Market Conditions

Why homeowners are leaving billions on the table


Mortgage rates have been so low for so long that it is hard to believe nearly everybody hasn’t refinanced to a lower rate yet. Believe it. More than 5 million borrowers could both qualify and benefit from a mortgage refinance, according to a new report from Black Knight Financial Services.

True, that is less than the nearly 7 million who could have refinanced just last spring, when the average rate on the 30-year fixed mortgage was below 3.7 percent. Today, thanks to the rout in the stock market, rates have fallen back just below 4 percent. About 2.4 million borrowers could potentially save $200 or more on their monthly mortgage payments and an additional 1.9 million could save $100 to $200 per month. Add it up, and that is $1.2 billion still on the table, according to Black Knight.

“If rates go up 50 […]

Interest Rate Hike Will Boost Mortgage Credit Availability


The availability of home loans for low credit score borrowers remains very tight by historical standards but there might be some loosening in 2016 if the Federal Reserve begins raising interest rates.

“If interest rates were to rise, lenders would begin to open up the credit box in order to get more borrowers through the door,” said Sam Khater, deputy chief economist at CoreLogic, during a webinar hosted by American Banker.

But Khater said he doesn’t expect interest rates to rise very much “because the economy remains weak.”

Laurie Goodman, the housing finance director at the Urban Institute, said she expects to see a “modest expansion” in mortgage credit due to the efforts of Fannie Mae, Freddie Mac and the Federal Housing Administration to clarify their loan put-back and indemnification policies.

“I expected to see some expansion in credit as the FHA and GSEs continue to take actions […]

Affordability Will Push Buyers to Suburbs


As affordability worsens near city centers, first-time homebuyers will move to the suburbs in greater numbers, according to 2016 predictions from Zillow.

The Seattle-based real estate and rental marketplace predicts that affordable housing will continue to dry up closer to city centers. Consequently, first-time homebuyers will increasingly turn to suburbs, particularly those with an urban feel and easy access to cities.

Further on the point of affordability, rents will continue to rise in 2016, which Zillow said will create the least affordable median rents recorded. Home values are also expected to rise roughly 3.5% in 2016, meaning that those whose income falls in the bottom third of all incomes will find themselves priced out of homeownership.

“Many potential first-time buyers are living in hot markets where buying a home is really expensive,” Zillow chief economist Svenja Gudell said in a Nov. 30 news release. “In […]

U.S. existing home sales plunge; new rules seen as drag

U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy although new regulations on paperwork for home purchases may have driven the decline.
The National Association of Realtors said on Tuesday existing home sales plunged 10.5 percent to an annual rate of4.76 million units. That was the sharpest decline since July 2010. October’s sales pace was revised slightly lower to 5.32 million units.
Housing has been providing a sizable boost to U.S. economic growth this year as a strengthening labor market and low interest rates have helped young adults to leave their parents’ homes.
Economists had forecast sales rising to a rate of 5.35 million units last month.

NAR economist Lawrence Yun said most of November’s decline was likely due to regulations that came into effect in October […]

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