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Getting a Mortgage Before the Door Shuts
March 7, 2011 By
If you have been sitting on the fence trying to decide whether to buy a new house or refinance a mortgage, you should act soon. New loans are starting to get costlier.
The mortgage market is facing pressures from new laws and regulations, still-declining home prices and the ongoing need for government-owned mortgage players to shore up their finances. The Mortgage Bankers Association predicts mortgage originations, which reached $3 trillion in 2005, will be less than $1 trillion this year, the lowest level since 1997.
“The price of mortgage money is going to go up, and the availability of mortgage money may also be impinged,” says Keith Gumbinger, vice president at HSH Associates, which tracks mortgage data.
The silver lining is that the rate for a 30-year fixed loan is hovering around 5% for those with good credit. That is up about a percentage point from last year’s lows but is still an attractive rate by historical standards, though expected to keep climbing as the economy improves.
Home prices in some areas are still falling, but they are bottoming out or firming up in others. It may not be the perfect time to buy a home—but better mortgage options today may be a worthy trade-off to the possibility of lower prices tomorrow.
Still not convinced? Consider the following:
• New costs.Fannie Mae and Freddie Mac, which provide liquidity to the mortgage market by buying mortgages and selling securities backed by them, are adding new fees to loans to people with the best credit and raising existing loan fees. Freddie’s new fees start March 1, while Fannie’s kick in April 1.
Read the full article here
Boom’s Home-Ownership Gains Lost
February 11, 2011 By
By DAWN WOTAPKA
The meltdown of the U.S. mortgage market and rising foreclosures have wiped out more homeowners than were created in the 2000-07 housing boom, some industry watchers say, the latest indication of the severity of the housing bust.
In the fourth quarter of 2010, 66.5% of Americans owned homes, down from 67.2% a year earlier and the lowest rate since the end of 1998, according the Census Bureau. During the boom, when easy credit made mortgages available with less regard for income or ability to pay, the ownership rate surged to a record 69.2% in 2004′s second and fourth quarters and stayed near that level until the recession deepened.
Some industry watchers expect the rate to slip below 65% as the housing market meltdown forces millions more Americans to give up their homes.
That “shows how big the bubble was and how catastrophic the bursting has been,” said Paul Dales, senior U.S. economist with Capital Economics. “We have pretty much reversed all of the increases in the home-owner rate generated by the housing boom.”
The nation’s homeownership rate gained 0.8 percentage points from 2000 to 2007, but has lost 1.3 percentage points since 2007, erasing the boom’s gains, said Stephen East, a Ticonderoga Securities housing analyst.
Read the full article here…
U.S. Home Prices Slump Again, Hitting New Lows
February 9, 2011 By
A home in Atlanta, one of the metropolitan areas where prices fell to new lows in this economic cycle.
By DAVID STREITFELD
Published: January 25, 2011
A new slide in housing prices has begun in earnest, with averages in major cities across the country falling to their lowest point in many years.
Multimedia
Prices in 20 major metropolitan areas slid 1 percent in November from October, according to the Standard & Poor’s Case-Shiller Home Price Index released Tuesday. The index has fallen 1.6 percent from a year ago.
Nine of the 20 cities in the index sank in November to new lows for this economic cycle: Chicago; Las Vegas; Detroit; Atlanta; Seattle; Charlotte, N.C.; Miami; Tampa; Fla.; and Portland, Ore. Only a handful of places — essentially, California and the District of Columbia — went counter to the trend and had rising prices over the last year.
Whether the long-predicted double dip is looming or has already arrived is a quibble of semantics.
David M. Blitzer, chairman of S.& P.’s Index Committee, does not count a downturn as a double dip until it exceeds the previous low. The index is still 3.3 percent above the low it reached in April 2009. Mr. Blitzer thinks a double dip could be confirmed before spring.
“We shouldn’t kid ourselves,” he said. “The last few months have been weak.”
Cities that were never mainstays of the boom are suffering unduly in this latest bust. Atlanta, Chicago and Portland have dropped more than 7 percent over the last year, with much of the tumble in October and November.
