5 Reasons to Buy a Home in 2011
Michele Lerner, author of Homebuying: Tough Times, First Time, Any Time, offers reasons why real estate is likely to improve in 2011. Here are five reasons she thinks consumers should consider a home purchase next year:
Mortgage rates will stay low. Even with rates climbing — maybe to as high as 6 percent by 2012 — they are still well below where they have been historically.
Tax cuts could help. Extending the tax cuts could encourage a more rapid recovery for the economy.\
Americans want to be home owners. A recent Fannie Mae survey showed that Americans still believe a home is a safe and desirable investment.
Builders are about to begin building. Home builders have been sitting on the sidelines. This year, they think pent-up demand will create an appetite for new homes.
Homes are shrinking. Homes are getting smaller, which has made them more affordable.
Source: Investopedia, Michele Lerner (12/24/2010)
Lenders ‘Foreclose’ Homes They Don’t Own
In dozens of incidents nationwide, confused banks have ransacked properties that were either not mortgaged at all or were mortgaged by a different lender or were a customer of the bank in question but were current on their payments.
For instance, Bank of America broke into Alan Schroit’s second home in Galveston, Texas, and turned off the power, allowing 75 pounds of salmon and halibut Schroit had caught on an Alaskan fishing vacation to spoil and create a reeking mess. Schroit had previously paid off the property. Schroit and the bank settled a lawsuit for an undisclosed sum.
Critics of the mortgage process say these kinds of incidents are evidence that the mortgage foreclosure business is flawed and needs to be reformed.
”Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” says Ira Rheingold, executive director of the National Association of Consumer Advocates.
Source: The New York Times, Andrew Martin (12/22/2010)
Habitat for Humanity Builds 400,000th Home
Habitat for Humanity says it has built its 400,000th home. The organization was founded in 1976, and has served more than 2 million people worldwide.
“In 2005 we celebrated our 200,000th house. Now, five years later, we have more than doubled that number thanks to the generous support of our volunteers and sponsors,” says CEO Jonathan Reckford.
A copy of Habitat for Humanity International’s fiscal year 2010 annual report, “What We Build,” is now available on the group’s Web site. The report gives a snapshot of Habitat’s work around the world.
Source: Habitat for Humanity (12/13/2010)
10 States Losing the Most Residents
Using data from Moody’s Economy.com, Forbes identified the top-10 states where more residents are leaving than arriving.
The factors that encourage outbound migration from these states are mostly economic — high employment and high cost of living — although both Louisiana and Mississippi have been affected by natural disasters.
The 10 states that have said goodbye to the most residents are:
1. New York
2. Illinois
3. Ohio
4. Nebraska
5. Kansas
6. Iowa
7. Louisiana
8. North Dakota
9. South Dakota
10. Mississippi
Source: Forbes, Jenna Goudreau (12/08/2010)
5 Predictions for 2011
Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:
1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.
2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.
3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.
4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.
5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the “seriously delinquent rate” — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.
Source: Freddie Mac (12/09/2010)
