Mortgage Applications Up 1.3 Percent

Mortgage applications increased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 7, 2011.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.3 percent compared with the previous week. The Refinance Index increased 1.3 percent from the previous week. The seasonally adjusted Purchase Index increased 1.1 percent from one week earlier. The unadjusted Purchase Index increased 1.2 percent compared with the previous week and was 2.9 percent lower than the same week one year ago. The increases were driven mainly by the government loan category, with the Government Purchase index up 2.4 percent and Government Refinance index increasing 9.9 percent. The Conventional Purchase and Refinance indexes increased 0.1 percent and 0.2 percent, respectively.

The four week moving average for the seasonally adjusted Market Index is up 1.56 percent. The four week moving average is down 0.51 percent for the seasonally adjusted Purchase Index, while this average is up 2.15 percent for the Refinance Index.

The refinance share of mortgage activity remained unchanged at 79.1 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.0 percent from 6.4 percent of total applications from the previous week.

The average loan size of all loans for home purchase in the US was $210,863 in September 2011, down from $212,736 in August 2011. The average loan size for a refinance was $237,632, down from $241,323 in August. The largest purchase loans were made in the Pacific region at $ 302,110. The largest refinance loans were also made in the Pacific region at $ 339,592.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.25 percent from 4.18 percent, with points increasing to 0.47 from 0.44(including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.59 percent from 4.49 percent, with points increasing to 0.49 from 0.41 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.06 percent from 4.05 percent, with points decreasing to 0.58 from 0.69 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.49 percent, with points remaining unchanged from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.03 percent from 3.02 percent, with points increasing to 0.54 from 0.41 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

Home Values Tread Water, Dallas Remains Flat in August

Home values in the United States showed minimal monthly appreciation in August of 2011, according to the Zillow® Real Estate Market Report(i). The Zillow Home Value Index(ii) increased 0.1 percent from July to August. On a year-over-year basis home values declined 4.5 percent to $172,600. Home values have fallen 28.3 percent since they peaked in June 2006.

Regionally, 68 of the 157 metropolitan statistical areas (MSAs) covered by Zillow experienced monthly home value appreciation, though minimal in many areas. Most notably, two of the hardest hit markets, Detroit and Ft. Myers, Fla., have now seen five and nine consecutive months of appreciation, respectively. Seventy-four markets saw home value depreciation and 15 markets, including Los Angeles, Dallas and Miami-Ft. Lauderdale, Fla., remained flat.

The foreclosure liquidation rate, which measures the number of homes lost to the bank, stayed steady at around 9.2 out of every 10,000 homes foreclosed in August. This is down from the rate of 10.9 out of every 10,000 homes in October 2010, before the robo-signing lawsuits slowed the pace of foreclosures in most states. However, foreclosure liquidations remained high in many of the hardest hit metros in California, Nevada, and Arizona. In Las Vegas and Phoenix more than 30 out of every 10,000 homes were liquidated in August.

"Due to the robo-signing controversy, the pace of foreclosure liquidations has been slower than it would be otherwise, which is impacting home value trends positively. Eventually the pace will pick up again, putting more bank-owned homes into local markets and putting additional downward pressure on prices," said Zillow Chief Economist Dr. Stan Humphries. "We remain encouraged about the organic stabilization in home values that we have been seeing absent the federal home buyer tax credits, but we remain concerned about the impact that recent economic turmoil and continued weak economic indicators will have on future home sales and home value trends."

"At this point, we maintain the expectation that a definitive bottom will not occur until 2012 at the earliest."

2010 Census Shows Second Highest Homeownership Rate on Record Despite Largest Decrease since 1940

Texas has 22.3 percent increase.

The U.S. Census Bureau today released a 2010 Census brief, Housing Characteristics: 2010, that shows the homeownership rate is the second highest on record, behind only 2000, since homeownership data collection began in 1890. However, the rate decreased by 1.1 percentage points to 65.1 percent between 2000 and 2010. The decrease is the largest since the period from 1930 to 1940.

