It's Becoming Easier to Get a Mortgage

DAILY REAL ESTATE NEWS | TUESDAY, MAY 19, 2015

Lenders are showing signs of loosening up when it comes to home buyers seeking a mortgage. The Mortgage Bankers Association's Mortgage Credit Availability Index ticked up slight in April, following an increase the previous month too. Increases in the index are indicative of an overall loosening of credit.

Other government offerings also helped to ease credit even more in the latest report, reflecting April data, MBA notes.MBA's index shows that mortgage credit availability has increased consistently over the last several months, coinciding with recent announcements from the federal government of programs that have been designed to open the credit box. Fannie Mae and Freddie Mac's move to back 3 percent down payment loans as well as the Federal Housing Administration’s action to reduce its mortgage insurance premiums have helped ease credit, MBA Chief Mike Fratantoni says.

"Mortgage credit availability increased on net in April," Fratantoni says. "The increase was driven by new offerings of FHA's 203K home improvement program, new VA offerings, and new jumbo products. The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings."

REALTORS® surveyed have pinpointed tight credit conditions, significant lender overlays, and loan processing delay as a major hurdle facing their buyers the past few years, but REALTORS® are also reporting gradual improvements, according to the latest REALTORS® Confidence Index, a survey of real estate professionals.

REALTORS® point to the trend of lenders showing more willingness to accept slightly lower FICO scores – moving from the high range of 740-plus to now the mid-range of 620-740. Also, REALTORS® note an increase in the number of their clients securing a loan while making zero to 6 percent down payments. FHA's reduction in the mortgage insurance premium and the GSE-backed 3 percent down payment loans are helping buyers to come with less money to the table.

But while mortgage credit availability is showing definite signs of easing, credit continues to still be far less available than it was during the housing boom days, according to MBA.

Contact Stacey Guzanick 262.490.3696,   RE/MAX Realty Center  Guzanick@gmail.com,  if you have questions about buying a house or selling one.

I can  guide you  toward your next home.

www.HomesWithStacey.com

See you at the closing!

4 Indicators Show Rising of Millennial Buyers

The millennial generation is inching their way into home ownership. These millennials, born from the early 1980s through the late 1990s, have largely delayed their entrance into home ownership, saddled by debt and high unemployment in the aftermath of the recession.

Here are some indicators that are making economists the most optimistic:But economists are getting optimistic that the millennials are emerging into home ownership. Jonathan Smoke, realtor.com®’s chief economist, said earlier this year that 2015 will mark an opportunity for younger buyers to enter the housing market, which will fuel a stronger housing recovery.

1. Rising employment: The unemployment rate between 2007 and 2010 among millennials surged to 14 percent (the population as a whole was 9.6 percent), according to Alan MacEachin, the corporate economist for the Navy Federal Credit Union. But as of January, the millennial unemployment rate had dropped to 9.3 percent. The improvement in employment for this generation will bring rising incomes that may push more toward home ownership.
2. Moving out: More millennials are moving out of their parents’ homes and forming their own households. New household formation is back up to pre-recession levels. Household formation rates generally take three years to recover after a major drop – like seen in the recession, according to researchers at the University of Southern California Lusk Center for Real Estate in Los Angeles.
3. Low mortgage rates, greater credit availability: Millennials have said that one of the biggest challenges to home ownership is saving for a down payment. Mortgage rates are still near historical lows, which is opening the doors for some. Also, several government programs are helping to increase mortgage availability for first-time home buyers. For example, Fannie Mae and Freddie Mac are now requiring as little as 3 percent down payments for new conforming loans. The Federal Housing Administration has lowered its insurance premiums, which has helped make the loans more affordable to first-time buyers.
4. They desire to be home owners: Young adults say they want to buy. Thirty-two percent of millennials recently surveyed said they were saving for a house, according to a Bank of America/USA Today survey conducted in November. The real estate brokerage Redfin recently found in its own survey that 38 percent of millennials said they’d be willing to delay their wedding or honeymoon in order to save for a down payment on a home. What’s more, a new Goldman Sachs’ infographic shows that 93 percent of millennials say they want to own a home in the future.

Looking to buy or sell?  Let me know how I can help.

 

Contact your local RE/MAX  Realty Center Agent Stacey Guzanick 262.490.3696, Guzanick@gmail.com,  if you have questions about buying a house or selling one. I can  guide you  toward your next home.

www.HomesWithStacey.com

See you at the closing!

Source: "Millennials on the Home Ownership Path," The New York Times (March 6, 2015)