Two big changes makes it easier to get mortgage.

Two big changes will make it easier to get a mortgageT
Source: CNBC

Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan. The changes will also add more risk to the mortgage market.

First, the nation's three major credit rating agencies, Equifax, TransUnion and Experian, will drop tax liens and civil judgments from some consumers' profiles if the information isn't complete. Specifically, the data must include the person's name, address, and either date of birth or Social Security number. A sizeable number of liens and judgments do not include this information and have subsequently caused some misrepresentations and mistakes.

Additionally, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent. That is designed to help those with high levels of student debt.

California housing market bounces back in May

California’s housing market rebounded in May as existing home sales and median home price recorded strong gains on both a monthly and annual basis, a trend in every major region of the state, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said this week. 

Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 14th consecutive month and totaled a seasonally adjusted annualized rate of 430,060 units in May. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the May pace throughout the year. The May figure was up 5.4 percent from the revised 408,030 level in April and up 2.6 percent compared with home sales in May 2016 of a revised 419,000. 

“Mortgage rates dropping to the lowest level since November could have been a motivating factor for the sales increase in May,” said C.A.R. President Geoff McIntosh. “The low interest rate environment, however, may not last long as the Federal Reserve’s gradual rate hike and plan to reduce its balance sheet will likely lead to higher rates and could change the momentum of the market.”  

The statewide median price stayed above the $500,000 mark for the third straight month and reached the highest level since August 2007. The median price was up 2.3 percent from a revised $537,920 in April to reach $550,200 in May, and was 5.8 percent higher than the revised $519,930 recorded in May 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values. 

“Despite a solid performance thus far in the spring housing market, the continued mismatch between buyers and available homes for sale that’s driving up home prices remains an issue,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Stubbornly low supply levels will continue to propel prices higher and, when combined with imminently higher interest rates, will worsen an already dismal affordability situation in the housing market.” 

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Best Regards,

Skand Mittal, Realtor®
Alliance Bay Realty
Direct : 510.938.8960
E-mail: mittalrealty@gmail.com

www.mittalrealty.com

Fast Facts

Calif. median home price: May 2017: California: $550,200 Calif. highest median home price by region/county: San Francisco, $1,501,680 Calif. lowest median home price by region/county: Lassen, $192,500 Calif. Pending Home Sales Index: Statewide pending home sales decreased in April on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI) declining 8.9 percent from 141.9 in April 2016 to 129.3 in April 2017. Calif. Traditional Housing Affordability Index:  First Quarter 2017: 32 percent Mortgage rates: Week ending 6/15/2017 (Source: Freddie Mac) 30 year fixed: 3.91% fees/points: 0.5% 15-year fixed: 3.18% fees/points: 0.5% --  Best Regards, Skand Mittal, Realtor® Alliance Bay Realty Direct : 510.938.8960 E-mail: mittalrealty@gmail.com www.mittalrealty.com

Talking Points

Talking Points 

• House price appreciation accelerated to a seasonally adjusted annual rate of 7.3 percent in July, according to the Federal Housing Finance Agency (FHFA) index. The Standard and Poor’s/Case-Shiller (CS) index shows house prices rose at an annual growth rate of 4.6 percent in July.

• Both indexes have been rising since the housing market stabilized in late 2011-early 2012. Activity from these indicators strongly reflects movement in existing home sales.

• Accelerating sales put upward pressure on prices and declining sales put downward pressure on prices.

Talking Points …

Talking Points..

• Lower interest rates and stabilizing home prices over the past year combined to make it easier for more Californians to purchase a home in the first quarter of 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

• The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in first-quarter 2015 rose to 34 percent from the 31 percent recorded in the fourth quarter of 2014 and up from 33 percent in the first quarter a year ago.

• Home buyers needed to earn a minimum annual income of $87,700 to qualify for the purchase of a $442,430 statewide median-priced, existing single-family home in the first quarter of 2015. 

C.A.R. Market matters- Talking Points

• Diminished housing affordability continued to hold back pending home sales for the fifth straight month in August as rising home prices contributed to a further reduction in the share of distressed home sales, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

• California pending home sales fell in August, with the Pending Home Sales Index (PHSI) dropping 4.5 percent from 104.5 in July to 99.8 in August, based on signed contracts.  The month-to-month drop was inconsistent with the seasonal trend, which typically shows a slight increase from July to August. 

• Pending sales were down 8.7 percent from the 109.3 index recorded in August 2013.  The year-over-year decrease was in line with the six-month average of -8.9 percent recorded between February 2014 and July 2014.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Fast Facts

According to C.A.R;-

Calif. median home price:December 2013:

• California: $438,040
• Calif. highest median home price by region/county December 2013: San Mateo, $1 million
• Calif. lowest median home price by region/county December 2013: Tehama, $137,500

Calif. Pending Home Sales Index:
December 2013: Decreased 25.2 percent from 92 in November to 68.8 in December.

Calif. Traditional Housing Affordability Index: Fourth Quarter 2013: 32 percent (Source: C.A.R.)

Mortgage rates: Week ending 1/30/2014 (Source: Freddie Mac)

• 30-yr. fixed: 4.23% fees/points: 0.7%
• 15-yr. fixed: 3.33% fees/points: 0.7%
• 1-yr. adjustable: 2.51% Fees/points: 0.5%