A New Year’s path to homeownership

Posted by at 12:44 pm

The New Year always begins with New Year’s resolutions – with a list nearly always topped by getting fit (i.e. giving up fatty food, alcohol or smoking), getting organized or taking better care of finances. Our Bay Equity Loan Officers are experts in helping customers make a similar list of resolutions. Let us help you make it a happy New Homeowner’s Year, too. Ready to get started? Credit Check:  Good credit is key to getting a mortgage but it takes discipline and planning. First, find out what your score is. Pay bills on time, and work to improve your credit establish it independently by opening up checking/savings accounts and using credit cards carefully. How much? Figure out how much you can spend with a handy mortgage calculator. Don’t forget to consider closing costs, ongoing maintenance and insurance, too. Experts recommend...
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December 10th, 2018

The X Factor

Posted by at 10:46 am

Young homeowners who scuffled through the economic strife of the Housing Crash appear now to be reaping the spoils of their resilience. According to the Pew Research Center, Generation X (born 1965-1980) homeowners have seen their home equity nearly double since 2010.. In the same timeframe, Gen X household wealth has risen by 115 percent, surpassing 2007 levels. Baby Boomers (born 1950 to 1964) and the Silent Generation (born 1935 to 1949) have yet to recover their pre-crisis wealth levels. Members of Generation X were hit disproportionately hard by the Housing Crisis. At the time, most were in their late 20s – a sort of first-time homebuyer “sweet spot.” Credit access was running like water. They were excited at their prospects and starting to build a little equity. Just as things were looking up, several concurrent financial calamities resulted in...
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Conforming loan limits set to rise again in 2019

Posted by at 10:57 am

Due to generally rising home prices, the Federal Housing Finance Agency will increase conforming loan limits in 2019 for mortgages backed by Fannie Mae and Freddie Mac. It’s the third straight year with an increase after nearly a decade without a change. Limits will rise to $484,350 from $453,100 in all but 47 counties in the U.S., an increase of 6.9%. Loan limits will also be increasing in what the FHFA calls “high-cost areas,” where median home prices are more than 115% of the baseline cost. Most of the high-cost counties in CA, CO, MA, MD, NC, NJ, NY, TN, UT, VA, WA and the District of Columbia will have a ceiling of $726,525, which is 150% of $484,350. In Alaska, Hawaii, Guam and the U.S. Virgin Islands, the baseline loan limit will be $726,525 for one-unit properties. For a county-by-county...
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Water Floods Future Real Estate Concerns

Posted by at 10:18 am

The construction and ongoing maintenance of utilities, roads and other infrastructure is essential to meeting the growing housing need in the 21st Century. First among these needs is ensuring the availability of usable water, especially in drought-stricken parts of the Southwest and West already dealing with supply issues. In May, California became the first state in the nation to pass laws permanently limiting indoor water use: 55 gallons per person per day by 2022, gradually dropping to 50 gallons by 2030. The Department of Water Resources says it will recommend standards for outdoor use by October 2021. Water districts who fail the to meet the goals face fines of up to $10,000. Officials say they put the onus on providers to motivate cleaning up overall system problems. