2011 Mortgage Trends

2011 Mortgage Trends: Jumbo Loans, Cash Buys


The number of mortgage applications for home purchases is expected to become a bigger part of the mortgage market in 2011 as home prices stabilize, predicts the Mortgage Bankers Association. Refinancing has mostly dominated in recent months as home owners looked to lock-in low interest rates, but experts predict refinancing to slow as new mortgage shoppers dominate.



Real estate analysts predict the other following trends in the mortgage market for 2011:



Rates on the rise. The Mortgage Bankers Association predicts mortgage rates to rise slightly in 2011 and hover around 5 percent. They expect rates to increase to about 6 percent in 2012.



Jumbo loans become more attractive. Jumbo loans (loans over $417,000 in most housing markets and above $729,750 in high-cost housing markets) are expected to pick up pace in the next few months. Jumbo loans often have higher mortgage rates than conforming loans. However, with mortgage rates on jumbo loans dropping, experts predict a hike in refinancing and purchase applications for high-end housing.



All-cash purchases. All-cash purchases represented about a quarter of all existing home purchases in the last four months of 2010, according to Lawrence Yun, chief economist of the National Association of REALTORS®. He expects all-cash purchases to continue to represent a big part of the real estate landscape in 2011.



Slow and complex mortgage loan process. The time between application and closing can take as much as 60 days and that’s not expected to get any faster, experts say. Lenders often recommend borrowers lock in a loan 60, 75, or 90 days to help ensure the loan process will be completed within that lock-in period. The industry's new levels of documentation and verification that is now required is causing lengthy delays in the loan process, experts say.

Source: “7 Mortgage Trends to Expect in 2011,” MSNBC (Jan. 10, 2011)

Emily Lee

call/text 606-499-7836

Realty Group II

broker:423-869-5111



Housing Starts Expected to Climb in 2011

Housing Starts Expected to Climb in 2011


New home construction is looking up this year.



During an economic update Wednesday at the International Builders' Show in Orlando David Crowe, chief economist of the National Association of Home Builders, projected single-family housing starts to rise by 21 percent in 2011, reaching 575,000 units.



The estimate is slightly more conservative than the Dec. 30 projection of 716,000 housing starts this year by Lawrence Yun, chief economist of the National Association of REALTORS®. Both estimates assume sustained job growth, increasing U.S. population, as well as continued low interest rates driving construction.



Yun expects about 2 million jobs to be added in 2011. However, as NAHB presenter Frank Nothaft, chief economist for Freddie Mac, pointed out, 2011 got off to a slow start with nonfarm payrolls rising only by 103,000 in December. He called the figure weaker than expected.



Credit is another factor. Lending remains tight, but if it opens up with safe underwriting standards for creditworthy buyers, Yun says there would be a bigger boost to the housing market with spillover benefits for the broader economy. The 30-year fixed-rate mortgage is forecast to rise gradually to 5.3 percent around the end of 2011; at the same time, unemployment should drop to 9.2 percent, according to NAR.



In addition, over the past 10 years the U.S. has added 27 million people. Continued population growth will also spur home construction and sales. “All the indicator trends are pointing to a gradual housing recovery,” Yun says.



An even more conservative projection of 492,000 housing starts in 2011 was released by the Portland Cement Association during the International Builders Show Wednesday. Edward Sullivan, PCA chief economist, does not expect significant increases until 2012 due to tight lending standards, a high home inventory count, and unstable housing prices. He also says that new home construction will vary considerably by region.



-- Erica Christoffer, REALTOR® Magazine

 

Emily Lee

call/text 606-499-7836

Realty Group II

Broker:423-869-5111

States with the highest foreclosure rates

Lenders Repossess 1 Million Homes in 2010


Banks repossessed more than 1 million homes in 2010 and this year is expected to get even worse, according to RealtyTrac, a foreclosure tracking resource. About 5 million borrowers are at least two months behind on their mortgage payments, which industry analysts say will likely lead to lenders taking back even more homes this year as borrowers continue to struggle with job losses and dropping home values.



"2011 is going to be the peak," says Rick Sharga, a senior vice president at RealtyTrac Inc.

