Posts Tagged ‘mortgages’

Intero Insider: What the New Budget Proposal Means for Home Buyers

By Gino Blefari | February 16th, 2011 0 Comments

The Obama Administration’s new budget proposal came out last week. The one loud message I took away for would-be home buyers? Loans are cheaper today than they’re likely to be in the future.

That means if you’re thinking of buying a home this year or in the near future, now is the time to get going.

A lot of the proposed changes have to do with the future of Fannie Mae and Freddic Mac – the two mortgage finance giants that are backed by the government to keep a steady flow of funds available for the nation’s home buyers. While their fate is still being worked out, there are some related changes that could go into effect this fall that would impact home buyers. They are:

1. The maximum size of mortgages backed by Fannie and Freddie will be smaller come October. Currently, the limit in high-cost areas like San Francisco is $729,750 for a single-family home. That amount will drop 14% to $635,500 when the current limits expire. What this means is that a substantial number of homes in San Francisco county, for example, (10%, according to the California Association of Realtors) will become ineligible for financing backed by the two finance companies.

2. Bigger down payments are on the horizon. We discussed some of the other measures on the table a few weeks back that are outside of any Fannie/Freddie discussions. But now, in the government’s attempts to shrink Fannie and Freddie, some new proposals for the mortgages backed by these companies would mean that borrowers would face a requirement of 10% down with mortgage insurance – up from 5%. Not a lot of details are available about any of these proposals as of today, but we’re expected to know more by April.

3. Fees, fees fees. The Federal Housing Administration in November could begin raising annual mortgage insurance premium fees by 0.25% for all borrowers, according to the proposals. Basically, that means an extra $250 per $100,000 of loan per year.

As I’ve noted before, this is the year of big changes in housing regulation – many of which are aimed at protecting consumers and the American public from another collapse in mortgage finance. However, the consequence is looking more and more like higher costs to borrowers. So if you’re going to buy, you might want to speed up your decisions before a lot of these things start to take effect.

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Intero Insider: Global house prices trend up

By Gino Blefari | November 3rd, 2010 1 Comment

Real estate is one of the most local businesses around, but it’s interesting to take a look outside at the global market and see what’s happening. What are sales and price trends like in the world’s other top economies?

A recent round-up from The Economist shows that prices are on the rise in most markets across the globe. Only four of the 20 markets tracked by the publisher saw declines in the third quarter from a year ago. And only Ireland’s market worsened.

What does this mean for us?

Well, America’s FHFA index, which excludes houses that are financed with large mortgages, was also down. But The Economist notes that the Case-Shiller national and 10-city indices rose modestly.

Our real estate market in the U.S. is certainly not worsening. And compared to the rest of the world, we’re not doing that badly either.

According to the National Association of Realtors, over $40 billion in U.S. real estate was sold to foreign buyers last year. When you think about that, it suddenly becomes really interesting to see how foreign markets are performing and how various markets can affect purchase decisions for intercontinental buyers.

Global real estate is something I’ve particularly been interested in as I see a wealth of opportunity. Last summer, Intero Real Estate’s Chairman Robert Moles and I had the pleasure of speaking at two prestigious global real estate seminars in Singapore and Hong Kong to talk about this opportunity and share our insights as a company that’s been growing and succeeding through extraordinarily difficult times.

To make sure Intero is ahead of the curve, we just announced a deal in which Intero Real Estate will syndicate all property listings to the iProperty.com network of websites. This means that all listings will now get exposure to buyers across Singapore, Malaysia and Hong Kong.

Global real estate is an important indicator to follow as we look at the state of U.S. housing. Take a look outside the U.S. and you may find our market looks a little different. And if you’re really into seeing global price trends and how various nations compare to others, check out The Economist’s Interactive Global House Price Trends tool.

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Intero Insider: Good News for Employed AND Unemployed

By Gino Blefari | August 17th, 2010 0 Comments

In times of economic hardship, most news tends to focus on the bad stuff: unemployment, consumer spending, consumer confidence, slow economic growth. This may be why a recent economic story in The New York Times caught my eye: “For Those With Jobs, a Recession With Benefits.”

The headline says it all – the silver lining. It seems obvious, but for those lucky enough to still be employed, these are great times to be a consumer.

Just look at interest rates for mortgages. If you’re employed and looking to buy a house, you’re part of a group of borrowers who will lock in rates so low even buyers from a few months ago would cry. 4.375% percent (APR 4.579%) on a 30-year fixed!! That is something to brag about. Even an $8,000 home buyer tax credit cannot beat the savings achieved on these borrowing costs.

Further tipping the scales in favor of today’s employed are wages. According to the NYT article, “The typical jobless person has been out of work six months. The typical worker has received a raise.” Since the start of the recession in December 2007, real average hourly pay has risen nearly 5 percent.

This is obviously bad news for those who have been out of work for some time. But again, the bright side: Rising wages are good news for housing. And while the market may not see a huge pop from this right away, higher wages at least provide confidence for those buyers who are in the market today, and those sellers who are hoping for a match.

Remember: Every home sale needs just one qualified buyer. Your pool of buyers starts to increase with every job that is secured.

A lifeboat for unemployed homeowners

But even amid bad times for the jobless, there was some good news out of Washington last week. The Obama Administration is prepping $3 billion in financial assistance to aid homeowners in the states most affected by unemployment.

The assistance program will send $2 billion in aid to state Housing Finance Agencies for programs for borrowers who are struggling to make payments due to job loss. Another $1 billion in aid will come from the U.S. Department of Housing and Urban Development to provide up to 24 months of assistance to homeowners who are at risk of foreclosure.

So you see, it’s not all bad right now. Let’s hope it works!

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