- According to Realtor.com’s predictions for the national housing market in the new year, the market will see a rise in inventory to bring it in line with more normal levels. The beginning of 2013 was in many ways characterized as the “year of low inventory.”
- Realtor.com reports that 10 million homeowners have less than 20 percent equity in their homes, but since prices are expected to continue rising in 2014, it predicts that more homeowners will be lifted into positive territory.
- September marked the 36th straight month of declining foreclosure activity on an annual basis, according to Realtor.com; this movement is expected to continue in 2014.
Source: Wall Street Journal
The saving rate has been trending down among American consumers. Households saved just 4.2 percent of the after-tax income in November. The average was close to 6 percent from 2009 until 2011. Wealth gains from existing assets, such as rising home values, may explain why households are saving less.
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The Office of Financial Research at the U.S. Treasury, which was created to help the nation avoid the next financial crisis, is struggling to stay relevant after passage of the 2010 Dodd-Frank law. Other regulators are hesitant to share data and expertise with the office.
Source: LA Times
Fully appointed homes are the latest fad in the ultra-luxury market, as high-end buyers look to purchase an instant lifestyle with designer furnishings, art, knickknacks, and linens included with the home.
Source: Wall Street Journal
The incoming director of the Federal Housing Finance Agency, Rep. Mel Watt (D., N.C.), announced that he intends to delay an increase in mortgage fees charged by the housing-finance giants. These fee increases would likely be passed along to borrowers in the form of higher mortgage rates.
Freddie Mac’s total mortgage portfolio fell at an annual rate of 2 percent in November, as its mortgage portfolio continues to shrink. Refis are still making up 53 percent of the GSE’s total single-family mortgage portfolio, and single-family refinance loan purchase and guarantee volume hit $11 billion last month.
With rental housing turning into an industry, big landlords are benefiting from access to financing at a time when banks remain reluctant to lend to home buyers. Investors from multibillion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes in the past three years.
Source: New York Times
Experts predict that in 2014 mortgage rates will continue to increase, lenders will loosen up requirements
a little, adjustable-rate mortgages will make a comeback, and homeownership rates will flatten or fall.
Source: LA Times
In what amounts to a record rebound for a 12-month period, homeowners’ net equity holdings soared $2.2
trillion from the third quarter of 2012 to the third quarter of this year. This turnaround has provided some
much-needed relief to the personal finances of hundreds of thousands of owners, who for years have been
underwater on their mortgages. With increased equity, homeowners now have more options at their
Making sense of the story:
- With these improved conditions, homeowners are able to borrow against their equity to help pay
for college tuition, home improvements, and other items. They also may be able to refinance their
mortgages without having to use a government-aided program.
- Equity is typically improved in the following ways: Reduced debt from making payments to your
lender, improved market conditions that increase the value of your home, or upgrades that raise
the home’s sales value.
- If your house is worth $300,000 and you owe the bank $150,000 — whether from a single
mortgage or multiple loans — you have $150,000 in equity.
- CoreLogic estimates that 791,000 homes moved from negative to positive equity status during the
third quarter of this year alone, and more than 3 million have done so since the beginning of
- According to the CoreLogic’s study, 92 percent of all mortgaged homes in the country valued at
more than $200,000 have positive equity, while just 82 percent of homes valued at or below
$200,000 have positive equity.
- Values have roared back in the last two years in California, as now the state has just a 13 percent
negative equity rate. This is significantly lower than Ohio (18 percent), Michigan and Illinois
(both 17.7 percent), Rhode Island (16.6 percent) and Maryland (15.6 percent)