Did Mortgages Just Get Easier to Obtain?

Fannie Mae and Freddie Mac's new lending guidelines went into effect Monday, which are expected to help loosen up the tight credit standards that home buyers and refinancers have faced in recent years.

The guidelines clarify when lenders will be penalized for making mistakes on mortgages they sell to the mortgage financing giants. Following the financial crisis, Fannie and Freddie forced banks to repurchase tens of billions of dollars in loans that they say did not meet their standards. It caused many lenders to tighten their lending, except to the most creditworthy borrowers with the highest credit scores. Lenders have blamed the lack of clarity from Fannie and Freddie on the tight credit conditions that have made it difficult for home buyers to qualify for a mortgage.

Fannie and Freddie's latest lender guidance is "going to be big, but it's going to take time" to see the full impact of the changes, Laurie Goodman, director of the Housing Finance Policy Center at the Urban Institute, told The Wall Street Journal. Earlier this year, the Urban Institute estimated that up to 1.2 million additional home loans would be made annually if mortgage availability was at "normal" levels. 

Lending giants such as Wells Fargo and SunTrust Banks Inc. have said borrowers will likely see faster turnaround times on mortgage applications in the next few weeks. Some lenders also say they expect to broaden the range of borrowers they'll accept by reducing credit-score requirements and making exceptions for consumers who faced a one-time financial event, such as a job loss or large medical bill.

"It's providing greater certainty for all the parties so that you can lend more confidently and make the whole judgment process much easier and more clear cut," Mike Heid, president of Wells Fargo Home Mortgage, told the Journal.

However, some banks still are treading cautiously and aren't ready to relax their underwriting rules quite yet.

"You won't see us start to expand our criteria much past what we've done," says Brian Moynihan, Bank of America chief executive.

U.S. Bank CEO Richard Davis says his bank also isn't prepared to make any changes yet.

"Unless we are convinced that the rules are going to be permanent and there is not going to be a look back or a reach back in future times … we are simply going to stay on the sidelines in the concerns of both compliance risks and other uncertainties," Davis told the Journal.

SOURCE: DAILY REAL ESTATE NEWS

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

VIP BUYER'S LIST - $5,000 Cash Savings Guarantee:  www.ShowMeHomes.info

www.cbprosperity.ca

www.facebook.com/JamesYKuang

Sellers Settle Into 'Waiting Game'

Sellers are starting to get the message that the market is no longer tilting in their favor.

The number of Americans who say now is a good time to sell plunged 17 percentage points from the previous quarter, according to the latest Real-Time Seller Survey, which polls 295 current and potential sellers in 30 of the country's large real estate markets.

Some would-be sellers say they're holding out for higher prices before selling; 59% of respondents say they want to wait for the maximum price on their home. 

"Sellers hoping for higher prices will face reality soon, as all signs point to lower price growth and less competition among buyers in coming months," says Chief Economist Nela Richardson. "Buyer demand is there, but only at the right price."

Some potential sellers — 36% — are waiting to list their homes because of low inventories, believing that the small pool of homes for sale reflects a sluggish market, Richardson says.

"The lack of homes for sale creates a vortex of short supply that can only be relieved when potential sellers find homes they want to buy and then list their own homes," according to research. Several markets are reporting that inventory levels are starting to climb over last year's numbers, but supplies remain tight in many areas.

For the sellers who are willing to list, they're coming to terms with the fact that they may not be able to price their home as aggressively as they thought. The double-digit home-price gains of last year have mostly vanished across the country.

"While some sellers are disappointed that they can no longer expect double-digit price gains, increasing inventory and stabilizing prices provide relief for everyone — buyers and sellers — that we are moving toward a much more balanced market," says Shawn Flynn, a real estate professional in Boston.

SOURCE:  Daily Real Estate News


If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

$5,000 Cash Savings Guarantee for BUYERS:  www.ShowMeHomes.info

www.cbprosperity.ca

www.facebook.com/JamesYKuang

Buyers Grow Resistant to Higher Home Prices

Buyers are pushing back against higher home prices, according to the latest Credit Suisse monthly survey of real estate professionals. Overall, agents in 37 of the 40 markets surveyed in September reported lower-than-expected buyer traffic, up from 31 markets in August.

