Archive for April, 2015

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Pending home sales rose for the third straight month in March, and according to the National Association of Realtors (NAR) Pending Home Sales Index, they’re at their highest point since June 2013.

The index, an indicator of sales based on contract signings, was released this morning. It showed a 1.1 percent increase in pending sales for March and an 11.1 percent increase over the same time last year. This marks the third month in a row the sales have risen and the seventh year that pending sales numbers have improved.

The Pending Home Sales Index was at its highest point in June 2013, coming in at 109.4. As of March, it has now reached 108.6, its peak since that time.

The index also broke down pending home sales by region. While the South and West saw an increase of 4 percent and 1.7 percent for March, respectively, the Northeast and Midwest saw drops, decreasing by 1.5 percent and 2.5 percent.

All regions were up over March 2014. The Northeast rose .6 percent, the Midwest was up 11.3 percent, the West jumped 15.6 percent, and the South increased 12.4 percent.

As for explaining the ever-increasing sales, Lawrence Yun, chief economist at NAR, attributes it to a competitive spring market and an improving number of long-term homeowners.

“Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year,” Yun said. “While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year’s activity is being driven by more long-term homeowners.”

Yun also said he expects sales to continue improving over the next few months, but that supply and rising prices could hinder them slightly.

“Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer,” he said.

“This in turn has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.”

See the index at Realtor.org.

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In the Federal Reserve’s latest Beige Book released on Wednesday, residential real estate activity was reported to be “steady to improving” across most of the Fed’s 12 districts for mid-February through the end of March despite a minor slowdown in construction due to winter weather.

The districts of Richmond, Chicago, and Dallas reported that residential mortgage demand, particularly in the area of refinancings, grew during the period, while New York reported steady growth. Delinquencies were down or at low levels in New York and Cleveland, while Philadelphia and Kansas City bankers expressed confidence in the quality of their loan portfolios, according to the Fed.

Most Fed districts reported improvement in residential real estate, namely Cleveland, Richmond, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco. The remaining districts reported steady residential real estate activity, except for New York, which said conditions were softening. Construction activity slowed in Philadelphia, Cleveland, Atlanta, and Dallas due to harsh winter weather conditions.

Half of the districts reported low-to-declining levels of inventory, while housing inventory was near historic lows in the Chicago district – particularly for homes in the lower price range. Most of the districts reported that the real estate supply was tight in most price points. In Philadelphia and Cleveland, mid- to high-priced homes were selling better, while low- to mid-ranged priced homes outsold homes in other price ranges in the Chicago, Kansas City, and Dallas districts. First-time homebuyers were absent in Philadelphia and Cleveland, according to the Fed.

With winter over, most Fed districts remained hopeful with regards to home sales for the rest of the year.

“Contacts across the system uniformly reported that they were optimistic and many expect a greater than normal upswing in home sales with the coming of spring,” the Fed wrote in the report.

Labor markets remained stable or showed modest improvement in most districts, with hiring increases reported in New York, Richmond, Atlanta, Chicago, St. Louis, and Dallas.

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I thought our readers would benefit from the wisdom of the article below!  My suggestion is to put into practice at least some of the following suggestions and let’s start a conversation about it on this Blog.  Let us know your results and thoughts.  BJ

From Buzzfed

I would love to be happier, as I’m sure most people would, so I thought it would be interesting to find some ways to become a happier person that are actually backed up by science. Here are ten of the best ones I found.

1. Exercise more – 7 minutes might be enough.
You might have seen some talk recently about the scientific 7 minute workoutmentioned in The New York Times. So if you thought exercise was something you didn’t have time for, maybe you can fit it in after all.

