How Improving Home Values May Lead To Easier Mortgage Approvals

How Improving Home Values May Lead To Easier Mortgage Approvals

If falling home values is what prompted Fannie Mae and Freddie Mac to tighten mortgage guidelines in 2007 and 2008, America’s mortgage applicants may get their long-awaiting loosening within the next 18 months. According to a government report, the values of homes financed with conforming mortgages rose for the third straight month in February. This is an important piece of data because as values rise on the homes against which conforming mortgages are made, Fannie Mae and Freddie Mac’s respective loan portfolios get less risky. With less risk related to home values, there’s an opening for the agencies to assume more risk on individual borrowers. A guideline loosening would help home loan applicants that currently find themselves ineligible for conforming mortgage financing — often the least costly source for mortgage money. Pressed for profitability, it’s unlikely that Fannie Mae or Freddie Mac will loosen their respective guidelines prior to 2010, but if the Home Price Index continues to show improvement, it’s […]

National Real Estate Data Lumps 128,203,000 Homes In America Into 1 Data Set

National real estate data helps economists identify trends in the housing market. It shapes policy and influences markets. For active home buyers and home sellers, though, national real estate data is irrevelant.  This is because national data says nothing for the factors determining home prices in any given zip code. See, national real estate news is mash-up of data.  It’s 128,203,000 homes from all 50 states.  Each of these states has its own economy and there are different factors that drive home values in each Most Americans understand this. But, if we dig deeper, we see that within those states, there are more than 19,000 incorporated cities — plus thousands of unincorporated ones.  And like the 50 states, city-to-city home values vary by economy, too.  Furthermore, each city is comprised of areas, and those areas can be broken down into neighborhoods and then sub-divided again into streets, with blocks. It’s apparent that a random home in Alabama can’t be compared to a random home in California.  Yet, that comparison is exactly […]

Why Home Buyers Should Worry About Falling Housing Starts And Why Sellers Should Cheer Them

With respect to housing data, news is rarely positive or negative on a universal level. There’s always two perspectives to consider, after all. The home buyer’s perspective The home seller’s perspective Usually, when data is beneficial to one group, it’s less beneficial to the other.  This is true for rising home prices, average days on market and so forth. Today, the group that gets the most benefit from data is the home seller group. Published Thursday, a government report showed that Housing Starts fell 11 percent nationwide in March and also fell short of analyst expectations.  A “Housing Start” is a new housing unit on which construction has started. The press is calling this a stumbling block for the economy, but that’s not exactly true. Fewer Housing Starts last month means that fewer new homes will come on the market later this year.  This is not necessarily bad news.  Especially if you’re planning to sell your home in the latter half of the […]

The 3 States That Accounted For 50% Of The March 2009 Foreclosures

Since 2007, foreclosures have dominated real estate news.  You can’t turn on the news or open a paper without some foreclosure-related story.  But for all of the discussion, foreclosures continue to be geographically concentrated.  Adding up the latest stats from RealtyTrac.com, more than half of the country’s foreclosure actions from March occurred in just 3 states — California, Florida and Nevada. Those 3 states represent just 19 percent of the nation’s population. Despite the local concentration of foreclosures, however, they remain a national problem.  This is because mortgage lenders lend in all 50 states — not just 3 of them — so the impact of mortgage defaults in one region can quickly spread to others. In part because of foreclosures are higher, the following has happened: Mortgage guidelines have tightened Downpayment requirements have increased Private mortgage insurance has become more expensive That’s an important set of changes for a would-be borrower.  In some cases, it can keep a person from qualifying. Search the March […]

Are Home Values Rising Or Falling? The Answer Depends On Who You Ask.

A report published Tuesday showed that home values fell nearly 3 percent in January 2009 versus the month prior and by 19 percent from last year. On the surface, data from the study looks like more bad news for housing. With deeper inspection, though, we uncover reasons to discount the report’s finding. For one, the report includes home price data from just 20 cities around the country — and they’re not the 20 most populated cities, either. For example, data from #4-ranked Houston is not included and neither is #7 San Antonio nor #10 San Jose. #54 Tampa, however, is included. Secondly, the report is two months lagging. Published March 31, its data is only accurate as of January and a lot has happened in the last 2 months. This includes a record-drop in interest rates and the introduction of an $8,000 tax credit for qualified first-time home buyers. The stimulus has helped raise home sales volume on both new […]

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