Freddie Still Bullish on New-Home Sales

Freddie Still Bullish on New-Home Sales
Freddie Mac   article by Daily Real Estate News | March 5, 2018

House 1032New-home sales may have started 2018 by softening, but that hasn’t made Freddie Mac economists lose their optimism that the sector will be key to driving the housing market in 2018. New-home sales plunged 7.8 percent in January month over month, but economists remain hopeful.

“While existing home sales may struggle to top their best-in-over-a-decade 2017 performance, new home sales should provide enough growth to push total home sales in the U.S. modestly higher in 2018,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Housing construction continues to lag demand by a wide margin, so we expect to see housing starts grind higher in 2018.”

Freddie Mac economists also predict that tax reform recently enacted will have a limited influence on national home prices. Certain markets with higher average incomes and those with higher property tax rates may see an impact on home prices ranging up to 2 percentage points, Freddie Mac predicts.

Instead, economists predict the highest impact on home prices will come from rising mortgage rates. Freddie Mac has revised its forecasts on mortgage rates since its January Outlook. It now predicts the 30-year fixed-rate mortgage to average 4.6 percent for 2018, up from its 4.5 percent forecast in January.

Home prices are expected to continue to increase too. The most recent release of the Freddie Mac House Price Index shows U.S. house prices increased 7.1 percent from December 2016 and December 2017.

“With construction ramping up slowly to meet demand, house prices should continue to increase, though the pace of growth may moderate as higher interest rates pinch affordability and the tax bill shifts the balance between buy and rent,” says Kiefer.

Freddie Mac estimates that about $14.8 billion in net home equity was cashed out during the fourth quarter for the refinance of conventional prime-credit mortgages (adjusted for inflation in 2017 dollars). That does represent a decrease from $19 billion the year prior.

Source: “Will the New Tax Bill Dampen the Industry?” Freddie Mac Outlook (Feb. 27, 2018) and “Freddie Mac Still Predicts New Home Sales to Drive 2018 Growth,” HousingWire (Feb. 28,2 018); REALTOR® Magazine Online, Daily Real Estate News 030518

Freddie Mac Warns Buyers of 3 Credit Scams

Freddie Mac Warns Buyers of 3 Credit Scams
Article by Daily Real Estate News | November 9, 2015

FreddieMac-LogoFreddie Mac issued a warning for home buyers about scams that try to entice them with promises of raising their credit score in exchange for money.

“Who doesn’t want the highest credit score possible to garner the most-favored terms?” Freddie Mac notes on its website.

“For many Americans with consumer credit negatively impacted by the housing crisis and fluctuating economy, it’s easy to be lured by the promise of a raised credit score. Schemes that falsely raise credit scores will land borrowers in scalding hot water — as well as cost you time and money combating both origination- and servicing-related fraud.”

Freddie Mac highlighted three types of common fraud schemes that include a promise to raise credit scores:

1. Disputing credit with credit bureaus.

A new program with FICO – called FICO Score Open Access for Credit & Financial Counseling – was created to help borrowers who have credit management problems by providing FICO Scores along with credit education material to help consumers understand credit scoring and learn more about financial management. However, some fraudsters are using the program in a scam. “(Scammers) may direct a borrower to contact credit repositories repeatedly to dispute previously defaulted debt,” Freddie Mac warns at its site. “The fraudster hopes the creditor will miss responding to one of the disputes and the defaulted debt will disappear temporarily, triggering a jump in the borrower’s credit score. The borrower may qualify for — and close on — a new mortgage before the credit report correctly reflects the defaulted debt and the borrower’s true credit score.”

2. Claiming identity theft falsely.

Some companies are encouraging buyers to falsely claim identity theft on their loan application in order to have debt removed from their credit report. “Some borrowers who falsely claimed identify theft have gone as far as providing affidavits of identity theft and police reports,” Freddie Mac writes. “Of course, lenders take these claims seriously and investigate. In some instances, they discover that the ‘police report’ is fake, never actually filed, or from a police department that doesn’t exist.”

3. Misusing credit protection numbers.

Using a credit privacy number — an alternative for a Social Security number that is most commonly used by celebrities and politicians to hide previous credit issues – can be a dangerous move. “Some consumers with poor credit acquire a CPN with the intent of creating a new, clean – and misleading – credit profile,” Freddie Mac notes. “CPNs were not created for this purpose, and mortgage loans originated using a CPN are ineligible for sale to Freddie Mac. Borrowers who use a CPN with the hope of leaving their bad credit histories in the rear view mirror are in for a rude awakening. As the Federal Trade Commission bluntly points out, ‘By using a stolen number as your own, the con artists will have involved you in identity theft,’ for which you may face legal trouble.”

