Have You Missed the Housing Recovery???

As always, Jim Beloit's Mortgage Matters will get you thinking!!    A matter that has been discussed
fully in my blog, news reports and other platform is tightness in financial markets.   Qualified buyers without out hefty down payments or slightly less than stellar credit(guessing Jim is talking under 660 as that seems to be the magic credit score now needed) are being left out of the market.

He restate a National Assoc. of Realtor study that shows only 32% vs typical 45% of first time home buyers have a shot at buying a home right now.  And this is the best time ever to buy a home.

Prices  have improve but aren't in most parts of the country and specifically here in Hampton Roads have not recovered to pre-2008 levels.  So bargains are plenty.  Add historically low 3.5% mortgage money, we should have a very robust housing market.  But as noted the banks aren't in an environment which
encourages them to lend as broadly as they might to qualified buyers that just fall outside the 'stellar buyer' profile.

Read the comments on the silver lining from Sandy!!  Love to hear your thoughts...especially if you live in New York/New Jersey or have family there!

Keeping you updated on the market! For the week of  November 5, 2012 MARKET RECAP “Dog bites man” has been a leading theme as we head toward 2013. By that, we mean we continually report on improving home prices; to the point where home prices are almost no longer longer news. We say “almost,” because after years of reporting on falling prices, we still have a ways to go on the upside to balance the scales. The latest price data from S&P/Case-Shiller added more weight to the rising-price side. Case-Shiller's data show home prices edged up 0.9% month-over-month in August for 19 of the 20 cities it follows. Case-Shiller's data continue to affirm the positive price-trend data issued by other popular pricing providers, such as Zillow, Fiserv, and CoreLogic. Speaking of CoreLogic, its latest data release shows continued improvement in distressed properties. CoreLogic reports that completed foreclosures posted at 57,000 in September, down from 83,000 a year earlier and slightly lower than the 59,000 foreclosures reported in August. Improved pricing and greater demand, which have enabled more short sales, are allowing more underwater borrowers to escape their obligation without foreclosure. The downward trend in foreclosures, along with a gradual clearing of the shadow inventory and rising home price, leave little doubt that we are in the midst of wide-spread housing recovery. Of course, ulta-low mortgage lending rates have aided the recovery in no small measure. Rates today continue to hold their lows (though they haven't been setting new lows lately). Today, the concern, if not the lament, among housing-market participants is credit availability. Last week, we reported on the Mortgage Bankers Association lament that too many qualified borrowers are not getting their loan. Overly strict lending standards, in short, are retarding the speed of the housing recovery. Most of us know that credit availability is a chief concern among first-time home buyers, many of whom lack strong credit scores or large down payments. This segment usually constitutes 45% of the overall home-buying market, but today it's down to 32%, according to the National Association of Realtors. There is still too much uncertainty in the market for lenders to venture farther out on the risk curve. Impending new regulations have lenders understandably nervous. The new regulations will determine risk held by lenders, as well as down payment required for borrowers. To be sure, we need to balance regulation with access to credit, but that's a fine balancing act. What's more, it's not a constant act. The system must be sufficiently flexible to meet market demand.  The good news is that the purse strings show signs of loosening. A recent survey by the Federal Reserve shows that banks, on net, are reporting easing lending standards. (The survey encompasses all forms of credit, not just mortgage.) We think we will see a less restrictive mortgage market in 2013. Economic growth and job creation are expected to improve next year. An improving economy leads to more liberal lending policies and more accommodating regulation. Economic Indicator Release Date and Time Consensus Estimate Analysis Mortgage Applications Wed., Nov. 7, 7:00 am, et None Important. The trend in purchase applications continues to point to higher home sales. Consumer Credit (September) Wed., Nov. 7, 3:00 pm, et $10 Billion (Increase) Important.Rising credit use is reflective of rising consumer confidence. International Trade (September) Thurs., Nov. 8, 10:00 am, et $45.1 Billion (Deficit) Moderately Important. A slight uptick in domestic demand for foreign goods is reflective of economic growth. Import Prices (October) Fri., Nov. 9, 8:30 am, et 0.5% (Increase) Moderately Important. Prices remain subdued and non-inflationary. Uncreative Destruction Hurricane Sandy swept through 12 U.S. states this past week, causing wide-spread flooding and an estimated $10 billion to $20 billion in potential losses, according to research firm Capital Economics. That means a lot of money will be earmarked toward home repairs and new-home construction. Some commentators have viewed this as a silver lining. To be sure, more money spent on housing will help the housing sector, but there is an unseen and a frequently neglected opportunity cost: Money spent on housing is money that could have been spent elsewhere. A natural disaster means money must be spent to replace what already existed; that's money that could have been spent on other goods or services or investments. This lost opportunity to spend elsewhere is what the 19 th century French economist Frederic Bastiat referred to as “the unseen.” Yes, we can see more money being spent on housing, but we can't see where it would have been spent had there been no hurricane. In other words, Hurricane Sandy will provide a boost to housing, which is our gain, but that doesn't translate into a boost to the overall economy because of the lost opportunity to spend elsewhere. The point we want to emphasis is that it's always worth considering Bastiat's the unseen. The seen in housing is improving sales and pricing, but the unseen is what the housing recovery could be if it were unhampered by the exclusion of unfunded qualified borrowers. This unseen is our loss.