Homebuying Alert. In November of 2011 President Obama signed HR 2112, the Consolidated and Further Continuing Appropriations Act of 2012 into law renewing the expired higher loan limits for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans for an additional two years, through Dec. 31, 2013. This means that the higher loan limits are set to expire at the end of 2013, which is less than two months from now. What does this mean? With regard to FHA loans, areas that allow high cost limits will be lowered from $ 729,750 to $625,500 without further Congressional action. In addition, areas which are higher than the base limits of $271,050 floor for FHA loans in low cost areas will also see a reduction of approximately 10% of allowable loan amounts if area home prices have not increased significantly enough to offset this decrease. While those seeking a mortgage under $625,500 can turn to conforming alternatives which require a 5% downpayment rather than FHAs 3.5% required --- loans above $625,500 may require a downpayment as much as 10% unless private lenders change their guidelines at the same time. The bottom line is that anyone thinking about purchasing a home and needing a minimum down payment before the end of the year should consider acting quickly. As of the date of this article, neither FHA nor VA have issued letters with instructions indicating how the new limits will be phased in if Congress does not act, however, purchasing in November should put you in position to beat any deadlines. The Remodeling Market Index (RMI) continued to climb at a modest pace in the third quarter of 2013 rising two points to 57, the highest reading since the first quarter of 2004, according to the National Association of Home Builders (NAHB). An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. The RMIs current market conditions index rose from 54 in the previous quarter to 58, the highest reading since the creation of the RMI in 2001, driven partly by rising existing home sales. The growth in home equity and home sales prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times, said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. NAHB Remodelers looks forward to continuing our tradition of profes sional service and craftsmanship as the housing recovery makes progress. All three major components of the RMIs current market conditions index increased in the third quarter. Major additions and alterations increased from 51 to 55, minor additions and repairs from 55 to 58 and maintenance and repair from 57 to 59. The future market indicators component of the RMI remained even with the previous quarter reading of 56. In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefited from rising home values, said NAHB Chief Economist David Crowe. This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period. Source: NMP Daily Choosing a community is one of the most important factors for consumers as they consider buying home, and research by the National Association of Realtors (NAR) has consistently revealed that Americans prefer walkable, mixed-use neighborhoods and shorter commutes. According to NAR’s 2013 Community Preference Survey, 60% of respondents favor a neighborhood with a mix of houses and stores and other businesses that are easy to walk to, rather than neighborhoods that require more driving between home, work and recreation. The survey findings indicate that while the size of the property does matter to consumers, they are willing to compromise size for a preferred neighborhood and less commuting. For example, although 52% of those surveyed prefer a single-family detached house with a large yard, 78% responded that the neighborhood is more important to them than the size of the house. Fifty-seven percent would forego a home with a larger yard if it meant a shorter commute t o work, and 55% of respondents were willing to forego a home with larger yard if it meant they could live within walking distance of schools, stores and restaurants as opposed to having larger yard and needing to drive to get to schools, stores and restaurants. When asked to identify their ideal community, the most popular choice was a suburban neighborhood with a mix of houses, shops and businesses. The least popular was a suburban neighborhood with just houses. As for transportation concerns, 41% said improving public transportation would be the best solution, while 29% would prefer the development of communities where people do not have to drive long distances to work or shop, and 20% would choose building new roads. Source: NAR
Posted on: Wed, 13 Nov 2013 19:55:47 +0000
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