Market Conditions

More Consumers Applying for Home Equity Lines of Credit


In a reflection of the recovering housing market, consumer demand for home equity lines of credit is surging, according to the Consumer Banker Association’s Home Equity Lending Committee.

As of March 15, HELOC originations have grown 36% over the year prior, the CBA found in market analysis performed in coordination with analytics firm Icon Advisory Group. HELOC applications grew 25% in 2014.

“With recovering home values and improving consumer confidence, we are seeing an increase in demand for HELOCs from qualified borrowers,” said Nancy Elkus, vice president and senior consumer lending product manager at Fifth Third Bank and chair of CBA’s Home Equity Lending Committee, in a news release. The results of the market analysis were first presented at CBA LIVE 2015.

Attractive interest rates have also contributed to the growth in demand, the study found. Borrowers seeking these lines of credit also have an improved profile with […]

Rising Rents Are Finally Forcing Millennials to Buy Houses


Americans in their 20s and early 30s are getting a nudge toward homeownership a decade after sales peaked during the housing bubble. It’s not their nagging parents. It’s rents. They’ve risen so much that buying is making more sense.

“I pay $1,410 in rent for my one-bedroom apartment in downtown Denver,” said Eric Arther, 28, who has saved about $30,000 for a down payment. “If I pay that much, I’d like to build some equity.”

Expect the open-house crowds to skew a little younger during this year’s spring homebuying season. Millennials made up 32 percent of the U.S. housing market in 2014, up from 28 percent two years earlier, and have pulled ahead of the older Generation X as the largest segment of buyers, according to the National Association of Realtors.

Purchases by younger buyers are likely to grow gradually […]

Refinancing Will Strengthen Despite Rate Worries


Refinancing will come back strong in 2015, according to mortgage industry consultant Barry Habib.

His prediction relies on a contrarian view of the Federal Reserve Board’s intentions on interest rates.

The central bank will not raise rates in June, and is likely not to raise rates this year, he predicted during the Regional Conference of Mortgage Bankers Associations this week.

As a result, there will be an incredible opportunity for mortgage refinancing in 2015 as the yield on the 10-year Treasury note falls below 1.5% and rates on the 30-year fixed-rate mortgage approach 3%, he said.

Habib, the founder and CEO of MBS Highway, noted the composition of voting members of the board has changed, going from five doves, four hawks and one centrist to seven doves, two hawks and one centrist, making it less likely to take action.

Meanwhile, the dollar is getting stronger […]

Young Home Buyers Return in U.S. as Economy Accelerates


After Damien and Tina Bucci were approved for a mortgage in 2012, they decided they couldn’t afford the biggest purchase of their lives without greater confidence in the U.S. economy. Next month, they will close on their first home — a four-bedroom Colonial with a half-acre yard.

“We could have made it work two years ago but it would have stretched our budget too thin,” said Damien Bucci, 30, from the kitchen of his two-bedroom apartment in a 238-unit development in Fairless Hills, Pennsylvania. “Financially, we’re in a lot better position now.”

The Buccis have been shut out of the housing market since its rebound in 2012 from the biggest collapse since the end of World War II and now are belatedly part of its recovery. They will benefit from faster economic growth and a labor market that’s approaching what the Federal Reserve […]

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