NAR’s existing home sales report came out Wednesday, shocking the industry with its increase. Sales hit their highest point since 2007, a clear sign that the housing recovery continues. However, experts point out the hurdles the market will face in the new year.
Category: Industry News
A new Harvard report lays out the wide-reaching impact of a coming surge in senior homeowners.
Baby Boomers have spent decades impacting and re-shaping the U.S. economy, and show no signs of slowing down as they enter their golden years. That’s especially true when it comes to the housing market, according to the latest report from the Harvard Joint Center for Housing Studies.
Despite a new report from Moody’s Investors Service stating that wholesale reform of the government-sponsored enterprises is years away, some members of Congress are pursuing changes to how Fannie Mae and Freddie Mac operate. On Thursday, Reps. Ed Royce, R-Calif., and Gwen Moore, D-Wisc., introduced a new bill in the House of Representatives that would require the GSEs to offload more credit risk onto the private sector.
Higher scores and improved consumer behavior are fueling a stronger credit market, Experian found in its seventh annual State of Credit study.
The average credit score nationwide rose four points from last year to 673 points, Experian reported Wednesday. That score is now just six points off the average of 679 set in 2007 prior to the financial crisis.
The Federal Housing Finance Agency’s choice to raise conforming loan limits in 2016 for the first time in a decade is being met with enthusiasm from the mortgage industry, as it should prove to be a positive for future origination volume.
The agency said Wednesday that it would increase the maximum baseline conforming loan limit in 2017 for mortgages purchased by Fannie Mae and Freddie Mac to $424,100 from $417,000, the level set back in 2006.
The yield on the 10-year Treasury Note will be 2.5% to 2.75% a year from now if President-elect Donald Trump pushes through his proposed tax cuts and fiscal-spending policies, said Michael Kushma, chief investment officer for global fixed income at Morgan Stanley Investment Management.
New data from the National Association of Realtors (NAR) may help us better understand why homebuyers are hesitant to jump on the buying train.
In its third-quarter Housing Opportunities and Market Experience survey, NAR reports that 78% of homeowners and 60% of renters say now is a good time to buy. That’s down from 80% and 62%, respectively, in the previous quarter.
Part of the reason for this decrease in buyer’s confidence is the low levels of housing supply and rising prices, according to NAR chief economist Lawrence Yun. As interest rates hit historically low levels over the summer, demand increased. But there just aren’t enough homes on the market to keep a lid on pricing.
“Given the stiff competition and limited homes available at the lower end of the market, it’s not surprising at all that those under the age of 34 and in the West are the least confident about it being a good time to buy,” Yun said.
But according to Yun, another factor leading many buyers — especially younger ones — to the decision not to buy may be a lack of knowledge about different mortgage financing options that are available.
Across all ages, fewer than 20% say that they would need just a 10% down payment to finance a home purchase. And 43% of those 65 and older and 37% of those below the age of 35 think a down payment above 20% is required. The average median down payment for first-time buyers, according to the NAR’s Profile of Home Buyers and Sellers, is only 5%.
Even with conventional programs with as little as 1% down using private mortgage insurance, as well as the government’s Federal Housing Administration and Department of Veterans Affairs programs with little/no down payment requirements, more and more buyers are turning to family for loans, rather than lenders. The NAR reports that 19% of current homeowners received some form of down-payment assistance from a parent or relative, and that figure shot up to 34% for homeowners under 35.
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Source: National Mortgage News
Loan applications for new home purchases rose 3% in September over the previous year, but continued year-over-year growth could be subdued for the rest of 2016, according to the Mortgage Bankers Association.
New single-family home sales occurred at an estimated seasonally adjusted annual rate of 593,000 units in September, a 1.3% dip from August, the MBA’s Builder Application Survey released on Thursday said.