Housing Inventory Grew the Most in South and West

The national housing inventory increased by 15.8 million units, or 13.6 percent, from 2000 to 2010. The housing inventory increased in all states during the decade but grew faster in the South and West than in the Midwest and Northeast. The South grew 17.9 percent to 50.0 million units and the West grew 17.3 percent to 28.6 million units. In contrast, the Midwest grew by 9.3 percent to 29.5 million units and the Northeast grew by 6.6 percent to 23.6 million units.

All of the states with the largest percentage increases in housing units were in either the West or the South: Nevada (41.9 percent), Arizona (29.9 percent), Utah (27.5 percent), Idaho (26.5 percent), Georgia (24.6 percent), Florida (23.1 percent), North Carolina (22.8 percent), Colorado (22.4 percent), Texas (22.3 percent) and South Carolina (21.9 percent).

No states in either the Midwest or the Northeast experienced a percentage change in housing inventory greater than the national increase of 13.6 percent. In the Northeast, housing units in Pennsylvania (6.0 percent), New York (5.6 percent) and Rhode Island (5.4 percent) increased less than both the nation and the Northeast as a whole (6.6 percent). West Virginia had the lowest percentage increase of any state at 4.4 percent.

Metro Areas Have More Homeowners while Major Cities Have More Renters

As a percentage of the entire national inventory, more than a third of all owner-occupied homes (38.3 percent) and renter-occupied homes (35.6 percent) were in the South. The homeownership rate in the Midwest was 69.2 percent, followed by the South (66.7 percent), the Northeast (62.2 percent) and the West (60.5 percent). Homeownership rates decreased in each region from 2000 to 2010.

West Virginia (73.4 percent) and Minnesota (73.0 percent) had the highest homeownership rates in 2010 as well as 2000. The states with the next highest homeownership rates in 2010 were Michigan (72.1 percent), Iowa (72.1 percent), and Delaware (72.1 percent). As in 2000, New York had the lowest percentage of homeowners at 53.3 percent.

All but one metropolitan area had more homeowners than renters in 2010. With a homeownership rate of 49.5 percent, Manhattan, Kan., was the only metro area where renters outnumbered homeowners. In 2000, five metro areas had more renters than homeowners.

The metro areas with the highest homeownership rates can be found primarily in Michigan and Florida, where each had three metro areas in the top 10. Monroe, Mich., had the highest percentage of owner-occupied units at 79.8 percent, followed by Punta Gorda, Fla. (79.7 percent), Holland-Grand Haven, Mich. (78.2 percent), Bay City, Mich. (77.8 percent) and Barnstable, Mass. (77.4 percent).

While homeowners were the majority in most of the nation's metro areas, they were outnumbered by renters in many of the country's largest cities, including the four most populous cities. This was similar to 2000. In New York, renters made up 69.0 percent of households, followed by Los Angeles (61.8 percent), Chicago (55. 1 percent) and Houston (54.6 percent).

Similar to metro areas, homeowners were the majority in most of the nation's counties. Homeowners outnumbered renters in all but 1.5 percent of the 3,143 counties and equivalent areas in the country. The counties with the highest homeownership rates were Keweenaw County, Mich. (89.8 percent), Sumter County, Fla. (89.7 percent), Alcona County, Mich. (89.6 percent), Morgan County, Utah (89.1 percent) and Powhatan County, Va. (88.5 percent).

Despite most counties having a majority of homeowners, many saw a decrease in the homeownership rate and an increase in renter occupancy. The largest percentage point increases in renter occupancy were in Loving County, Texas (19.8), Manassas Park, Va. (13.2), and Madison County, Idaho (10.9). Only 14 counties had more than a 5 percentage point increase in their homeownership rates.

Every region and all but three states experienced a percentage point increase in their gross vacancy rate during the decade. Nevada led all states with both the largest percent increase in total housing units and the largest percentage point increase in the gross vacancy rate. Only three states, New Mexico (-0.9), Wyoming (-0.2) and Hawaii (-0.1), experienced a decrease in their gross vacancy rates.