Exercise has such a profound effect on our happiness and well-being that it’s actually been proven to be an effective strategy for overcoming depression. In a study cited in Shawn Achor’s book, The Happiness Advantage, three groups of patients treated their depression with either medication, exercise, or a combination of the two. The results of this study really surprised me. Although all three groups experienced similar improvements in their happiness levels to begin with, the follow up assessments proved to be radically different:

The groups were then tested six months later to assess their relapse rate. Of those who had taken the medication alone, 38 percent had slipped back into depression. Those in the combination group were doing only slightly better, with a 31 percent relapse rate.The biggest shock, though, came from the exercise group: Their relapse rate was only 9 percent!

You don’t have to be depressed to gain benefit from exercise, though. It can help you to relax, increase your brain power and even improve your body image, even if you don’t lose any weight.

A study in the Journal of Health Psychology found that people who exercised felt better about their bodies, even when they saw no physical changes:

Body weight, shape and body image were assessed in 16 males and 18 females before and after both 6 × 40 mins exercise and 6 × 40 mins reading. Over both conditions, body weight and shape did not change. Various aspects of body image, however, improved after exercise compared to before.

We’ve explored exercise in depth before, and looked at what it does to our brains, such as releasing proteins and endorphins that make us feel happier, as you can see in the image below.

2. Sleep more – you’ll be less sensitive to negative emotions.
We know that sleep helps our bodies to recover from the day and repair themselves, and that it helps us focus and be more productive. It turns out, it’s also important for our happiness.

In NutureShock, Po Bronson and Ashley Merryman explain how sleep affects our positivity:

Negative stimuli get processed by the amygdala; positive or neutral memories gets processed by the hippocampus. Sleep deprivation hits the hippocampus harder than the amygdala. The result is that sleep-deprived people fail to recall pleasant memories, yet recall gloomy memories just fine.

In one experiment by Walker, sleep-deprived college students tried to memorize a list of words. They could remember 81% of the words with a negative connotation, like “cancer.” But they could remember only 31% of the words with a positive or neutral connotation, like “sunshine” or “basket.”

The BPS Research Digest explores another study that proves sleep affects our sensitivity to negative emotions. Using a facial recognition task over the course of a day, the researchers studied how sensitive participants were to positive and negative emotions. Those who worked through the afternoon without taking a nap became more sensitive late in the day to negative emotions like fear and anger.

Using a face recognition task, here we demonstrate an amplified reactivity to anger and fear emotions across the day, without sleep. However, an intervening nap blocked and even reversed this negative emotional reactivity to anger and fear while conversely enhancing ratings of positive (happy) expressions.

Of course, how well (and how long) you sleep will probably affect how you feel when you wake up, which can make a difference to your whole day. Especially this graph showing how your brain activity decreases is a great insight about how important enough sleep is for productivity and happiness:

Another study tested how employees’ moods when they started work in the morning affected their work day.

Researchers found that employees’ moods when they clocked in tended to affect how they felt the rest of the day. Early mood was linked to their perceptions of customers and to how they reacted to customers’ moods.

And most importantly to managers, employee mood had a clear impact on performance, including both how much work employees did and how well they did it.

Sleep is another topic we’ve looked into before, exploring how much sleep we really need to be productive.

3. Move closer to work – a short commute is worth more than a big house.
Our commute to the office can have a surprisingly powerful impact on our happiness. The fact that we tend to do this twice a day, five days a week, makes it unsurprising that its effect would build up over time and make us less and less happy.

According to The Art of Manliness, having a long commute is something we often fail to realize will affect us so dramatically:

… while many voluntary conditions don’t affect our happiness in the long term because we acclimate to them, people never get accustomed to their daily slog to work because sometimes the traffic is awful and sometimes it’s not. Or as Harvard psychologist Daniel Gilbert put it, “Driving in traffic is a different kind of hell every day.”

We tend to try to compensate for this by having a bigger house or a better job, but these compensations just don’t work:

Two Swiss economists who studied the effect of commuting on happiness found that such factors could not make up for the misery created by a long commute.

4. Spend time with friends and family – don’t regret it on your deathbed.
Staying in touch with friends and family is one of the top five regrets of the dying. If you want more evidence that it’s beneficial for you, I’ve found some research that proves it can make you happier right now.

