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First-time homebuyers whose home loans are guaranteed by the Federal Housing Administration would benefit from an Obama administration move to lower mortgage insurance premiums.
Under the plan, the housing administration will reduce annual mortgage insurance premiums by 0.5 percentage points, to 0.85 percent. What does this new reduction means? it means new home buyers would pay $900 less a year than they would without the change.
Mortgage rates for 30-year U.S. loans fell for a fourth
week, reducing borrowing costs to the lowest level in a year and a half.
The average rate for a 30-year fixed mortgage was 3.89
percent, down from 3.97 percent last week, Freddie Mac said in a statement
today. That was the lowest since May 2013. The average 15-year rate dropped to
3.10 percent from 3.17 percent, the McLean, Virginia-based mortgage-finance
Lower borrowing costs are helping to make housing purchases
more affordable as values rise across much of the country. Home prices rose 6.1
percent in October, the 32nd straight year-over-year increase, CoreLogic Inc.
said this week.
“Lower mortgage rates would be a net positive for the U.S.
housing market and the economic recovery more generally,” Millan Mulraine,
deputy head of U.S. research and strategy at TD Securities USA LLC in New York,
said in a phone interview. “It improves affordability and provides a greater
incentive for people on the sidelines, waiting for rates to fall.”
Starting on Dec. 13, Fannie Mae will allow the lower down
payments for first-time home buyers and permit refinancing borrowers to reduce
equity to 3 percent to cover closing costs, the company said today in a
statement. Freddie Mac will begin a program in March giving breaks to
lower-income buyers and first-time borrowers who get housing counseling.
“These underwriting guidelines provide a responsible
approach to improving access to credit while ensuring safe and sound lending
practices,” Melvin L. Watt, who oversees the two U.S.-owned companies as head
of the Federal Housing Finance Agency, said in a
Watt encouraged the move as part of a broader effort to spur
lending to minorities, young adults and first-time buyers. Lenders have
tightened standards after paying tens of billions of dollars to settle lawsuits
over mortgage-underwriting flaws.
“It’s an example of the government taking a step toward
expanding the credit box,” said Isaac Boltansky, an analyst at Compass Point
Research & Trading LLC in Washington.
Diana Walton Properties
Champion Real Estate Group
First Time Home Buyer & VA Specialist
Payment ProgramsWhat You Need
When: Saturday, August 23rd
Where: Kendall Neighborhood Library
609 N Eldridge
Pkwy, Houston, TX 77077
Time: 10:30 am.- Noon
Step by step home
Types of down
How to qualify
Which Program is
Right for You?
What you need to
know about Escrow & closing cost
Move into your
new home before the end of the year
When preparing to go on a listing appointment do you take
the time to screen the seller to make sure he/she is really serious about
selling their home? Yesterday I went on what I though was a listing appointment.
It turned out to be anything but. I called the seller from my expired list and
after briefly discussing my reason for calling, I ask for the appointment and
I thought I had taken all the necessary steps by providing
the seller with a prelisting package before our schedule appointment. I went
over my pricing strategy to make sure the home would be priced fair and
effective.I took the necessary steps to
preview other homes within the area and within his price range.
In addition, I had all the necessary documents, including tax
records, past sales, and comps, as part of my presentation on my Ipad. I also
had a fully prepared market analysis to give to the seller. I arrived eight minutes
early, ready to sell myself and my services. I knocked on the door, the owner
came out, I introduce myself and was invited in. It was a stunning home, one of
which the owner, it turned out had no intension of allowing anyone to sell.
The owner was very upset with the first agent that listed
his home because it did not sell. I was
not aware of this. For the six months the home was on the market, he said only
two people came to view the home. The comps I did show the home was overpriced
He wanted to sell the house himself, and decided that he would
interview as many agents as possible within a given time, to collect data on
how each would market the home, then used what he thought was the best
marketing ideas to market and sell the home himself. Of course he did not share
this information with me voluntarily.
