Mortgage rates down, availability up

Surprisingly, historically low mortgage rates recently dropped a bit lower. At the same time, mortgages are becoming more available to consumers.

Mortgage availability increased in February, according to the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association, which analyzes and reports on such data.

The index increased 0.7 percent to 118.6 in February. A decline in the index indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012, it was noted in a report from MBA.

"Credit availability improved marginally in February, led by further increases in jumbo loan programs and additional take-up of Fannie Mae's 3-percent down payment program," said Mike Fratantoni, MBA's chief economist.

"More than half of investors are now offering a low-down program, and Freddie Mac announced that their program will soon be available. In terms of conforming credit, this was offset by somewhat tighter constraints on cash-out loans and investors with multiple financed properties."

Q. What age group of homebuyers is most active in today's market?

A. The millennial generation represents the largest share of recent buyers, according to the 2015 National Association of Realtors Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent homebuyers and sellers.

The survey report also noted that an overwhelming majority of buyers search for homes online and then purchase their home through a real estate agent, with millennials using agents the most.

For the second consecutive year, NAR's study found that the largest group of recent buyers was the millennial generation, those 34 and younger, who composed 32 percent of all buyers (31 percent in 2013).

Generation X, ages 35 to 49, was closely behind with a 27 percent share. Millennial buyers represented more than double the amount of younger boomer (ages 50-59) and older boomer (60-68) buyers (at 31 percent). The Silent Generation (ages 69-89) made up 10 percent of buyers in the past year.

Q. How do homeowners' valuations of their residences compare with an appraiser's view of the home?

A. There is indeed a variance in a home's valuation from the perspective of its owner and an appraiser, according to Quicken Loans Home Value Index.

Appraisers valued homes 0.13 percent lower than homeowners' estimates in February, according to the index. In January, appraiser opinions were 0.18 percent higher than homeowners' estimates.

The difference is only slight, but it does show the first divergence between owners' price opinions and appraisers in more than a year. Despite the overall drop, appraiser opinions remain higher than homeowner estimates in 18 of the 27 metros analyzed.

"While it's significant that appraiser opinions are now lower than homeowners' nationally, this minimal difference is unlikely to derail a refinance or cause headaches for the homeowner," says Bob Walters, Quicken Loans chief economist, as quoted in a NAR report.

Q. Why are downtown areas appealing to so many homebuyers?

A. Certain downtown areas do indeed appeal to increasing numbers of buyers. Many of those prospective buyers factor in population growth, ratio of residents to jobs, income growth, home vacancy rates, affordability of housing, and retail and office vacancy rates.

Q. Are high-end (expensive) homes more apt to experience a foreclosure?

A. Before the recession, high-end homes tended to see fewer foreclosures than the rest of the market. But in the aftermath of the recession, that trend is reversing, according to a recent report from the real estate analytics firm CoreLogic.

The foreclosure rate for homes that are $750,000-plus peaked in May 2012 at 6.8 percent - nearly double the peak of 3.6 percent that the overall market saw in October 2011, as noted in a report from the National Association of Realtors.

Both rates have declined considerably in the past two years, but the upper end of the market continues to see higher foreclosure levels, according to CoreLogic.

• Email Jim Woodard at storyjim@aol.com.

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