Mortgage and Finance - St Louis Real Estate News

Should you buy a new home directly from the builder?

By Dennis Norman, on March 25th, 2019

Some new home buyers believe that if they buy a new home directly from the builder or the builder’s sales person, they will get a better price. But is this true? Do you get a better deal buying a new home directly from the builder?

First, we should address a “better deal” and what constitutes a good “deal”. If it is strictly price, then, while I think it is somewhat short-sided on the part of the buyer and falls in that “penny-wise, dollar-foolish” category, in some instances, with some builders, the builder will save some cost by you buying from Continue Reading →

Mortgage Interest Rates Drop to Lowest Rate In Over a Year

By Dennis Norman, on February 19th, 2019

After mortgage interest rates on a 30-year fixed rate mortgage nearly hit 5 percent back in November, they have steadily declined and this past week fell to an average of 4.37% according to the Freddie Mac Primary Mortgage Market Survey. Last weeks 30-year fixed rate mortgage rate of 4.37% was the lowest average rate report by the survey since Feb 8, 2018, when the average rates were 4.32%.

The outlook for mortgage interest rates looks promising as well with the most recent Fannie Mae Housing Forecast predicting the 30-year fixed rate will stay at 4.5% through the end of 2020.

Continue Reading →

Underwater Homeowners In St Louis Drops To Lowest Rate In Two Years

By Dennis Norman, on February 8th, 2019

During the fourth quarter of 2018, 14.2% of the homeowners in St Louis with a mortgage, were underwater on their mortgage, meaning they were in a negative-equity postion, according to data just released by ATTOM Data Research. As the table below shows, this is the lowest rate since the 4th quarter of 2017 when the St Louis undertwater homeowner rate was at 13.8%. On a national level, just 8.8% of homeowners with a mortgage are underwater which puts the St Louis rate at 161.5% of the US rate.

Search St Louis Homes For Sale Search St Louis Upcoming OPEN Continue Reading →

St Louis Home Mortgage Originations Drop Five Percent In Third Quarter

By Dennis Norman, on December 12th, 2018

There were 9,983 home purchase mortgage loans originated in the St Louis metro area during the 3rd quarter of this year, a decline of 5% from the prior quarter and a decline of 3% from a year ago, according to a report just released by ATTOM Data Services. This is the lowest number of home purchase loan originations for the 3rd quarter since 2015 when there were 9,731 home purchase mortgage loans originated. As the historical table below shows, the peak for loan originations in St Louis was in the 3rd quarter of 2005 when there were 17,698 purchase mortgage Continue Reading →

Nearly 1 In 5 St Louis Home Sales In Past 12-Months Were Cash Deals

By Dennis Norman, on December 7th, 2018

There were 37,721 homes sold in the St Louis metropolitan area during the past 12 months as reported by MORE, REALTORS. Of those, as the chart below illustrates, conventional financing made up the lion’s share of the sales. Conventional mortgages accounted for 18,967 home sales (50.3%), followed by cash transactions with no financing that accounted for 7,109 sales (18.9%), then 6,353 (16.8%) sales with FHA loans, 2,333 (6.2%) with VA loans, and 770 (2.0%) sales financed with USDA financing. The remaining 5.8% of the home sales were financed with one of roughly 30 other lessor popular financing methods.

Search St Louis Homes For Sale Continue Reading →

Mortgage Delinquency Rate Falls To Lowest Level In More Than 12 Years

By Dennis Norman, on November 20th, 2018

The overall mortgage delinquency rate in the U.S. fell in August to the lowest level in over 12 years, according to a report just released by CoreLogic. According to the report, 4.2% of all St Louis home mortgages were 30+ days delinquent in August 2018, a decline of over 14% from a year ago when the rate was 4.9%. During the same period, seriously delinquent mortgages, those that are 90+ days late, in St Louis dropped from 1.8% a year ago to 1.4% in August 2018, according to the report.

Search St Louis Homes For Sale Search St Continue Reading →

Number of Equity-Rich St Louis Homeowners Increases In 3rd Quarter

By Dennis Norman, on November 12th, 2018

According to a report just released by ATTOM Data Solutions, 16.9% of the homeowners in St Louis with a mortgage are “equity-rich”, meaning their loan balance is 50% or less of their home’s estimated value. As the table below illustrates, this is an increase from 15.8% during the 2nd quarter as well as the 1st quarter of this year.

