Analysis

Will the Housing Market Crash in 2022?

Will the housing market crash in 2022? After all, doesn’t the current housing climate look similar to the market right before the crash in 2008? It is easy to get a mortgage right now and home values are going up after all! The good news is that while there may be some similarities to 2008, today’s market isn’t the same. Most experts are not predicting a crash this year. Let’s look at a few facts to explain why. No Housing Market Crash in 2022 Due to Inflation We’ve all noticed the rising prices.…
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How to Calculate Your Profit in 2022 When Selling Your Rental Property

If your rental property investment goal is to reap a big profit when you sell, then understanding your potential taxes upfront is critical. Just knowing you'll pay a tax on any gain you earn and the general tax rate is not enough preparation. You need to look at capital gains, depreciation recapture, net investment income tax, and short versus long-term gain tax rates to get to your real net profit number. The details can be found in the Internal Revenue Service (IRS) Publication 550, Section 4. For starters - if you sell a…
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Mortgage Refinancing and Automation: More Important than Ever Before

We are in the midst of an extraordinary year that has seen a surprising turn in the mortgage industry. The fact that the COVID-19 pandemic has had unprecedented economic impacts doesn’t need to be overstated. In the case of mortgage refinancing especially, record low rates have led to extraordinarily high rates of refinancing. Black Knight reported that the second quarter of 2020 saw refinance lending rise more than 200% from the same time last year.  Mortgage professionals will agree that there is one overarching problem with the refinance process as it currently stands:…
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What to Do in a Changing Real Estate and Mortgage Market

As if the shortage of homes for sale wasn't severe enough, now rising interest rates are making the spring buying season extra challenging across the nation. The latest analysis and forecasting of market information by organizations such as National Association of Realtors (NAR), the St. Louis Federal Reserve, and Realtor.com highlights the shortage in inventory. Meanwhile, the California Association of Realtors (CAR) is reporting some good news in California. Read on to get the latest data, but don't take it all as a sign that you should abandon your plans to buy or…
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Republican Tax Plan Has Huge Implications for Housing

Republican lawmakers unveiled the tax reform bill this morning and it doesn't augur well for housing. (** After the bill was passed, I wrote an updated version of this post. Please refer to that by clicking here - https://www.mortgageblog.com/5-ways-the-tax-cuts-and-jobs-act-will-impact-housing-and-mortgages/) The National Association of Realtors came out swinging against the bill, suggesting a huge fight awaits over how real estate is treated. “Eliminating or nullifying the tax incentives for homeownership puts home values and middle-class homeowners at risk, and from a cursory examination this legislation appears to do just that,” said William E. Brown, president…
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Is Affordability Becoming a Problem for US Real Estate?

What do you do when the free market prices the average - sometimes even the exceptional - American family out of owning a home? The answer used to be simple, people would just rent. In many markets - most major metro area - rents are increasing at rates equal to, or higher than, home values? Something has to give. You have to have somewhere to live whether you own it, rent or - in some cases - drive it. So how do we approach the affordability issue that many markets are experiencing? Where…
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Its One Of The Worst Times To Be A Renter

It’s not a great time to be a renter. In fact, it might be the worst time in 36 years. The median rent nationwide now takes up 30.2 percent of the median American income, the highest cost burden recorded since 1979. In the late 1980s and throughout the 1990s, the median American looking to lease a home could expect to spend a little less than a quarter of what she earned on rent. Last year at this time, the median cost burden for renters was 29.5 percent of income. For rent and utilities…
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April Housing Data Show Robust Price Increase, Shorter Selling Time

Total existing-home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, declined 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Despite the monthly decline, sales have increased year–over–year for seven consecutive months and are still 6.1 percent above a year ago. The problem does not appear to be a sign of housing market weakness however. Lawrence Yun, NAR chief economist, says sales in April failed to keep pace with the robust gain seen in March. "April's…
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5 Things That Will Change For Mortgage Lending In 2015

Mortgage industry had a torrid time in 2014.  The year was marked with huge decline in production volume, mass lay offs and several multi-million (or billion) penalty/lawsuits. According to Mortgage Bankers Association (MBA), total loan production for 2014 was $1.1 trillion, down almost 40% from 2013 where it was $1.8 trillion. Purchase business surprisingly went down, but most of the decline came from refinance, where the production slipped almost 60% compared to 2013. As we look ahead, I believe there are 5 things that will change for mortgage lending in 2015. 1. Higher…
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Millennials Shaping the Housing Market…as Renters?

Collectively, Millennials represent a hugely important demographic for the Housing Market. Representing 95 million people ages 18-34 that have, historically, driven the first time-buyer landscape. However, in the first quarter of 2014, homeownership for the Millennial demographic declined to 36.2 percent, down from 36.8 percent in 2013 and the lowest on record since the Housing Vacancy Survey began tracking homeownership by age in 1982. This data is important for another huge housing demographic - the real estate investor. So what’s behind the drop? What does this mean for the greater housing market and…
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