Social time is highly valuable when it comes to improving our happiness, even for introverts. Several studies have found that time spent with friends and family makes a big difference to how happy we feel, generally.

I love the way Harvard happiness expert Daniel Gilbert explains it:

We are happy when we have family, we are happy when we have friends and almostall the other things we think make us happy are actually just ways of getting more family and friends.

George Vaillant is the director of a 72-year study of the lives of 268 men.

In an interview in the March 2008 newsletter to the Grant Study subjects, Vaillant was asked, “What have you learned from the Grant Study men?” Vaillant’s response: “That the only thing that really matters in life are your relationships to other people.”

He shared insights of the study with Joshua Wolf Shenk at The Atlantic on how the men’s social connections made a difference to their overall happiness:

The men’s relationships at age 47, he found, predicted late-life adjustment better than any other variable, except defenses. Good sibling relationships seem especially powerful: 93 percent of the men who were thriving at age 65 had been close to a brother or sister when younger.

In fact, a study published in the Journal of Socio-Economics states than your relationships are worth more than $100,000:

Using the British Household Panel Survey, I find that an increase in the level of social involvements is worth up to an extra £85,000 a year in terms of life satisfaction. Actual changes in income, on the other hand, buy very little happiness.

I think that last line is especially fascinating: Actual changes in income, on the other hand, buy very little happiness. So we could increase our annual income by hundreds of thousands of dollars and still not be as happy as if we increased the strength of our social relationships.

The Terman study, which is covered in The Longevity Project, found that relationships and how we help others were important factors in living long, happy lives:

We figured that if a Terman participant sincerely felt that he or she had friends and relatives to count on when having a hard time then that person would be healthier. Those who felt very loved and cared for, we predicted, would live the longest.

Surprise: our prediction was wrong… Beyond social network size, the clearest benefit of social relationships came from helping others. Those who helped their friends and neighbors, advising and caring for others, tended to live to old age.

5. Go outside – happiness is maximized at 13.9°C.
In The Happiness Advantage, Shawn Achor recommends spending time in the fresh air to improve your happiness:

Making time to go outside on a nice day also delivers a huge advantage; one study found that spending 20 minutes outside in good weather not only boosted positive mood, but broadened thinking and improved working memory…

This is pretty good news for those of us who are worried about fitting new habits into our already-busy schedules. Twenty minutes is a short enough time to spend outside that you could fit it into your commute or even your lunch break.

A UK study from the University of Sussex also found that being outdoors made people happier:

Being outdoors, near the sea, on a warm, sunny weekend afternoon is the perfect spot for most. In fact, participants were found to be substantially happier outdoors in all natural environments than they were in urban environments.

The American Meteorological Society published research in 2011 that found current temperature has a bigger effect on our happiness than variables like wind speed and humidity, or even the average temperature over the course of a day. It also found that happiness is maximized at 13.9°C, so keep an eye on the weather forecast before heading outside for your 20 minutes of fresh air.

The connection between productivity and temperature is another topic we’ve talked about more here. It’s fascinating what a small change in temperature can do.

6. Help others – 100 hours a year is the magical number.
One of the most counterintuitive pieces of advice I found is that to make yourself feel happier, you should help others. In fact, 100 hours per year (or two hours per week) is the optimal time we should dedicate to helping others in order to enrich our lives.

If we go back to Shawn Achor’s book again, he says this about helping others:

…when researchers interviewed more than 150 people about their recent purchases, they found that money spent on activities—such as concerts and group dinners out—brought far more pleasure than material purchases like shoes, televisions, or expensive watches. Spending money on other people, called “prosocial spending,” also boosts happiness.

The Journal of Happiness Studies published a study that explored this very topic:

Participants recalled a previous purchase made for either themselves or someone else and then reported their happiness. Afterward, participants chose whether to spend a monetary windfall on themselves or someone else.Participants assigned to recall a purchase made for someone else reported feeling significantly happier immediately after this recollection; most importantly, the happier participants felt, the more likely they were to choose to spend a windfall on someone else in the near future.

