Property taxes aren’t the purview of the Feds; however, the FHA opposed plans to make solar power tax deductible because tax assessments take precedence over mortgages in the event of a default, there was general opposition to so called PACE (Property Assessed Clean Energy) programs from Fannie and Freddie in light of the 2007 recession. Now, that’s changing. The FHA just released guidelines that will enable the program pioneered in Berkley, CA, to be made available nationwide.
Bill Greiner makes a fairly convincing argument in Forbes that the housing market will be driving real GDP growth upwards of 3% over the next 18 months. He distinguishes between existing home sales and new home sales, and gives an explanation of key factors: employment, confidence, affordability, alternatives, and tax impact. Additionally, he looks at the comparative value of owning vs. renting, and comes up with some compelling and surprising numbers (at least at the national-average level).
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The mortgage industry has been moving towards e-closings for quite a while now (as this blog has covered before), and there are great hopes that this will streamline and simplify the process. However, before we get all the way there, things may take a step backwards. New federal disclosure rules, though designed to simplify financial reporting, are likely to have a retarding effect on the speed of closings as we exit summer and head into the fall. The new changes go into effect October 3rd.
As this blog reported a few days ago, mortgage application rates were relatively flat in total, but underlying that data were some big swings that didn’t show up in the average. These changes are particularly surprising given the rate of home building starts and U.S. consumer confidence. The current thinking from the Mortgage Bankers Association ties those underlying moves along with the drop in long-term interest rates (the 30 year fixed rate was down to 4.11% last week) to the current angst in China.
There’s a curiosity happening in the current mortgage market. More people are buying more homes, and they’re buying them at higher prices. However, the total amount of outstanding mortgage debt amongst U.S. homeowners is actually flat, or even marginally down. Perhaps this is related to the experience we described the other day on this blog, of Millennials buying, but doing it in a financially responsible way, with a larger down payment (amongst other things).
Jeffrey Dorfman, a contributor to Forbes magazine, published an opinion piece yesterday afternoon title, “The Sneaky Path We Took To A Socialist Mortgage Market”. His essential premise is that when the Fannie and Freddie bailout occurred under the Bush administration, it was viewed as a first step towards fully privatizing the market; however, under the Obama administration, the conservatorship has been used both to drive social policy, and as a source of revenue for the federal government.
Despite their reputation as a generation of renters, the truth of the matter is that many Millennials are buying homes. And they’re not just buying, they’re buying smarter than a lot of people did in the past. To be sure, they seem to be taking longer than previous generations to buy their first home, but that’s not necessarily a bad thing — it often means they’re in a better financial position when they do. Here are 5 things we could all do well to understand before buying our first homes.
For professionals in the housing industry, from real-estate agents to loan officers, and everywhere in between, the more successful you become, the harder it can be to find time to take a vacation. But, you still really should. In April’s issue of Realtor Mag, Michelle Hoffman wrote a great article on how to plan (and take!) a vacation without your business suffering. If you haven’t gotten out of town yet this summer, then this article is a must-read. After all, what good is success if you can’t take any time off to enjoy it?
CNBC reported yesterday that mortgage application rates are basically unchanged at an increase of 0.1%, citing the Mortgage Bankers Association. However, hidden in that no-news number was a little bit of actual news, refinances were up substantially, with a week-over-week increase of 3%, contrasted with a 4% decline in purchase applications. Apparently the word on the financial street is that all of you buyers are waiting for news from the Fed, while the pros are trying to convince themselves that any Fed move has already been priced into the market.
A strong Employment Report, a real increase in hourly wages, and a low unemployment rate often collude to drive interest rates in a direction unfriendly to homebuyers or those with ARMs. The jobs report can have an immediate impact on your monthly mortgage payment. Financial markets prognosticators argue that economic forecasts are already “priced-in” to the markets well ahead of the actual report. In fact, the headline unemployment rate may not be as important as it once was, but today, with it at 5.3%, we should all get used to those higher monthly mortgage payments.
