Is the Housing Market Set for a Rebound?
September 18, 2009
Some experts argue that the worst is behind us and others are predicting the worst is yet to come.
Here are a few recent reasons in support of a market recovery:
New Home Builds
- Based on a government report, new home building increased in August. The Census Bureau reported that builders broke ground for 598,000 new homes during August, up 1.5% from a revised 589,000 in July.
- Building permits rose 2.7% to 579,000.
- The National Association of Home Builders reported their index of homebuilder confidence had risen a point to 19, its highest level since May 2008.
Resale Homes
At Loan Mitigation Advocates, part of our job is to stay abreast of trends in the real estate market. We pay particular attention to inventory numbers and the ratio of normal sales to REO/short sale transactions. In our local area of Northern California, inventory numbers are reaching staggering low numbers in some areas. There have been cases of multiple offers and homes selling for more than their asking price. We have also noticed less foreclosures and short sales coming on to the real estate market over the past few months.
On the flip side, there are some potential pitfalls in the near future that could put a damper on the recovery:
Recasting Loans, Foreclosures and Short Sales
According to CNNMoney.com, a large number of non-conventional mortgage loans, including interest-only mortgages and option ARMS, will reset over the next year or so. These resets will lead to increases in the monthly mortgage payments for homeowners. Many people will not be able to afford the increases.
The interest-only loans specifically pose a large threat. These are homeowners who are paying only the interest payment for a fixed number of months. Once the number of fixed months is up, the payment is based on principal and a new interest rate, resulting in a much higher payment in most cases. There were a number of these type of loans created back in 2005 that are set to recast in 2010.
Besides the threat of interest-only loans, option ARMs could create problems as well. The option ARM loan has provided a borrower the ability to Read more
Everyday, struggling homeowners call foreclosure and loan mitigation hotlines for help on how to save their homes. This is just a small sample of a larger problem. Foreclosures, short sales, adjustable mortgages, and financial or personal hardship have wreaked havoc in the marketplace. The need for loan mitigation is paramount.
At Loan Mitigation Advocatessm, we encourage homeowners to try and resolve their situation themselves. In many cases, the homeowner realizes the complexity of the situation and that they do not have the time, connections within the lending industry or negotiation power. This is where many homeowners turn to a loan mitigation advocate. The hiring of a specialist to handle the process from start to finish can ease an already stressed situation, reaping benefits long into the future, and most importantly, help you, the homeowner, stay in your home.
CORPORATE BROKER’S LICENSE #01858172