The New Conforming Mortgage Guidelines, Effective September 1, 2009

Category: Housing Market

Posted on in Housing Market

The New Conforming Mortgage Guidelines, Effective September 1, 2009

As a reminder, Fannie Mae is rolling out new lending guidelines Tuesday, September 1, 2009.  Starting next week, being approved for a home loan could be much more difficult. The new rules mark the first major underwriting update since April of this year.  The changes are mostly geared at fraud prevention. Among the updates: Stock options are no longer eligible for “reserves” Relocating families can’t use the “trailing” spouse’s projected income “Tip” income must be documented and verified Lenders must call employers to verify employment Lenders must verify tax transcripts against IRS records But there are other changes, too.  As examples: Owners and buyers of 2-unit homes are subject to new minimum FICOs with larger downpayment and equity requirements. Only 70% of stock, bond and mutual values may be used as reserves Only 60% of retirement assets may be used as reserves Consider this post to be your advance warning. Not everyone that qualifies for a mortgage on Monday, August 31 […]

by jberman
Posted on in Housing Market

Home Supplies Plummet, Putting Pressure On Home Prices To Rise

It’s no wonder that builder confidence is soaring — their inventory of homes for sale is depleting at a furious pace. For the 4th straight month, New Home Sales gained, posting the best numbers since last September’s meltdown and handily beating economist expectations. The available supply of homes is down to 7.5 months nationwide. It’s further evidence that the housing market may have bottomed at some point this past spring. To be sure, the strong housing data is, in part, a reaction to three outside factors: Low mortgage rates An expiring government tax credit Hefty builder incentives But, buyers are buyers and the clearing out of outstanding inventory provides terrific support for home prices.  It also gives them reason to rise.  Coupled with the blowout Existing Home Sales numbers from July, therefore, this months’ New Homes Sale report may be a signal that the Buyers’ Market is ending and the Sellers’ Market is beginning. If you’re planning to buy a home this year […]

by jberman
Posted on in Housing Market

Home Prices Keep Rising, Rising, Rising

18 of 20 markets tracked by the Case-Shiller Index showed rising home values in June.  It’s the 5th consecutive month with strong numbers and the best showing for the benchmark housing index since home values began deflating in 2006.  Some would argue it’s a sign that housing has finally bottomed out. Even Case-Shiller representatives acknowledge that home prices are “on an upswing”. Despite the Case-Shiller Index’s popularity with economists and the press, though, it’s falls short of being a perfect housing indicator.  As examples: Its data is reported with a 2-month lag Its sample set includes just 20 U.S. cities Real estate isn’t a “national” market — it’s local Nevertheless, flaws aside, Case-Shiller is still important.  It helps identify broader trends in housing and many people believe the housing is the keystone of the economy right now. This is why June’s Case-Shiller Index gives cause for hope.  The nascent housing recovery has a long road ahead but June’s Case-Shiller data shows that […]

by jberman
Posted on in Housing Market

The Long-Term Trendline For Existing Home Sales Points To A Housing Recovery

The housing market continues to surprise.  Last week, the latest good news came in the form of the monthly Existing Home Sales report. An “existing home” is a home sold by an existing owner as opposed to a developer.  It’s non-new construction property. The data on Existing Home Sales was noteworthy for its trends: Sales volume rose over four straight months for the first time in 5 years Sales volume rose year-to-year for the first time in 4 years Median home prices fell for the first time since April Furthermore, first-time home buyers and buyers of “distressed” homes accounted for nearly one-third of the market activity each. But, before we declare a bottom in housing, it’s important that we remember the First Rule of Real Estate — All Real Estate Is Local. The Existing Home Sales report is not neighborhood-specific.  It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real […]

by jberman
Posted on in Housing Market

If Builders Are Building, It’s Got To Be A Good Sign

Single-family Housing Starts rose for the 4th straight month in July, another sign that the battered housing market may be making its comeback. “Housing starts” are new homes on which construction has recently started.  Not surprising, in a related story, homebuilder confidence moved to a 12-month high. Ironically, an increase in newly-built homes could actually slow a nationwide housing rebound because values are driven by supply and demand. More in-the-pipeline supply means that buyer demand has to stay strong or else prices will eventually fall. So far this year, though, demand has kept pace.  Over the past 6 months, the combination of low mortgage rates, aggressive home valuations, and federal and state tax credits has kept buyer activity up and home values on the rise.

by jberman
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