So spending money on other people makes us happier than buying stuff for ourselves. What about spending our time on other people? A study of volunteering in Germany explored how volunteers were affected when their opportunities to help others were taken away:

Shortly after the fall of the Berlin Wall but before the German reunion, the first wave of data of the GSOEP was collected in East Germany. Volunteering was still widespread. Due to the shock of the reunion, a large portion of the infrastructure of volunteering (e.g. sports clubs associated with firms) collapsed and people randomly lost their opportunities for volunteering. Based on a comparison of the change in subjective well-being of these people and of people from the control group who had no change in their volunteer status, the hypothesis is supported that volunteering is rewarding in terms of higher life satisfaction.

In his book Flourish: A Visionary New Understanding of Happiness and Well-being, University of Pennsylvania professor Martin Seligman explains that helping others can improve our own lives:

…we scientists have found that doing a kindness produces the single most reliable momentary increase in well-being of any exercise we have tested.

7. Practice smiling – it can alleviate pain.
Smiling itself can make us feel better, but it’s more effective when we back it up with positive thoughts, according to this study:

A new study led by a Michigan State University business scholar suggests customer-service workers who fake smile throughout the day worsen their mood and withdraw from work, affecting productivity. But workers who smile as a result of cultivating positive thoughts – such as a tropical vacation or a child’s recital – improve their mood and withdraw less.

Of course it’s important to practice “real smiles” where you use your eye sockets. It’s very easy to spot the difference:

According to PsyBlog, smiling can improve our attention and help us perform better on cognitive tasks:

Smiling makes us feel good which also increases our attentional flexibility and our ability to think holistically. When this idea was tested by Johnson et al. (2010), the results showed that participants who smiled performed better on attentional tasks which required seeing the whole forest rather than just the trees.

A smile is also a good way to alleviate some of the pain we feel in troubling circumstances:

Smiling is one way to reduce the distress caused by an upsetting situation. Psychologists call this the facial feedback hypothesis. Even forcing a smile when we don’t feel like it is enough to lift our mood slightly (this is one example of embodied cognition).

8. Plan a trip – but don’t take one.
As opposed to actually taking a holiday, it seems that planning a vacation or just a break from work can improve our happiness. A study published in the journal,Applied Research in Quality of Life showed that the highest spike in happiness came during the planning stage of a vacation as employees enjoyed the sense of anticipation:

In the study, the effect of vacation anticipation boosted happiness for eight weeks.

After the vacation, happiness quickly dropped back to baseline levels for most people.

Shawn Achor has some info for us on this point, as well:

One study found that people who just thought about watching their favorite movie actually raised their endorphin levels by 27 percent.

If you can’t take the time for a vacation right now, or even a night out with friends, put something on the calendar—even if it’s a month or a year down the road. Then whenever you need a boost of happiness, remind yourself about it.

9. Meditate – rewire your brain for happiness.
Meditation is often touted as an important habit for improving focus, clarity and attention span, as well as helping to keep you calm. It turns out it’s also useful for improving your happiness:

In one study, a research team from Massachusetts General Hospital looked at the brain scans of 16 people before and after they participated in an eight-week course in mindfulness meditation. The study, published in the January issue of Psychiatry Research: Neuroimaging, concluded that after completing the course, parts of the participants’ brains associated with compassion and self-awareness grew, and parts associated with stress shrank.

Meditation literally clears your mind and calms you down, it’s been often proven to be the single most effective way to live a happier life. I believe that this graphic explains it the best:

Calming-mind-brain-waves make yourself happier.

According to Shawn Achor, meditation can actually make you happier long-term:

Studies show that in the minutes right after meditating, we experience feelings of calm and contentment, as well as heightened awareness and empathy. And, research even shows that regular meditation can permanently rewire the brain to raise levels of happiness.

