As the federal tax credits come to an end, home buyers everywhere are hurrying to get in under the wire.
But in California the rush has turned into something of a stampede as some would-be buyers try to qualify for both the federal credit and a $10,000 state credit that kicks in Saturday.
As one home shopper tells the Los Angeles Times, "I am looking at properties almost constantly, and it is just kind of a feeding frenzy right now."
Economists Outlook is Positive
The Case-Shiller home price index showed that home prices are stabilizing. NAR’s median home price also earlier showed similar stabilizing trends.
Perhaps consumer confidence regarding home buying will begin to revive. There could have been a sizable number of financially qualified potential homebuyers in the past two years who have been waiting for lower home prices before striking. Now that prices are showing essentially no further declines, some of these potential buyers could enter the market.
The hard-hit California market has made a speedy recovery. After falling big time, home values are rising the fastest in San Francisco, San Diego, and Los Angeles, according to the latest Case-Shiller data.
Perhaps consumer confidence regarding home buying will begin to revive. There could have been a sizable number of financially qualified potential homebuyers in the past two years who have been waiting for lower home prices before striking. Now that prices are showing essentially no further declines, some of these potential buyers could enter the market.
The hard-hit California market has made a speedy recovery. After falling big time, home values are rising the fastest in San Francisco, San Diego, and Los Angeles, according to the latest Case-Shiller data.
Incentive to Avoid Foreclosure
Fannie Mae will make it easier for some struggling homeowners to buy houses in the future if they avoid foreclosure in the present.
Under rules released this month that will take effect in July, some troubled borrowers who give up their homes by voluntarily transferring ownership through a "deed in lieu of foreclosure" or by completing a short sale, where a home is sold for less than the amount owed, will be eligible in two years to apply for a new mortgage backed by Fannie.
Currently, borrowers who complete a deed-in-lieu of foreclosure must wait four years before they can take out a loan that Fannie is willing to purchase.
Under rules released this month that will take effect in July, some troubled borrowers who give up their homes by voluntarily transferring ownership through a "deed in lieu of foreclosure" or by completing a short sale, where a home is sold for less than the amount owed, will be eligible in two years to apply for a new mortgage backed by Fannie.
Currently, borrowers who complete a deed-in-lieu of foreclosure must wait four years before they can take out a loan that Fannie is willing to purchase.
Fannie Mae Revises Eligibility Requirements
Fannie Mae announced it is updating several policies impacting the future eligibility of borrowers to obtain a new mortgage loan after experiencing a preforeclosure event, including a preforeclosure sale, short sale, or deed-in-lieu of foreclosure.
Among the changes is the amount of time that must elapse after the preforeclosure event before a borrower is eligible to obtain a new mortgage loan owned or guaranteed by Fannie Mae.
This waiting period may be dependent on the loan-to-value ratio of the transaction and whether extenuating circumstances, such as loss of employment, contributed to the borrower’s financial hardship.
Additionally, Fannie Mae is updating the requirements for determining that borrowers have re-established their credit after a significant derogatory credit event.
These changes apply only to loans owned or guaranteed by Fannie Mae and do not impact those owned or guaranteed by Freddie Mac or the Federal Housing Administration (FHA).
Among the changes is the amount of time that must elapse after the preforeclosure event before a borrower is eligible to obtain a new mortgage loan owned or guaranteed by Fannie Mae.
This waiting period may be dependent on the loan-to-value ratio of the transaction and whether extenuating circumstances, such as loss of employment, contributed to the borrower’s financial hardship.
Additionally, Fannie Mae is updating the requirements for determining that borrowers have re-established their credit after a significant derogatory credit event.
These changes apply only to loans owned or guaranteed by Fannie Mae and do not impact those owned or guaranteed by Freddie Mac or the Federal Housing Administration (FHA).
Cost Gap Narrows Between Buying & Renting
Thinking of buying a home? Consider this: The gap between monthly rents and mortgage payments is at its lowest level in almost 20 years.
In some markets, the difference can be less than $100, according to a national study conducted for The Associated Press.
The analysis of 45 metro areas found the difference between the monthly mortgage payment on a median-priced home and the median rent is down to $256. The last time that gap was anywhere near that small was in 1993 when it fell to $264, according to the study.
In some markets, the difference can be less than $100, according to a national study conducted for The Associated Press.
The analysis of 45 metro areas found the difference between the monthly mortgage payment on a median-priced home and the median rent is down to $256. The last time that gap was anywhere near that small was in 1993 when it fell to $264, according to the study.
Mortgage Rates Fall
Home-mortgage rates fell this week, returning to levels seen two weeks ago, according to Freddie Mac's weekly survey of conforming rates, released on Thursday.