By this point, the problems in the housing market are well known. Builders built too much, lenders lent too much, and people bought too much. The binge was epic and so is the hangover.
Click here for the full article.
2011 housing market will be pancake flat
February 8, 2011 By
A BOLD PREDICTION…
By Les Christie, staff writerJanuary 26, 2011: 12:43 PM ET
NEW YORK (CNNMoney) — Housing markets will remain flat, flat, flat in 2011, according to forecasts from the Mortgage Bankers Association.
The organization, which represents more than 80% of the nation’s mortgage business, predicts that overall home sales will inch down 0.1% during the year. Sales of existing homes will fall 1% to 4.82 million, and new home sale will rise 10% to 358,000.
The MBA attributes the sales decline mostly to slow economic recovery and high unemployment. Until hiring picks up, the market will continue to struggle.
The MBA has also reduced its forecast due to recent credit liability issues affecting banks, according to its chief economist, Jay Brinkmann.
Investors in mortgage backed securities have started demanding that lenders repurchase loans that are in default. The threat of having to repurchase these loans has made banks reluctant to lend, especially, Brinkmann said, to borrowers without the highest qualifications.
Read the full article here…
Curbing Closing Costs
February 7, 2011 By
By Lynnlee Browning – NYTimes
Published January 27, 2011
BORROWERS have some weapons for keeping closing costs down, the result of recent guidelines requiring lenders to disclose certain fees, but perhaps the most underutilized consumer tool simply involves old-fashioned haggling.
Good-faith estimate rules, part of a tougher Truth in Lending Act that emerged from the mortgage crisis, mean that lenders must provide a clear picture of the costs involved in buying or refinancing a home. Yet consumers may not realize that some of those numbers are actually negotiable, mortgage experts say.
“There’s a lot of room for negotiation in the costs of closing,” said Barry Zigas, the director of housing policy at the Consumer Federation of America, a consumer advocacy group, “and consumers should examine every charge and not hesitate to challenge them and try to bring them down.”
Closing costs can run a borrower 3 to 6 percent of the price of a property, according to the Federal Reserve. In 2010, the average cost for a $200,000 purchase rose by nearly 37 percent, to $3,741, according to Bankrate.com, a financial data publisher; the average in New York State was $5,623.
Read the full article here…
5 steps to first-time-buyer happiness
February 5, 2011 By
Finding best home depends on preapproval, agent
By Dian Hymer, Inman News
Posted: 01/27/2011 11:13:51 AM PST
Updated: 01/27/2011 11:43:05 AM PST
The first step in the homebuying process is to find out what you can afford to pay for a house, condo or co-op. This will depend on the amount of cash you have available for a down payment, your credit, income, assets and overall financial situation.
Mortgage qualification is easier for buyers who work as employees whose income can be easily verified. Self-employed individuals or buyers with income from investments may find the qualification process more difficult.
A wrinkle in the financing end of the homebuying process is that it’s not as easy to get a preapproval letter from your mortgage broker or loan agent as it used to be. As of Jan. 1, 2010, the Department of Housing and Urban Development (HUD) began requiring lenders and mortgages brokers to issue a binding Good Faith Estimate (GFE) within three days of receiving a loan application.
Before then, buyers shopped around for a mortgage. When they saw a house they wanted to buy, they asked their loan agent or broker to provide a preapproval letter to accompany their purchase offer. The loan person would run a credit check and verify the buyers’ income and assets without, in many cases, taking a formal loan application. On the basis of this information, a preapproval letter was written.
Read the full article here
Additionally; this article fits in well with the Orange County Market Update Video that we shoot weekly, and it’s our tip of the week. Check out our Anaheim Hills Market Update here…
The Best Time in History to Buy a House
January 29, 2011 By
By Dr. Steve Sjuggerud- Friday, January 28, 2011
Right now, is the best time in history to buy a house in America.
Today, I’ll show you why… based on a few cold, hard facts!
