Best of the Week
More Prognostications for 2015, and some good news for home buyers this week.
Good News for First Time Home Buyers
- Fannie Mae and Freddie Mac have been hinting at lowering the minimum down payment requirements for some loan products. This Chicago Tribune article details the Monday announcement, Freddie and Fannie unveil the terms for down payments as low as 3% for first-time buyers. September this year marked the lowest number of first-time buyers in 19 years. Hopes are high that this will make it easier for first-time buyers to purchase a home.
- And again, the Los Angeles Times reported on the lower 3% downpayment: “A Federal Reserve survey released in August found that 45% of renters delayed buying a home because they couldn’t afford a down payment.”
Information for Home Buyers
- In this informative article, Home Loan Pre-Qualification or Pre-Approval?, Colorado Lender Sean Young explains the difference between the two processes. He also points out that a pre-qualification will give you an idea of what you can expect to afford, but a pre-approval upfront let’s the seller and real estate agent know that you have gone the extra step and have had your actual income and assets reviewed. This will give you an edge if you find yourself in competition for a home.
- This Mortgage Rate Table breaks down the difference the mortgage rate makes on your monthly payment. Remember as well, as mortgage rates rise AND home values rise, the increase in monthly payment rises even more.
Prognostications for 2015
- Interest Rates Will Rise. Mortgage professionals love to predict mortgage rates. In this video Lani Rosales interviews Jonathan Smoke, Chief Economist for Realtor.com, [read the entire article on Agent Genious] on mortgage rates, as well as other predictions. In a refreshing statement, Smoke admits how everyone has gotten it wrong, and explains that two issues have added to the wrong predictions: 1) the feds involvement with QE, Quantitative Easing, and 2) the lack of inflation since 2008.
- Inflation Will Arrive. Financial Analysts are much more confident that it’s a matter of when, not if mortgage rates will go up. Inflation is a definite prediction for next year, and along with it, the fed will raise rates. Predictions run from Spring 2015, to late 2015, to early 2016 that interest rates will rise.
- How Much Rates Will Rise: anywhere from 4.3% (Fannie Mae) and 5.4% (Moody’s Analytics). It’s a broad range.
- Home Prices are creeping up, and have been since 2013. Predictions for price increases nationally run from 3% (Trulia) and 5% (Realtor.com)
- Home sales are predicted to rise 2% to 8%, depending on the area of the country. See the previous “Best News Articles” for charts.
- New Home Sales are predicted to increase as demand builds. Smoke predicts the increase will be by 25%, NAHB (National Association of Home Builders predicts 26%, and NAR (National Association of Realtors) predicts a whopping 41% gain. Moody’s Analytics forecasts a huge 56%.
Watch the video for all the details:
And Just for Fun:
Pantone’s 2015 Color of the Year….[drumroll]…. Marsala. hmmm. What do you think? I think my Gramma would really like it. Me…not so much:/