Why Fears of a Looming 2008-Style Housing Bubble Are Likely Misplaced

In this white-hot real estate market, some fear the U.S. may be headed toward a second housing crisis similar to the one that sent the country into a deep recession in 2008. Experts argue that’s unlikely due to the differences between the 2008 market and today. The likelier scenario, many are positing, is not the bursting of a market bubble, but rather a more conventional cooling-off and gradual balancing of prices. The 2008 crisis was precipitated by a broadly complex variety of interrelated factors. Chief among them was what’s known as “subprime lending,” where homebuyers were given loans they were unlikely to maintain given their financial situation. Such loans are often accompanied by provisions such as high interest rates to…

New Veteran Mortgage Assistance Program Kicks Off This Week

A new federal program meant to assist veterans pay their mortgages kicks off this week, seeking to help veteran homeowners maintain their mortgages after more than a year of the SARS-Cov-2 crisis. The VA Partial Claim Payment Program is meant to “assist Veteran borrowers specifically impacted by the COVID-19 pandemic to resume making their regular (pre-COVID) mortgage payments after exiting forbearance,” the U.S. Department of Veteran Affairs says on its website. The program, which went into effect on Tuesday, July 27, is set to last until October of last year. Participants must have a VA-backed loan and must have missed at least one mortgage payment since March of last year. The VA says that for qualifying homeowners it will purchase…

FHFA: Home Prices Rose 1.7% in May, Up 18% Year-to-Year

The Fair Housing Finance Agency House Price Index (FHFA HPI®) rose 1.7 percent in May, sending the annual price increase to 18 percent. The previously reported 1.8 percent price change for April 2021 was unrevised. “House prices continued their record-setting growth into May,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “This trend will likely continue around the country as busy summer homebuying months maintain the pressure being felt in already tight housing markets.” The increase in home prices was not evenly distributed across the country. Among the nine census divisions, the Pacific enjoyed the highest monthly price spike (2.4 percent), while prices rose least in the Middle Atlantic division (1 percent). The 12-month…

CEO of Lending Group Argues for ‘Looking Beyond’ Race and Gender, Focusing on ‘Character’

The chief executive officer of a California lending group is urging industry leaders to ignore policy initiatives that target individuals based on race and sex, dismissing such measures as “baloney” and stressing the need to focus on individual character. William Tessar, the CEO of Civic Lending Services, told Mortgage Professional America this week that his company has achieved “diversity targets” not by specifically setting out to fill them but by following a philosophy of “get[ting] the best people” when they’re needed. “You’d better look beyond all the other baloney about ethnicity and gender and age, and just focus on the character of the person and the qualities they bring to the organization,” he said, arguing that “it’s actually rather easy and it’s…

The White-Hot Housing Market is Causing Some Buyers to Stop Looking

The still-searing housing market has reached such dizzying heights in some regions that many homebuyers are giving up searching altogether, at least until prices come down. Many would-be buyers “are calling off their search, for reasons that range from an inability to compete financially, to an unwillingness to waive contingencies like an inspection, to a belief the market will cool in time,” the New York Times reports. Prospective buyers have been resorting to drastic measures like waiving inspections and paying full closing fees in efforts to get a leg up and out-compete other buyers. But in some markets the competition is nearly stratospheric: Buyers in Utah, for instance, recently put an offer for a hour $60,000 over asking price with…

As the Pandemic Recedes, Is Buyer’s Remorse on the Rise?

Is the U.S. facing an impending wave of “homebuyer’s remorse?” While the Delta variant is increasing the number of cases, COVID-19 vaccines and more effective treatments have kept hospitalizations and deaths far lower than in the pandemic’s early days. As a result, even if cases spike in the fall, the economy will likely continue to grow. The result will be a relatively normal American economy — and thousands of homeowners left with the consequences of hasty home-buying decisions made amid a lockdown. Last year, as the virus began to sweep the globe and many nations went under hardcore lockdowns, many residents of big cities began scrambling to find property outside of the now-restricted confines of city centers. There were widespread…

Mortgage Credit Availability in June Fell to Six-Month Low As Housing Market Cools

Buyers seeking mortgages to finance home purchases may have reason to celebrate as a confluence of factors that make the market more favorable for mortgage notes, although tighter standards might put a slight damper on those developments.  The overall housing market is showing signs of cooling off; though significant segments of the real estate market are still white-hot, increasing stock suggests the manic feeding frenzy of the past year may be settling down. Interest rates, meanwhile—though having risen some since President Joe Biden took office—remain historically low. Building material prices, meanwhile, are dropping, and while experts say buyers won’t immediately reap the benefits of that trend, lower material prices could echo through the market eventually. Mortgage forbearance numbers are also…

How Local Zoning Rules Can Drive Up the Price of Housing Stock

Prospective homebuyers looking to snag a modest home for less than the price of a motor yacht might consider an unlikely tactic: Petitioning their municipal council. Local zoning rules can have a significant effect on home purchases, with regulations often restricting the number of houses that can be built and thus driving up the price of remaining house stock. The Austin American-Statesman reports this week on that city council’s intention to revisit local zoning rules; the paper says that the “last comprehensive rewrite to land use rules [in the city] was completed in 1984.” Current rules have restricted building practices within Austin itself, driving housing stock down and prices skyward. As with many cities in recent years, bitter fighting in…

Rates for 30-Year Fixed Mortgages Fall Slightly, Remain Below 3 Percent

Key mortgage rates are remaining low, a trend which will likely spur continued homebuying as rates remain favorable for buyers and housing stock increases across the U.S. Rates for 30-year fixed mortgages effectively remained steady day-over-day, falling from 2.87 percent to 2.86 percent from July 18 to July 19, a very slight downward trend that sees rates remaining below 3 percent as they have since early June of this year. Rates for 30-year loans have fluctuated since early July but have remained below 2.9 percent. Rates for 15-year fixed mortgages and 5/1 ARMs, meanwhile, have risen over that time. Favorable mortgage rates and low housing stock have contributed to a highly competitive housing market over the past year and a…

Mortgage Rates Back Below 3%

The 30-year fixed-rate mortgage average fell below 3 percent for the week again in Freddie Mac’s weekly Primary Mortgage Market Survey released Thursday. The survey found: The 30-year fixed-rate mortgage averaged 2.95 percent with an average 0.7 point for the week, down from last week’s 3 percent and 3.15 percent last year at this time.The 15-year fixed-rate mortgage averaged 2.27 percent with an average 0.6 point, down from last week’s 2.29 percent and last year’s 2.62 percent.The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.59 percent with an average 0.2 point, unchanged from last week and down from last year’s 3.13 percent.  “Mortgage rates are down below three percent, continuing to offer many homeowners the potential to refinance and increase their…