Fargo announced it will be reaching out to all home lending customers from September 16, 2013, through February 28, 2017, who paid fees for mortgage rate lock extension requests.

According to the release, Wells Fargo already stated that they would be reviewing past policies and procedures for situations such as the above mentioned and again stated the plan at Tuesday’s hearing.

“We want to serve our customers as they would expect to be served, and are initiating these refunds as part of our ongoing efforts to rebuild trust,” Sloan said.

The rate lock extension policy in place in September 2013 was said by Wells Fargo to be not consistently applied at times and resulted in some borrowers being charged fees when it was the company primarily at fault for the delay that made the extensions necessary. On March 1, 2017, the company changed how it manages the mortgage rate lock extension process to alleviate this problem and ensure consistency through the use of a review team that will review all requests and apply Wells Fargo’s policy.

Wells Fargo expects the first customer communications and refunds to go out in Q4 2017.

“A total of approximately $98 million in rate lock extension fees were assessed to about 110,000 borrowers during the period in question, although the company believes a substantial number of those fees were appropriately charged under its policy,” the release stated.

Due to the fact that not all fees assessed were paid and some have already been refunded, Wells Fargo anticipates the amount refunded to likely be lower.

Equifax breach could be worst in history

The hack reported last week by Equifax will go down as one of the worst data breaches in history, and could prove to be the most damaging ever for American consumers, many security experts contend.

Anonymous criminals committed the crime, but cybersecurity experts told Scotsman Guide News that the blame for exposing sensitive information belonging to roughly half of the U.S. population lies with Equifax, which has a history of data breaches.

cybercrime“I firmly believe they could have prevented this,” said Tim Crosby, a senior security consultant with Austin, Texas-based Spohn Consulting.

Equifax reported last Thursday that it discovered on July 29 that cybercriminals exploited “a U.S. website application vulnerability” to gain access. Equifax determined that as many as 143 million people were compromised.

The information included Social Security numbers, birth dates, addresses and, in some cases, drivers-license information. Also, the credit card numbers of 209,000 U.S. consumers were exposed. Information on consumers residing in the United Kingdom and Canada also was breached.

Equifax believes the attack occurred in mid-May and continued until it was discovered nearly two months later.

“This is a pretty scary thing,” Crosby said. “It is going to affect the other credit reporting agencies, who are going to have to be on their toes. We know somebody has the information. We don’t know how widely it has been distributed, or who got it yet.”

Repeated breaches

Equifax has been breached or admitted to mishandling sensitive consumer information five times since 2005, according to the website Most recently it was reported in May 2016 that hackers breached its W-2 Express Website, exposing tax and salary information on 431,000 Kroger employees.

In October 2010, Equifax agreed to pay a $1.6 million fine to settle a complaint with the Federal Trade Commission, after admitting to selling information on people who had been late in paying their mortgages. This affected 17,000 consumers. The company had two other smaller incidents in 2010 and 2006.

“In my opinion, this is the super jackpot of cybersecurity compromise,” said Jeffrey Bernstein, the managing director of Critical Defence. Bernstein doubted that the hackers will ever be caught. They may have already sold the information on a shadowy “dark web,” a number of small private networks that can’t be accessed through traditional search engines. Equifax could face severe penalties, Bernstein said.

“This type of breach should never happen,” Bernstein added. “A company like Equifax has a very high-profile, high-threat environment that they operate in. They have a treasure trove of data, of our private data, and they need to protect it.”

Equifax officials were not immediately available for comment.

As of Monday, Equifax had provided no additional information on how cybercriminals accessed its database. Web applications can be any program accessed over a network connection. Typically, a person logs in with a user name and password. Facebook and LinkedIn are two well-known examples of web applications.

Hackers often develop attack tools to exploit vulnerabilities in these programs, engaging in a cat-and-mouse game. Companies, in turn, must constantly test their web applications for vulnerabilities and provide fixes.

U.S. foreclosure rate drops to 10-year low

Mortgage delinquencies and foreclosures continue to fade back to pre-crisis levels, CoreLogic reported.

Nationally, 4.5 percent of mortgages were in some stage of delinquency in June, down 0.8 percent from the rate a year earlier, the company reported.

The foreclosure inventory rate, which measures the share of mortgages in some stage of foreclosure, was 0.7 percent in June, down 0.9 percent from June 2016 and the lowest rate since July 2007.

“The CoreLogic home price index increased 6 percent and payroll employment grew by 2.2 million jobs in the year ending June 2017, supporting further declines in delinquency rates,” said Frank Nothaft, chief economist for CoreLogic.

Key rates stay down

Key interest rates remained unchanged last week at lows for the near, Freddie Mac reported.

