Occupancy rates increased to 94.6% at the end of 2011, up from 93.5% a year ago and from 91.8% when the occupancy rates bottomed in late 2009.

MPF Research predicts occupancy rates to increase another 50 basis points, and rents to rise 4.5%.

Northern California’s apartment markets ranked as the nation’s rent growth leaders during calendar 2011, despite the fact that some weakness registered in the performances recorded in parts of the Pacific Northwest specifically during the fourth quarter. Year-over-year, effective rents for new leases jumped 14.6% in San Francisco, 12.3% in San Jose, and 9% in Oakland. With rents down 0.4%, Las Vegas was the nation’s only major apartment market that lost pricing power during calendar 2011.

Rent Growth Leaders in Calendar 2011

Related: Apartment Vacancies Fall to Lowest in 3 Years in the USA (April 2011) – Top USA Markets for Buying Rental Property – Apartment Rents Rise, Slightly, for First Time in 5 Quarters – It’s Now a Renter’s Market

Chart showing loan delinquency rates from 2000-2011, shows seasonally adjusted data for all banks for consumer and real estate loans. The chart is available for use with attribution. Data from the Federal Reserve.

Residential real estate delinquency rates increased in the first half of 2011 in the USA. Other debt delinquency rates decreased. Credit card delinquency rates have actually reached a 17 year low.

While the job market remains poor and the serious long term problems created by governments spending beyond their means (for decades) and allowing too big to fail institutions to destroy economic wealth and create great risk for world economic stability the USA economy does exhibit positive signs. The economy continues to grow – slowly but still growing. And the reduction in delinquency rates is a good sign. Though the residential and business real estate rates are far far too high.

Related: Consumer and Real Estate Loan Delinquency Rates 2000-2010 – Real Estate and Consumer Loan Delinquency Rates 1998-2009 – Government Debt as Percent of GDP 1998-2010 for OECD

Notes: these data are compiled from the quarterly Federal Financial Institutions Examination Council Consolidated Reports of Condition and Income. Charge-offs are the value of loans and leases removed from the books and charged against loss reserves. Charge-off rates are annualized, net of recoveries. Delinquent loans and leases are those past due thirty days or more and still accruing interest as well as those in nonaccrual status.

Charge-offs, which are the value of loans removed from the books and charged against loss reserves, are measured net of recoveries as a percentage of average loans and annualized. Delinquent loans are those past due thirty days or more and still accruing interest as well as those in nonaccrual status. They are measured as a percentage of end-of-period loans.

So if you didn’t refinance when I suggested it (and refinance, myself), previously, you may want to look at doing so now. Or you may believe that listen to me about interest rates doesn’t seem very wise.

I have even read that banks are reducing fees in order to encourage refinancing. Seems crazy to me, but what do I know.

You do need to have a decent loan to value ratio (certainly no more than 90%, and probably 80% would be better). That can be difficult for those that have had large decreases in their homes value. Also you need a great credit rating and a stable job situation. But if you qualify refinancing at these rates should be a great financial move for many. I’m perfectly happen to have done so earlier, I didn’t quite pick the bottom but I still think over 30 years these rates (the current rates and earlier rates of 4 1/4% or 4 3/8%) will seem like a dream.

Related: Fixed Mortgage Rates Reach New Low (August 2010) – Lowest 30 Year Fixed Mortgage Rates in 37 Years (Dec 2008) – The Impact of Credit Scores and Jumbo Size on Mortgage Rates (Jan 2009)

The HomeVestors-Local Market Monitor Best Markets to Invest in Rental Property ranking forecasts the expected performance of rental real estate properties, specifically single-family homes maintained as rental properties. The rankings show the extra return, or risk-return premium, that an investor must demand from rental property in a local market. The risk-return premium can be added to the regular capitalization rate to produce a risk-adjusted cap rate at full occupancy for a local market. The ranking is calculated based on three-year forecasts of home prices (reflecting underlying home-price appreciation potential) and gross rents (as a proxy for potential investor cash flow). Of course, this is based on the creators expectation (and therefore hardly to be relied upon – they have no track record to measure against yet) but it is interesting.

The Top 10 markets in the new ranking are:

• Las Vegas, Nevada
• Detroit, Michigan
• Warren, Michigan
• Orlando, Florida
• Bakersfield, California
• Tampa-St. Petersburg, Florida
• Phoenix, Arizona
• Ft. Lauderdale, Florida
• Rochester, New York
• Stockton, California

Obviously their expectations favor cities that have seen drastic price declines. And that makes sense, as long as those cities rental markets are steady and housing prices stabilize.

An interesting piece of data: HomeVestors and Local Market Monitor estimate that approximately 14% of single-family homes in the USA are maintained as rental properties.

I do believe rental property investments in many markets in the USA may well be quite wise. Investing in rental properties is much more difficult than say stocks and has some high costs (if you chose to higher a property manager, for example). Real estate also requires a long term (5+ year commitments) to have reasonable expectations of successful investing results.

Related: Apartment Vacancies Fall to Lowest in 3 Years in the USA (April 2011) – Home Values and Rental Rates – Landlords See Increase in Apartment Rentals (June 2010)

I am renting my house in Arlington, Virginia. If you are interested here is a great house with a large yard in a wonderful, quiet neighborhood near the Washington DC metro, great restaurants, parks, shopping and more. See more pictures of the house and floorplans.