Vacant Units

Many of the states with the highest homeowner vacancy rates also had the highest rental vacancy rates in 2010. The homeowner vacancy rate is the proportion of homeowner inventory that is unoccupied and "for sale," and the rental vacancy rate is the proportion of the rental inventory that is unoccupied and "for rent." Of the top 10 states with the highest homeowner vacancy rates, eight were also in the top 10 for rental vacancies: Alabama, Arizona, Florida, Georgia, Michigan, Nevada, North Carolina and South Carolina.

Data on vacant units and homeownership rates are collected for several different Census Bureau surveys in addition to the 2010 Census, including the Housing Vacancy Survey and the American Community Survey. Noticeable differences in results occur because of differences in data collection methods. For example, the 2010 Census measured occupancy status as of April 1, 2010, while other surveys measure the status of a sampling of units at the time a field representative conducts the interview.

New Survey: Homeowners Expect Declines

One an almost certain retirement vehicle, Rasmussen Reports has released the results of a national telephone survey shows that 40 percent of U.S. homeowners now expect their home’s value to go down over the next year-- the highest level of pessimism to date.

Just 13 percent expect the value of their home to go up over the next year. In the longer-term, there's a bit more optimism. Thirty-six percent expect their home’s value will go up during the next five years

The survey of 753 Homeowners was conducted on September 15-16, 2011 by Rasmussen Reports.

Home Sales Ahead of Last Year, Prices Stabilizing

August home sales reached a level 18 percent higher than August 2010. Traditionally, June is the highest sales month, but this year July and August were the two summer months that experienced higher sales than in 2010. In the August 2011 RE/MAX National Housing Report based on MLS data from 53 metropolitan areas, the inventory of homes-for-sale dropped for the 14th consecutive month, while total inventory remains almost 19 percent below the level in August 2010. And the Median Sales Price of homes sold in August, like July, was down fractionally, while the loss from last year’s prices continues to shrink.

The Median Sales Price for August was $189,831. This is just 0.6 percent below the price in July and 3.6 percent below the price in August 2010. Home prices have risen in 4 of the last 8 months, while on a year-over-year basis, the Median Price has improved for five consecutive months. Of the 53 metro areas reviewed for this report, 14 saw prices rise from July, and 10 saw prices rise over August 2010, including: Detroit +15.7 percent, Orlando +14.2 percent, Milwaukee, +10.6 percent and Pittsburgh, +2.2 percent.

Ad Council Launch New PSAs to Prompt Homeowners Who Are Facing Mortgage Trouble to Reach Out For Help

The Ad Council, in partnership with the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD), have joined together to launch a new phase of their Foreclosure Prevention Assistance Public Service Advertising (PSA) Campaign. The campaign aims to increase awareness of the Making Home Affordable® Program's free resources and assistance for homeowners who are struggling with their mortgage payments.

One in 11 homeowners nationwide has missed two or more mortgage payments. Many struggling homeowners delay conversations about their mortgage concerns and enter foreclosure without ever reaching out for assistance. The new PSAs notify homeowners facing mortgage trouble that options other than foreclosure are available, and the sooner they act, the more options they have for the best possible outcome.

The Foreclosure Prevention Assistance campaign encourages homeowners to call 888-995-HOPE (4673) to speak one-on-one with a HUD-approved housing expert to discuss the solutions that are available based on their individual circumstances. In addition, the program website, MakingHomeAffordable.gov, serves as an online resource for struggling homeowners to learn about options other than foreclosure.

Created pro bono by Schafer Condon Carter, a Chicago-based advertising agency, the new television, radio, print, out of home, and online PSAs have been created in English and Spanish. The PSAs aim to inspire homeowners who are unsure of where to turn to reach out for help as soon as possible.

