Rising home prices and rents
Last week has seen rising home prices and rents. FHFA House Price Index rose 0.7% to 193.75 in June. Existing Home Sales increased by 2.3% month-over-month and 10% year-over-year. According to data released by Zillow, Rents have increased 5.4% year-over-year with the current Zillow Rent Index at $1,278. Rents show a rising trend in 70% of the metros surveyed. Wells Fargo, the leading bank that has been relatively stable during the housing crisis, is now confident enough to start a dedicated homebuilder banking group.
Fannie Mae and Freddie Mae have come a long way from depending on taxpayers’ money. Not only have these agencies turned in impressive profits for the second quarter of 2012, but also they exhibit continued confidence in the revival of the housing market. It is the rest of the economy that needs to catch up, says Richard Koss, the Director of Economics at Fannie Mae. Listen to Fannie Mae audio on August 2012 Economic and Housing Outlook. There is hope for the rest of the US Economy with American manufacturing doing much better compared to the rest of the world as shown in the chart below, according to the Business Insider.
Apart from all the above positive news related to the housing sector, there is work being done to avert costly foreclosures. Fannie Mae and Freddie Mac have a new set of guidelines to follow which allow a borrower going through a personal crisis seek a short sale before being delinquent on payments. This is an excellent news allowing borrowers facing a divorce, job transfer, disability, illness or the death of a co-borrower to opt for a short sale if they cannot continue to be good on their payments; and investors do not have to wait long to see these properties in the market unlike the foreclosure situations.With mortgage rates trending upward, albeit at a modest rate, it is time for Home Investors to jump in to the market and take advantage of rising rents and low prices. According to National Mortgage News, Home Investors accounted for nearly three out of every ten sales in the first quarter, up from 24% in the fourth quarter of 2009. Let HomeUnion help you have the privilege of your contributing to that number!