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Freddie Mac analysts point to five features that they believe will likely characterize the 2011 real estate markets:
*Advantageous home loan rates. With Fed observers expecting the central bank to keep the federal funds rate its current target range of 0% to 0.25% for most or all of 2011, advantageous rates will be a feature of the 2011 market. Thirty-year fixed-rate loans are likely to remain below 5.0% throughout the year, and initial rates of 5/1 hybrid adjustable -rate loans will likely remain below 4.0% in 2011.
*House prices have hit bottom. Prices are likely to begin a gradual, but sustained recovery in the second half of 2011.
*Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market next year, likely translating into more home sales in 2011 than in 2010.
*Refinances will dwindle. Many eligible borrowers have already refinanced. While fixed-rates are likely to remain low, they will move up gradually.
*Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings generally crests within a year of the start of the recovery in payroll employment. Payrolls began to rise last January, and by the spring delinquency rates had begun to fall.
Source: Freddie Mac
*Advantageous home loan rates. With Fed observers expecting the central bank to keep the federal funds rate its current target range of 0% to 0.25% for most or all of 2011, advantageous rates will be a feature of the 2011 market. Thirty-year fixed-rate loans are likely to remain below 5.0% throughout the year, and initial rates of 5/1 hybrid adjustable -rate loans will likely remain below 4.0% in 2011.
*House prices have hit bottom. Prices are likely to begin a gradual, but sustained recovery in the second half of 2011.
*Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market next year, likely translating into more home sales in 2011 than in 2010.
*Refinances will dwindle. Many eligible borrowers have already refinanced. While fixed-rates are likely to remain low, they will move up gradually.
*Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings generally crests within a year of the start of the recovery in payroll employment. Payrolls began to rise last January, and by the spring delinquency rates had begun to fall.
Source: Freddie Mac
Compliments of Suzanne Smith
HNB Mortgage
Homeowners Are Richer
The average homeowner has a net worth that is about 41 times greater than that of a renter, according to a report from the National Association of Realtors. Homeowners net worth averaged between $150,000 and $200,000 this year, according to the NAR.
The trade group for Realtors said homeowner equity accounts are a substantial part of that net worth. NAR based its research on results from a 2007 Federal Reserve Survey that provides a snapshot of family income and net worth in conjunction with basic demographic makeup. The Fed survey is conducted once every three years. Homeowner net worth back in 2007 was 46 times greater than that of renters, reflecting the economic conditions before housing price declines and a decreasing equities market. The average net worth of a homeowner was above $200,000, while the average net worth of a renter in 2007 was $5,000. It is interesting to see that while many media outlets have questioned the advantages of purchasing in today's markets, the numbers supporting owning are quite clear.
Source: Housing Wire
The trade group for Realtors said homeowner equity accounts are a substantial part of that net worth. NAR based its research on results from a 2007 Federal Reserve Survey that provides a snapshot of family income and net worth in conjunction with basic demographic makeup. The Fed survey is conducted once every three years. Homeowner net worth back in 2007 was 46 times greater than that of renters, reflecting the economic conditions before housing price declines and a decreasing equities market. The average net worth of a homeowner was above $200,000, while the average net worth of a renter in 2007 was $5,000. It is interesting to see that while many media outlets have questioned the advantages of purchasing in today's markets, the numbers supporting owning are quite clear.
Source: Housing Wire
Compliments of Suzanne Smith
HNB Mortgage