New Refi Program Aims to Help Lower-income Owners Save – Industry Outlook

By June 14, 2021Industry Outlook

Surging Home Prices Are Set for a Cooldown – According to® reports, the U.S. median home price continued to post double-digit appreciation in May and reached a record high of $380,000. But the rate of price growth has shown signs of slowing for the second time in 13 months (15.2% year-over-year in May compared to 17.2% annually in April),®’s Monthly Housing Trends Report shows. Prices have been rising due to high buyer demand and a lack of inventory. Inventories are less than half the total number of homes for sale on the market compared to a year ago. “Home buyers looking to lock in still-low mortgage rates face fierce competition for fewer homes for sale than last year’s historic pandemic lows, pushing up the typical asking price in May to an all-time high for the fourth consecutive month,” said Danielle Hale,®’s chief economist. “The good news is that price momentum may be beginning to cool off.” “While still in double-digits, May was the first non-weather related slowing in price appreciation since April 2020,” Hale added. “And with a normal, summer seasonal peak in home prices expected this year, we could see growth fall back to a more normal single-digit pace in the fall.”

Source and link to the full article:®

Builders Reporting Material Shortages Hits Record High – Based on the National Association of Home Builders reports, the challenges to build a home continue to mount for the nation’s builders. Material shortages for lumber, appliances, windows, and doors are at the tightest levels in history. About 90% of builders recently surveyed across the country reported shortages of appliances, framing lumber, oriented strand board, plywood, and more, the survey shows. The shortages have worsened over the past year when fewer than 40% of builders reported a decrease in building products and materials. The latest building material shortages are increasing building timelines and prompting a delay in construction. It’s also leading to higher prices.

Source and link to the full article:  “Record Numbers of Builders Report Material Shortages,” National Association of Home Builders’ Eye on Housing blog (May 27, 2021)

New Refi Program Aims to Help Lower-income Owners Save – According to Fannie Mae, they have launched a new refinance program which could help lower-income homeowners save hundreds of dollars a month on their mortgage payments. The program, which began June 5th, aims to help about 2 million homeowners lower the interest rates on their mortgages. Eligible homeowners could save an estimated $100 to $250 a month, according to the Federal Housing Finance Agency, Fannie Mae’s regulator. Among the eligibility requirements, homeowners must earn 80% or less of their area’s median income to apply. Borrowers also must have a Fannie Mae backed mortgage. Borrowers must be current on their mortgage and have no missed payments in the last six months. The mortgage also can’t have a loan-to-value ratio above 97%, and borrowers’ FICO credit scores must be at least 620. “Lower-income borrowers typically refinance at a slower pace than higher-income borrowers, potentially missing an opportunity to save on housing costs,” said Malloy Evans, senior vice president and single-family chief credit risk officer at Fannie Mae. “Fannie Mae’s new RefiNow option will help homeowners refinance.”

Source and link to the full article: Fannie Mae_and “Fannie Mae’s Refinance Program for Lower-Income Homeowners Starts Next Week. Here’s What to Know,” CNBC (May 27, 2021)

Survey: Young Adults Underestimate Costs of Homeownership – Based on a new survey conducted by Lombardo Homes, young adults may be missing some key information to move forward in the housing market. For example, two out of three young adults recently surveyed said they are waiting for lower mortgage rates to start the homebuying process, according to a survey of 1,000 non-owner millennials (between the ages of 25 to 40). However, economists have largely predicted that mortgage rates will soon start to edge upwards in the coming weeks, moving higher from their current lows below 3%. With mortgage rates already near historic lows, this “may speak to a lack of education and awareness among this cohort of home buyers,” the survey notes. Also, many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years, the survey notes. Regardless of some of the confusion, 83% of respondents say they are actively saving for a home right now. But high rents may be standing in their way from making any major progress. Seventy-one percent said their rent is so high it’s hard to accumulate savings for buying a home.

Source and link to the full article:  “Renting vs. Buying 101,” Lombardo Homes (May 13, 2021)

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