The 30-year fixed-rate mortgage averaged 5.07% for the week ended April 15, down from 5.21% last week. A year ago, the mortgage averaged 4.82%. The 15-year fixed-rate mortgage averaged 4.40%, down from 4.52% last week and 4.48% a year ago.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.08%, down from 4.25% last week and 4.88% a year ago. And the one-year Treasury-indexed ARM averaged 4.13%, down from 4.14% last week and 4.91% a year ago.
The 30-year fixed-rate mortgage averaged 5.07% for the week ended April 15, down from 5.21% last week. A year ago, the mortgage averaged 4.82%. The 15-year fixed-rate mortgage averaged 4.40%, down from 4.52% last week and 4.48% a year ago.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.08%, down from 4.25% last week and 4.88% a year ago. And the one-year Treasury-indexed ARM averaged 4.13%, down from 4.14% last week and 4.91% a year ago.
Interest in Owning a Home Remains Strong
Interest in purchasing a home as an investment has more than tripled in the last year, according to a survey released today by REALTOR.com.
More than 17 percent of potential home buyers say they plan to purchase a home in the near future as an investment, compared to just 5.6 percent in March 2009, the survey found.
Owning a residence in remains a goal for many more potential buyers:
• 21 percent of consumers report they plan to purchase a home in the next 12 months to five years.
• 8 percent plan to purchase in the next two years.
• 49 percent of all home owners would buy another home today if they could sell the one they currently own for what they paid for it.
Of those planning to purchase a home in the near future, 50 percent are first-time buyers.
While access to financing is important, many buyers plan to use cash to make real estate purchase:
• 12 percent of Americans planning to purchase investment property in the near future say they will pay for the property using 100 percent cash.
• 13 percent will use cash for more than 50 percent of the purchase price and finance the rest.
• 50 percent say they will buy the property with less than 50 percent cash down and finance the remainder.
More than 17 percent of potential home buyers say they plan to purchase a home in the near future as an investment, compared to just 5.6 percent in March 2009, the survey found.
Owning a residence in remains a goal for many more potential buyers:
• 21 percent of consumers report they plan to purchase a home in the next 12 months to five years.
• 8 percent plan to purchase in the next two years.
• 49 percent of all home owners would buy another home today if they could sell the one they currently own for what they paid for it.
Of those planning to purchase a home in the near future, 50 percent are first-time buyers.
While access to financing is important, many buyers plan to use cash to make real estate purchase:
• 12 percent of Americans planning to purchase investment property in the near future say they will pay for the property using 100 percent cash.
• 13 percent will use cash for more than 50 percent of the purchase price and finance the rest.
• 50 percent say they will buy the property with less than 50 percent cash down and finance the remainder.
California's Tax Credit Monies May Go Fast
The $100 million allocated for California's first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to California Association of Realtor's Economics team.
California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.
C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.
Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become available.
California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.
C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.
Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become available.
California won't tax forgiven home debt
In a statement Monday, Govenor Schwarzenegger said, "It is important that we continue to provide all possible assistance to homeowners who were negatively impacted by the mortgage crisis…and protect them from thousands of dollars in unfair taxes."
Those affected can now rest a little easier, knowing they won't be hit with a large state tax bill after already being forced to sell their home at a huge loss.
Mortgage debt is typically considered forgiven by lenders – and eligible for taxation as extra income – during a foreclosure or a short sale. In short sales, lenders accept a price below what's owed to avoid higher costs of foreclosing. The difference is the forgiven debt.
The state Franchise Tax Board estimates about 100,000 Californians will be spared from $34 million in state taxes through 2012 as a result of the new law.
The tax relief plan applies only to people who lost homes in which they lived. Investors are not affected and still owe, says the FTB.
State officials say qualified taxpayers don't have to do anything to get the tax break. Those who qualify for federal relief will automatically get the state relief.
Those affected can now rest a little easier, knowing they won't be hit with a large state tax bill after already being forced to sell their home at a huge loss.
Mortgage debt is typically considered forgiven by lenders – and eligible for taxation as extra income – during a foreclosure or a short sale. In short sales, lenders accept a price below what's owed to avoid higher costs of foreclosing. The difference is the forgiven debt.
The state Franchise Tax Board estimates about 100,000 Californians will be spared from $34 million in state taxes through 2012 as a result of the new law.
The tax relief plan applies only to people who lost homes in which they lived. Investors are not affected and still owe, says the FTB.
State officials say qualified taxpayers don't have to do anything to get the tax break. Those who qualify for federal relief will automatically get the state relief.
Subscribe to:
Comments (Atom)
