Palm State Mortgage Company supports the American dream of home ownership by scouting the finest mortgage rates available, based on the personal merits of each individual client. It is indicative of our American Spirit that our society has not lost faith in ownership of our own homes, businesses and real estate.
Look at the contrasts in the immediate past: On the one hand, there have bee 16 million foreclosures since 2008. On the other hand, in a recent survey of more than 2,000 adults by home buyer website Trulia, 80% of the renters surveyed stated they planned to buy homes in the near future.
So, we begin 2013 on an note of optimism as we bring you the mortgage trends for the coming 52 months of the New Year. It remains to be seen if the trends we have noticed are good or bad. At this point, they are simply facts with a little power of expert prediction thrown in.
What House-shoppers Must Know In 2013
1. Your cost of “House Love” Will Rise…Calvin Schnure, an economist at the National Association of Real Estate Investment Trusts, estimated that new construction needs to create houses and apartments in the ballpark of “1.25 and 1.5 million a year just to keep up with population growth.” A National Association of Realtors (NAR) report in October lists only a 5.4 months’ inventory of homes for sale at the current pace, and yes, that is 22 percent below where it was a year ago. Typically, we need a 6 months inventory to maintain a healthy market.
So, house-hunters, be prepared! You are facing the lowest inventory since February 2006. “I think we’re going to look back three years from now and say that 2012 was the year the housing market turned the corner in America, says Mark Dotzour, chief economist at Texas A&M’s Real Estate Center. So, look for increases of 5-6% mortgage rates in the coming months.”
2. Your Rental Prices Will Rise… It is predicted by experts that many 20-30 year olds are now finding their elusive jobs. Economist, Calvin Schnure says “they represent a pent-up demand for rentals that’s twice as big in percentage terms as the country has ever seen. For next year, “that means that for people looking to rent, good luck… it’s going to be a challenge,”
3. You Might Be First Time Home Buyer… Congratulations, you are part of a big trend. The trend is obvious in an NAR survey of buyers and sellers released in November—“Thirty-nine percent of borrowers were first-timers, up from 37 percent in the 2011 survey.”
4. Your Credit Standards Will Be Loosened… 760 has been the magic FICO credit score for mortgages, and that is high compared to many previous years, according to the FHA. In 2013, according to Luis Vergara of Mission Capital Advisors in NYC. qualifying scores will begin to go down because more qualified will be entering the market. Plus, lenders will be increasing competition to offer them loans.
As the title above indicates, this is only Part One of our Trend List for the new Year. We are assembling more predictions and data, and we will be bringing you four more trends to watch in our next blog, Part Two. Likewise, we pledge to watch the financial and fiscal information as it unfolds and we are constantly commit to bringing you mortgage news and views that you can use!
