Mortgage Lending Standards Loosen in January

Mortgage lending standards loosened in January, with the Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI) increasing 1.1 percent to 177.1. The MCAI indicates the overall standard with which lenders are offering credit; an increase equates to loosening, while a decrease equates to tightening.
 
"Mortgage credit availability increased for the fifth consecutive month in January, driven by increased availability of jumbo loan programs," said Lynn Fisher, MBA's vice president of Research and Economics, in a statement. "We saw a particular increase in agency jumbo programs that focus on loans in high-cost areas that exceed the baseline conforming loan limit of $424,000 but are still eligible for purchase by the GSEs. While the change in GSE loan limits may have had an indirect impact on the jumbo MCAI, there were other factors at play, as several investors rolled out new jumbo loan programs in January."
 
The MCAI is comprised of four indices: Conforming, Conventional, Government and Jumbo. The Jumbo MCAI increased 4.7 percent in January, while the Conventional MCAI and Government MCAI increased 2.3 percent and 0.2 percent, in order. The Conforming MCAI decreased 0.1 percent.
 
Source: Mortgage Bankers Association (MBA)

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Experts Agree: The No. 1 Factor Shaping the 2017 Housing Market

Rising mortgage rates will have the most impact on the housing market in 2017, according to expert opinions recently assessed in Zillow's Home Price Expectations Survey, followed by limited housing supply and shifting demographics.
 
Rising rates, markedly, affect both sides of the transaction—as rates increase, homebuyers are further extended, while sellers hold off on listing to avoid a higher-priced mortgage. The experts surveyed expect the most significant changes to come when rates reach 5.5 percent. According to Freddie Mac, rates currently are in the neighborhood of 4 percent. 
 
"Rising mortgage rates, inventory shortages and demographic shifts will be the main drivers of the U.S. housing economy this year, especially for first-time buyers who will face tougher competition for entry-level homes and often operate with a tighter budget than move-up buyers," says Zillow Chief Economist Dr. Svenja Gudell. "When you combine higher mortgage rates with increasing home values, mortgage affordability starts to suffer, and buyers will have to spend more and more on their monthly payments. This makes it even more important for buyers to prepare their finances, and shop around to make sure they are getting the best possible rate."
 
Seventy-seven percent of homebuyers obtain a mortgage to finance a home purchase, according to Zillow—this widespread use, experts agree, will amplify the effects of rising rates on home price appreciation.
 
"Compared to their outlook in our previous survey just a few months ago, most of our panelists now expect somewhat stronger home value appreciation this year and next, as tight inventory conditions persist," says Terry Loebs, founder of Pulsenomics, which partnered with Zillow on the survey. "However, longer-term, the consensus still calls for decelerating prices, with the most pessimistic quartile of experts continuing to project negative inflation-adjusted returns for U.S. housing beyond 2017. The specter of rising mortgage rates and other affordability hurdles are clearly impacting these home value projections."
 
For more information, please visit www.zillow.com.

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Foreclosures Fall 82 Percent from Recession Peak

Foreclosures are continuing their exodus from the housing market, with foreclosure inventory falling 30 percent and foreclosure completions falling 40 percent in 2016, according to CoreLogic's December 2016 National Foreclosure Report. Foreclosure completions totaled 21,000 in December, down from 36,000 one year prior and 82 percent from its recession peak.
 
Mortgage delinquencies in December also fell, 19.4 percent from one year prior. One million mortgages are in "serious" delinquency, or 90 days or more past due—the lowest amount since August 2007.
 
"Foreclosure and delinquency trends continue to head in the right direction powered principally by increasing employment levels, stringent underwriting standards and higher home prices over the past few years," says Anand Nallathambi, president and CEO of CoreLogic. "We expect to see further declines in delinquency and foreclosure rates in 2017. As the foreclosure inventory diminishes, we must look ahead and tackle tight housing supply and growing affordability issues, which are keeping many potential homebuyers, especially first-time buyers, on the sidelines."
 
Foreclosure inventory stands at 329,000, or 0.8 percent of all homes with a mortgage. Foreclosure inventory stood at 467,000, or 1.2 percent of all homes with a mortgage, in December 2015. New Jersey (2.8 percent), New York (2.7 percent), Maine (1.8 percent), Hawaii (1.7 percent) and the District of Columbia (1.6 percent) had the most foreclosure inventory in December 2016. Colorado (0.2 percent), Minnesota, Utah, Arizona, and California (all 0.3 percent) had the least.
 
At 45,000, Florida had the most foreclosure completions in December 2016, followed by Michigan (30,000), Texas (24,000), Ohio (21,000) and California (19,000). The least foreclosure completions were in North Dakota (182), the District of Columbia (254), West Virginia (312), Montana (630) and Alaska (668).
 
Source: CoreLogic 

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact us at 866-977-7623.

Reprinted with permission from RISMedia. ©2017. All rights reserved.