Don't miss: New Mortgage Rules | Increase in Residential rental investment income | Interest rates remain low

new mortgage rules“Consistent, positive reports on housing starts, permits, prices, new-home sales and builder confidence in recent months provide further confirmation that a gradual but steady housing recovery is underway across much of the nation.” – David Crowe, chief Economist, NAHB

Economy

Regulators unveiled new mortgage rules to take effect in one year. The Wall Street Journal detailed the rules in question and answer format – no more interest free loans, no loans where principal increases over time, no balloon payments, and no mortgage beyond a 30-year period. Borrowers should have total debt less than 43% of their gross monthly income. Most qualified mortgages will have a 3% cap on the amount of fess and origination costs.

The ISM index of Institute of Supply Management US expanded in December to 50.7 from November’s 49.6. A number above 50 indicates expansion and below 50 indicates contraction. A rebound in the housing market and stabilization of overseas market have contributed further decline in the manufacturing.

CNBC reported that more than 20 million homeowners in the US own homes with no mortgage. Zillow, the original source of the information further reports that Pittsburgh, Tampa, New York, Cleveland and Miami had the highest percentage of owners with no mortgage out of the top 30 housing markets.

Property Market

The CoreLogic December MarketPulse report highlights that the rental income from residential properties increased by 12% in September on a year-over-year basis. The real estate cycle has a reached a stage of contributing to the growth of the overall economy.

The National Realtors Association reported that majority of realtors report rising home prices and improving number of days on the market.

Trulia reported annual asking prices were up by 5.1% nationally in 2012 in 82 out of the 100 largest metros and rents were up by 5.2%. In Houston, Chicago, Philadelphia, and Baltimore, rents are rising much faster than home prices.

Interest Rate

Freddie Mac’s 30-year average fixed rate mortgage is at 3.4% and the 15-year FRM averages to 2.66%.

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