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Record-High Home Equity Levels Left Unused in Q1

Despite exceedingly low interest rates, a very limited number of borrowers pulled cash out of their houses in Q1. This led to a record-high for the dollar value of usable home equity, reports Integrated Technology firm, Black Knight.  The mind goes back to the housing boom when homeowners tapped their equity to buy cars and fund vacations. When the market crashed, many such owners were left with no equity at all in their homes. There is enough evidence to believe that many still fear cash-outs due to the memory of those days. Cash-out…continue reading →

Mortgage Rates May Not Have Hit Bottom Yet

While the mortgage rates have never come down as low since Freddie Mac started in 1971 with its Primary Mortgage Market Survey, there is a good chance we haven’t seen the bottom yet.  Freddie Mac’s Chief Economist, Sam Khater, feels that in the final few months, the 30-year fixed-rate mortgage could come down in a deficit of 3%. For the week ending June 25, the average for ‘30-year’ was 3.13%. It fell to 3.07, a week later. On the year-over-year chart, the 30-year fixed-rate mortgage has seen a 16% decline. The fall in…continue reading →

Millennials to have a Big Say in 20s’ Residential Real Estate

The novel Coronavirus has come in a year when a good percentage of millennials are turning 30. What this means is that this demographic is stepping into its prime home-buying years in a scary situation. True that 2020 may be a headache-inducing year but looking at the big picture, “millennials may be poised to fuel a ‘roaring 20s’ of homeownership demand”, according to  First American Financial’s Chief Economist, Mark Fleming. Fleming feels that all that the millennials need to do is make the right lifestyle choices.  Not all millennials are serious about buying…continue reading →

Mortgages in Forbearance Up after Falling for Three Weeks

Integrated Technology company Black Knight says that the total mortgages in forbearance have shot up after three successive weeks of decline.  The update on June 23 divulges that the number of mortgages under forbearance ran up to 4.68 million, a clean 83,000 above its tally a week before that.  The Government-sponsored Enterprise (GSE) mortgage (Conforming) forbearance numbers rose to 1.925 million, representing a 1.3% hike. The Federal Administration and Veteran Affairs numbers shot by 3% to 1.509 million. The uncleared forbearance principal balance shot up by 1.28% to $1,025 trillion for June 23.…continue reading →

CFPB Proposes Amending the 43% DTI Cap for QM

According to the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage (QM) rule, all the mortgages that can be eligibly bought by Fannie Mae or Freddie Mac are exempt from the 43% debt-to-income cap. This exemption is referred to as the GSE patch (GSE stands for government-sponsored enterprises). The GSE patch is slated to expire on 10th January 2021. Convinced that both Freddie Mac and Fannie Mae benefit from a competitive advantage in underwriting, CFPB now proposes to extend the GSE patch and also make changes to the definition of QM.  Loans that have…continue reading →

Inventory Shortage May Obstruct Corona-rebound Sales

Aspiring homeowners are likely to come hard once the Coronavirus scare recedes but real estate marketplace Zillow feels that housing inventory shortage may obstruct any possible sales rebound.  Its Weekly Market Report reveals a drop of 17.1% in inventory compared to the same time last year. Over the week, it has fallen by 0.4%. Houses which are on for-sale supply also took a beating in many of the top 35 metros. The figures show a 35% dip in Cleveland, 36% in Seattle, and 34.4% in Philadelphia. To paraphrase Skylar Olsen, Zillow’s senior principal…continue reading →

Covid-19 Comes Down Heavily on California House Sales

The California Association of Realtors (CAR) reveals that house sales in California have come down by 41.4% in May ‘20’, compared to the same time last year. Over a year, such a drop hasn’t been seen since November ‘07’.  CAR President Jeanne Radsick Bakersfield feels that the worst is past us and things will improve, come June. It is a relief that at least the house prices have shot up from year-ago levels for each county in Southern California (barring the Orange county). According to CAR, if the whole year runs at May’s…continue reading →

Housing Supply Shortage Hurts May Home Sales

May ‘20’ is not as encouraging for home purchases as May ‘19’ had been and we needn’t be told the reason for it. Closed transactions dropped by 3.9% compared to April and a mammoth 33.7% on the Year-over-Year chart.  Each housing market in the country has reported an annual drop in double figures (Iowa cutting the best picture with a 14.3% drop while Detroit the sorriest picture with a 64.8% drop). Inventory constraint hasn’t helped one bit. Housing supply in May is lowest since 2008. It has come down by 25% compared to…continue reading →

Purchase Mortgage Applications at a Level Untouched Since 2009

The Mortgage Bankers Association informs that aspiring homeowners are putting behind the Coronavirus scare and filing purchase mortgage applications at a level not seen over the previous decade.  It comes as a bonus that the 30-year fixed loan rates are at their lowest since the MBA’s Weekly Mortgage Applications Survey began. Purchase mortgage applications have risen for the 9th week straight. It is partly the result of soaring consumer confidence and partly due to the demand kept in leash since spring, believes Joel Kan, the Associate VP of Economic and Industry Forecasting, MBA. …continue reading →

While the Economy is Falling, Home Prices Keep Rising. Here’s why.

National Association of Realtor's (NAR) existing home sales report for April 2020 reported that the Median Sales Price rose a staggering 7.4% year-on-year. April's increase marks 98 straight months of year-on-year increase. Even a more recent data (for the week ending May 15, 2020) from Altos Research shows that the Median Sales Price is still increasing. This, when 38 million Americans have lost their jobs and the unemployment rate is at the highest levels since the Great Depression of 1933, mostly due to Covid-19 pandemic (see chart below). It seems that all the…continue reading →