Monday, March 14, 2011

Real Estate Outlook: Good News Across the Nation

The market is changing out there, and the latest reports are showing that when it comes to buyers, less is more in some cases.



A recent study from the National Association of Home Builders (NAHB) indicates that the recent housing slump has meant buyers are looking for smaller houses. The McMansions of the boom era are quickly losing their style.

The NAHB reports that the builders they "surveyed expect homes to average 2,152 square feet in 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010. To save on square footage, the living room is high on the endangered list – 52 percent of builders expect it to be merged with other spaces in the home by 2015 and 30 percent said it will vanish entirely."

Also a heavy influence on the housing front are green and eco-friendly features. The NAHB reports that "in addition to floor plan changes, 68 percent of builders surveyed say that homes in 2015 will also include more green features and technology, including low-E windows; engineered wood beams, joists or tresses; water-efficient features such as dual-flush toilets or low-flow faucets; and an Energy Star rating for the whole house."

This is great news for eco-activists across the nation. The other great news this week? The Mortgage Bankers Association (MBA) reports that mortgage applications are at the highest level in months. They rose by 17.2 percent, that being the biggest increase since June 11th.
Michael Fratantoni, MBA's vice president of research and economics, reports, "An improving job market is beginning to pave the way for an improving housing market. Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications."

The U.S. Department of Housing and Urban Development (HUD) had their own good news. Their latest February edition of the Obama Administration's Housing Scorecard revealed that existing home sales are on the rise thanks in part to high home affordability levels.

And since April of 2009, record low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings.

They did report, however, that the "housing market remains fragile as data through January paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010. Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak."

But not everyone is in agreement about what foreclosures mean for today's homeowner. According to the New York Times, "All 50 state attorneys general, as well as a host of federal agencies, are pushing for a settlement over investigations into foreclosure abuses by major mortgage servicers that could cost the industry $20 billion or more. Much of that money would be earmarked to reduce principal owed by homeowners facing foreclosure."

Many homeowners have weathered the storm, however, taking on heavy burdens in order to avoid foreclosure. Bank of America argues that by helping some and not helping others, we create an unfair system.

"There's a core problem that if you start to help certain people and don't help other people, it's going to be very hard to explain the difference,” said Brian T. Moynihan, the chief executive of Bank of America. "Our duty is to have a fair modification process.”

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