First off, mortgage rates are lower than they’ve ever been in American history…
Most investors have only seen a couple decades of mortgages rates on a chart. But my friends at Global Financial Data have databases – including real estate data – that literally go back centuries.
I had dinner with the Global Financial Data team over the weekend. And they told me about their “Winans International” real estate indexes, with housing prices back to the 1800s and mortgage rates going back over a century. I had to share it with you…
Take a look at this chart of mortgage interest rates since 1900:
As you can see, current mortgage rates are the lowest in U.S. history.
When were mortgage rates even close to this low in the past? Just after World War II…
And what happened, just after World War II, when mortgage rates were this low? The greatest postwar boom in housing prices – by far.
Take a look. Mortgage rates bottomed in the mid-1950s, and house prices bottomed about the same time. Then the greatest boom in home prices in our lifetimes started.
Today we have record-low mortgage rates. And we have another thing in our favor…
Homes are more affordable than ever.
Based on the 40-year history of the Housing Affordability Index… houses are more affordable than they’ve ever been. Take a look…
“Affordability” takes three factors into account: home prices, your income, and mortgage rates.
Home prices have crashed. And mortgage rates are at record lows. But incomes (nationwide) haven’t fallen nearly as much… So homes are now more affordable than ever.
“Most people” out there will only tell you the bad news about housing… That’s the way it goes in a bear market. People drive looking in the rearview mirror.
Meanwhile, we have some darn compelling facts out there…
Home prices have fallen by a third… and mortgage rates are the lowest in history. Therefore, U.S. homes are more affordable than they’ve ever been.
You can listen to “most people.” Or you can choose to ignore them and stick to these facts.
Based on these facts alone, now may be one of the best times in American history – even the very best time – to buy a house.
Good investing,
Steve
Home seizures by banks decline in state
January 26, 2011 By
Los Angeles Times
While foreclosures climbed 2% nationally, California saw a 14% drop. But California’s high unemployment rate and resetting loans mean the fall in foreclosure activity could be brief.
Fewer Californians grappled with foreclosure last year, bucking a national trend and giving homeowners fresh hope that the state’s housing market could be on the mend.
Trash litters the front yard of a bank-owned home in Phoenix. Arizona was among the states hardest hit by the housing meltdown. (Joshua Lott, Reuters / January 13, 2011)
Fewer Californians grappled with foreclosure last year, bucking a national trend and giving homeowners fresh hope that the state’s housing market could be on the mend.
The 14% drop in foreclosure activity contrasted with a 2% rise nationally, according to data tracking firm RealtyTrac. Analysts noted that California’s housing market was among the first to falter and may now be among the first to recover. Home prices here hit bottom in April 2009, and have gradually risen since then.
If you follow my blog at all… I have a few questions for you. How can anyone know what media forum is correct? Did you see my post yesterday about 1 million homes foreclosed in 2011? While this article is more geographically specific, I would question how accurate is this data, and is it really an issue or a concern to me?
Rather than have uncertainty in the future market, ask yourself, how long am I going to live in my next home? How comfortable am I with my current job, with my current mortgage or rent payment? We have no control over the market; however we as consumers have full control over our individual plans, thoughts and actions.
2011’s green homes to be cheaper, smarter, tighter
January 24, 2011 By
USA Today
What will be the top 2011 trends in green building? A non-profit research group expects green homes will become increasingly affordable, smart, and energy-efficient — all trends that Green House agrees are likely.
The Earth Advantage Institute, a non-profit research group, expects green homes this year to become more affordable and energy efficient such as this Passive House-certified home built by Bilyeu Homes in Salem, Ore.
What will be the top 2011 trends in green building? A non-profit research group expects green homes will become increasingly affordable, smart and energy-efficient — all trends that Green House agrees are likely.
With limited land available here in North Orange County, and construction on the slower side, I’m curios how this will affect our real estate market. Will our small single home developers or flippers look to this type of redevelopment as an added selling feature? Will the costs savings really be seen by the home owner? How long until we see more of these properties being built by our larger home builders such as Lennar, Pulte, or D.R. Horton? Your thoughts?