Pending home sales rose 7.3 percent in November to the highest level since April 2010, according to the National Association of Realtors.
Reported by: Washington Business Journal by Jeff Clabaugh, Broadcast/Web Reporter
The District-based association also revised higher its pending home sales data for October, showing a gain of 10.4 percent the previous month.
“Housing affordability conditions are at a record high and there is pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high,” said NAR chief economist Lawrence Yun. “Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage.”
Bryan Smith from 1 Hot Property – Bend Oregon Real Estate, says that Bend Oregon real estate and home sales are improving. He and other brokers area reporting stronger demand and less inventory in the “A” market locations, and short of any unexpected issues, the trend is expected to expand to “B” locations in 2012 and 2013. The largest holdback now to the market is the huge shift from anyone could get multiple mortgages, to few can get one mortgage. This is actually great for those that can qualify to get get locked into a property now at these prices. But for the market to start sustaining appreciation and true health the mortgage qualification guidelines need to start moving to being more accommodative. We are not talking about the days of the past, but the pendulum has swung too far. We would also like to see the return to limited document mortgages for the self employed and small company owners. Just one mortgage with 20 to 25% down and a decent credit score should be enough security for the current purchasers of mortgages.
Fannie and Freddie are now essentially owned by the taxpayers, and their oversight managers are looking pretty narrowly at how they should run those organizations. The Congress needs to get in here and decide how to let the economy recover, and that cannot really happen until Fannie and Freddie change some practices.
As taxpayers and citizens we should be asking our representatives to look at the two following concepts to allow the economy to get going again.
- Refinance everyone. Allow all people with mortgages held by Fannie and Freddie to refinance with no conditions with a simple $750 fee. We the public already own these loans/mortgages. The risk of default is less if the rate is reduced by a refinance, no matter what the situation with the loan is. So just do it.
- Loosen up the qualification requirements for new loans. The standards were way too loose years ago, and have now swung to too tight.
- Investor Loans. One way to soak up excess inventory is to make it easier to get an non owner occupied loan. If an investor is willing to put down 25% on a distressed property, it gets it off the market, and hey, the risk for Fannie Freddie has to be less compared to the existing loan, if an investor would put that kind of cash into the property.
- Limited Documentation Loans. Small business people have income that cannot be counted under traditional standards. Example capital gains income is excluded even though it is income. And lots of small business people have capital gains income, and other kinds of complications of their accounting, that makes it tough to qualify under a conforming loan application. Let these folks put down 25% and open these loans back up, limited to one loan. ( not like the old days where you could get more than one)
All of these things dry up the excess inventory, and reduce economic risk, and provide a substantial boost to the economy and jobs. Most economists have said that housing has to improve before the economy and jobs can improve. These are some straightforward ways to get that going.
Comments are welcome and appreciated.
Please share this article and contact your elected representatives to tell them you want the economy to get back on it’s feet, and housing mortgage reform is the way to get that done, clean and simple.
Fed says bigger Fannie, Freddie role could aid housing.
Fed says bigger Fannie, Freddie role could aid housing
WASHINGTON (Reuters) – The Federal Reserve on Wednesday said expanding the role of government-controlled mortgage firms Fannie Mae and Freddie Mac could speed a housing market recovery and lift the overall economy.
In a white paper to leading members of Congress, the Fed outlined an array of steps that could be taken to help the housing sector. It focused on ways to keep a lid on the vast inventory of unsold homes, make it easier for borrowers to get credit and contain an onslaught of foreclosures.
“Continued weakness in the housing market poses a significant barrier to a more vigorous economic recovery,” the Fed said in the paper, which was sent to the chairman and ranking minority members of the Senate and House of Representatives banking committees.
Fed Chairman Ben Bernanke, in a letter accompanying the recommendations, said the U.S. central bank had received requests for advice about what could be done to halt the spiral of falling home prices and rising foreclosures.
Among the Fed’s recommendations was allowing Fannie Mae (FNMA.OB: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) to refinance loans that the two so-called government-sponsored enterprises have not guaranteed.
That could allow an additional 1 million to 2.5 million borrowers to refinance loans into lower interest rates through the government’s Home Affordable Refinance Program.
Although the GSEs would take on added credit risk from expanding HARP to non-GSE loans, the broader benefits from an expanded program might offset some of the costs, the Fed said.
(Reporting By Mark Felsenthal and Margaret Chadbourn; Editing by Neil Stempleman)
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1 Hot Property – Bend Oregon Real Estate, CEO and Principal Broker, Bryan Smith adds, we have published several blogs with original content in our 1 Hot Property Bend Oregon Real Estate/ blogs pages on this, and other steps that could finally get the housing market stabilized. We welcome link backs, and use of materials with the condition that our links are not removed.
We create original content weekly on issues important to those interested in real estate issues in general and in particular those on Bend Real estate and homes.
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