Posts Tagged ‘tight credit’

Millennials: Content to Rent?

June 3rd, 2014 Comments off

U. S. Census Bureau statistics report only 36% of Americans under the age of 35 own a home, a drop from 42 percent in 2007, and the lowest level since 1982 when the Bureau began documenting the age of homebuyers, as has learned. While 90 percent of Millennials would prefer owning a home to renting one, student debt, access to financing and stiff competition due to low inventory make it difficult, according to CNNMoney. Even though home prices have fallen about 20 percent due to the downturn, the number of homes on the market has also dropped, and younger buyers, who have not reached their higher earning years, can not always compete with older buyers who have cash. However, Steve Deggendorf, a senior director for Fannie Mae, says, “Mortgage lending is getting a little less tight, with lenders approving buyers with a little lower credit score and who have less of a down payment.” ##

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Sales of Existing Homes Fall

December 20th, 2013 Comments off

Marking the third consecutive month of falling sales, the National Association of Realtors (NAR) reports sales of previously-owned homes edged down 1.2 percent to a seasonally-adjusted annual rate of 4.9 million homes sold. The combination of rising mortgage rates, low inventory of available homes and tight credit have contributed to slowing sales, says NAR Chief Economist Lawrence Yun. “There is a pent-up demand, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction,” he notes. However, according to CNNMoney, the recovery in the housing market continues to be a bright light in the economic upturn, even though home building remains 25 percent below long-term averages. MHProNews has learned the median price of homes sold in November rose 7.3 percent from a year earlier to $244,500, although it dropped slightly from October, 2013.

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Mood Continues to Brighten for Home Builders

August 15th, 2013 Comments off

Builder confidence for new, single-family homes rose three points to 59, according to the National Association of Home Builders (NAHB) Wells Fargo Housing Market Index (HMI), bringing the index to its highest mark in almost eight years. Any number over 50 is rated as “good”, MHProNews has learned. The index measures current sales, traffic of prospective customers and sales expectations for the next six months. Says NAHB Chief Economist David Crowe, “Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets. However, this positive momentum is being slowed by the ongoing headwinds of tight credit and low supplies of finished lots and labor.” Regionally, the Midwest gained six points to 60, the West also moved up six points, to 57, while the South notched a four-point gain and the Northeast remained steady at 39.

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Housing Market Continues to Expand

August 14th, 2013 Comments off

The momentum of the housing recovery, despite tight credit, rising prices and low inventory, is in its early stages of recovery, and panelists at the Bipartisan Policy Center’s conference say the Federal Reserve’s bond-buying program should continue. “There is a cyclical and structural nature to the problem,” reports Paul Weech of the Housing Partnership Network. “We haven’t solved for the underlying structural problem and if we revert back to the norm, we still have millions of homes trying to get back in the full market recovery.” The fastest growing age group, the baby boomers, could have the largest affect on the housing market. Wanting to continue to own a home, they may sell their current home and downgrade their living quarters to allow more time and resources for travel, as HousingWire tells MHProNews.

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New Home Construction Continues to Stimulate Economy

July 4th, 2013 Comments off

According to the Commerce Department, of the 45,000 new houses sold in May, construction has not begun on 16,000, nearly 36 percent, up from 26 percent a year ago, and over two times the 14 percent rate from 2008 during the recession. Total new home sales in May rose to their fastest annualized pace since 2008, and permits for building new homes increased to a five-year high. As mortgage rates increase and prices continue to rise, would-be buyers will want to lock-in interest rates, and increasing values make homes a more attractive asset to lend against. However, as National Association of Home Builders Chief Economist David Crowe points out, builders still feel stymied by tight credit as well as shortages in available lots, labor and materials. He estimates starts on single-family homes will increase 150,000 over last year, as nationalmortgagenews informs MHProNews. These figures indicate strength in the home building market which translates into stimulus in the overall economy: Each new home creates three jobs, and triggers purchases of building materials as well as appliances and furniture.