"The Making Home Affordable Program has already assisted over a million homeowners," said HUD Secretary Shaun Donovan. "Housing counselors are ready to continue their work with homeowners to discuss specific solutions for their mortgage problems. Struggling homeowners do not need to work through their concerns alone. The key is encouraging homeowners to pick up the phone now to explore their options."

Treasury Secretary Tim Geithner added: "While the housing market is still distressed, the Administration's programs have helped establish better standards for the mortgage industry. As a result, struggling homeowners have more options today than ever before. We are continuing to do everything we can to help stabilize the market and to ease the burden on struggling homeowners. And that includes working to make sure families and individuals know about the resources available to them."

"We are proud to continue our partnership with Treasury and HUD on this critical issue of home foreclosures that affects so many Americans," said Peggy Conlon, president and CEO, the Ad Council. "We are confident that these new PSAs will resonate with homeowners struggling with their mortgages and encourage them to call 888-995-HOPE or visit the website to learn what they can do to prevent foreclosure."

"All of us at Schafer Condon Carter have been honored to work with the Ad Council and its sponsors at Treasury and HUD on the Making Home Affordable campaign," said David Selby, president of Schafer Condon Carter. "We know that the financial burdens currently facing many homeowners are paralyzing. We've captured this emotion with a creative treatment that shows people frozen in time while the world goes on around them. Speaking directly to these homeowners is key in getting them to get the help they need as soon as possible."

The Ad Council will distribute the new PSAs to more than 33,000 media outlets nationwide. The new advertisements build on the successful nationwide campaign first launched between Treasury, HUD and the Ad Council in the summer of 2010. The PSAs will air in advertising space donated by the media.

Dallas-Based Investment Firms Form Hotel Venture

Downtown Dallas

Dallas-based hotel investment venture, GVM Hotel Partners (GVM), today announced the acquisition of five TownePlace Suites by Marriott, at a purchase price of $30 million. Four of the hotels are located in Texas markets (Austin, College Station and Houston) with the fifth in Birmingham, Alabama. GVM Hotel Partners is a joint venture among affiliates of Gatehouse Capital, Varro Hospitality and the Muse Family Office.

"This acquisition falls directly in line with the stated goals of our venture -- to purchase assets built in the last ten years in solid Texas growth markets at a discount to their current replacement and by changes in management and/or additional capital investment, produce good year one yields," said Marty Collins, of Gatehouse Capital. "We are hopeful this is the first of many deals, as we feel there is particular opportunity in the major growth markets of Texas within this segment of the hospitality industry."

This is the first acquisition by GVM, which was formed to acquire and manage a portfolio of financially distressed select-service, limited-service, and extended-stay premium-branded hotels. The venture builds on broad depths of experience in the investment, real estate and hospitality markets, while marking its initial entry into this particular segment of the hotel market.

"With the hospitality markets showing quicker rebounds in recessionary periods than most other classes of commercial real estate, we are excited about our growth possibilities and look forward to generating positive cash-flow for our investors," said Jeremy Robinson of Varro Hospitality.

Gatehouse Capital is an investor and provides specific investment strategies and oversight for this portfolio and the GVM venture. Gatehouse has developed a $1 billion portfolio of hotels including the W Hotels of Hollywood, Silicon Valley, San Diego and Dallas, as well as The Joule Hotel in Dallas, Hyatt Regency Resort and Marina in Mission Beach and Aloft Jacksonville Tapestry Park.

Varro Hospitality, a co-equity investor in the venture with their Opportunity Fund I, is a privately-held hotel investment company whose principals have broad experience in real estate and investments. Varro provides the underwriting, due diligence, asset management, re-development, administration and reporting for the GVM venture.

John Muse is the single largest investor and brings more than 30-years investment experience to the venture through his experience as co-founder and chairman of HM Capital.

The partners engaged Texas Western Management to operate these Marriott branded hotels, among others owned by Texas Western Hospitality and third parties.

"This portfolio of quality Marriott properties, in attractive markets at well below replacement cost, represents a compelling investment opportunity. We hope to drive growth in performance by having Texas Western manage these assets," said John Muse of the Muse Family Office.