FHA Reducing its Annual Mortgage Insurance

FHA Lowers Annual Mortgage Insurance Premiums
The Federal Housing Administration is reducing its annual mortgage insurance premiums by 0.5 percentage points in a move "to expand responsible lending to creditworthy borrowers." FHA also said it would take added steps over the next few months to "cut red tape and clarify lending standards" in reducing mortgage costs for hundreds of thousands of creditworthy borrowers. FHA-backed loans allow buyers to put down as little as 3.5 percent of the purchase price, and they are a major financing resource for first-time buyers. FHA's mortgage insurance premiums will be reduced from 1.35 percent to 0.85 percent. The reduction in premiums on mortgages could save an average borrower $1,000 a year on a $200,000 loan, read more.

Smaller Cities Led Way in Rent Increases

Smaller Cities Saw Biggest Rent Hikes
2014: Surging rental costs continue to grip national headlines, but some of last year's biggest leaps in rental costs were in small to midsized cities. Nationwide, apartment rents increased 3.6 percent, on average, in 2014, pushing the average monthly lease rate to $1,124.38, according to Inc.,  a real estate research firm. That marks the largest increase since began tracking the market in 1980. Most of the drive in rental costs has been due to a short supply of vacancies at a time when demand has been high. The vacancy rate in 2014 was 4.2 percent, the lowest point since 2000,  reports. See the following markets that saw the highest effective rent increases in the fourth quarter compared to a year earlier:

Inventories Remain Near All-Time Lows

Inventory Problems Aren't Going Away
Despite recent increases, new-home inventories remain near all-time lows and are unlikely to return to their highs any time soon, according to a new analysis.The rise in single-family inventory levels over the last few months bring them back only to 2012 levels. What's more, the supply of condos continues to be at record lows, with fewer new high-rise developments and condo conversions occurring now than in the mid-2000s. From 1984 to 2014, there was an average of 9,900 units on the market. The current inventory is 72 percent below the average of the last 30 years and 79 percent below the average since 1971. Why are new-home inventory levels so low, and why will supply not likely reach the previous highs? See following reasons:

Questions to Ask Your Lender

Questions to Ask Your Mortgage Lender
A house is likely your most valuable asset, so it’s a good idea to know as much as possible about your mortgage before you rush toward closing day. When you meet with a mortgage lender, here are 10 questions you should ask to ensure you’re clear on what your options are when buying a home. What mortgage types do you offer? Different mortgage lenders offer different types of mortgages. These can loans differ in the amount offered, interest rates, length and payment type, Read more. 

10 Reasons: Real EstateWill Rock

2015 Will Rock for Real Estate
10 Reasons: After a slowdown in the market this year, housing analysts and economists have high hopes for 2015. The real estate market is expected to build momentum across the board nest year, mostly because of a strengthening economy. Moreover, the recent drop in oil prices cannot be overstated, because not only does it directly lower the transportation and home energy costs for households, but it also improves consumer confidence. And confident consumers are more likely to spend on big ticket items, which is sweet music to the ears of the real estate market." Here's a recap of some of the real estate forecasts for 2015:

What is Causing the Decline in Short Sales?

Is Housing Facing a “Short Sale Cliff?
Throughout late 2012 and into 2013, short sales had been steadily declining, due in part to rising home prices pulling homeowners into positive equity.  While two data points do not make a trend, this negative trajectory appears to have picked up pace in 2014 with short sales dropping 0.6 percentage points from 5.2 percent of total sales in December 2013 to 4.6 percent in January 2014. The preliminary February data, keeping in mind that it is preliminary and subject to revisions, shows a potentially dramatic drop to 2.2 percent. Meanwhile, the REO-sales share has not declined in the same way, moving instead in accordance with the normal seasonal pattern. This implies that while home price appreciation and other factors have contributed to the decline in short sales, the expiration of the Mortgage Forgiveness Debt Relief Act could be having an impact, Read more. 

Rents Pushed Higher

 Vacancies Low, Rents Pushed Higher
Apartment construction has reached its highest monthly pace since the beginning of 2006. So far, demand has been keeping up, but some executives and brokers say the highs in the multifamily sector can't last forever.  "Sure, the market has been resilient, and most of the new construction has leased quickly up to this point. But with every new building that delivers, concerns that the market will become oversaturated and existing properties will feel the effects of increased competition become all the more real. In fact, in some metros, this dynamic has already begun to play out, "Read more.