“Many buyers have shifted from a negotiation mindset toward a willingness to sit on the sidelines and wait for lower prices,” according to the survey.  “The resistance of buyers to higher home prices was broad-based with comments from agents suggesting that affordability and the future trajectory of home prices was a particularly large part of conversations with buyers.”

The median price of existing-homes has risen by 25 percent in the past five years to $219,800 in August. The median price of new homes has increased even more, up 33 percent, to $275,600 during that time period.

Real estate professionals in several of the largest housing markets are complaining about lackluster growth heading into the fall. For example, the Credit Suisse report showed that in Phoenix, Ariz., many real estate professionals report that housing demand is being challenged by sluggish job growth. They say many sellers have over-priced their homes and are unwilling to negotiate. In Atlanta, real estate professionals blamed dropping buyer traffic on the lack of quality inventory.

“To purchase a house you have to have confidence in the future and the buyers are very uncertain about the future,” the Atlanta agents surveyed said in the report.

Even in Dallas, where the housing market is strong and more buyer traffic has been reported since the spring, real estate professionals say low inventories are hampering growth. Dallas real estate professionals are “relying on new builds much of the time but even that inventory remains low,” according to the survey.

In Houston, another strong market, agents reported that relocation activity has slowed in September, but the market there is returning to normal levels after more than three years of price increases and high home sales.

SOURCE:  Daily Real Estate News


If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

Get a FREE over the net home evaluation:  www.EasyHomePricing.com

www.cbprosperity.ca

www.facebook.com/JamesYKuang

More Singles Than Ever: How It Affects Real Estate

In the age of "selfies," the majority of adults are sticking to themselves. Single Americans now make up more than half of the adult population, the first time the number of singles has passed the 50 percent mark since the government began tracking such data in 1976.

About 124.6 million Americans indicated they were single in August; 50.2 percent were age 16 or older, according to new data from the Bureau of Labor Statistics. The percentage has been gradually trending upward since the beginning of 2013.

The rise of single households has "implications for our economy, society, and politics," writes Edward Yardeni, president of Yardeni Research Inc., in a report called "Selfies." He called the proportion of singles today "remarkable."

What are the implications for real estate? Singles, particularly younger professionals, are more likely to rent than own a home. They are less likely to have children, and the growth in single households likely will exaggerate income inequality, Yardeni notes.

"While they have less household earnings than married people, they also have fewer expenses, especially if there are no children in their households," Yardeni writes in his report.

The number of never-married adult Americans has been on the rise, too, increasing to 30.4 percent from 22.1 percent in 1976. The number of divorced, separated, or widowed adults also has risen up to 19.8 percent from 15.3 percent.

Some real estate analysts are expecting an increase in singles heading into home ownership in the coming years. For example, single women make up the second largest segment of home purchases, with one out of every five homes purchased by a single woman, according to National Association of REALTORS® data. More than 25 million single women over the age of 45 — who may be either divorced, widowed, or never married — are also making up a growing number of home owners, real estate professionals report.

Some builders are even catering to this growing segment, reportedly adding two master bedrooms to appeal to the 40 percent of single women who choose to have non-romantic roommates, according to AARP surveys.

SOURCE:  Daily Real Estate News


If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email - james.kuang@coldwellbanker.com

Get a FREE over the net home evaluation:  www.EasyHomePricing.com

www.cbprosperity.ca

www.facebook.com/JamesYKuang

Housing Slowdown Could Be Good for Buyers

The growing signs of a slowdown in the housing market might be good news for home buyers. Slowing home prices—after the double-digit increases last year—mixed with still-low interest rates are making homes more affordable. Also, the supply of homes for sale today represents 5.8 months of demand, the most since October 2011, giving buyers more choices than they have had in the recent past, as inventory shortages have plagued many markets.

"From an individual perspective, the best investment you can make is to buy a primary residence," John Paulson, who runs the hedge fund Paulson & Co., said in a statement recently. "Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent." 

