The Financial Times / Meredith Whitney reported that Freddie Mac wants to enter the secondary home equity loan market in a win-win for the government, Wall Street, and consumers with Mortgage Reform that could unleash the next big U.S. stimulus.
The U.S. housing market is harboring the potential for unprecedented economic stimulus that wouldn’t require any federal spending, according to Meredith Whitney, the one-time Oracle of Wall Street” who predicted the Great Financial Crisis.
Meredith noted that mortgage finance giant Freddie Mac asked its regulator last month to enter the secondary mortgage market, or home equity loans, which allow homeowners to borrow against the equity in their houses. Such borrowing can be used for vacations, weddings, new cars, investments, medical bills, or starting a business. In other words, it’s more money that could power the economy.
Letting Freddie Mac initiate this mortgage reform for home equity loans could start putting $1 trillion into consumers’ wallets as soon as this summer and $2 trillion by the autumn, Whitney estimated. If fellow mortgage giants Fannie Mae and Ginnie Mac follow along, the potential stimulus could top $3 trillion.
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Don’t wait! Mortgage Rates remain high and it is unlikely rates will drop this year. Real Estate experts are urging home buyers not to wait as home prices are expected to rise. It’s a challenging market for buyers and Fannie Mae is predicting an increase in home prices through 2025. Don’t wait
Rising costs aren’t the only obstacle for buyers as low inventory is also impacting the market’s dynamics.
If Baby Boomers ever decide to move/downsize some experts believe that will put 9 million homes on the market over the next 10 years. Wait and see? Don’t wait.
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In 1971, the interest rate for a mortgage was 7.33%. If you waited for interest rates to go down, you wouldn’t have purchased a home until 1993. You would have rented for 22 years waiting for rates to go down, meanwhile the value of real estate quadrupled. Don’t wait to buy real estate. Buy real estate and wait. Marry the house, date the rate.
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The Santa Barbara Real Estate market continued to reflect trends that have been with us all year: relatively few homes for sale, higher mortgage interest rates, and a gradual cooling from the very hot market we experienced during the height of the pandemic.
Median prices and numbers of sales often flatten or decline in late summer into January compared to spring and early summer months. The market seems to have moved into this pattern. At the same time, continued interest rate increases and other factors are putting pressure on prices, offset to a large degree by a low supply of available homes for sale (inventory).
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Would you like a 3% Mortgage Rate? An Assumable Loan might be something to consider. Assumable loans are loans where the buyer takes over the interest rate that the seller currently has if the seller’s lender allows for that. This allows for more affordability and increased opportunities for sellers and is something listing agents should factor into their marketing.
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In the movie The Big Short there was a scene in which a stripper bought multiple investment condos. She was able to do so because there were subprime loans available in the early 2000s that required: 1. No Income Verifications, 2. only a 680 credit score 3. No Down Payment: 4. and no owner occupancy.
So Strippers could speculate in investment condos with no income and no money out of pocket – effectively getting free “put” options. If condo prices went up – woohoo! Strippers got rich! If condo prices went down – darn! Strippers walked away and lost very little.
What could go wrong? Well, we know the answer… The economy was a mortgage broker/stripper doom loop. What may be even more amusing is that those strippers were probably making very good money, as the same mortgage brokers who gave them loans were also spending inordinate amounts of time in those same strip bars, tipping strippers with the money they made providing mortgages for strippers.
ZILLOW ANNOUNCES 1% DOWN
Last week Zillow announced its 1% down loan program, and the internet went wild with comments about how this is a return to the worst excesses of the subprime mortgage days. You’d think we are on the verge of mortgage Armageddon. But alas, we’re not because Buyers need to actually verify income with a real job and real tax returns.
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AUGUST 23, 2023 The current average interest rate for the benchmark 30-year fixed mortgage is 7.61%, rising 6 basis points compared to this time last year. If you’re looking to refinance your current loan, the national 30-year refinance interest rate is 7.83%, rising 12 basis points compared to this time last week. With interest rates on the rise, it’s important to shop around for mortgage offers before committing to a loan.
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We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008. We may be in one of the strongest Real Estate Markets in a long time. When you look at the numbers today, the one thing that stands out is the strength of this housing market.
Here are two fundamentals that prove this point. Click “Read More” below to continue reading.
Mortgage rates continue to hover around seven percent, as the dynamics of a once-hot housing market have faded considerably. Unsure buyers navigating an unpredictable landscape keep demand declining while other potential buyers remain sidelined from an affordability standpoint. The interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market.
A new company has come up with a way to make an all-cash offer even though you need a mortgage.
