Tuesday, November 16, 2010
Mortgage Rates Continue Record Slide
Reprinted from REALTOR® Magazine, November 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.
Jumbo Loans Come Out of Hiding
Reprinted from REALTOR® Magazine, November 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.
Jumbo mortgages are more readily available than they have been for the last two years. Both small and regional banks are beginning to offer them again.
Jumbo mortgages are more readily available than they have been for the last two years. Both small and regional banks are beginning to offer them again.
In the second quarter of this year, jumbo lending rose 30 percent compared to the first quarter, according to Inside Mortgage Finance Publication, which provides industry data.
J.P. Morgan Chase home lending unit has increased jumbo lending by 146 percent in the first six months of this year. Wells Fargo’s jumbo lending is up 47.5 percent in the same time period.
Securing these loans continues to be difficult. Borrowers need excellent credit scores, verification of income and a down payment of somewhere between 20 percent and 40 percent. Some borrowers report that approval time can be faster at smaller banks.
Source: The Wall Street Journal, M.P. McQueen (11/06/2010)
Home Sales Could Enter 'Virtuous Cycle'
Reprinted from REALTOR® Magazine, November 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.
Consumer confidence and business spending are key to whether the U.S. housing market will move into a virtuous or a vicious cycle in 2011, NAR Chief Economist Lawrence Yun told a packed audience at the Residential Economic Outlook Forum Friday in New Orleans.After the downturn, the housing market has clawed its way back to a point of near stability, Yun said, with the pace of new foreclosures easing, sales moving toward historically normal levels and prices on a national basis gaining modestly.
At the same time, affordability remains strong. He said all of the price excesses from the housing bubble have been squeezed out. In San Diego, for example, buyers today would pay $1,564 a month in mortgage payments for a house that at the height of the boom would have cost
them $2,833 a month.
The broader economy is also showing positive signs, with businesses enjoying strong profits, sitting on huge cash reserves, and even adding jobs. Yun predicts this positive trend to continue into 2011, with existing home sales reaching 5.5 million units, prices rising a modest 1 percent, and the U.S. gross domestic product increasing to about 2.5 percent.
“We are entering a virtuous cycle,” he said. But for the positive trend to continue, he added, businesses will have to start spending some of their cash to fuel job growth at a far greater pace than they’re doing now. Currently, businesses are adding jobs at a pace of about 100,000 a month. That needs to grow to about 400,000 a month for unemployment
to start shrinking.
The scenario will be far more negative if businesses continue to sit on their cash. In that case, sales will fall, inventories will rise, the high rate of foreclosures will resume, and the cost to the federal government of bailing out Fannie Mae and Freddie Mac will surge.
Federal Reserve Governor Thomas Koenig, who shared the data with Yun, said the Fed’s continued effort to spur the economy, most recently through a $600 billion bond buying program, is understandable given concerns over the slow pace of growth. But the continued subsidization of the market could unleash inflationary forces.
Yun said he sees possible evidence of inflation building, but it’s not visible now because the housing-cost portion of inflation measurements is holding down prices.
—Rob Freedman, REALTOR® Magazine
7 Trends That Will Drive the Future of Housing
Reprinted from REALTOR® Magazine, November 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.
Hanley-Wood's ProSalesOnline.com identifies seven trends that the magazine’s editors believe will have the biggest impact on housing in 2011.
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
Source: ProSalesOnline.com (October 2010)
Thursday, November 11, 2010
Veterans Day 2010
Veterans Day is celebrated on November 11th, the anniversary of the signing of the Armistice that finished World War I. The main hostilities of WWI were properly finished at the 11th hour of the 11th day of the 11th month of 1918, with Germany signing the Armistice.
With heartfelt thanks to the men and women who have served in our armed forces, protecting our nation, and preserving the freedoms we cherish.
Tuesday, November 9, 2010
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