St Louis increase in equity surpassed the U.S. average but fell behind Kansas City and Chicago…

As the table below shows, during the past 2 years, the percentage of equity-rich homeowners in St Louis increased from 16.0% to 16.9%, an increase Continue Reading →

Number of Underwater St Louis Homeowners Falls To Lowest Level Since Last Year

By Dennis Norman, on November 10th, 2018

During the 3rd quarter of this year, 14.4% of the homeowners in St Louis with a mortgage were “seriously underwater”, meaning they owe at least 25 percent more than the estimated value of their home, according to a report just released by ATTOM Data Solutions. This is the lowest rate this year, down from 15.6% in the 2nd quarter and down from 14.7% in the first quarter of 2018. For the last quarter of 2017, St Louis homeowners that were seriously underwater had fallen to 13.8%.

Kansas City and Chicago have fared better over the past 5 years…

As the Continue Reading →

Real Estate Agents Are In The Goldilocks Zone – What Does This Mean For Their Future?

By Dennis Norman, on October 30th, 2018

Will technology send real estate agents into near extinction like it did with travel agents and may be doing with taxi-cab drivers today? This is a topic of frequent conversation in our industry, especially with dozens of new, well-funded startups, many with new and different business models, all gunning for a piece of the residential real estate industry.

I don’t like Kool-Aid® and don’t drink it..

Before I start, for the naysayers out there that may think since I’ve spent my entire adult life in real estate that, of course, I’m going to come to the conclusion that real estate Continue Reading →

Mortgage Bankers Forecast Five-Percent Mortgage Rates Next Year

By Dennis Norman, on October 20th, 2018

The Mortgage Bankers Association (MBA), in their Mortgage Finance Forecast released this week predicted that interest rates on home mortgages will continue to rise this year and will hit 5% early next year. According to the report, the interest rate on a 30-year fixed rate mortgage is expected to come in at an average of 4.6% for the 3rd quarter, which just ended and then rise to an average of 4.9% during the last quarter of this year. Interest rates are then forecast to hit 5.0% during the 1st quarter of 2019, rise to 5.1% by the second quarter, then Continue Reading →

Are Homes Going To Become ATM’s Again?

By Dennis Norman, on October 18th, 2018

During the housing bubble that peaked around 2006 and then burst in 2008 one of the things that got many homeowners in trouble was using their home’s as ATM’s. They did this by using, in most cases, home-equity loans to take advantage of the equity they had in their homes to give them access to tax-free cash to make improvements on their home, pay for vacations, buy cars, boats, whatever. This was fine until the value of homes began declining which resulted in many of these homeowners becoming “underwater“ meaning they owed more on their homes than they were worth.

Continue Reading →

Home Affordability In St Louis Drops For All Counties In Third Quarter

By Dennis Norman, on October 4th, 2018

One of the nice things about St Louis has always been that it’s an affordable place to live and an affordable place to own a home. However, as St Louis home prices, and mortgage interest rates, continue to increase, home affordability in St Louis has declined.

As the table below, which is based on data from ATTOM Data Research, shows, all of the counties reported on in the State of Missouri saw home affordability decline during the 3rd quarter with the exception of Jackson County (Kansas City). All of the counties had a decline in home affordability from a year Continue Reading →

Mortgage Delinquency Rates Continue to Improve-St Louis Distressed Home Sales Falling

By Dennis Norman, on September 18th, 2018

Mortgage delinquency rates, the precursor to foreclosures, continue to fall as the real estate market continues to perform well. The 30-plus day mortgage delinquency rate for June 2018 fell to 4.3% of all outstanding mortgages down from 4.6% a year ago, according to a report just released by CoreLogic. Frank Nothaft, the Chief Economist for CoreLogic, attributed the good news to “A solid labor market” going on to say that June’s national unemployment rate of 4% was “the lowest for June in 18 years“.

St Louis distressed home sales falling quickly…

With the economy and real estate market doing so Continue Reading →

House Flipping In St Louis Drops Twenty-Three Percent In 2nd Quarter

By Dennis Norman, on September 6th, 2018

House flipping, something that has become quite popular among investors over the past few years and has even spawned several reality TV shows, continues to decline in terms of the number of flips. This is certainly not due to a lack of interest but instead a lack of opportunities. Many flipping opportunities are the result of foreclosures and with the mortgage delinquency rates continuing to improve resulting in declining foreclosure rates, the end result is few opportunities for investors to flip homes.

In St Louis, during the 2nd quarter of 2018, there were 835 homes flipped in the St Louis Continue Reading →

Mortgage Interest Rates After Peaking In May Are Staying Down Near April Levels

By Dennis Norman, on July 19th, 2018

Today, Freddie Mac, through their Primary Mortgage Market Survey® revealed that for the current average interest rate on a 30-year fixed-rate mortgage is at 4.52%. which is just a slight decline from a week ago when the rate was 4.53% and the same as the week before that. After 30-year fixed-rate mortgages hit 4.66%, the highest rate in 7-years, back in late May, they have been trending downward a little, which is good news for the real estate market!

