September:  Highest Consumer Confidence

September: Highest Consumer Confidence

Consumer confidence reached its highest level since the Great Recession in September, according to the Thomson Reuters and University of Michigan Surveys of Consumers.

consumer-confidenceSeptember’s increase in consumer confidence is the result of optimistic outlooks on the overall economy and personal incomes.  The consumer expectations index rose 5.8 percent over the month of September, while the current conditions index fell 0.9 percent.

Additionally, a growing number of consumers expect their incomes to increase over the next year. The median income growth expectation reported in September was 1.1 percent, which is the highest expectation since late 2008. At the same time, more households anticipate income growth now than at any time since September 2008.

The renewal of income growth is particularly important for sparking consumer spending, and adding pending changes to monetary policy will make income gains prompt to boost even more consumer’s confidence.

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80,000 Foreclosures prevented!

The Federal Housing Finance Agency (FHFA) indicated in its report on foreclosure prevention  for Q2 2014 released on September 24, that Fannie Mae and Freddie Mac  prevented nearly 80,000 foreclosures nationwide in the second quarter, raising the total number of foreclosures prevented since the start of the conservatorship in September 2008 to 3.3 million.

fThe measures taken by the two GSEs to prevent foreclosures have helped about 2.7 million borrowers remain in their homes in the last six years, with approximately 1.7 million of those borrowers receiving permanent loan modifications. The number of foreclosures prevented is down 10 percent from Q1, when GSE measures stopped almost 89,000 foreclosures.

FHFA reports as well that about 37 percent of those who received permanent loan modifications were able to reduce their monthly payments by more than 30 percent in second quarter.

Homeowners Pay Less for  Mortgage than Renters for Rent

Homeowners Pay Less for Mortgage than Renters for Rent

Paying a mortgage is cheaper than paying rent. But owning a home costs more.  The never ending debate…Is better to buy or rent?  This could be answered only after considering all of the expenses that contribute to homeownership.

The Bureau of Labor Statistics (BLS) says it’s cheaper to own. It has become less expensive to own. From 2009 to 2012, fueled by falling interest rates, ForRentForSalehomeownership has become more affordable, while renters saw costs go in the opposite direction, according to the BLS.

A recent report by Zillow found that current U.S. home buyers can expect to pay 15.3% of their incomes to a mortgage on the typical home – down considerably from the 22.1% of income homeowners had to budget in the pre-bubble years but renters pay today over 29.5% of their income to rent, compared to 24.9% in the pre-bubble period.

The main reason for the budget disparity is the income gap between owners and renters. At the end of the second quarter, the Census Bureau reported the median annual income in the U.S. was $53,216. But among homeowners, median salaries were $65,514 per year, while the typical renter’s income was just $31,888.

Why NOW is a great time to buy a house!

Why NOW is a great time to buy a house!

There has never been a better time to buy a home; the advantage is on the buyer side. Buying is cheaper than renting in most markets. More people want to be homeowners, even younger buyers.  A recent Fannie Mae survey of younger renters and buyers finds out that younger renters prefer owning. They don’t want to be renters – 90% would prefer to be homeowners. Family Savings

Mortgage rates have dropped across all loan types including FHA loans, USDA loans, VA loans, and conventional loans backed by Fannie Mae and Freddie Mac, and 30-year rates are at their best levels of 2014.

Inventory is down but so is the buyer pool. That means prices may be coming down. You may well have less competition for homes right now, especially if you’re in the ultra-competitive first time buyer market. This means that your chances of finding a home—and getting it for the right price—look good.

Credit and affordability issues remain. If you are financially and emotionally prepared, it makes sense to write a check list of what you need to get approved for a mortgage; order your credit reports; get your FICO score; pay stubs and bank statements; shop for the best mortgage rates; cobble together a down payment; meet with your choice of lender, and find out what your monthly payments will be for the home of your dreams, then GO for it!

Bouncing back from foreclosure!

After losing their homes in the foreclosure crisis, boomerang buyers are back!   Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another 2.2 million gave them up in short sales, according to Realty Trac.