Through Wednesday, the 30-year fixed rate averaged 3.78 percent for the second consecutive week. A year ago, the rate averaged 3.5 percent. The 15-year fixed rate was also unchanged at 3.08 percent, but the rate for five-year adjustable rate mortgages ticked down two basis points to 3.13 percent.

Mortgage rates fell despite a surge in Treasury yields.

“Following a sharp decline last week, the 10-year Treasury yield rose 11 basis points this week,” Freddie’s Chief Economist Sean Becketti said. “If Treasury yields continue to rise, mortgage rates could see an increase in next week’s survey.”

Census Bureau: Optimistic Outlook for Economy

Census Bureau: Optimistic Outlook for Economy

The U.S. Census Bureau announced new comprehensive data for dates ranging between 2015 and 2016, which shows improvements in income, poverty and health insurance coverage.

Median household income increased by 3.2 percent, from $57,230 to $59,039. 2016 marks the second year in a row that the median household income in the U.S. increased. According John Ydstie of National Public Radio, “that’s the highest median income ever recorded, but the Census Bureau cautions that a big change in its survey in 2014 makes historic comparisons very difficult. We’re essentially back to about the same levels as 2007, just before the Great Recession.”

Real median income for family households sat at $75062, an increase of 2.7 percent from the 2015 medium. Nonfamily household’s medium income was $35,761, which was an increase of 4.5 percent.

The official poverty rate dropped 0.8 percentage points, from 12.7 percent in 2016, or 40.6 million people in poverty, which is 2.5 million people fewer than in 2015. This is also the second year in a row the poverty rate reduced. The report does note, however, that the poverty rate in 2016 is not much different than the poverty rate in 2007 (12.5 percent), right before the Great Recession.

Those covered by health insurance also rose year-over-year, which is another indication of a strengthening economy. In 2015, the number of Americans without health insurance for the full calendar year was 29.0 million—a year later that number fell to 28.1 million.

The report also breaks down median incomes, earnings, poverty, by region, race, sex, ethnicity, and age. To access the full breath of the Census Bureau’s report, you can go directly to the agencies website, here.


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Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email

Market Snapshot

Homeownership: Making Forward Progress in the Short Run

Following the Great Recession, homeownership in California is down. After peaking at more than 60%
at the height of the last cycle, it now sits below 55%. Notably, the Census Bureau estimates that
Los Angeles and Orange County have dipped below 50% homeownership, meaning that it’s a
majority-renter region now.

Much of the decline is cyclical: many homeowners lost their previous home to short sale or
foreclosure during the downturn. However, there is also a structural component to homeownership, as
evidenced by a particularly low homeownership rate amongst minorities. This will have an increasing
impact on overall homeownership as California becomes more diverse. This is a long- term challenge,
but also a potential opportunity for the housing market and the California economy over the short

Currently, there are over 1 million households that earn more than the minimum qualifying income,
yet continue to rent. Even without addressing the larger structural issues, simply getting more of
the income-qualified households into homes would largely erase California’s gap with the rest of
the U.S.—boosting ownership to more than 60% again. The effects would be especially important for
Hispanic and black households. For example, roughly 277,000 additional Hispanic renters who earn
enough to purchase the median priced home in their county would be enough to push Hispanic
homeownership to almost 50%. Black households would see homeownership rise from the low 30s to more
than 40% as well.

This would be good for the buyers, who could take advantage of today’s low interest rates, enjoy
the tax benefits of homeownership, and begin

generations. It would also be good for the state’s economy by generating all the consequent
economic activity that comes with a new home purchase. The housing market would obviously benefit
as well—a win-win-win.

Of course, some “income-eligible” renters may not qualify for a mortgage because of bad credit, no
credit, previous bankruptcy or foreclosure, no formal documentation of income, or a myriad of other
reasons. However, many may just lack the knowledge about the buying process. Others may be unaware
of FHA and other low-downpayment loans. New programs have even sprung up to help finance buyers who
don’t have traditional credit profiles. Still others may have simply never considered the benefits
or thought homeownership was possible for them. Thus, some sizeable portion of that 1+ million
households could become owners. For those families, education, marketing, and effort could play a
big role in making the difference on the homeownership decision.

There is still a ton of work to do with respect to boosting incomes and providing equality of
opportunity for Californians over the long haul. However, there’s a lot that can be done in the
interim, With rates still incredibly low by historical standards, let’s help more of our neighbors
take advantage of the current environment and the

accumulating wealth for themselves and future
benefits of becoming a homeowner.

Brought to you by:

Ricardo Thomas REALTOR®
Realty World Golden Gate 1300 Clay St., Ste. 600
Oakland, CA 94612

Office: (510) 632-8100
Cellular: 510-632-8100 Email: BRE License: 01407688