Despite the enormous gains in the housing market, and the rapid surge in home prices in recent years, nearly 2 million people still owe more on their mortgage than their home is worth.

Throughout much of the housing downturn a decade ago, the plight of underwater borrowers sparked fierce debates. Many industry participants fretted about homeowners making “strategic defaults” — calculating that it would be smarter to cut their losses and walk away from the home, leaving an empty house and a broken promise to pay.

While there’s lots of evidence that most homeowners who defaulted did so because they had no other choice, the issue is still controversial.

Still, a survey published by the New York Fed this week sheds some light on how homeowners think about their mortgage payments when they’re underwater — or at least how they say they think about it.

The survey, the housing component of the massive Survey of Consumer Expectations, asked underwater owners: “Have you considered no longer making your monthly payments on loans against your home?” Nearly 87% said “no, absolutely not.” Another 6% said “yes, considered but did not stop.” No one admitted, “yes, actually did stop.”

While it’s fairly obvious that survey responses are always subjective, the responses to this particular survey may be even more complicated than usual. For one thing, many homeowners who loved their homes but lost their jobs may simply never have been able to keep them.

But perhaps even more poignant is the 11% of people who said they knew home prices would recover. In the depths of the downturn, with prices down 30%, that was probably hard to fathom.

Daren Blomquist, senior vice president at the real-estate data firm Attom Data, has frequently spoken about this lesson learned from the crisis. If the housing market turns down again, he told MarketWatch in December, we should “find ways to help those distressed homeowners stick it out and not go through foreclosure,” he said.

“There was a sense that it was financially smart to cut their losses and just walk away, but in many areas of the country we’ve seen home prices exceed their pre-recession peaks,” Blomquist said. “If they could have just stuck it out they would have built wealth.”

Of course, the next downturn will probably not look like the last one. But Americans seem to have lots of strong personal reasons to keep making mortgage payments, even in the worst conditions

Experts say rising home prices won’t stop anytime soon

Home prices increased across the U.S. in February, picking up the pace in annual price gains, according to the latest report released by S&P Dow Jones Indices and CoreLogic.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. Census divisions, increased by 6.3% annually in February, up from January’sincrease of 6.1%.

The 10-City Composite increased at an annual rate of 6.5%, up from its increase of 6% the previous month. The 20-City Composite also increased, rising 6.8%, compared to its increase of 6.4% in January.

“Home prices continue to rise across the country,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the index committee. “The S&P CoreLogic Case-Shiller National Index is up 6.3% in the 12 months through February 2018. Year-over-year prices measured by the National index have increased continuously for the past 70 months, since May 2012.”

“Over that time, the price increases averaged 6% per year,” Blitzer said. “This run, which is still ongoing, compares to the previous long run from January 1992 to February 2007, 182 months, when prices averaged 6.1% annually. With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue.”

But while the nation is averaging increases around 6%, home prices in some cities are rising at a much faster rate, the report shows. Seattle, Las Vegas and San Francisco reported the highest annual gains with increases of 12.7%, 11.6% and 10.1% respectively.

“Increasing employment supports rising home prices both nationally and locally,” Blitzer said. “Among the 20 cities covered by the S&P CoreLogic Case-Shiller Indices, Seattle enjoyed both the largest gain in employment and in home prices over the 12 months ended in February 2018.”

“At the other end of the scale, Chicago was ranked 19th in both home price and employment gains; Cleveland ranked 18th in home prices and 20th in employment increases,” he said. “In San Francisco and Los Angeles, home price gains ranked much higher than would be expected from their employment increases, indicating that California home prices continue to rise faster than might be expected. In contrast, Miami home prices experienced some of the smaller increases despite better than average employment gains.”

In all, thirteen of the top 20 cities reported higher price increases for the year ending in February than for the year ending in January.

Monthly, before seasonal adjustment, the National Index increased 0.4% from January to February. The 10-City and 20-City Composites each increased 0.7% month-over-month.

After seasonal adjustment, the increases were slightly higher at 0.5% for the National Index and 0.8% for the 10-City and 20-City Composites. All 20 cities reported increases in February before and after seasonal adjustment.

One expert explained these rapidly rising home prices are creating problems for homebuyers, especially those on the lower end of the market.

“The kind of sustained, rapid home price growth we’ve been seeing in Case-Shiller and other indices for the past few years is enough to give home buyers of all stripes a headache,” Zillow Chief Economist Svenja Gudell said. “But that pain is especially acute for first-time and lower-income buyers at the bottom end of the market in search of entry-level homes that are appreciating the fastest, in large part because they are in the most demand.”

“Competition is fierce, offer windows are short and tensions will inevitably run high for many buyers as the spring shopping season unfolds,” Gudell said, telling buyers who are hoping for more inventory soon: Don’t hold your breath, it could take years.

Always be aware. . .

Hackers are posing mortgage and title insurance company employees in order to steal the down payments of homebuyers in one of the wealthiest cities in the country.

Police in Southlake, Texas, a suburb of the Dallas/Ft. Worth Metroplex and the fourth wealthiest city in the U.S., based on data from the Census Bureau, issued a warning this week about scammers who are hacking into the email accounts of real estate professionals and then pose as title company employees in order to steal a homebuyer’s down payment.

And in Southlake, the down payments can be quite high.

According to data from Zillow, the median home value in Southlake is $686,200, the median price of homes currently listed in the area is $995,000, and the median price of homes recently sold is $606,500.

According to the Southlake PD, they’ve seen about 10 cases in the last six months where hackers attempted to steal a homebuyer’s down payment.

And this is hardly the first time a scam like this has been uncovered.

Original Article

An earthquake fault line under Seaport Village has led to a major rework of plans for what will likely become a San Diego landmark.

Plans for the nearly 40-year old shopping and recreation area include a 480-foot observation tower that, according to the San Diego Unified Port District, could make the city’s skyline more distinctive. Redevelopment will also include hotels, offices and an aquarium.

Original ideas for the site were unveiled in 2016 by Protea Waterfront Development but it will present new preliminary plans Tuesday to port officials, who must still decide on them. Aside from just the earthquake changes, the firm has further modified plans but says the alterations still fit with the port’s vision.

A hotel, retail area and underground parking garage directly on top of the fault line need to be relocated elsewhere on the 70-acre site. The fault line will largely be turned into a long pedestrian mall surrounded by trees, inspired by Barcelona’s Las Ramblas.

Read the rest HERE.