Skip to content

Lending Cafe Bookmark and Share

Monthly Archives: February 2015

Renters in single-family homes looking to move out

According to recent research from Zillow, almost all the growth in the number of households in the US in the past decade has been driven by an increase in the number of rental households. This piece of information on its own would be rather neutral, were it not for the fact that renters are disproportionately represented among cost-burdened households, with over 30 percent of the household's income going toward rent each month.

The Zillow study determined that 61 percent of the growth in rental households during the period between 2005 and 2015 was due to an explosive increase in the number of people renting rooms in houses originally designated as single-family. Only one third of the growth could be attributed to an increase in the number of renters in multifamily housing. This trend may have been driven by increasingly high rents in multifamily housing and the more informal structure of renting from a homeowner, which often requires fewer proofs of employment and credit checks, which many people had trouble providing during the recession.

55+ real estate market booming

champagnetoastWhile many in the real estate profession have been busy wringing their hands over when millennials will get into the housing market, there is a solid segment of homebuyers and renters who have been quietly supporting the market on their end: those 55 years of age and over. With many baby boomers looking for retirement homes or downsizing now that their children are out of the house, this demographic has been spurring increased single-family and multifamily starts for the past year.

According to the National Association of Home Builders (NAHB)'s 55+ Housing Market Index (HMI), builder sentiment is more confident in the 55+ market now than it has been at any time since the 2008 crisis. The organization surveys builders on their current sales levels, numbers of prospective buyers they're seeing and their predictions about sales for the next six months. Confidence in all of those areas increased substantially in 2014, and future predictions are equally as optimistic.

3 reasons now is the time to refinance

With mortgage rates sinking to near historic lows, now is the best time in recent history to consider refinancing your home. Refinancing applications are up dramatically since the beginning of the year as borrowers take advantage of the advantageous conditions. The refinance application rate has soared to the highest level since June 2013. Here are a few of the reasons why you will definitely want to consider refinancing your home soon:

3 tips to keep in mind when refinancing your mortgage

Mortgage rates have been holding below 4 percent since the new year, making now an especially attractive time for homeowners to reduce their costs by refinancing their mortgages. According to a report from Black Knight Financial Services, more than 7 million homeowners in the U.S. could save money in the long term by refinancing their loans under current conditions. If you are looking into this process, here are some tips to guide you:

4 ways to save for a down payment

For the past month, the real estate market has been in one of its best conditions in recent memory for first-time homebuyers, with low mortgage rates becoming the norm and the FHA announcing that it will lower its annual premiums to bring more buyers into the market. If you're one of those buyers who is thinking about taking the plunge and moving from renting to homeownership, you're probably the most concerned about one number: the down payment. An FHA loan can give you one of the lowest down payments on the market, but you'll still need to save a substantial chunk of money. Here are some tips to help you get there fast:

Average U.S. mortgage rates continue to fall

According to mortgage company Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage in the U.S. fell again this week, after a slight increase last week. The current average 30-year mortgage rate is 3.59 percent, the lowest level it has reached since May 29, 2013, when it also sat at 3.59 percent. These historically low rates are great conditions for new homebuyers and homeowners looking to refinance.

Last week, the average mortgage rate was 3.66 percent, and exactly a year ago it was 4.32 percent. The average rates for 15-year fixed-rate mortgages also fell, declining to 2.92 percent from 2.98 percent a week ago (and 3.4 percent a year ago). That makes this the fourth week in a row that the 15-year average rate has been lower than 3 percent.

Mortgage rates continue to fall

According to data from Freddie Mac from late January 2015, mortgage rates across the country continued to fall, with average rates for a 30-year fixed-rate mortgage falling to 3.63 percent and those for a 15-year mortgage, popular with those refinancing their homes, slipping even further to 2.93 percent. Mortgage economists attributed the new lower rates to continuing low yields on long-term government bonds and falling oil prices.

Rates have been falling for three weeks straight and are currently at their lowest since May 2013, and almost a full percentage point lower than this same time last year, when they were holding steady at 4.39 percent for a 30-year mortgage and 3.44 for a 15-year mortgage.

5 mortgage acronyms explained

We'll admit it: When you're shopping for a mortgage, sometimes all the acronyms commonly used in the mortgage business can make the process confusing. Don't let yourself be intimidated by the slew of acronyms you'll encounter throughout your mortgage search. Just because something is commonly referred to by an acronym doesn't mean it's necessarily a confusing or overly technical concept. Here are some of the more common mortgage acronyms and their meanings:

Mortgage delinquencies down at the end of 2014

According to Black Knight Financial Services' December 2014 First Look at Mortgage Data, the end of 2014 saw an encouraging trend that lends credence to the idea that the US housing market is in recovery mode. Mortgage delinquencies dropped by 7 percent between November and December 2014, finishing the year at a low 5.6 percent.

A delinquent mortgage is defined as a mortgage on which payments are 30 or more days past due, and delinquencies surged during and after the financial crash in 2008. Now, it appears that the rates may finally be returning to normal after a long, slow recovery period.

Homeownership more affordable now than before the housing bubble

According to real estate research from Zillow, homeownership is more affordable for first-time buyers now than it has been at any time since 1999. When skyrocketing rents are taken into account, this means that for many millennials, owning their own home would be cheaper than renting, if they are able to get into the market in the first place.

Since the housing crash, many millennials' ambitions of owning their own homes have stalled as student debt and ever-higher rent payments have made it impossible for them to save enough for a down payment on a home. Moreover, many young people's views on homeownership were deeply shaped by the experience of the crash, and they continue to assume that renting is more cost-effective than taking on a mortgage.