Real Estate News: Rehoboth Beach, Lewes and Bethany Beaches

February 13, 2013


Mike Kogler Team: Rehoboth Beach Real Estate

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Breaking News. April 1. That is the date set by FHA to raise mortgage insurance premiums again. If you are thinking about purchasing a home, moving now would make sense with rates rising and FHA set to raise premiums. FHA is also increasing down payment requirements for certain loans. It would also be wise to see if you qualify for low downpayment alternative for FHA financing. If you would like more information, please contact Jeff Baxter, Prosperity Mortgage.

 The U.S. headed into 2013 with prices on a rebound due to an 8.3% year-over-year surge in home prices in December, according to data firm CoreLogic. The Irvine, Calif.-based company said December home prices grew the most annually since May of 2006. From November, home prices including distressed sales edged down 0.4%. When excluding distressed properties, home prices rose 7.5% over last year in December "December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom more than six years ago," said Mark Fleming, chief economist for CoreLogic. "We expect price growth to continue in January as our Pending HPI shows strong year-over-year appreciation." CoreLogic's Home Price Index currently suggests home prices will rise 7.9% from last year in January and fall by 1% from December. When excluding distressed sales, January home prices could rise 8.6% from a year ago. Source: HousingWire.

The conventional wisdom today around the millennial generation, often defined as having been born between 1980 and 2000, seems to be that they aren't as interested in owning a home as previous generations. Recent stories in the media go so far as to claim that the dynamic, diverse people in this group prefer the flexibility of renting to the stable, long-term arrangement provided by home ownership. However, this is a misinterpretation of present-day trends, said Dr. Glenn Crellin, a professor at the Runstad Center for Real Estate Studies, University of Washington. D.C. Crellin acknowledged that the home ownership rate among the under-35 population in 2011 was just under 40 percent (compared to the national rate of approximately 65 percent), and that home ownership levels had declined more sharply among those under 35 than among other groups since the housing bubble burst. But he said many in the media were drawing the wrong conclusions from that data. "Recently, headlines showed the general press believed we were entering an era of rentership," Crellin said. "[As a result], they believe home ownership doesn't deserve the kind of support it had been given." But Crellin pointed out that the rate of home ownership for those under 25 today is actually higher than that of the under-25 baby boomers in 1970. Also, a recent poll of Washington State University students that he conducted showed that 48 percent of them expect to buy a home in the next 3-5 years. While the willingness of young people to purchase a home is certainly there, the financial means to do so may not be, Crellin said. The underlying story, then, is not one of shifting mindsets but rather changing economic factors. "[The recession] is probably going to delay purchases, but it's not the permanent transition that the national press is predicting," he explained. Source: National Association of Realtors.

 The number of consumers with sub-prime credit scores is shrinking across the country, according to new data from Equifax. The total number of consumers with Equifax credit scores below 620 fell 2.1 percent, or by about 1 million consumers, in the third quarter of 2012 versus the third quarter of 2011. The overall share of consumers with Equifax credit scores under 620 fell by 0.7 percent (from 25.9 percent to 25.2 percent) during that same period. Credit scores below 620 are considered sub-prime for the purposes of this report. A consumer with an Equifax score below 620 likely will have a harder time securing credit from a bank or other lender and may have to pay a higher interest rate if a loan is secured. "Consumer credit scores are improving in most major metropolitan areas," said Trey Loughran, president of the Personal Solutions division at Equifax. "The job market is improving and time is starting to heal the wounds of the Great Recession." "It is nice to see that over one million people across the country have moved out of the below 620 range," said Loughran. "We are seeing a trend of consumers being careful and disciplined about their use of existing credit while also being cautious about using new accounts they have opened."

 Source: National Mortgage Professional Magazine

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Mike Kogler Team: Rehoboth Beach Real Estate

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