First quarter data shows some encouraging signs for housing market

Posted on: May 24th, 2012 by HomeFinder.com News
No Comments

Freddie Mac's U.S. Economic and Housing Market report for the first quarter shows some encouraging signs for the U.S. economy and the housing market.

Positive economic data for first months of 2012

The report notes the economy grew 2.2 percent, as measured by real GDP. This was a slight increase from the previous quarter, but the highest increase of the four previous quarters.

The unemployment rate also declined in the first quarter, falling from 8.7 percent in Q4 2011 to 8.3 percent in Q1 2012. In turn, consumer expenditures gained with the decreased unemployment rate, the outlook indicates, improving 15.3 percent, as consumers increased their purchases of big-ticket items, such as cars and home appliances.

Additionally, Freddie Mac's report found residential fixed income (RFI) increases were consistent with the economy's growth. RFI increased 0.4 percent for the first quarter reflecting positive growth in new home construction and remodeling. Housing starts and home sales were the two bright spots for the market in the first quarter, the government-sponsored enterprise noted. Starts increased to a seasonally adjusted annual rate of 690,000 per month from 670,000 in the previous quarter. Total home sales increased from a per month average of 4,220,000 in the fourth quarter to a 4,380,000 monthly average in the first quarter of 2012.

Foreclosures remain a factor in housing market

Foreclosures still continue to put downward pressure on the markets, reports Freddie Mac. More than 2 million homes still remain in foreclosure. Further, the quarter's homeownership rate decreased 0.5 percent for the quarter dropping to 65.5 percent. This statistic is also expected to decrease further as the market foreclosures continue to work their way through the market.

Decreased foreclosures would likely help improve market prices given the deep discounts they are sold at in comparison to standard listed homes. The downward pressure from foreclosures could be one reason for the decreases in housing prices. The Freddie Mac House Price Index fell 0.3 percent for the first quarter. This index has been consecutively decreasing but is expected to turn up slightly in the second quarter of 2012.

With home prices and mortgage market rates continuing to remain low, now may be the best time for many interested buyers to capitalize on the housing market's value.

Posted in The Real Estate Market |

Struggling mortgage borrowers can find help from HUD certified counselors

Posted on: May 23rd, 2012 by HomeFinder.com News
No Comments

In today's post-crisis environment, there are many homeowners who are still struggling with their mortgage payments. A survey by Money Management International asked 1,019 consumers nationwide about their their reactions to struggling mortgage payments.

Twenty-five percent of survey respondents stated that they or someone they knew needed assistance with mortgage payments since 2008. When asked who they turned to for payment assistance, the majority of the respondents listed family and friends, followed by lenders and housing counselors.

Further, surveyed respondents stated that some of their greatest concerns when seeking mortgage assistance included fraudulent services or scams, services that were too expensive or not worth the value they provided and services that were too complicated or provided solutions that they did not understand.

The survey also found that 63 percent of respondents seeking help for mortgage payments did so after they were one to three months late on payments. This indicates the need for increased mortgage counseling and awareness about funding opportunities available to help with debt before consumers find themselves in the situation of missed payments.

"Homeowners face real concerns when considering who to turn to for help with mortgage troubles," said Jo Kerstetter, vice president of education and community relations for MMI.

Many of these borrowers don't realize the programs and services that are available for them through the U.S. Housing and Urban Development agency. The Housing and Urban Development agency provides certification for counselors interested in helping struggling homeowners with their mortgage payments. These counselors can also provide consumers with financial planning advice as well. 

The U.S Housing and Development agencies services are an extension of President Obama's Homeowner Affordability and Stability Plan (HASP). HASP is a $75 billion dollar federally funded program, designed to provide relief to homeowners and to set a framework for relief plans for homeowners affected by the financial crisis and ensuing mortgage defaults.

The HASP plan provides help for struggling consumers through its Making Homes Affordable provision which allows eligible borrowers to make home loan modifications, lowering their interest rate and reducing their monthly payments. The provision also provides refinancing options as well as solutions for foreclosures that can help consumers improve their credit situation.

Posted in Mortgage News |

NAR: Consumers have increased purchasing power

Posted on: May 22nd, 2012 by HomeFinder.com News
No Comments

The National Association of Realtors' Housing Affordability Index rose to 205.9 in the first quarter, reaching its highest level since the index began in 1970.

The index is based on the relationship between median home price, median family income and average mortgage interest rate – all of which NAR reports are at or near record lows.

NAR president Moe Veissi, stated the market is ideal for most consumers.

"For those with good credit, we've never seen better housing affordability conditions or market opportunities than we see at present," said Veissi.

Further data from the index reports that a median income family, earning approximately $61,000, could afford a home costing $325,500 in the first quarter. This is well above the national median home price of $158,100. Further, the median monthly mortgage principal and interest payment for a median-priced home was 13.5 percent of gross income.

With this purchasing power, interested homeowners should ensure their credit scores are in good shape. High credit score ratings can improve consumers' chances of securing a low rate for mortgages.

Posted in The Home Buying Process |

« Older Entries