Source: “Freddie Mac Issues Credit-Scam Warning to Potential Home Owners,” HousingWire (Nov. 6, 2015); REALTOR® Magazine Online, Daily Real Estate News 110915

Kenneth Bargers, REALTOR® | Pilkerton Realtors
(615) 512-9836 cellular (615) 371-2474 office kb@bargers-solutions.com email
www.bargers-solutions.com web kennethbargers.com blog
2 Cadillac Drive, Brentwood Tennessee address

Need a home? visit Search for Properties
Do you need marketing assistance for special projects or contract assignments? visit the Marketing page of Bargers Solutions

Home Buyers Don’t Need to Fear

Home Buyers Don’t Need to Fear
Article by Daily Real Estate News | November 2, 2015

HouseSaleKB110315Home shoppers no longer need to tremble all the way to the lenders’ office or have nightmares over being denied a home loan – all the troubles that have been prominently spotlighted by many news reports in recent years. A new report confirms: It’s getting easier to get a mortgage – and as a bonus, borrowing costs are still low.

Over the past year and a half, the federal government and enterprises have taken several steps to open up the credit box, and the efforts may finally be showing signs of paying off.

Credit scores on closed loans in September dropped to the lowest level since Ellie Mae began collecting the data in August 2011, according to Ellie Mae’s latest Origination Insight Report. The average FICO score for closed loans has fallen throughout the year – from 731 in January to 723 in September.

“Average credit scores declined to the lowest levels we’ve seen since 2011,” said Jonathan Corr, president and CEO of Ellie Mae. “We are also seeing rates fall while the time to close is also decreasing. It will be interesting to see if these trends continue as we begin to see impacts from TRID.”

Closing rates remained high with more than 66 percent of all loan applications closing for the third consecutive month. The closing rate on purchase loans rose to 71 percent. Also, the time to close on all loans dropped for the fourth consecutive month to 46 days.

And more good news for buyers: The 30-year fixed-rate mortgage continues to remain well-below 4 percent. Freddie Mac reported this week that average rates were 3.79 percent nationwide for the week ending Oct. 29, down from 3.98 percent a year ago. Fifteen-year fixed-rate mortgages averaged 2.98 percent, down from 3.13 percent averages a year ago.

Source:Is the Credit Box Finally Showing Signs of Opening Up? HousingWire (Oct. 21, 2015) and Freddie Mac; REALTOR® Magazine Online, Daily Real Estate News 110215

Kenneth Bargers, REALTOR® | Pilkerton Realtors
(615) 512-9836 cellular (615) 371-2474 office kb@bargers-solutions.com email
www.bargers-solutions.com web kennethbargers.com blog
2 Cadillac Drive, Brentwood Tennessee address

Need a home? visit Search for Properties
Do you need marketing assistance for special projects or contract assignments? visit the Marketing page of Bargers Solutions

Economist Calls for National Policy to Reinforce Home Ownership

Economist Calls for National Policy to Reinforce Home Ownership
Daily Real Estate News | September 15, 2014

In a recent column for HousingWire, Jonathan Smoke, chief economist at realtor.com®, breaks down the good and the bad of the housing recovery. He notes certain areas are close to a complete recovery, such as employment, home prices, distressed existing home sales, multifamily new construction, and rents. On the other hand, Smoke says the recovery is far from normal levels in terms of single-family new-home construction, mortgage applications and originations, household formation, and home ownership.

“The most negative sales signal comes from the new-home market, where new-home sales came in at an estimated annualized rate of 412,000 in July, the second lowest rate in the last 10 months,” Smoke notes. New-home permits and starts have failed to reach a pace that economists consider healthy for the sector, which is generally above one million.

Smoke points to another troubling area: Mortgage applications, which fell to the lowest level in 14 years at the beginning of September. Mortgage applications remain low despite the fact that rates are hovering near yearly lows.

“Mortgage applications are considered a leading indicator for future home sales, but I believe the decline is not so much a signal of another downturn in demand but rather an indication of a seriously hobbled housing credit market,” Smoke writes. He says many buyers are being sidelined due to a very “small credit box,” where only consumers with easily documented incomes, strong credit scores, and large down payments are able to qualify for financing on a home.