30 Year Fixed Rate Mortgage Average – 2000 – Present

(Click on Chart for LIVE chart with current Continue Reading →

St Charles County Residents Have Best Housing Affordability Threshold In St Louis Area

By Dennis Norman, on July 5th, 2018

Nearly 80 percent (78.8%) of the homeowners with a mortgage in St Charles County spend less than 30% of their household income for gross monthly housing costs, according to the U.S. Census Bureau’s latest data. As the table below shows, the 4-largest St Louis area counties are all within the green (good) level for housing affordability in all categories: Homeowners with a mortgage, homeowners without a mortgage and renters.

Of the three categories, St Louis renters have the worst housing affordability threshold with a median of 46.3% of St Louis renters spending more then 30% of their household income on Continue Reading →

Home Loan Origination Data Showing Impact Of Interest Rates On Refi’s But Not Home Purchases In St Louis

By Dennis Norman, on June 15th, 2018

Mortgage interest rates have been on the rise and hit their highest level in seven years toward the end of May, however, the higher rates don’t appear to be having an effect on the number of people in St Louis obtaining home loans yet. The table below is based upon the latest data from ATTOM Data Research, just released yesterday, and shows that there were 6,830 home purchase mortgage loans obtained in the St Louis metro area during the 1st quarter of this year. This represents an increase of nearly 10% from the number of home purchase mortgage loans that Continue Reading →

St Louis Real Estate Market Update VIDEO – June 2018

By Dennis Norman, on June 10th, 2018

There is a lot of activity in the St Louis real estate market! The inventory of homes for sale in St Louis remains low, interest rates have dropped a little over the past couple of weeks, home prices are beginning to soften as we move beyond the peak spring market and demand is still strong.

[xyz-ips snippet=”Market-Update-Video–Inline-Link”]

[xyz-ips snippet=”Seller-Resources—Listing-Targeted”]

[xyz-ips snippet=”Market-Update-Video-Package”]

House Flipping Volume In St Louis Down From Year Ago

By Dennis Norman, on June 7th, 2018

During the first quarter of this year, there were 600 home “flips” in St Louis or about 8.6% of the homes sold in St Louis, according to data just released by ATTOM Data Research. This rate of flipped homes is up 5% from the prior quarter, however, is down 7% from a year ago. The decline certainly doesn’t have anything to do with a lack of interest by investors in flipping, it has more to do with a low inventory and declining mortgage delinquency and foreclosure rates reducing the opportunities.

What is a “flipped” home?

In the report issued by Continue Reading →

Mortgage Interest Rates Hit Highest Level In Over Seven Years

By Dennis Norman, on May 25th, 2018

Freddie Mac has been tracking average mortgage rates since 1971 through their Primary Mortgage Market Survey® and yesterday it revealed that, as the chart below shows, the average interest rate on a 30-year fixed-rate mortgage was at 4.6%, the highest rate in over 7 years. The last time mortgage interest rates were this high was back on May 5, 2011 when the 30-year rate hit 4.71%.

Even with the recent increase, mortgage interest rates are still reasonably low from a historical perspective. As the second chart below illustrates, 20 years ago the rates were around 8 percent. Mortgage interest rates Continue Reading →

St Louis Ranked 8th Most Affordable Metro Area To Buy A Home

By Dennis Norman, on May 23rd, 2018

According to a report just released by HSH, St Louis is the 8th most affordable metro area to buy a home in and one of just 17 metro areas where an income of less than $50,000 per year will buy a median-priced home. The report is based upon data from the 1st quarter of this year when the median-priced home in the St Louis MSA was $162,400 (a 4.84% increase from a year ago) and the average mortgage interest rate was 4.41% (an increase of 0.36% from the previous quarter) resulting in a house payment (principal and interest portion only) Continue Reading →

New Home Construction In St Louis Area Trending Upward In Most Areas – St Charles County Sees Decline

By Dennis Norman, on February 23rd, 2018

New home construction in the St Louis area is off to a good start for 2018 with a total of 326 building permits for new homes being issued during January for the 7-county St Louis area reported on by the Home Builders Association of Eastern Missouri. This permit activity in January represents an 11% increase over the activity in January 2017 when there were 293 new home permits issued. During the month of January 2018, 4 of 7 counties saw an increase in building permits from January 2017 (Jefferson County +26%, Franklin County +143%, Warren County +1%, St Louis City Continue Reading →

Number of Seriously Underwater St Louis Homeowners Down Fifty-Percent From 4 Years Ago

By Dennis Norman, on February 9th, 2018

The percentage of homeowners with a mortgage in the St Louis MSA that were seriously underwater in the last quarter of 2017 was 13.8%, about half the rate from 4 years earlier, according to data just released by ATTOM Data Solutions. For this report, a homeowner is considered “seriously underwater” when the total of their home mortgage(s) is equal to, or greater than, 125% of their home’s current value.

