Recession Alert?! Housing market NOT in recession! Homebuyers seen to Gain More Bargaining Power in August


Homebuyers Gain More Bargaining Power in August

Homebuyers in several markets have regained some negotiating power as demand has decreased. According to a Redfin survey released on Thursday, the average sale-to-list price ratio decreased to 99.8% over the four weeks ending on August 28.

The research discovered that only 37% of residences sold for more than the asking price, down from 50% a year earlier. Additionally, on average, 7.5% of homes listed for sale experienced a price decrease each week as the previous four weeks.

The median asking price for homes has dropped by 5.8% from the record high set in May to $379,194, reflecting sellers’ efforts to make their properties more engagingly priced. However, compared to a year ago, this asking price is still 9% higher.

Despite the general slowdown, homes are still selling at a reasonably quick pace. The median number of days on the market was 26, slightly longer than a year ago when the market was much hotter. Many homeowners opt not to list their houses since interest from buyers has decreased, and they can no longer command as high of prices.

Strong Job Market Will Continue To Support Housing Demand – MBA

Despite economic challenges, employment opportunities appear to improve as US companies added 315,000 jobs in August. According to the Bureau of Labor Statistics, employment on nonfarm payrolls increased by 315,000 last month, with job growth remaining stable in most industries. The unemployment rate, however, increased by 0.2% to 3.7%.

“The August jobs report revealed that while the labor market remains quite strong, with employment growth still above a sustainable pace; however, that pace is slowing,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “Wage growth is still strong, with average hourly earnings up 5.2% compared to a year ago.”

Health care (+48,000), retail commerce (+44,000), and professional and business services (+68,000) all had significant job growth.

“Coupled with other recent readings, these data indicate an economy that is still growing, but perhaps at an inflection point,” Fratantoni added. “With this in mind, we expect that the Federal Reserve will stay the course with further rate hikes at upcoming meetings.”

Why the Housing Market Is Not In Recession

Fernando Ferreira, a professor of real estate at Wharton, disputes the notion that the American housing market is in recession.

Even though home sales are declining due to higher loan rates, he said there is still a disparity between supply and demand. There is no simple resolution for this mismatch, which is at the root of the present housing crisis in the United States.

Although prices have decreased as a result of the poor sales, as per Ferreira, who is also a professor of business economics and public policy, most Americans still find housing to be prohibitively expensive. According to the National Association of Realtors, the typical sale price of a home in July was $403,800, down $10,000 from a month earlier.

“There’s been a long-term trend of not allowing any new construction, at least not any type of dense construction, on both coasts and in the majority of big cities in the United States,” he said. “Over time, that created this gigantic difference between demand and supply of homes. And to be honest, that’s the main reason [for] these extremely high prices today.”

According to Ferreira, housing prices will only decrease significantly if there is more supply. The only option to expand home-building is to modify rules to permit more and various kinds of construction. He complimented the Texas cities of Dallas and Austin for allowing additional construction, particularly multifamily buildings, to keep up with the rapid population expansion.

Next week’s potential market-moving reports are:

  • Monday, September 19 – NAHB Home Builders’ Index
  • Tuesday, September 20 – Building Permits, Housing Starts
  • Wednesday, September 21 – Existing Home Sales, Federal Reserve Statement
  • Thursday, September 22 – Initial Jobless Claims, Construction Spending,
  • Friday, September 23 – No Report

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.


Do You Have An FHA Home Loan? STOP Wasting Money: Refinance NOW And See How Quick it will Clear Away Your PMI/Mortgage Insurance

If you have an FHA loan, you may be getting tired of paying mortgage insurance every month in addition to your house payment and property taxes. There are so many advantages to FHA loans, but they do require you to pay mortgage insurance, sometimes called MIP (Mortgage Insurance Payments). On a conventional mortgage, mortgage insurance can also be called PMI (Private Mortgage Insurance). Unlike your life insurance policy, MIP doesn’t protect your family if you should become ill or die. It protects your lender and the amount of money they have loaned for your home.

Can you remove mortgage insurance from an FHA loan?

If you paid less than a 10% down payment on an FHA loan, you will pay mortgage insurance for the life of your loan. Part of the insurance is a one-time mortgage insurance premium, which is paid when you took out the loan. Usually, the lender will finance this one-time insurance payment as part of your loan. You’ll also continue to pay an annual mortgage premium based on the length of your mortgage.

FHA rules for mortgage insurance payments are complicated. If you got your FHA loan after June 3, 2013, and you made a down payment of more than 10% on a 15, 20, 25, or 30-year FHA loan, you are eligible to apply for cancellation of your mortgage insurance payment (MIP) after 11 years. For older FHA loans taken out before June 3, 2013, you will pay MIP up to 78% LTV based on your original purchase price. Older FHA loans with borrowers who paid more than 22% down never had a MIP requirement. You may be able to refinance your FHA loan with a lower MIP depending on your equity in the home. If you’ve missed a mortgage payment during your loan, you won’t be able to drop the MIP until or unless you refinance into a conventional loan. HUD and FHA can change these rules at any time at their sole discretion.  So it’s best to reach out to an independent mortgage broker and home loan professional at California Platinum Loans for the most current guidelines as they relate to your specific FHA loan.

Can you refinance your FHA mortgage to eliminate MIP?

Another option for getting rid of mortgage insurance is refinancing the mortgage completely. You have many options for different home loan products which could not only eliminate your mortgage insurance requirement but could also provide you with lower monthly payments.

If you’re tired of paying mortgage insurance every month and you want to put the money to better use, contact a home loan professional today to learn your options for eliminating mortgage insurance on an FHA mortgage by refinancing your current FHA loan into a new conventional mortgage loan.


What Does Seasoning Mean When Applying For a Mortgage To Buy The Home You Want? Can You Get a Loan With No Seasoning After Financial Problems?

Seasoning food makes it taste better. In the home loan area, seasoning can refer to the amount of time you’ve had a mortgage, and it may also be used to refer to adverse financial events. Can you still get a California home loan if you’ve had a bankruptcy, foreclosure, or short sale?

A waiting period after you’ve had an adverse financial event is commonly called “seasoning” by many home mortgage lenders. The longer the period of time after these events, the more “seasoning” you have. Different lenders require different periods of time before they’ll consider a loan application. For example, some lenders may offer products available for people who’ve filed for bankruptcy in the past one, two, or three years. You can find programs for:

  • No Seasoning on BK (Bankruptcy)
  • No Seasoning on Foreclosure
  • No Seasoning on Short Sale

Some mortgages that fit these criteria can be available, but they won’t provide you with the interest rates you’ll see advertised for 30-year fixed-rate mortgages of 3% to 4%. Sometimes you can see mortgages offered for less-than-ideal financial histories referred to as subprime mortgages, but that term has gone out of favor in recent years. You could also see these financial tools called nonprime mortgages, or alternative financing.

You may be able to qualify for a new home loan even if you’ve had a bankruptcy, foreclosure, or short sale. But you should also be aware that the loan will come with a higher interest rate than loans offered to customers with no adverse financial history. You may also be asked to pay a higher down payment.

California home loans are available if you’ve had a financial downturn and experienced bankruptcy, foreclosure, or short sale. While your choices aren’t as varied as those available to people with good credit and no adverse financial events, don’t rule out home ownership for seven years, as some online guides suggest. You can work with an experienced mortgage loan professional who can inform you of loans you may qualify for.


The loan products that had some availability to BK or foreclosure – plus basic terms from this article