Another housing hurdle Smoke notes is the abnormal levels of supply and demand. “Affordable homes aimed at the first-time buyer segment are not being built,” he says. “Hedge funds bought up most of the affordable distress inventory over the last three years and have turned them into rentals. Home values have recovered the least in affordable price points, resulting in higher numbers of existing owners with negative equity and therefore unable to sell.”

Smoke says that the continuing declines in areas of home ownership will portend to bigger problems ahead for the overall economy.

“Without a strong housing policy, the mortgage market is incapable of adequately addressing risk-appropriate access to credit that supports home ownership,” Smoke writes. “Fundamentally, we need new directions for national housing policy to address the broken credit market, find solutions for affordability housing across all income levels, reinforce home ownership as the cornerstone of financial security, and fulfill the housing needs of older households.”

Source: “Economist: Here’s Why Mortgage Supply and Demand Isn’t Normal,” HousingWire (Sept. 12, 2014); REALTOR® Magazine Online, Daily Real Estate Magazine 091514

KENNETH BARGERS, REALTOR® | Bargers Solutions real estate : marketing
a proud member of Pilkerton Realtors

(615) 512-9836 cellular | (615) 371-2474 office
kb@bargers-solutions.com email | www.bargers-solutions.com web
kennethbargers.com blog | www.pilkertonrealtors.com web

2 Cadillac Drive, Brentwood TN 37027 address

Subscribe BLOG: EMAIL ME your name/email address to receive Kenneth Bargers Blog
Subscribe NEWSLETTER: EMAIL ME your name/email address to receive In The News

let’s connect…

pinterest-logoyelp-logoabout-me-logogoogle-plus-logowordpress-logotwitter-logolinkedin-logofacebook-logo

 

 

Poll: Renters Want to Buy

Article by: Daily Real Estate News (March 28, 2012)

Poll: Renters Want to Buy

Americans still believe in home ownership, but they’re spooked about the mortgage process, a survey finds.

Two-thirds of renters — across educational and demographic levels — say they want to purchase a home in the future, according to a quarterly national housing survey of 3,000 Americans conducted by Fannie Mae.

“In spite of the impact of the housing crisis on home values and home ownership rates across the country, Americans by and large still hope to become home owners,” says Doug Duncan, Fannie Mae’s chief economist. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

However, Duncan says many renters are expressing caution about the homebuying process when it comes to qualifying for a mortgage and navigating the mortgage process.

“If potential home owners avoid the process because they believe it to be too complex, we will likely see a continued impact on home ownership rates,” Duncan says.

Source: “Fannie Mae Finds Americans Remain Committed to Homeownership,” HousingWire (March 27, 2012); Daily Real Estate News (March 28, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located In Nashville, Tennessee

Mortgage Applications Soar 7.5% on Low Rates…

Article by: HousingWire

Mortgage Applications Soar 7.5% on Low Rates

Record low mortgage rates are creating more demand for mortgage applications. The Mortgage Bankers Association reports in its most recent weekly mortgage market survey that loan application volume increased 7.5 percent on a seasonally adjusted basis compared to one week earlier.

Refinance activity was due to most of that increase last week. Applications for refinancings increased 9.4 percent compared to a week earlier, while applications for purchases only ticked up slightly at 0.1 percent.

The 30-year fixed-rate mortgage on conforming loans reached its lowest rate in the survey’s history last week — falling from 4.09 percent to 4.05 percent. Freddie Mac was reporting even lower for the week ending Feb. 2, with 30-year rates averaging 3.87 percent nationwide.

Source: “Mortgage Applications Surge on Low Interest Rates,” HousingWire (Feb. 8, 2012); Daily Real Estate News (February 8, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Mortgage Applications Soar 4.5%

Mortgage applications for purchase — a gauge of future home buying — increased 8.1 percent last week, the Mortgage Bankers Association reports. The purchase index on an unadjusted basis now stands at 41.9 percent higher than last year, signaling more people taking out loans to buy homes.

More home owners are also taking advantage of low interest rates. Refinance activity last week also increased, inching up 3.3 percent from a week earlier. Overall, mortgage applications were up 4.5 percent last week.

For the fifth consecutive week, 30-year fixed-rate mortgages have averaged at historical lows below 4 percent, Freddie Mac reported last week. For the week ending Jan. 5, 30-year fixed-rate mortgages averaged 3.91 percent, with an average 0.8 point, matching the previous record low set a few weeks ago.

Source: “Mortgage Applications Rise 4.5%,” HousingWire (Jan. 11, 2012); Daily Real Estate News; Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee