The Federal Housing Administration (FHA) announced Friday it will leave loan limits unchanged for the highest- and lowest-cost housing markets in 2015.
For most high-cost housing markets, the maximum allowable amount for an FHA loan will stay at $625,000, a threshold first set at the start of this year.
For low-cost metro areas, the limit will remain unchanged at $271,050, the agency announced.
FHA recalculates its national loan limit every year, basing its math on a percentage calculation of the national conforming loan limit for mortgages eligible for purchase or guarantee by the GSEs. That limit was also left untouched by the Federal Housing Finance Agency and will stay at $417,000 for most of the country next year.
FHA will continue to insure mortgages at a much higher threshold—$938,250—in certain established high-cost areas, including Alaska, Hawaii, Guam, and the Virgin Islands.
The agency also announced that loan limits for FHA-insured reverse mortgages will also be left untouched. FHA's reverse mortgage product, the Home Equity Conversion Mortgage (HECM) will have a maximum claim amount of $625,500.
The number of existing homes sold in the U.S. stood at about 5.26 million in October, coming in just ahead of the 10-year October average of about 5.198 million, according to NAR. The Midwest and South experienced a similar trend with existing home sales, while October's existing home sales figures for the West and Northeast were below the 10-year October average.
NAR reported that there have been four consecutive year-over-year gains in October for existing home sales for every region except the West, which experienced a slight decline in October. This is likely due to existing home sales hitting their low point in 2010, shortly after the sales figures were buoyed by the first-time home buyer tax credit in late 2009.
Meanwhile, the median price of existing homes in the U.S. for October 2014, reported at $208,300, was higher than the 10-year nationwide October average of $191,500, NAR reported. The median price in October was higher than the 10-year average in all regions except the Northeast, according to NAR. While year-over-year median existing home price data shows prices generally struggling from 2006 to 2011, prices have improved in the last three years, although the growth rate for existing median home price has decelerated over the past year, NAR reported.
Monday, December 1, 2014
Emphasizing charm and weather readiness can pay big dividends when it's cold outside.
For your home to look its best during a winter viewing, it should feel both welcoming and warm.
It may not be your first impulse to list your home in winter, but life events can sometimes dictate timing on when moves must happen. Knowing how to best show off your home to its full advantage can pay even bigger dividends in the winter, when daylight hours run short, temperatures drop, and the usual rules may not apply.
If you were selling your house in the summer or spring, you’d likely address any cosmetic concerns as part of the staging process. The same attention to detail is important in the winter. Keep up the curb appeal
Curb appeal has a different meaning in winter weather, but the same basic principles apply: tidying the exterior and clearing driveways and walkways are essential. Carpet should be recently cleaned and in good repair — and now’s the time to embark on a mission to make your home clutter-free by removing photographs and knickknacks.
Emphasize light
For your home to look its best during a winter viewing, it should feel both welcoming and warm. Consider removing some window treatments to allow windows to shine at their full size. If showing your home during daylight hours, open all your remaining draperies or blinds to maximize light; during evening hours, you can choose a pleasant combination of reduced overhead, floor, and table lamps, which can impart a warm and comforting glow throughout all the rooms you’ll be showing.
Highlight winterized features
On the flip side, emphasizing features that make your property a smart winter buy can also help seal the deal after your home passes the charm test. Your home can be more attractive to winter buyers with features like an attached and enclosed garage, a new water heater or HVAC components, or skylights or other energy-efficient upgrades. Winter buyers want to be confident that their new property will be well winterized for the immediate months ahead.
Show all seasons
Take advantage of the opportunity to display your home’s charm by providing a photo portfolio with your listing — or even laying out a photo album of your home — and be sure to include pictures from all seasons.
No matter how you choose to make your home more sellable, stay within your budget. You won’t want to blemish your credit picture right in the middle of making a move — one of the major life events when you’ll want your credit in tiptop shape.
Despite slower economic growth in recent months following a strong showing in mid-2014,Fannie Mae's Economic and Strategic Research Group said in areport released Thursday that it still expects 2015 to be a slightly better year overall economically in the U.S.
The group's current forecast was based on continued improvements in employment, income, and consumer and business spending. The group predicted that economic growth will come in at 2.5 percent for 2015, which is a slight improvement over the 2.1 percent predicted for 2o14.
"The pace of growth around the middle of the year was well above trend, driven by an unsustainable rebound after a weak first quarter, and we anticipate that the fourth-quarter numbers will presage a more modest pace for 2015," Fannie Mae chief economist Doug Duncan said. "We are still seeing some conservatism on the part of consumers, who remain hesitant to take on significant credit and mortgage debt in the wake of the economic downturn. However, recent data show that their confidence is growing amid strengthening employment numbers and household incomes, which we expect to continue next year and eventually drive stronger consumption."
Duncan said the housing market "continues to grind its way upward" and that due to muted fundamentals, he does not expect the market to have a breakout performance in 2015. Duncan predicted the state of the housing market and mortgage industry in 2015 will be similar to that of 2014 based on Fannie Mae's current view of home sales, housing starts, and price trends, which is largely unchanged from the research group's previous forecast.
"Homebuilding activity improved during the third quarter due primarily to the multifamily segment, which we expect to grow further next year, but the single-family segment has been relatively flat for some time," Duncan said. "Although interest rates still are relatively low, the temporary burst in refinance activity appears to have subsided, and we expect that the market will turn more toward the purchase market in 2015."
Thursday, November 20, 2014
Top 10 Reasons to “List A Property” during the Holidays
People who look at property during the holidays are serious buyers and are more ready to make a decision.
Serious buyers have fewer houses to choose from during the holidays, so the property has less competition.
Houses “show better” when decorated for the holidays with the wonderful lights and festive colors associated with the season.
Buyers are more emotional during the holidays and often base their decision on the warmth and good feelings they receive when viewing the home.
Buyers have more time to look for a house during the holidays because they have designated time off from work to purchase a home.
Many people want to buy before the end of the year for financial and tax reasons.
January is traditionally the month for transfers. Transferees can’t wait until the spring to buy. These buyers need a home now and houses must be on the market to capture these buyers.
Sellers can restrict showings during personal family events and still take advantage of their homes being spruced up and decorated “show ready” property.
Sellers can sell now – but specify a delayed closing or extended occupancy until early next year if it is agreeable within the negotiations of the contract.
By selling now sellers have the opportunity to buy during the spring – when more properties are on the market.
Wednesday, November 19, 2014
Analysts Predict Continued Improvement for Housing as Economy Strengthens in 2015
With only weeks left before 2014 comes to a close, many economic commentators are already looking to what next year could bring—including Frank Nothaft and Len Kiefer, chief economist and deputy chief economist at Freddie Mac.
In the company's latest Economic and Housing Market Outlook for the United States, the two analysts turn their attention away from 2014—a mixed year for housing, especially compared to 2013—and toward 2015, which they say will see continued strengthening in the market for home purchase mortgages as the economy improves on a broad basis.
Looking at the larger economic picture, the economists predict a 3 percent growth rate for gross domestic product (GDP) in 2015, which would mark only the second year in the past decade in which growth was at 3 percent or higher.
Also among the pair's predictions for 2015:
Interest rates will climb further: Having started the year off at 4.53 percent, mortgage interest rates spent the year's opening months falling into the low 4 percent range before climbing throughout the summer and eventually dropping again. With yields on the 10-year Treasury expected to average 2.9 percentage points next year, the average 30-year fixed rate is forecast to gradually rise throughout the year, ending around 5 percent.
Home price gains will slow even more: While price growth is expected to continue, it will come at a more moderate pace, Freddie Mac's economists say. The company's current projection is for prices to rise 3.0 percent in 2015 compared to 2014—down from 4.5 percent anticipated for this year and less than one-third the increase seen in 2013. While ongoing price gains will dampen affordability somewhat, the analysts don't see it as a major concern: "Historically speaking, that's moving from very high levels of affordability to high levels of affordability."
Home sales and housing starts will accelerate: Sales and new construction are the two areas where the housing market has disappointed this year, but that's expected to improve. Freddie Mac predicts total housing starts will increase by 20 percent from 2014 to 2015, with single-family homes accounting for most of that pickup. Meanwhile, total home sales are expected to increase by about 5 percent over the year, marking the best sales pace in eight years.
Home purchase mortgages will gain even greater share... but total originations will fall:Refinance originations are anticipated to account for only 23 percent of 2015's loan volumes, coming down hard off the surge of recent years. Meanwhile, purchase lending is expected to fall short of filling that gap, resulting in an 8 percent annual drop in originations to $1.1 trillion.
"Government fiscal drag has turned into fiscal stimulus, lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development, and more upbeat consumer and business confidence, all of which portend faster economic growth in 2015," Nothaft said of the forecast. "And with that, the economy will produce more and better paying jobs, providing the financial wherewithal to support household formations and housing activity."
Tuesday, November 18, 2014
Poll: Majority of Lenders Reluctant to Lower Standards to Expand Credit Access
As federal housing agencies push mortgage firms to lend to more consumers, a recent survey indicates most lenders feel the regulatory risk is still too great for them to lower their standards.
In a poll conducted by the Collingwood Groupthroughout October, 71 percent of mortgage lenders said the odds of them lowering credit score requirements for borrowers are between "somewhat" and "extremely unlikely," with several saying they feel their standards are already relatively low and that they generally follow the credit parameters set by agency investors.
As homeownership numbers sit at their lowest level in nearly two decades, regulators have recently announced plans to boost mortgage availability by allowing the GSEs to purchase loans with lower down payments and by clarifying their repurchase framework.
Despite those steps and the strain some originators are feeling as the mortgage market shrinks, one anonymous respondent commented that "[i]t isn't worth the business risk" to relax their lending criteria.
"The reluctant to broaden the credit parameters to reach additional borrowers is a clear indication that lenders are passing up additional volume to avoid regulatory enforcement actions," the Collingwood Group said in a report detailing the survey findings.
The findings echo recent remarks from Bank of America's CEO, Brian Moynihan, who said the bank has little to no incentive "to try to create more mortgage availability where the customers are susceptible to default."
Out of all the regulatory worries contributing to lenders' anxiety, the Consumer Financial Protection Bureau's (CFPB) mortgage rules are the biggest concern, the survey shows, with 74 percent of respondents pointing to the bureau as the biggest source of concern. Also on the list were Fannie Mae and Freddie Mac, Federal Housing Administration program requirements, and state regulations, with each earning single-digit shares of responses.
In their views of CFPB, many originators questioned whether the bureau's rules are actually in American borrowers' best interests, and some said they feel the agency is too focused on finding faults and fining companies rather than offering guidance.
"CFPB is rule making through enforcement," said one unnamed lender. "No clear guidance on certain issues. They won't put anything in writing when you ask a question. No recourse to their fines and penalties. No real due process."
Other respondents indicated that while they're not concerned about any one agency, it's the volume and complexity of new rules that are making lending more burdensome. The vast majority also said that the enforcement of the new regulations is "subjective" and "unfair."
In response to the new regulatory environment, 82 percent of respondents reported their companies are taking expansionary actions, including increasing compliance staff, enhancing risk controls, and investing in compliance technologies. Another 9 percent said they are taking the opposite strategy by reducing third-party originations and tightening credit standards.
