It is the Middle of December, a time that year in and year out proves to be the slowest time of the year with regard to Demand for Housing and New Listings being places on the market (for sale). Yet, this year the market in December is still HOT!
All of the information above is current as of December 17th, 2017. We will bring you another update in a couple of weeks :)
Original Post: OCsearch.com
As home values continue to rise at levels greater than historic norms, many are concerned we might be headed for another crash like the one we experienced a decade ago. The simple fact is the Lenient Lending Standards of the previous decade (which created false demand for housing) no longer exist. But, what about Home Prices?
Are prices currently appreciating at the same rate as they were just prior to the crash of 2006-2008? Freddie Mac just released the numbers below - let's take a look:
Why is there so much paperwork required by the Lenders for a residential mortgage loan application when purchasing a home today? I feel like they need to know absolutely "everything" about me and even then they need 3 separate sources to independently validate every single fact I provided them on the application.
As a buyer, my friends and family are telling me the process was 100 times easier when they bought their home 20 years ago.
Well, there are two very good reasons why the mortgage loan process is much more difficult now than in past decades.
1) After the U.S economy crashed in 2008, the government put in place new guidelines demanding that the banks prove beyond any doubt that you are indeed able to pay the Mortgage you are applying for.
In the years preceding the housing crises, more than a few people "qualified" for a mortgage that in reality, they could never pay back. This ultimately led to millions of Homeowners losing their home. The government aspires to make sure this never happens again.
2) The simple fact is, Banks do not want to be in the Real Estate business.
Over the last several years (since the crash), Banks have been forced to take on the huge task of liquidating millions of homes that ended up being foreclosed on and also negotiating millions more through the short-sale process. Just like the government, banks do not want more foreclosures. For that simple reason, they need to double (or even triple) check every detail on the application.
The housing crises that forced the banks to be extremely diligent about their paperwork requirements also allowed you to get a very low-interest-rate in the 4% range!
Those friends and family you know that purchased homes 10 or 20 years ago did, in fact, experience a simpler mortgage application process. But, they also paid a higher interest rate - the average rates for a 30 year fixed mortgage in the 1990's was 8.12% and in the 2000's was 6.29%.
Today, if you went to your bank and said you were willing to pay 7% instead of around 4%, they would likely bend over backward to make even today's more complex process as easy as possible for you.
Instead of focusing on the more complex paperwork process, let's be grateful we are able to purchase a home at historically low interest rates.
Original Post - OCsearch.com
There is a great deal of discussion regarding housing affordability for both move-up buyers and first-time buyers, and much of the discussion is delivered with a negative slant. However, the facts are that housing affordability is better today than at almost any time in history.
The naysayers are actually correct in the fact that current housing affordability is not as great as it has been in recent years. But, it is important to keep in mind that home prices truly collapsed during the housing crises that began in 2008. and during that crash distressed properties (foreclosures and short sales), kept housing prices depressed for years.
When we compare current housing affordability to the decades that preceded the crash, a whole different story is revealed.
Here is a recent graph put out by the National Association of Realtors (NAR). The higher the point in the graph, the more affordable houses are.
It is plain to see that housing affordability is better today than in the fifteen years prior to the boom and bust.
CoreLogic recently published a report showing Homebuyers "typical Mortgage Payments" nationally.
The Chart above reveals that while a "typical" housing payment was lower in 2012 (remember the distressed properties that were still a factor back then), it is currently less expensive than it was back in 2000 and is still predicted to continue to be lower next year than it was back in 2000.
In the end, Mark Fleming, Chief Economist at First American puts it this way;
“While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.”
Original Post: OCsearch.com
Most of us know that actually owning your home offers great financial benefits, yet many of us continue to rent! Let's take a moment and review the undeniable financial benefits of owning a home versus simply renting.
Zillow.com recently posted the following statement:
Home-ownership has always been, and will always be, the better choice from a financial standpoint - than renting.