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Shortage of Skilled Tradespeople may Slow Recovery

June 24th, 2013 Comments off

A shortage of skilled trades workers combined with tight credit and lack of available finished lots may slow the housing market rebound, according to Fitch Ratings, although the only likely downside is a longer construction timeline. Prior to the Great Recession, over eight million construction workers were employed, but according to the Bureau of Labor Statistics, as of May 2013 that number stood at 5.8 million. Many tradespeople left the field during the downturn and have not returned, feeding into the shortage. Currently, as HousingWire tells MHProNews, the only areas experiencing shortages are metro markets recovering faster than the national average, such as those in Fla., Calif., Nev., and Ariz.

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Extending Loans to Boomers

May 27th, 2013 Comments off

The washingtonpost informs MHProNews seniors whose income does not qualify them for a mortgage or refinancing a home under current tight credit, may now have more income for purposes of underwriting: Due to a rule change by the top home lenders, borrowers may now use retirement assets to improve their debt ratio. Under mortgage giant Freddie Mac’s formula, the total amount of retirement assets is discounted by 70 percent to allow for market swings, then that number is multiplied by 360 (30 years X 12 months) to arrive at 30 years worth of monthly payments. This monthly number can then be considered income towards the house without even tapping the assets, as long as they are accessible. The revision is targeted at the baby-boomer generation entering retirement for the next 18 years at the rate of 8-10,000 a day.

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Total Home Sales Rise in April

May 23rd, 2013 Comments off

MHProNews has learned from CNNMoney the National Association of Realtors (NAR) released figures today that show total home sales rose 0.6 percent in April to just under an annual pace of five million, up nearly ten percent from a year ago. Lawrence Yun. Chief economist for NAR, noting consumer traffic is up 31 percent over a year ago, resulting in greater demand than actual sales, says tight credit and low inventory has prevented sales from being well over five million. The median price of a home sold in April rose four percent over March to $242,600, and nine percent over a year ago. Inventory on the market represented a 5.2 month supply at the current pace of sales, up over March but below the 6.6 month supply a year ago. Distressed sales represent 18 percent of all home sales, a drop from 28 percent a year ago. The pace of new home sales has been increasing every month for almost two years, and is at the strongest rate since Nov. 2009 when sales were spurred by a home-buyers tax credit.

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Builders’ Confidence Wanes

April 18th, 2013 Comments off

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) survey reports builder confidence dropped two points to a composite score of 42 in March as concerns over rising material costs, tight credit, shortages of skilled labor and available lots nag at the market for newly built, single-family homes. As MHProNews knows the survey is based on builders’ perceptions of current sales, sales expectations, and traffic of prospective buyers for the next six months, and has been used by the NAHB for 25 years. Any score above 50 indicates builders think conditions are good, whereas any number below 50 is interpreted as meaning conditions are poor. Regionally, based on a three-month moving average of HMI scores, the Northeast remained at 38, the Midwest lost two points to 45, the South suffered a four-point decline to 42, and the West lost three points to settle at 55.

(Photo credit: Sue Orgocki/Associated Press)

Bi-partisan Measure Introduced to Ease Tight Credit

March 20th, 2013 Comments off

The National Association of Home Builders (NAHB) reports bipartisan legislation has been introduced in the House of Representatives to ease credit for the nation’s home builders. Sponsored by Reps. Carolyn McCarthy (D-NY) and Gary Miller (R-CA), H. R. 1255, the Home Construction Lending Regulatory Improvement Act, would address regulatory obstacles to builders’ ability to obtain construction loans. Jobs and taxes are being lost in the wake of tight credit resulting from the housing downturn. The construction of 100 new homes creates over 100 full-time jobs and generates $8.9 million in local, state, and federal revenues. As MHProNews reported April 10, 2012, Rep. Miller co-sponsored the Preserving Access to Manufactured Housing Act that was intended to rescind provisions of the Safe Act and Dodd-Frank that hamper financing for would-be manufactured home buyers.

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