Friday, September 11, 2009

Home prices looking forward

Home Price Increases Depends on Foreclosure Sales - Developments - WSJ
Where will home prices head this fall? It depends, in large part, on how many more foreclosures are made available for sale, as a new study by LPS Applied Analytics, a real-estate research firm, makes clear.

LPS looked at the link between sales of bank-owned foreclosures (known as REO, for real-estate owned) and the rate of home price declines. In Michigan, for example, REO accounted for 64% of sales in the first half of 2009. Home prices declined by 47% over that time, though the decline falls to just 26% when excluding REO properties.


Buying a home - what size will your down payment be?

Mortgages - A Down Payment Anomaly - NYTimes.com
HOME buyers are often advised to come up with at least a 20 percent down payment, or face the likely additional expense of private mortgage insurance. But this year, at least, that counsel would not have saved them as much money as in the past.
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Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable to borrowers who put down 20 percent to 25 percent, considered to be the industry minimum. (Fannie and Freddie are the government-controlled companies that establish the underwriting standards for most of the nation’s loans.)

For most people, it turns out, smaller down payments result in lower interest rates. Whether that benefits borrowers in the long term, though, is open to debate.


What happens to the recovery if the FHA runs out of money?

FHA loans have driven this market recovery. 

REALTOR® Magazine-Daily News-Will Taxpayers Have to Bail Out FHA?
Will Taxpayers Have to Bail Out FHA?
The Federal Housing Administration stepped up to guarantee low-downpayment mortgages for riskier buyers after the mortgage market crashed. Now with many of them in default, the FHA’s losses have mounted, and it’s possible that its reserves will fall below the 2 percent level required by law. If that happens, taxpayers may have to bail out FHA.

Some housing analysts say that this will lead to tighter restrictions on FHA mortgages.

"It absolutely changes the political dynamic once you have to ask taxpayers" for money, says Lisa Marquis Jackson, vice president for John Burns Real Estate Consulting.

The 10 states with the most FHA-insured mortgages are:

1. Texas
2. California
3. Florida
4. Georgia
5. Ohio
6. Illinois
7. Pennsylvania
8. Michigan
9. Virginia
10. North Carolina


Source: The Wall Street Journal, Nick Timiraos (09/05/2009)