Latest Real Estate News and Trends
BAD NEWS:
INMAN News reported housing construction fell to record lows throughout the month of December 2008 based on statistics released by the US Census Bureau and HUD. Housing permit activity dropped 50% between the period 12/07 to 12/08. Housing starts dropped 45% for the same period.
INMAN News also reported a drop in refinancing due to an increase in 30 year fixed mortgage rates, which reversed a 3 month trend. However, we believe refinaces will continue to rise and rates will drop again.
Speaking of mortgages, efforts to stabilize the housing market to prevent foreclosures have failed due to the restrictions on the programs placed by lenders. Borrowers in distress presently are in big trouble because lenders have refused to modify their loans. As an example, the Hope for Homeowners Act passed by Congress in July 2008 has been a failure. Its goal was to help some 400,000 borrowers avoid foreclosure. Congress allocated up to 300 Billion dollars in loan guarantees. Under this program only 350 loans nationwide have been refinanced to date. The reason is two-fold, lenders are required to write down the loans and borrowers were forced to share half of the home's equity with the federal government.
SOME GOOD NEWS
Buyers are out there and builders are more willing than ever to offer incentives to move inventory. There are lots of opportunities for investors in foreclosures and distressed properties.
National Association of Realtors will continue to petition Congress and the President to stimulate home sales by
Keeping you posted...
Bonnie & David