Real Estate Update April 2015
(626) 252-0839
5 Signs the National Housing Market Is Stabilizing
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According to Freddie Mac's Multi-Indicator Market Index, almost 80 percent of all housing markets across the country are stabilizing; 38 out of 50 states and 40 out of 50 metropolitan areas are showing a three-month improving trend. However, the index stands at 74.9, which indicates a weak overall housing market. While the index is far from its all-time high of 121.7 back in April 2006, it is also far from its lowest point of 57.2 in October 2010. The current market has improved 31 percent from its all-time low.

Good News for Loan Payments
Unemployment is down, and mortgage rates are low; thirty-year fixed-rate mortgages are averaging less than four percent. As such, the delinquency rate for mortgage loans at the end of 2014's fourth quarter fell to a 5.68 percent rate of all loans outstanding. According to the Mortgage Bankers Association's National Delinquency Survey, this is the lowest delinquency rate recorded since the third quarter of 2007. From just a year earlier, the mortgage delinquency rate has fallen 71 basis points, sending it back to pre-crisis levels. What's more, since the second quarter of 2012, the foreclosure inventory has fallen every quarter.

Tight Lending Standards Loosen
With such a low delinquency rate, economists have been calling for the loosening of lending standards, and the industry is listening. Fannie Mae allows borrowers with exceptional credit to purchase a conventional mortgage with as little as three percent down. Freddie Mac is following suit, allowing a three percent down payment for mortgages closed on or after March 23. The Federal Housing Administration, which insures loans with 3.5 percent down payments, recently reduced its mortgage insurance premiums so more buyers can afford to purchase a home.

National Pending Home Sales Increase
According to the Pending Home Sales Index, contract activity is up. Sales climbed the most in the South, with the index up 3.2 percent in January to 121.9; the index hasn't posted this high in the South since April 2010. Sales in the South were also up year-over-year, climbing 9.7 percent higher than January 2014. The West and the Northeast also saw positive month-over-month gains, climbing 2.2 percent and 0.1 percent, respectively. The West's index of 96.4 was 11.4 percent higher than a year earlier, while an index of 84.9 in the Northeast was 6.9 percent above January 2014. The Midwest was the only region where pending home sales decreased. The index dropped 0.7 percent to 99.3; pending sales were, however, 4.2 percent up year-over-year.

Yesenia E. Ruvalcaba-Garcia  -  (626) 252-0839 Real Estate Update  -  April 2015 

Yesenia E. Ruvalcaba-Garcia, New Century Realtors & Associates, 254 E. Rowland Street , Covina CA 91723
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