Monday, December 21, 2015

Housing Finance System to Get a Boost from Ginnie Mae

Federal Home Loan Banks (FHLBanks) are an important component of the housing finance system and were sanctioned by Congress to meet the credit needs of communities everywhere in all economic cycles by providing liquidity for mortgage lending. There are 11 regional FHLBanks which supply low-cost funding to upwards of 7,400 members that include community banks, credit unions, insurance companies and community development financial institutions throughout the United States. The Mortgage Partnership Finance (MPF) programs provide FHLBanks’ members resources to sell their mortgages to secondary market agencies which allow community banks to compete with mortgage loans and competitive pricing. These institutions in turn can provide housing finance for low rates to future homebuyers, better lending standards and community investment opportunities to the local markets.  This program will be a great benefit to departments such as the Department of Rural Development Loans which is committed to the future of rural communities – the role of which is to increase rural residents’ economic opportunities and improve their quality of life.

The FHLBanks have teamed up with Government National Mortgage Association (Ginnie Mae) and created a program that will lend a helping hand to improve liquidity in the mortgage markets, provide more competitive pricing for consumers and increase credit availability. MPF issued its first $5 million security guaranteed by Ginnie Mae which is made up of a mix of loans.  It includes over 50% in the RHS category, a majority of VA loans and the remainder FHA loans. The Federal Home Loan Bank of Chicago and Ginnie Mae already have a program set in place that helps FHLBank members to sell their Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and Rural Housing Services (RHS) loans into Ginnie Mae securities.

“This is an important milestone for the MPF program,” said Matt Feldman, president of the FLHBank of Chicago. “Ginnies are among the most liquid financial instruments in the world, and this new product allows us to enable FHLBank members to offer competitive FHA, VA and Government Guaranteed Native American and Rural Housing mortgages.”  Ginnie Mae President Ted Tozer said.
“Now they can connect directly to the capital markets, improving the home financing options they can offer to their customers without the burden of having to individually obtain and maintain Ginnie Mae approval,” he added. Now local community banks and local lenders can compete with national large banks and pass the savings and improved home loan financing options to their consumers.

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Tuesday, December 15, 2015

Housing Market Is on its Way Towards a Full Recovery

The housing market nationwide is reporting an increase in prices as well as pending home sales from 2015 to 2014.One of the key indicators that the housing market is on its way towards a full recovery post-Recession is house prices.  House prices reached “bubble status” pre-Recession and was the partial cause of the entire crash of the mortgage industry during the crisis because buyers found themselves living in homes with loans that vastly exceeded the appraised value of the home.  House prices must maintain a delicate balance as the ebb and flow of the housing market dictated by new home and existing home buyer supply and demand raises and lowers pricing year-over-year.

The House Price Index (HPI) reported that house prices have been increasing for the last three months as of May, 2015, which had an annual growth rate of 5.4%.  That percentage was higher than April’s increase of 4.7% and March’s increase of 3.8%.  The HPI is issused by the Federal Housing Finance Agency, and another report by The Standard and Poor’s/Case-Shiller also showed a slower growth based on a moving three-month average.  This growth in home prices shows a strong demand for new and existing homes from home buyers nationwide.

The National Association of Realtors (NAR) also had good news to report about existing homes under contract nationally.  The Pending Home Sales Index (PHSI) reached a record-high in 9 years in May, 2015, and declined only slightly in June.  This statistic is based on homes with signed contracts as reported to the NAR.  Even with the decline, the PHSI was up 8.2% compared to June, 2014, and the number of homes under contract has been increasing for the last 10 months consecutively.  The Southern Region reflected a 5% increase for the entire year of 2015 for contracts on homes for sale.

Click Here and Here for the Sources of the Information.

Tuesday, December 8, 2015

Available Construction Jobs on the Rise

Well over half a million builders are getting ramped up with the renewal of the real estate market nationwide and are very much now hiring employees as the number of open construction jobs increased in May.  In fact, the number of available construction jobs in the United States has been on the rise since 2012 along with the constant increase of new home sales and new home inventory.  May’s employment increase logged in as one of the 4 highest months of increases since 2012.

Almost 1.8 million contractors, sub-contractors, and trade companies also made up the number of businessesconstruction employment employed in the home building / remodeling categories of the total U.S. employment in June, 2015, bringing the total number of construction employed jobs to 2.442 million.  Now that new homes are being built on lots developed for sale in more and more numbers, the construction industry has gained almost a half a million jobs since the low point of the Great Recession.

In 2015 alone, approximately 127,000 jobs have been added in the U.S. nationwide.  In fact, since hitting the ceiling during 2010, the unemployment rate for builders and construction has dropped from 22% unemployed to 7% slightly higher than the national unemployment rate.  In fact, many builders are facing a shortage in employees as they try to build new homes for the buyer demand as quickly as possible in new home communities that once stood dormant during the Recession.  This increase in demand for construction employment has only been a boon for the real estate industry’s recovery overall.

Click Here for the Source of the Information.