Related: backyard wildlife – Apartment Vacancies Fall to Lowest in 3 Years in the USA – Apartment Rents Rise, Slightly, for First Time in 5 Quarters (April 2010)

View of the deck, looking to the backyard.

Rents have been slowly recovering the last year, after the economic shocks of the credit crisis. People, moved back into parents house and more people started sharing apartments and houses in the last few years as people where thrown out of jobs due to the after effects of the financial actions by large financial institutions. Slowly the economy has been recovering and jobs have been slowly growing and as a result the rental market has been strengthening .

Also the decline in construction the last few years has decreased the normal addition to supply. At the same time the population has continued growing. Some areas of the country seem to still have a large overcapacity in housing but areas that are adding jobs (such as Northern Virginia and New York City) are seeing increasing rents.

I have 2 properties for rent in Arlington, Virginia.

Related: Landlords See Increase in Apartment Rentals (July 2010) – USA Housing Inventory Puts Pressure on Prices (Sep 2010) – Apartment Rents Rise, Slightly, for First Time in 5 Quarters (Apr 2010) – It’s Now a Renter’s Market (Apr 2009) – Housing Rents Falling in the USA (Feb 2009)

The second half of 2010 saw real estate, agricultural, credit card and other loan delinquencies decrease. The rates are still quite high but at least are moving in the right direction. Residential real estate delinquencies decreased 138 basis points in the second half of 2010, to 9.94%, which brought them to just below the rate at the end of 2009. In the second half of 2010, commercial real estate delinquencies decreased 77 basis points to 7.97% (which was also exactly 77 basis points less than at the end of 2009. Agricultural loan delinquencies decreased 76 basis points, to 2.55% (down 53 basis points from the end of 2009). Consumer loan delinquencies decreased, with credit card delinquencies down 90 basis points to 4.17% and other consumer loan delinquencies down 27 basis points to 3.1%. The credit card delinquency rate decreased a very impressive 219 basis points in 210.

Related: Real Estate and Consumer Loan Delinquency Rates 2000 through June 2010 – Real Estate and Consumer Loan Delinquency Rates 1998-2009 – Bond Rates Remain Low, Little Change in Late 2009 – posts with charts showing economic data

Chart showing the loan delinquency rates from 1998-2009 by Curious Cat Economics Blog, shows seasonally adjusted data for all banks for consumer and real estate loans. The chart is available for use with attribution, data from the Federal Reserve.

Notes: these data are compiled from the quarterly Federal Financial Institutions Examination Council Consolidated Reports of Condition and Income. Charge-offs are the value of loans and leases removed from the books and charged against loss reserves. Charge-off rates are annualized, net of recoveries. Delinquent loans and leases are those past due thirty days or more and still accruing interest as well as those in nonaccrual status.

Charge-offs, which are the value of loans removed from the books and charged against loss reserves, are measured net of recoveries as a percentage of average loans and annualized. Delinquent loans are those past due thirty days or more and still accruing interest as well as those in nonaccrual status. They are measured as a percentage of end-of-period loans.

Eligible Single Family homes located in revitalization areas (there are hundreds of revitalization areas across the country. HUD is always working with localities to designate new areas) are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

Check the listings for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

Related: Fixed Mortgage Rates Reach New Low – Your Home as an Investment – articles on home ownership

Total Mortgage – 20 year fixed rate 3.875%, total fees and points not provided , apr 4.15%

American United Mortgage – 20 year fixed rate 4% [same as 30 year rate ], fees $2,995 (0 points), apr 4.26%

Aim Loan – 20 year fixed rate 3.875%, fees (about $4,100 I think), apr 4.02%

These are some of the best deals I have been able to find. However, companies can play games with fees and hide excessive costs in requirements they don’t consider fees (appraisal costs…). Rates can bounce around for a specific lender, so I think it make sense to watch several (not just pick out he lowest one on whatever date you first look).

Suggestions on how to tell whether specific lenders good faith estimates are accurate and comparable would be especially appreciated.
Edits:
RoundPoint – looks good, low rates, low fees, good reviews on Zillow.
Amerisave – 20 year fixed rate 3.75%, total fees and points $3,418, apr 3.87% (removed as an option – they don’t respond to customer have tons of negative reviews online about problems, poor service, etc.

Related: Fixed Mortgage Rates Reach New Low – Low Mortgage Rates Not Available to Everyone – 30 Year Fixed Mortgage Rates and the Fed Funds Rate – Mortgage terms

The shadow inventory, poor job market and low net home equity positions continue to put a huge amount of pressure on the housing market. Very low interest rates help support the market but not much else does. In some locations the rental market is starting to help. But the tightening of credit standards is reducing the pool of potential buyers. While it is a good thing (because credit standards were far too loose) it still will extend the duration of a bear housing market.

I would be looking to buy now, if I didn’t own a house already (and was planning on staying long term).

Related: Real Estate and Consumer Loan Delinquency Rates 2000-2010 – 10 million More Renters In the Next 5 Years – The Value of Home Ownership – Nearly 10% of Mortgages Delinquent or in Foreclosure (Dec 2008)