Traditional Patterns of Homeownership Changing?

A new survey from Fannie Mae reveals that the traditional patterns of homeownership are shifting around the country. Housing Wire’s Christine Ricciardi wrote up the most interesting findings from the survey:

Although 51% of survey respondents said the housing crisis has not affected their overall willingness to buy a home, 33% said they would be more likely to rent their next home than buy. In January, 30% of Americans surveyed said they would rent a home the next time around.

Overall, 89% of homeowners, as well as 49% of renters, feel they would be better off owning a home in the current economy. However, Fannie Mae found that the homeownership rate among young adults (ages 25 to 29) decreased 11% “since peak rates” before the housing crisis.

Married couples are the most likely to own a home. However, Fannie Mae said that portion of the population is increasingly shrinking — down to 50% of households in 2009 from 56% in 1990.

The survey found that 58% of single-mothers rent. Seventy-eight percent of survey respondents cited children as a major reason to own a home.

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“Shadow Inventory” of Homes Keeps Rising

There was a Wall Street Journal report this week on the rising “shadow inventory” of homes. The shadowinventory refers to unlisted bank-owned properties and those that are in the foreclosure process. These are primarily homes that banks have repossessed after foreclosure, but have yet to put up for sale for fear of flooding the market and further depreciating home values.

According to a report from CoreLogic, a real-estate research firm, the shadow inventory of unlisted REO homes and looming foreclosures increased to 2.1 million homes in August, up 10% from last year. When combined with the 4.2 million unsold homes that are listed for sale, that means there is more than 23 months of supply at the current sales pace.

Fannie, Freddie conforming loan limits to be extended

This is good news from Reuters for those of you looking to take out a large home loan in the next year or so:

The Federal Housing Finance Agency said the maximum for the conforming loans — generally $417,000 for a single-family home but up to $729,750 in certain high cost areas — will remain unchanged in the first nine months of next year compared with 2010 levels.

The conforming, 30-year fixed loans must meet certain underwriting standards for loan-to-value and borrower credit scores and are put into Fannie’s and Freddie’s pools of guaranteed mortgage-backed securities.

The extension was dictated by a recently enacted Congressional resolution. The limits for high cost areas, generally on the east and west coasts, had been increased in a housing recovery bill passed in July 2008.

Click here to read the full article.

LFC V.P. to Speak at Upcoming Short Sales and REO Conference

Exciting news! LFC’s Vice President Shawn Miller has been chosen to speak at the upcoming “Best Practices in Short Sales and REO” conference in San Diego next month. Shawn will be part of a panel titled “Overcoming the Biggest Challenges in REO Today.” Click here to see who else will be joining Shawn.

The conference is being put on by Mortgage Servicing News, and will be held at the  San Diego Westin. Shawn’s panel is scheduled for Wednesday, November 9 at 2:30pm. If you happen to be in town, stop by the Westin to hear some of the industry’s leading experts discuss the most pressing issues affecting the market today.

Residential Real Estate On the Up & Up

March was a month that took many real estate professionals by surprise. According to Austin Kilgore with Housing Wire, national housing sales rose 6.8% over February’s sales. The New York Times reported that the Western Region of the country did exceptionally well as sales rose 17%. Standard & Poor’s Case-Shiller Home Price Indices came out this week and showed that the overall home prices were up in the month of February.However, a report in Agent Genius Magazine says, “Where it gets mixed up is that despite this being the first time since 2006 that the annual rates of change for both [the 10-city and 20-city] composites are positive, more than half of the cities in the larger composite experienced price declines.”

Real estate professionals are speculating this recent uptick in sales is greatly due in part to the federal home buyer tax credit that expires at the end of April 2010. Prospective home buyers are moving off the sidelines to cash in on the low interest rates and potential $8,000-$6,500 tax incentive ending soon. However, Alan Ziebler reports “doubts remain about whether the momentum will be sustained in the second half of the year when federal support is gone.”

States such as California, are initiating their own home buyer’s tax credit in an attempt to maintain the momentum of residential real estate sales. According to the California Franchise Tax Board, “These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence.” Though this incentive can provide eligible home buyers more than the federal tax credit, the California state tax credit will not last forever and is scheduled to end on August 1, 2011.

Obviously, there is a short window where buyers can capitalize on some real estate deals that probably won’t present themselves for several decades to come. Interest rates are at record lows and tax credits are offering those in a financial pinch a lot of help. The real estate market is overstocked with a supply of REO’s and short sales just waiting to get off the bank’s books. With so many factors piling up in the buyer’s favor, what else would it take to get more buyers to move forward with purchasing in the market?

Will the market continue its gradual stablization or will the real estate market take a double-dip once the government stops offering incentives? What are some of your market thoughts and speculations?