Housing in 2015: Four Reasons for Optimism (And One for Worry)

Source: NPR

Will 2015 be the year that the housing market finally breaks out of its tepid recovery and takes off as economic indicators point to strong improvement? According to economists, there are several factors to encourage optimism. Firstly, employers are hiring again, job growth is relatively strong, and consumer confidence is growing. Also, slower price appreciation in 2014 may have set the stage for a buying surge in 2015. Millennial entry into the market and high rents may also working in housing’s favor.
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News Flash!!

The employment report for the month of December came in a little better than expected BUT, some components of the report were weaker than expected.  As a result rates have improved.  Conforming rates are around 3.75% (depending on credit score and other factors) and some experts are saying rates will drop to 3.5% or lower. 

Martin Luther King, Jr. Day 2015

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C.A.R. Market Matters

Good Signs for Housing in 2015

Source: U.S. News

With job growth and solid economic expansion, household formation experiences a boost and demand for rental and owner-occupied housing increases. As the economy continues to improve, there are promising signs for the housing industry because housing demand creates jobs and in turn fosters additional demand for construction. While prices have continued to rise on average, they have done so at slower rate over the course of 2014, and that trend is expected to continue in 2015.

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Nearly half of home buyers don't shop for a mortgage

Source: CNBC

A report from the Consumer Financial Protection Bureau reveals that almost half of consumers seeking a loan to purchase a home do not shop lenders. Consumers are cheating themselves of the opportunity to have a lower monthly payment, and the borrower with the cheaper loan will also build equity faster. Furthermore, a majority of home buyers seek information on mortgage choices from sources that have a stake in their decision. Just 20 percent said they rely heavily on websites, despite the ready availability of mortgage-related information online.

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Homeowners Win U.S. High Court Clash on Canceling Mortgages

Source: Bloomberg

A new ruling from the Supreme Court gives homeowners the ability to cancel their mortgages if lenders don’t provide the required disclosures. The Truth in Lending Act stipulates that borrowers have three days to rescind a mortgage after they receive the disclosures, and that right expires after three years. The justices unanimously ruled that borrowers don’t have to file suit within three years and instead can meet the deadline by sending a letter to lenders.

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FHA fee cut won't help many first time homebuyers in California

Source: KPCC

Recently the Obama administration dropped the fees on FHA loans, the mortgages taken out by most first-time buyers. These loans are popular with first-time buyers because they only require a down payment of 3.5 percent with a credit score of 580. The change in fees was applauded by the CALIFORNIA ASSOCIATION OF REALTORS®, and the trade association’s president, Chris Kutzkey, said, “Anything that goes toward assisting buyers getting loans is something that we embrace wholeheartedly.” But there are concerns that the fee cut may not make much of a difference in California for many buyers.

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