Also shown on the table below is the percentage of equity-rich homewners in the St Louis MSA. An “equity-rich” homeowner is at the other end of the spectrum from an underwater Continue Reading →

Home Mortgage Lending In Low and Moderate Income Areas On The Rise

By Dennis Norman, on November 3rd, 2017

There is little doubt that lower-income individuals and, subsequently, lower-income neighborhoods, were impacted more negatively by the housing market bubble burst in 2008 than other areas. This resulted in extremely high mortgage delinquency rates, high foreclosure rates, and declining home values. Afterward, citing “loose” lending standards, sub-prime mortgages, etc, the mortgage market tightened the reins on mortgage lending making it more difficult for everyone to get a loan, but particularly, those folks in the lower income brackets.

As time has passed, home loan requirements have eased and it is now easier to obtain a home loan. Some of the requirements Continue Reading →

Number of St Louis Homeowners With Negative Equity Continues To Drop In Most Areas

By Dennis Norman, on October 30th, 2017

Over the past couple of years, as the St Louis real estate market has continued performing well, mortgage delinquencies and foreclosures have continued to decline. Rising home value has also caused the number of “underwater” homeowners, also known as homeowners in a negative-equity position (meaning their mortgage balance exceeds their homes current value) to decline as well. As the table below shows, 5 of the seven St Louis area counties listed saw a decline in the number of underwater properties in the 3rd quarter of this year from a year ago. The largest decline in underwater properties was St Charles Continue Reading →

City of St Louis Has Second Highest Vacant Property Rate In The U.S.

By Dennis Norman, on October 27th, 2017

As of the end of September, in the city of St Louis, 7,265 of the 104,288 residential properties in the city were vacant, giving the city a vacant property rate of 6.97 percent, the 2nd highest of all the counties in the U.S., according to a newly released report by ATTOM Data Solutions. The number of vacant properties in the city of St Louis increased 4.4% from the same time last year. Baltimore Maryland had the highest vacant property rate at 8.14 percent.

As the table below shows, St Clair County, Illinois was the next St Louis area county on Continue Reading →

St Louis Mortgage Delinquency Rate Continues To Fall

By Dennis Norman, on October 10th, 2017

On a national level, according to a report released by Corelogic, the foreclosure rate is at a 10-year low and, for the most part, mortgage delinquency rates continue to fall as real estate markets around the country continue to improve.

The state of Missouri, as well as it’s two big metro areas, St Louis and Kansas City, are following suit with improvements in mortgage delinquency and foreclosure rates.

State of Missouri- Mortgage Delinquency/Foreclosure Rates: 30+ day mortgage delinquency rate improved from 5.3% of all mortgage loans a year ago to 4.5% for July 2017; 90+ day mortgage delinquency rate improved Continue Reading →

Mortgage Fraud Risk Report Shows Missouri In Top Five Increased Risk States

By Dennis Norman, on October 7th, 2017

CoreLogic just released it’s 2017 Mortgage Fraud Report in which Missouri made the list of the five states with the highest year-over-year risk growth for mortgage fraud. The two types of fraud Missouri made the list on were Transaction fraud risk and Undisclosed Real Estate Debt fraud risk.

Below are some national highlights from the report (all figures are based upon 2nd quarter 2017 compared with 2nd quarter 2016):

Occupancy Fraud Risk increased nationally 7% Transaction Fraud Risk increased 3.9% Income Fraud Risk increased 3.5% Property Fraud Risk decreased 1.9% Undisclosed Real Estate Debt Fraud Risk decreased 2.7% Identity Fraud Continue Reading →

Number Of St Louis Homeowners In Negative Equity Position Declines Nearly 20 Percent In Past Year

By Dennis Norman, on September 22nd, 2017

In the St Louis area during the 2nd quarter of this year, there were 30,407 (5.4 percent of all residential properties) with negative equity, or underwater, according to a report just released by Corelogic. This is a decline of nearly 20 percent (19.89%) from a year ago when there were 37,581 St Louis homeowners in a negative equity position.

In addition to the homeowners that are underwater, or in a negative equity position, during the 2nd quarter of 2017 there were 9.660 homeowners, or another 1.7 percent of all homeowners with a mortgage, that were in a “near-negative” equity Continue Reading →

Home Buyers; Do You Know What You’re Worth?

By Dennis Norman, on September 15th, 2017

Home buyers for sale! Buy one get one free!

Ok, it’s not quite like that but, if you are a home buyer, odds are you have been bought and sold whether you know it or not! Does this sound surprising to you? I’m guessing it probably does as I don’t think most home buyers realize that, just like the homes they are shopping for, there is a market for home buyers (and sellers, of course) as well. I’m talking about “real estate leads”.

How home buyers are bought and sold…

Before I go further, or, especially if you are a Continue Reading →