September 16, 2011
- Mortgage rates set new record lows last week, but demand for purchase loans remain at extremely low levels – close to lows last seen in 1996.
- From an article in RISMedia: boomers may be the first demographic to move when the market picks up. They have more equity in their homes and are looking for smaller, one storey living within neighborhoods with a broader mix of people. They eschew separate rooms – kitchen, living room and dining room – for open spaces and large decks with amenities such as fireplace, hot tub and wet bars.
- A survey from Move, Inc. indicates that investors will outnumber traditional homebuyers 3 to 1 over the next two years and more than half of these investors will use the properties purchased for rental income.
Pay attention to Congress with regard to two issues affecting real estate.
- Higher loan limits are currently set to expire on September 30th. Why should you care? Here’s an explanation from RISMedia: “Unless Congress acts, the mortgage loan limit formula and cap will fall. This could cause a significant drop in housing prices in more than 669 counties in 42 states and the territories. Changing the formula for the loan limits (from 125% to 115% of median home price) and lowering the cap means that some five million homes – roughly 27% of all owner-occupied homes in the United States – will become ineligible for mortgage financing since there is little to no private mortgage financing available.”
- The House passed a 5 year reauthorization of the National Flood Insurance Program, but the Senate has yet to act, so the NFIP could also expire on September 30th.