Something did not seem right based on the type of questions
he was asking. I asked him if he had met with any other agents, he said yes, 15
of them.I then ask what was it that he was
looking for in an agent that none of the 15 had, that’s when he told me what he
was doing.I smiled, thanked him for his
time, retrieved all my data, including the prelisting packet and walked out.
Were there any way I could have avoided being number 16?Once I got home I spend the rest of the
evening making modification to my phone screening process. While I may not be
able to eliminate all, I am pretty sure I can make it less likely to go on
another appointment like that again.
The average annual increase of 3.9% is outpacing inflation
and income growth. Will renters be priced out of many cities?It's no secret renters have been feeling the
crunch of a competitive rental market for a few years now. If it seems like
rent increases have been unusually high this year, though, that's because they
In June, the real-estate data firm Trulia analyzed the rent
prices in 25 of the largest rental markets in the United States. What Trulia
found is an average annual increase of 3.9%. This is a huge increase when
compared with inflation. And, generally speaking, incomes are not keeping pace
with rent increases, putting renters in an even tighter position.
According to Trulia, the five least-affordable rental
markets in the country are New York City, Miami, Los Angeles, San Francisco and
Boston. In these cities, rents often make up half or more of a renter's average
The cities that experienced the highest rent hikes for
2012-13 were Houston, Miami, Boston, Tampa-St. Petersburg, Fla., and San Diego.
Some cities, such as Houston, already had lower rents than the national average
for major cities, whereas in others the increases came on top of already
higher-than-average rates. For instance, Boston — already one of the most
expensive cities in the country — saw a 5.5% increase in rents this year.
It would seem the recent rent increases are an enduring
ripple effect of the foreclosure epidemic that catalyzed the Great Recession,
flooding the market with prospective renters. At the same time, the gradual
economic recovery has resulted in rising employment rates. With a shortage of
available rentals, landlords are in the enviable position of being able to name
their price and have their pick among tenants willing to pay it.
In their most recent survey, the apartment-research firm
RealFacts found not only that rents are up nationwide in 39 of the 41 markets
analyzed but that these increases also occurred even in cities that are
building rental units at a precipitous pace.
In particular, Seattle experienced a large rent increase
this past year despite a projection that 12,000 rental units will be added to
the market by the end of the year. Portland, which also experienced an
impressive increase in average annual rents, did so even as 4,000 units were
added in the city. In fact, Portland saw its occupancy rate jump a full percent
this past year. San Francisco, which has also added thousands of units
recently, saw an occupancy rate increase of 1.2%.
"So far, it appears aggressive rent hikes and new
construction hasn't had a negative impact on occupancy rates," according
to the RealFacts report.
Though there seem to be no signs of rent increases slowing
down, the report warned that the market will soon become oversupplied: The
increased availability of new rentals, coupled with the rise in interest rates,
will eventually lead to a downturn in the rental market.
Additionally, more people will turn to buying as an
affordable alternative. That's because even though home prices rose 7% in the
past year, outpacing rent increases, the gap between buying and renting is
still quite large.
Forbes reported this year that buying is much more
affordable than renting in all of the 100 largest metro areas in the nation.
According to mortgage lender Freddie Mac, buying is an average of 41% cheaper
than renting nationwide.
But buying is only slightly cheaper in some cities and
drastically cheaper in others. For example, buying is 19% cheaper than renting
in San Francisco but 70% cheaper in Detroit. In New York, buying has remained
26% cheaper for the past couple of years.
Despite the regional fluctuations in price, though, it looks
as though buying will be the cheaper option for some time to come no matter
where you live. That is because 30-year fixed rates on home purchases would
need to reach 10.5% to become the more expensive option. The rate is at 4.4%,
as of the week of Aug. 14.
RealFacts predicts that in 2014 or 2015, rent rates will
begin to stall as the rate of homeowners rise and renters decline.
Until then, renters will have to grit their teeth and wait
it out — or start shopping around for their own home.