If rates continue to move upwards, even though rates have far to go before they even come close to historical averages, will housing suffer? Common sense would dictate yes. However, two Goldman economists, Hui Shan and Marty Young, offer proof that rising rates will not hurt . Their study is based on an analysis built on home affordability.
The week brought a lot of economic news, but perhaps the least understood is that of rates making an upward movement. Earlier in the week, rates hit a one year high and Goldman Sachs declared that the bond bull run is over. Some still strongly feel that rates will improve but others argue that we hit bottom and we are entering the new normal.
One by-product of a jobless recovery is a movement to self employment as people give up on their hiring prospects. Small business does add to the economy and some feel a certain satisfaction from becoming their own boss, but it is not without it’s pitfalls. Long hours, increased and changing regulations, additional risk and less income when starting out all add to the burdens associated with starting on your own.
This week was a busy one for housing. Monday brought positive news from Pending Home Sales after Existing Home Sales missed expectations the prior week. While Pending Home Sales is a forward looking indicator, I do not put a lot of stock in it as too many things can alter the final results.
As expressed in recent columns, buyers are out in droves and homes are selling quickly. Well, homes that are priced correctly and show well. Hiring the right agent is paramount.
This applies to both buyers and sellers.
With Spring Buying Season upon us, everyone is focused on how to successfully acquire a home. From obtaining an accurate pre-approval to submitting an attractive offer to securing the financing. Good points all, but few are discussing what needs to be done in the event that you lose the home after acquiring it.
We can each run off a number of government programs that have fallen short, but every now an then , one comes along that offers many positives. HomePath has been around for awhile, but despite some great features, still seems to get little attention. HomePath is a program through Fannie Mae which allows homebuyers to purchase homes now owned by Fannie at great prices and amazing terms.
For some reason, a lot of housing rules start on April Fool’s Day – Coincidence? This year, FHA loans with case numbers assigned on or after April 1st will be subject to a 5-10bps increase to the Annual Mortgage Insurance Premium. In addition, loans with 15-year terms and LTVs of 78% or less (equity of 22% or less) will remain at 0 until June 3rd.
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Recent reports are spinning the negatives of the latest housing news. Home Sales were down and that is a cause for concern. However, while home sales dropping is not a good sign, there are several glimmers of hope.