Don’t you love sharing good news? I know I do. All the gloom and doom of today’s headlines seen on TV, the internet, or even the paper, makes us a bit sour and irritable. We look for some joy or good news to brighten our day. I hope you find encouragemnt in the housing news presented below, for you and for our country's economy. It seems especially fitting on the eve of our country's Independence celebration; home ownership is a vital component of the American Dream. Happy 4th of July.
Part of our mission at InSight Mortgage Group is to educate our clients so they can make the best financial decisions for themselves. And to help achieve our mission, we research the market trends ( especially the good news parts which get buried deep below the negative headlines) and share this information with our clients.
Encouraging news on the home front continues. Existing home sales were UP 2.4% to a 4.77 million annual rate. This is the third month in a row showing increased sales. They’re now 6.2% above their January low. Additionally, the percent increase for the last two months is the largest since April 2004. Inventory of existing home dropped to 9.6 months from April’s 10.1 supply. And, the median price of an existing home INCREASED to $173,000.
New construction homes also saw a decrease in supply from April’s 10.4 months to May’s 10.2. Inventories of new homes are now down 49% from their peak in mid-2006, and are at their lowest level since 2001! And, the Mortgage Bankers Association reported purchase loan applications UP 7.3%
A recently released report from Harvard University indicated there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years. This report also notes that price declines and low interest rates have brought affordability to many housing markets across the country.
Important information if you're considering a purchase or refinancing your current mortgage:
There are changes in the mortgage industry - that are government mandated - taking place now and in the near future. These would be nationwide rules, though additional requirements could be added by individual states. The intent is to increase safety for the borrower, by providing more transparency, and adding steps to help prevent deceptive lending practices. Additional steps now add time to the closing timeframe. In the past it was possible to close a loan within 30 days; now 30-45 days will become the norm, for both purchase and refinance transactions. Basically, the new appraisal process of using a third party appraisal company and more documentation requirements, along with the new Truth in Lending disclosure requirements, impacts the entire real estate and loan process.
As with many past consumer related regulatory changes, we can anticipate cost increases; (think back to the US pharmaceutical business and how health care & drug costs have risen due to regulation).
So, for buyers, critical decisions will need to be made promptly: loan application, type of loan and rate locked. Then, inspections & renegotiations if needed. Anything that can affect the closing costs, price, or date of closing need to be addressed as soon as possible or closing can be delayed.
What do these changes mean to you, if you’re purchasing a home soon or thinking of refinancing? Well, getting a loan will not be as easy, or as inexpensive, as we have known in the past. Don’t be a “fence-sitter”, get into the market now – housing is still affordable, mortgage rates are still historically low, and the cost of obtaining a mortgage is still reasonable.
Call or email us at 913-642-3334; michele@wantinsight.com or dickw@wantinsight.com for the most current information on rates and programs to best suit your individual needs. Blessings
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