One in 45 U.S. households received a foreclosure filing last year, a record high and a 1.67 percent increase from 2009.



Some states are harder hit than others. In Nevada alone, one in every 11 households received a foreclosure filing last year. The state had a 71 percent spike in bank repossessions in December.



Banks in recent months have mostly slowed their pace in evictions, following allegations that they were handled improperly. But Sharga says banks will resume repossessions and the first quarter will likely show a rebound in foreclosure activity.



The states with the highest foreclosure rates:



• Nevada



• Arizona



• Florida



• California



• Utah



• Georgia



• Michigan



• Idaho



• Illinois



• Colorado



Source: “Lenders Take Back 1 Million Homes Last Year Despite Slowdown in Foreclosures in December,” Associated Press (Jan. 13, 2011)

Emily Lee

call/text 606-499-7836

Realty Group II

Broker:423-869-5111

Federal Tax Report

Law Extends Tax Rates, Some Credits

President Obama has signed a massive tax bill that includes numerous provisions of interest to REALTORS® or other people in real estate. Check out the clink below to review the bill.



TAX Summary


EMILY LEE
606-499-7836 or 423-869-2442
REALTY GROUP II
423-869-5111

NEW TAZEWELL HOME

MLS#741681

Forbes lists Sevierville in top ten 'Fastest Growing Small Towns'

Taken from: The Tennessean




Dolly Parton's hometown, Sevierville is the eighth oldest town in Tennessee--and one of its fastest growing. From 2006 to 2009, the population grew from 81,382 to 86,243, a rate of 6%.



The magazine Forbes lists it as the tenth fastest growing small cities in the United States.



Another Tennessee town, Columbia, made the list coming in at number seven.



#1: Fairbanks, Alaska



The population of Fairbanks grew nearly 14% since 2006 and now has 98,660 people.



#2: The Villages, Florida



The Villages in Florida is an active adult retirement community in central Florida which has saw its population grow 13% in three years. By the end of 2009, nearly 78,000 people lived at The Villages in Central Florida.



#3: Bozeman, Montana



Home to Montana State University, Bozeman's population grew 10.5% from 2006 (81,763) to 2009 (90,343).



#4: Palm Coast, Florida



Despite the crashing real estate market in Florida, the crashing waves of Palm Coast are still a draw. The Atlantic Ocean beach community (the closest beach from anywhere on Interstate 95) grew more than 10% from 2006 to 2009. Its population is now 91,622.



#5: Ames, Iowa



Home to Iowa State, the population of Ames, Iowa grew nearly 9% between 2006 and 2009 and is now approaching 90,000.



#6: Stillwater, Oklahoma



Another university town, Stillwater is home to Oklahoma State. The population of this city, located halfway between Tulsa and Oklahoma City has grown 85 since 2006.



#7: Columbia, Tennessee



Located less than an hour south of Nashville, Columbia is the Maury County seat. Its population at the end of 2009 was 84,302, up 7.7% from 2006.



#8: Moses Lake, Washington



Located in the middle of Washington State, Moses Lake dubs itself as "Washington's Great Escape." Plenty of people have discovered this haven for outdoor recreation, with the population growing 6.6% since 2006



#9: Grand Island, Nebraska



Sitting in the center of the state north of Interstate 80, Grand Island was the 9th fastest growing small city in America between 2006 and 2009. With a 6.3% growth rate during that time, the city is now home to 72,302 people.



#10 Sevierville, Tenneessee



Dolly Parton's hometown, Sevierville is the eighth oldest town in Tennessee--and one of its fastest growing. From 2006 to 2009, the population grew from 81,382 to 86,243, a rate of 6%.



See the full Forbes list of the fastest-growing small cities in America

EMILY LEE

Realtor

call/text 606-499-7836

 

Realty Group II

Harrogate, TN

Broker: 423-869-5551

MARKET TRENDS

Today's Market Trends for single-family homes 


Average Listing Price: $169,107

-0.03%

Average Listing Price/Sq Ft: $91.14

-0.02%

 

Emily Lee

Realtor

606-499-7836

Realty Group II

423-869-5111