Posts filed under “Real Estate”
Under normal circumstances, approving my mortgage application should be a no-brainer: High income, no debt, high credit score. The missus also makes a good income, has an almost-perfect credit score and has been working for the same business for 28 years.
But these are not normal circumstances.
Let me jump to the end: Yes, we got our mortgage. We put 20 percent down, bought a house that appraised for more than the purchase price and got a 3.25 percent rate on a mortgage that resets after seven years. We moved in last month.
But the process was surreal. Indeed, it was such a bizarre experience that I started hunting for explanations from people in the industry about why mortgage lending has gone astray. I spoke to numerous experts, many of whom spoke only on background. Today’s column is about what I learned.
By just about any measure, credit is tighter today than it has been in decades. Although former Federal Reserve Chairman Ben Bernanke’s inability to refinance a mortgage is merely anecdotal, consider instead the gauge CoreLogic developed. It used 1998 as a baseline and considered six quantitative measurements to evaluate how loose or easy mortgage lending is. By those metrics, this is the tightest credit market for mortgage lending in at least 16 years.
The absurdities of my experience are worthy of its own rant, but rather than do that, I wanted to focus on what went wrong. The factors that led to the financial crisis were many, but let’s focus on three areas:
The bond market seems to have had its own flash crash this week. The yield on the 10-year U.S. Treasury bond dipped briefly below 2 percent, as panicked equity sellers looked for a safe place to park their cash. Treasuries, of course, are the world’s option of choice, the safest and most liquid port during…Read More
Source: National Association of Realtors Expensive home sales have been in the news a lot these days. The Wall Street Journal wrote about a “palatially priced” mansion in Florida listed at $139 million. The Los Angeles Times featured a Beverly Hills mansion listed at $85 million — interestingly, it was built on speculation. Business…Read More
Why Aren’t More Renters Becoming Homeowners? Andreas Fuster, Basit Zafar, and Matthew Cocci Liberty Street Economics Recent activity in the U.S. housing market has been widely perceived as disappointing. For instance, sales of both new and existing homes were about 5 percent lower over the first half of 2014 than over the first half…Read More
Bespoke: Below is a look at how much home prices have increased for each city tracked by S&P/Case-Shiller since the housing bust lows. As shown, San Francisco remains by far the biggest winner with a gain of 66%. Detroit and Las Vegas have seen the 2nd and 3rd largest increases in price at 51% and…Read More