But despite low interest rates and slowing home prices, first-time home buyers have mostly been absent from the housing recovery so far. They made up 28 percent of existing-home sales in June, but typically take up 40 percent of the market, according to the National Association of REALTORS®.

"The first-time home buyer is just not the factor that it once was," says Peter Boockvar, chief market analyst at the Lindsey Group, a D.C.-based economic advisory firm. "Without the first-time home buyer, and now with the reduction in the pace of investor purchases, the recovery will remain lumpy." 

While first-time home buyers' numbers remain low and home prices and mortgage applications have fallen in recent months, not all analysts are predicting that housing prices will fall. Barclays analysts, for example, expect housing prices to rise about 7 percent this year.


Last year's "double-digit home price gains were unsustainable" because income growth has been about 2 percent, says Boockvar. "We should be cheering slower home price gains, not fearing them, because it is the main factor that will entice the newly created household to consider buying instead of renting."


SOURCE: Daily Real Estate News

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email - james.kuang@coldwellbanker.com

Get a FREE over the net home evaluation:  www.EasyHomePricing.com

www.cbprosperity.ca

www.facebook.com/JamesYKuang

The Biggest Hurdles to Home Ownership

With mortgage rates still near historical lows, why aren’t more home owners making a move? Housing analysts blame student loan debt, overly strict lending standards, and lost equity as the leading culprits behind a sluggish housing recovery. But what do home owners say?

Mortgage information site HSH.com surveyed 786 home owners at the end of 2013 about their experiences when it came to finding and financing their home. The top six biggest hurdles to home ownership were identified as:

1. Home prices (flagged by 23.5% respondents): Rising home prices are not just difficult for young home buyers. Home owners aged 50 to 59 reported the highest incidence of struggling with higher home prices.
2. Down payment (22.9%): Those aged 18 to 29 reported the least trouble with down payments, while home owners aged 30 to 39 and 50 to 59 reported the highest incidence of down-payment struggles.
3. No issues (20.9%): A significant portion of respondents said they don’t face any hurdles to home ownership, with older home owners reporting fewer hurdles than their younger counterparts.
4. Credit score: 12.8%
5. Interest rates: 12.6%
6. Property taxes: 7.3%

SOURCE: Daily Real Estate News

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email - james.kuang@coldwellbanker.com

www.cbprosperity.ca

www.facebook.com/JamesYKuang

Live The Life Of A Landlord

If you’ve ever considered investing in rental property, now is a great time to make plans! Low prices and low interest rates make conditions for investing in rental property the best we’ve had in 15 years.

Fundamental benefits of owning income property include:

• monthly cash-flow of spendable income;
• equity growth by loan principal reduction;
• price-value increase as an inflation hedge ; and
• tax benefits of passive income and profits.

And remember to consider:

• Financing – Guidelines for financing income property are different from guidelines for financing a primary residence. How much do you qualify for and what down payment is required?
• Property size – Bite off only what you can chew. Will you be managing it yourself or do you intend to hire a property manager? 
• Location – Look for property in familiar areas. Knowing the neighborhood or city you buy in makes it easier to rent and maintain the property for maximum benefit.

The window of opportunity is open!  It’ll be too late to act after the public gets wise and drives prices up.

For a review on how to invest in income producing property today, please call me!

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

www.EasyHomePricing.com

www.facebook.com/JamesYKuang

How Are You Feeling?

4 Types of Homes That Won't Sell

Low inventories continue to plague housing markets across the country, as buyers face limited options and more bidding wars.  But with home prices rising, more sellers are slowly starting to put their homes on the market.

However, more than half of all existing homes are unlikely to be put up for sale anytime soon, unless there are significant changes to the housing market.  Here are the following four categories of homes that are unlikely to reach the market anytime soon because of their current financial position:

1. Low equity: Estimated 19 percent of homes. These are homes where the home owner owe more than 80 percent of the value on the home.  Many of these low-equity homes were purchased or refinanced during the housing bubble between 2004 and 2009.  Why go through the trouble of selling when most of the proceeds will just go to the lender?