The fact that we can actually alter our brain structure through mediation is most surprising to me and somewhat reassuring that however we feel and think today isn’t permanent.

We’ve explored the topic of meditation and it’s effects on the brain in-depth before. It’s definitely mind-blowing what this can do to us.

10. Practice gratitude – increase both happiness and life satisfaction.
This is a seemingly simple strategy, but I’ve personally found it to make a huge difference to my outlook. There are lots of ways to practice gratitude, from keeping a journal of things you’re grateful for, sharing three good things that happen each day with a friend or your partner, and going out of your way to show gratitude when others help you.

In an experiment where some participants took note of things they were grateful for each day, their moods were improved just from this simple practice:

The gratitude-outlook groups exhibited heightened well-being across several, though not all, of the outcome measures across the 3 studies, relative to the comparison groups. The effect on positive affect appeared to be the most robust finding. Results suggest that a conscious focus on blessings may have emotional and interpersonal benefits.

The Journal of Happiness studies published a study that used letters of gratitude to test how being grateful can affect our levels of happiness:

Participants included 219 men and women who wrote three letters of gratitude over a 3 week period.

Results indicated that writing letters of gratitude increased participants’ happiness and life satisfaction, while decreasing depressive symptoms.

Quick last fact: Getting older will make yourself happier
As a final point, it’s interesting to note that as we get older, particularly past middle age, we tend togrow happier naturally. There’s still some debate over why this happens, but scientists have got a few ideas:

Researchers, including the authors, have found that older people shown pictures of faces or situations tend to focus on and remember the happier ones more and the negative ones less.

Other studies have discovered that as people age, they seek out situations that will lift their moods — for instance, pruning social circles of friends or acquaintances who might bring them down. Still other work finds that older adults learn to let go of loss and disappointment over unachieved goals, and hew their goals toward greater wellbeing.

So if you thought being old would make you miserable, rest assured that it’s likely you’ll develop a more positive outlook than you probably have now.

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Following a disappointing year for housing in 2014, analysts expect housing to rebound in 2015 and reach a point of “sustainable recovery,” according to a recent report from the Wall Street Journal.

Economists at both Fannie Mae and Freddie Mac have stuck to their predictions that housing will recover in 2015 despite receiving recent reports of slower-than-expected economic growth in the first quarter, including job gains that fell well short of expectations in March.

“We remain comfortable with our call that the Fed funds rate lift-off will occur in September,” Fannie Mae chief economist Doug Duncan said last week. “The setback in the hiring picture is in line with consumer sentiment regarding the housing market from the Fannie Mae National Housing Survey.”

Freddie Mac deputy chief economist Len Kiefer said of the economic slowdown, “We also remain optimistic about trends in housing markets moving forward for the remainder of the year with mortgage rates low, purchase applications up and pending home sales on a positive upward trend.”

According to the Journal’s report, some markets have seen double-digit year-over-year growth in home sales, such as Charlotte, North Carolina (20.3 percent), Jacksonville, Florida (18.8 percent), and Seattle, Washington (17.7 percent), which has given many realtors and other mortgage industry stakeholders a renewed optimism regarding the housing market.

According to the latest National Association of Realtors pending home sales index, home sales are expected to make further gains nationwide throughout the rest of the year. In February, the index increased by 12 percent year-over-year, with the biggest gains in Houston (30.6 percent), Jacksonville, Florida (30 percent), and San Diego (27.8 percent). The Commerce Department also reported that in February, new home sales reached their strongest pace in seven years at a seasonally adjusted annual rate of 539,000 for the month.

There are three main factors that will make the housing market sustainable this year, according to the Journal. The first is an improved economy; despite the recent slowdown, the economy has added 3.1 million jobs in the last year, and lower gas prices have lifted consumer confidence; second, lenders have shown signs of expanding the credit box and lowering other costs, such as the FHA reducing its monthly mortgage insurance premium down to 0.85 percent; and third, the return of boomerang buyers, which are buyers who lost homes to foreclosure during the crisis but are now coming back to the market.

