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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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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Surging mortgage rates and still-high home prices are not leaving already demoralized home shoppers much to be thankful for these days.
Nonetheless, the housing market remains competitive as demand continues to outpace supply. Would-be buyers with the stomach to stay in the market are gobbling up the limited inventory, especially new homes, as builders continue offering incentives to hopeful homeowners.
Click Read More below for more information and video from Altos Research.
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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The average rate on the popular 30-year fixed mortgage hit 7.22% on Thursday, according to Mortgage News Daily. That’s the highest point since early November.
For a homebuyer taking out a $400,000 mortgage, the monthly payment of principal and interest rose to $2,720 from $2,637 in just one week.
For sellers, higher mortgage rates have created a so-called golden handcuff effect. The vast majority of homeowners today have mortgages with interest rates below 4% or even below 3%.
“Recent data indicated that nearly 82% of home shoppers reported feeling locked-in by their existing low-rate mortgage, while around 1 in 7 homeowners without a selling plan cited their current low rate as their reason for remaining on the sidelines,” said Jiayi Xu, an economist at Realtor.com.
Because of that, there is currently a critical shortage of homes for sale, with year-to-date new listings now 20% behind last year’s pace.
Click Read More Below for the entire post and GMA video on Mortgage Rates and Decoding the Real Estate market. (7.7.2023) Image from the World Property Journal
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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.
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