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How quickly someone can bounce back from a foreclosure or a short sale depends on the reasons for the past financial problems and on the person’s current credit score. A would-be borrower who had good credit history before a job loss, for instance, is more likely to qualify for a new mortgage than one who had bad credit and continues to demonstrate poor financial habits.

The FHA introduced a Back to Work loan program in 2013 to address the needs of individuals and families who lost their homes because of the housing crisis and recession. The program requires housing counseling before a new loan can be approved.

The borrowers need to be able to document the reason for the foreclosure or short sale and show that they’ve been responsible with their credit after they lost their home. A drop in credit score is okay as long as they can show they had good credit before the crisis.

The housing market right now

The housing market right now

Prices should stabilize this year.  Lender’s regulation, consumer confidence, investors tapering purchases, local economics, and rising home prices have forced participants to continually adjust to a market that has been anything but stable.

imagesCA9ELC9MGenerally speaking, we see price growth, which should help boost the confidence and purchase activity from buyers on the fence. Looking at home price trends by tier, it’s apparent the impact of investor activity has been concentrated in the low price tier segment.   There is a good price growth potential and could motivate enough buyers to sustain an overall rate of home price growth consistent with historical norms.

Credit and affordability issues remain. Mortgage rates have dropped across all loan types including FHA loans, USDA loans, VA loans, and conventional loans backed by Fannie Mae and Freddie Mac, and 30-year rates are at their best levels of 2014.

 

Luxury Homes!

Luxury Homes!

Luxury is a symbol of a particular lifestyle. It is a representation of a higher standard of living.  This is reflected and is often noted by the number and size of the rooms, specific décor, and other customizable features chosen by Luxury-Home-Interior-929the homeowner.

Luxury homes also boast interesting features not found in other homes. Some of these are customized to fit the wants and needs of the homeowner.

Examples of such features include: granite counter tops, crown molding, stainless steel appliances, and media rooms.

Most of these houses may include a formal dining room perfect for hosting large dinner parties and entertaining guests. They come in different shapes, sizes, and styles, so finding the right home for your money is extremely important. Everyone dreams of having a perfect home!   As always, a Realtor will  be able to take the time and search for the home  of your dreams!

U.S. construction spending rebounds strongly

U.S. construction spending rebounds strongly

construction-spending-misses-expectations-falls-06U.S. construction spending rebounded strongly to hit its highest level in more than 5½ years in July.

Construction spending increased 1.8 percent to an annual rate of $981.31 billion, the highest level since December 2008, said the Commerce Department on Tuesday.

The housing market recovery is back on track after stagnating from the second half of 2013 in the wake of a spike in mortgage rates and higher home prices amid a stock shortage.

What matters the most…Home Prices or Low Rates?

What matters the most…Home Prices or Low Rates?

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Whether sales price is more important than the interest rate depends on your perspective. It’s pretty much impossible to time the real estate market, but you can try to take advantage of the way the market moves.

A dramatic rise in home prices can slow home sales even when mortgage rates are low if mortgage availability is tighter.  Banks prefer higher prices to recoup their capital from their bad bubble-era loans, so they are offering 4% interest rates to prevent prices from going any lower.

However, most buyers prefer lower prices, but since the banks make the rules which determine market prices, low interest rates and high prices are what we get.

Buyers who purchase during a period of high mortgage rates may get the boost in appreciation from declining rates.  Low mortgage rates build equity faster through amortization but slower by appreciation. High mortgage rates build equity faster by appreciation but slower through amortization.

You can’t always predict how the market will move. But you can watch it move and get ready, set…GO!!

 

Lower Rates continues to Boost Loan Demand

Lower Rates continues to Boost Loan Demand

After several weeks of drops in interest rates, mortgage applications finally got a modest lift as refinancers and home buyers took advantage of them.apr1

The Mortgage Bankers Association’s weekly mortgage market index showed that total mortgage application volume rose 2.8 percent during the week ending Aug. 22 compared to a week earlier.

Broken out, applications for refinancing’s increased 3 percent last week but remain 25 percent below a year ago — even when mortgage rates were higher, MBA reports. Home-purchase mortgage applications also rose 3 percent during the week and remain 11 percent below its rate last year at this time.

While mortgage rates have teetered within a tight range, even a slight drop in interest rates was enough to boost mortgage applications