At any given moment, what you might hear about the real estate market nationally, state-wide, or locally is a snapshot in time and change is always possible, in either direction. Recent real estate news points to even further strengthening of real estate and pre-recession normality.
FHA Mortgage Insurance Premiums Reduced
In early January, the Federal Housing Administration (FHA) announced mortgage insurance premiums for FHA loans were being cut from 0.85 percent to 0.60 percent, a huge drop for homeowners with FHA-backed loans. Because these loans require such small down payments, as low as three percent, mortgage insurance is required as well.
After the beginning of the recession, the FHA increased premiums from 0.55 percent to 0.90 percent, and then increased them again in April 2013 over worries about credit risks and the desire to strengthen the FHA’s Mutual Mortgage Insurance Fund (MMIF). As a result, according to the National Association of Realtors (NAR), as many as 1.65 million renters were unable to become owners due to the increased costs of ownership.
The change in mortgage insurance premiums should allow many more creditworthy buyers to qualify for a FHA loan and become homeowners.
Foreclosures and Repossessions Drop
According to the National Foreclosure Report November 2016 from CoreLogic, Inc., foreclosures and repossessions are closing in on pre-recession numbers.
- Loans that are 90 days past due as of November 30, 2016 are the lowest since August 2007 at 2.5 percent.
- Serious mortgage delinquencies were at 2.5 percent in October, down 3.3 percent from the year before.
- The foreclosure rate is at 0.8 percent, the lowest since June 2007.
The ATTOM Data Solutions’ Year-End 2016 U.S. Foreclosure Market Report found that in 2016, 933,045 foreclosure filings occurred across the country. This was down 14 percent from 2015 and the lowest amount reported since 2006. This number represents default notices, bank repossessions, and auctions.
Mortgage Interest Rates
Mortgage interest rates are another factor to watch. While rising rates are more costly for buyers, they are another indication that the economy overall is improving. The average rate for 2016 was 3.65 percent. As of January 2017, interest rates have gone as high as 4.2 percent. Rates fell the second week of January to 4.12 percent but could continue to creep up over the coming months.
Of course, this just gives an overview of the housing industry on a national scale. If you want to know what’s happening on the Emerald Coast, contact us today.
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