2. Low mortgage rate: Estimated 16 percent of homes. Homes that were purchased or refinanced when mortgage interest rates were at record lows aren’t likely to sell anytime soon. I consider low mortgage interest rates to be below 4.25 percent. These homes were purchased or refinanced between 2011 and 2013.  No point in selling anytime soon when you have a lower rate than the current market and end up with a higher rate when you decide to buy again.

3. Purchased or refinanced in the past seven years: Estimated 14 percent of homes. A home that has been owned by the current owner for less than seven years isn’t likely to hit the market soon.  Buyers are more likely to buy a home that has been occupied by the current owner for more than seven years simply because most owners don’t plan on selling in such a short time frame.

4. Company or investor owned: Estimated 3 percent of homes. These are homes that are owned by a company or investor who bought five or more homes in a metro area during the past 10 years. These investors are likely holding on to their investment for the capital appreciation and rental income and will only sell when it is very advantageous for them.

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

www.EasyHomePricing.com

www.facebook.com/JamesYKuang

VALENTINE’S DAY FOR YOUR HOME

Show your home some love by giving it something special the same way you would for your significant other, because there really is no place like home.

FIVE QUICK AND EASY HOME IMPROVEMENT PROJECTS

Go green: A few changes to the landscaping of your home can make a world of difference!  You might want to consider planting some fruit trees in the backyard, adding a touch of color with some bright and unusual flowers, or perhaps finally starting the vegetable garden you've always dreamed about.

Add a touch of color: Feeling creative?  Why not give the family room, bedroom or bathroom a whole new look?  By focusing on the improvement of one room at a time, you'll find that what can seem like an overwhelming job becomes fun and simple.  Repainting a single room can be inexpensively completed over a single weekend.

Bright and beautiful: Replacing the light fixtures in your house with personally selected pieces can drastically increase your home's beauty and value.  Choose a cohesive look for the entire house, or decorate room by room!  The installation of new fixtures is generally a quick do-it-yourself task.

Tile it up: While it might seem like a daunting task, installing new tile in a kitchen or bathroom can be easily accomplished with a little know-how and the right supplies.  Your local home improvement warehouse will have everything you need to revamp and personalize the flooring of your choice!

The beauty beneath: Always dreamed of having beautiful hardwood floors?  Choose a room, pull up the carpet, and you'll be on your way to accomplishing just that!  Repairing, refinishing, and staining the floor is a simple step-by-step process that you can achieve without the heavy expense of installing new wood panels.

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

www.EasyHomePricing.com

www.facebook.com/JamesYKuang

One BIG Step Into 2014

It has been a few weeks since the New Year has started, so how has everything been treating you?  The holidays are starting to seem like something from the past already...

Well, I am looking forward to an exciting 2014! It's always nice to get that feeling of a fresh start with the beginning of a new year, and still write 2013 by mistake from time to time.

Right now you are probably wondering what's going to happen with the real estate market in 2014 right?  Well no ever knows exactly what tomorrow holds.  However, let's try to peek ahead into the future anyway because it's always good to have a plan, even if life never goes according to plan.

I expect 2014 to be another great year for real estate and the only direction for home prices in the next ten years is UP, and UP!  Don't get too crazy either.  Home prices will most likely remain flat and only move up slowly in line with the normal inflation rate of 2%.  Interest rates are up but there isn't a full job recovery, so that is going to keep many potential buyers out.  Investors are starting to see their profit margins down so expect to see less all cash deals.  That was one of the primary factors pushing prices up and now that investors are slowly leaving, that will soften up the prices.

You will still see the value in owning a home even without insane price increases, and so will everyone else.  Home ownership is still attractive in America that will be keeping the market afloat.  There are still new buyers entering the market everyday so expect it to continue remaining competitive!  That will keep home prices stable and moving upwards, but this time at a more reasonable pace.

Let’s strategize if you are planning to make a move this year!  Life never goes according to plan, but it is always still a good idea to have one.  Call me today.
 

If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email -james.kuang@coldwellbanker.com

www.EasyHomePricing.com

www.facebook.com/JamesYKuang