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By Robert Frank

What’s the secret to making money like the rich? Capital gains.

A study from the non-partisan Tax Policy Center looked at the sources of income for American taxpayers of different income levels. It found that the higher you go up the income ladder, the greater share of income comes from capital gains.

For the 99 percent of taxpayers making less than $500,000, salaries and wages account for 75 percent of their adjusted gross income for 2012, the latest period available from Internal Revenue Service returns. Of the remaining income, about half came from retirement programs such as pensions, annuities and Individual Retirement Accounts.

For taxpayers making $500,000 to $1 million, salaries and wages account for more than half of earnings.

But for those making $10 million or more, salaries and wages only account for around 15 percent of their income. Their real money comes from capital gains, with capital gains accounting for about half of their earnings. Another 15 percent to 20 percent came from interest and dividends. About 25 percent of their income came from business income, which means they owned or held a stake in a private company.

It’s no surprise that the really rich make their money from, well, money. But Roberton Williams of the Tax Policy Center said the data doesn’t mean that all of the wealthy are just sitting around making millions from the stock market every year. Many of the people in that $10 million-or-more group don’t repeat their mega-earnings every year. Their income came from a one-time sale of a business or asset, leading to a capital gain.

“A lot of the people at the very top are there because they sold a major asset or business they’ve built for years,” he said. “It’s a one-time big payday.”

Williams said one of his previous studies found that among those in the top 1 percent; about half were only in the 1 percent for one year over the course of a decade.

From a policy perspective, Williams said the importance of capital gains to the wealthy could be seen in two ways.

Some have argued for hiking the capital gains tax from its current federal rate of 20 percent (plus 3.8 percent for top earners under the Affordable Care Act’s Net Investment Income tax). This includes President Barack Obama, who proposed raising the rate to 24.2 percent in his 2015 budget. The argument is that because the capital gains rate is lower than the income tax on salaries and wages, the very rich sometimes pay lower rates than everyday earners. (Remember Warren Buffett and his secretary.)

“It looks like a ripe area to tax,” Williams said.

But, capital gains are also voluntary: Owners can choose when to sell their business or asset depending on the optimal tax environment. That’s why the incomes of the wealthy can be so volatile. If capital gains were to increase, the rich could simply sell their assets and take the gain before the tax increase, therefore leading to lower revenue from the capital gains tax.

“The higher you make the tax, the more people will resist it,” he said. “We know from history that people respond to capital-gains tax rates.”

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Author: Brian Honea

In its first-ever analysis of the U.S. housing market released Thursday, Nationwide Economics indicated that the national market was at its healthiest level in 14 years.

Nationwide’s Health of Housing Markets (HoHM) Report – Q1 2015 is the first report in a planned quarterly series of reports. Using a metric known as the Leading Index of Healthy Housing Markets (LIHHM), Nationwide said the health of the overall housing market in the United States suggest there is little reason to believe that another downturn will occur in housing during the coming year. The LIHHM is a data-driven view of the near-term performance of housing markets based on current health indicators for the national housing market and 373 metropolitan statistical areas (MSAs). LIHHM ratings focus on the entire housing market and not just prices or sales, according to Nationwide.

The national LIHHM was reported to be 109.8 for Q4 2014, a modest increase from the previous quarter and its highest level since 2001, the earliest available data. According to Nationwide, a value of 100 for the LIHHM suggests a healthy housing market, and the likelihood of a downturn decreases the higher the value climbs above 100.

“In the fourth quarter, the employment, mortgage market, and house price growth components of the LIHHM remained positive,” Nationwide wrote in the report. “Household formations increased at a faster pace, but a continued tight mortgage lending environment remains an impediment to even stronger national housing activity.”

Regionally, none of the nation’s 40 largest MSAs received a “negative” LIHHM rating. The only two MSAs that received a negative rating were Bismarck, North Dakota, and Atlantic City, New Jersey, and those two were close to being “neutral.” Pittsburgh, Cleveland, and Philadelphia were the MSAs that received the healthiest LIHHM ratings, according to Nationwide.

 

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From CNBC

More homebuyers enter the market this spring, but big banks are continuing their retreat from mortgage lending.

 

That is opening the door ever wider for independent, nonbank lenders. Both volume and profit at these lenders are up from a year ago, according to the Mortgage Bankers Association, but their share of all lending is where the numbers are really soaring.

Nonbank lending rose to 37.5 percent of the market during 2014, up from 14 percent in 2011, according to publication Inside Mortgage Finance.

“That was attributable to a combination of nonbanks being more aggressive, both in terms of rates and underwriting, and large banks pulling back slightly in the conforming markets,” Editor Guy Cecala said.

The leaders in nonbank growth were names like Quicken and Penny Mac as well as other smaller nonbanks, like Charlotte, North Carolina-based Movement Mortgage.

“Our building actually sits in the shadow of a Bank of America headquarters building, and we’ve been able to gain number one purchase market share in that city inside of five years by offering great service to homeowners,” said Casey Crawford, CEO of Movement Mortgage, which he founded in 2007.

Movement’s angle is a promise to borrowers that it can close a loan in eight business days, the fastest the federal government allows. It fulfills that promise by approving borrowers before they even apply for a loan.

Read More Mortgage applications surge on spring demand

“The market is extremely tight, unbelievably tight right now, and many finance buyers are competing with cash buyers,” Crawford noted. “If you want to be able to compete with cash buyers, you have to have surety of close, and sellers want to know that you’ve been pre-approved up front.”

The promise worked for Shaya and Yehudis Kohn in Pikesville, Maryland. They already owned a home, but needed to make a fast offer on a move-up home that they knew would sell quickly.

“I knew that if this house went on the market there was no way I would ever get it, so I bought it before it even went on the market,” said Shaya Kohn, who was able to secure a loan through Movement immediately.

Like smaller banks, nonbank lenders can offer more personal service. For today’s crash-strapped, sensitive borrowers, that, too, is a selling point.

Read More Priced out: New housing froth discourages buyers

“They literally held our hands every step of the way, helped us over every bump along the way,” said Yehudis Kohn.

Nonbank lenders are gaining share rapidly in the mortgage purchase market, but big banks are still doing a swift business in loan refinances. While the biggest lenders, Wells Fargo (WFC) and JP Morgan (JPM), reported huge drops in mortgage originations at the end of last year, that was primarily due to higher interest rates that caused refinance volume to plummet.

This is not to say that they haven’t lost purchase mortgage share as well, as they tend to be more conservative in underwriting, given the billions of dollars they had to pay back when millions of their loans went bad during the housing crash. Nonbank lenders have been more aggressive with rates and personal service. The last time nonbanks grew their share was during the housing boom, in the category of subprime lending. That is not the case now.

“We don’t want to go back to the subprime days, when we were extending credit to the wrong folks, but we do want to make sure we’re extending credit to those borrowers who do have the ability and capacity to repay the loans but may just not have traditionally documentable income,” said Crawford, who claims Movement’s default rate is lower than any of its peers.

Read More Pending home sales rose 3.1% in February

Nonbank lenders still sell the vast majority of their loans to Fannie Mae and Freddie Mac , so they must comply with their underwriting and capital standards. Fannie and Freddie are equally concerned with the nonbanks’ ability to service the loans-as having enough capital, employees and phone lines, to provide good customer service.

“We are happy to serve a wide spectrum of lender partners, from the largest depository institutions, to regional and community banks, to nonbank lenders. Nonbank lenders are an important part of the capacity mix as the market develops,” said Andrew Wilson, a Fannie Mae spokesman.

Nonbank lenders are still hoping for a return of private capital to the mortgage market, but that has still been nearly nonexistent. The home loan market is still being characterized as “tight,” for better or worse.