For the 1st time in over a year, both Fannie Mae’s and Freddie Mac’s forecast are the same! Both predict that:
- Purchase activity will be similar to 2nd half of 2011 – Stable is good
- Property values are expected to hold steady for the year – No Declines!
- Rates will remain at very low levels for 1st half of 2012
- Refinances will consume 85%-90% of Mortgage applications through June
What this means to the Realtor Community:
- Put yourself first, if you have not refinanced – now is the time!
- Lenders will be consumed by administering all the HARP program changes
- Loan Originators will be fired up to write refinance loans
- Only 20% of Purchase leads have a chance to materialize into a closing due to limited inventory
- 40% of Refinance Leads turn into done deals
We also came across some local Realtor production numbers for 2011. Out of 2000 local area agents, we found:
- Average sale volume – $3.6 Million – 30 Transactions
- Median (middle) sale volume – $2.5 Million – 20 Transactions
Our Question to you – Do you believe 2012 will be better or equal to 2011?
PLEASE Comment below and share your thoughts as we love to hear from our business partners and learn valuable insight into our market.
Posts tagged 2011
Fannie/Freddie Industry Forecasts
2011 Recap: Larger Down Payments
While everyone is trying to refinance their mortgage with HARP 2.0 and rates at historic lows, we actually had 40% of our closed loan transactions were purchases in 2011. This is almost the exact same mark we saw in 2010.
2011 was good and bad for the housing market. The bad side including purchase activity in the Midwest declined 15% from 2010; down 30% for us personally. This is due to there no longer being a Home Buyer Tax Credit in 2011. This was huge as 70% of our purchase deals in 2010 were before the tax credit expired in May. Also, the consumer confidence after the tax credit expired was substantially lower than what we are seeing now. Buyers are also saying there are fewer homes on the market right now than they’d like to see.
The good news is that our average loan size increased for 2011 as well as buyers made larger down payments. 40% of our buyers put at least 20% down on their purchases. With loan amounts increasing on FHA and Conventional loans, this tells us that appraisal concerns continue to be less of an issue as we move forward which is great news.
Our predictions for 2012 can be stated with this fact: We received more purchase lead inquiries in December of 2011 than we did for the whole 1st Quarter of 2011. It feels like the consumers have more confidence and there is definitely a buzz in the housing market going into 2012.
No appraisal needed – Refinance now
Rates are still at historic lows during this refinance boom, but there are still people not taking advantage in Michigan. What if we told you that No Appraisal is required on refinance transactions? Got your attention now? Let’s look at some numbers.
Currently, the average interest rate for home owners across the United States is 5.1%. At this time, 30 year fixed rated mortgages are at 4.25%. Say we have a borrower with a $175,000 loan and assume they are three years into their mortgage payments. By refinancing to the current rates and making the same monthly payment, they would save $46,500 over the life of the loan. Big money!
Right now, about one out of every five transactions we do are not requiring an appraisal. Yet the new 2011 HARP guidelines set to go in effect soon are hoping to bring that number up so that 4 out of 5 can refinance without an appraisal.
If you want to see how much potential money you could save by refinancing, you can check out our amortization tool for yourself on our site by clicking here. We’re going to let the math do the talking!
Join Our Conversations