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Market Matters

Bank of America to pay record $16.65 billion to settle mortgage claims Source: LA Times In what amounts to the largest settlement by a single company in U.S. history, the Justice Department has announced that Bank of America Corp. will pay $16.65 billion to end federal and state investigations into the sale of toxic mortgage securities during the subprime housing boom. California will receive $300 million from the settlement to reimburse the CalPERS and CalSTRS pension funds. Read the full story

3 facts crippling California's housing recovery Source: HousingWire   While California’s job growth and economy continue to improve, major hurdles remain for housing’s recovery. Firstly, affordability is a huge concern as rapid home price increases, mixed with a lack of affordable inventory is leaving little room for first-time borrowers to jump into the market. Tight credit and stagnant incomes are another concern if prices remain high. Read the full story

Housing construction surges in July Source: The Hill During July, housing construction hit its highest level in eight months as the sector shows signs of picking up pace in the second half of the year. After two months of drops, construction jumped 15.7 percent last month to a seasonally adjusted annual rate of 1.09 million homes, the fastest pace since the 1.11 million posted in November, according to the Commerce Department. Read the full story

Young Adults Are Living With Their Parents, But Not As Much As (Or Why) You Think

Source: Wall St. Journal

Young Americans are living with their parents in greater numbers, but don’t blame the economy or housing costs. Blame student loans. The proportion of young adults aged 18 to 31 living with parents has hit 36% from 31% in 2005, and indebtedness—especially rising student debt—explains roughly 30% of this increase, according to a new study by Lisa Dettling and Joanne Hsu at the Federal Reserve Board.
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Market Matters

Many Renters Could Afford Mortgages, But Can't Afford Homes
Source: The Atlantic

In many metro areas across the U.S., more than 50 percent of renters could afford to own a home, so why aren’t more young renters becoming first-time home-buyers right now? According to data analysis, the Atlantic notes that “Young renters don't appear to be transitioning into homeownership at the rate they could be. Either renters are opting out of the American dream, or it remains out of reach for reasons beyond affordability.” Possible explanations include tight credit, low inventory, and investor cash. 
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Closing costs: States ranked

Source: Bankrate

 

States have been ranked by average closing costs, from most expensive to least expensive. To determine the rankings, Bankrate requested good faith estimates for a $200,000 mortgage loan from up to 10 lenders in each state. The hypothetical loan was for a purchase of a single-family house in the state's largest city, using a 20 percent down payment, with excellent credit. California ranked as the 22nd most expensive state for closing costs.
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Homeownership at near 20-year low, but some bright spots
Source: HousingWire

Homeownership in the U.S. continues to fall, down to a low of 64.7 percent, a level not seen since 1995. Despite low interest rates and expanding credit availability, affordability has remained an issue. Also, first-time home purchasers are declining as a share of total home sales. Experts have expressed concerns that loosening of mortgage credit and a reduction in home price growth won’t be enough to reduce the trend of declining mortgage origination.
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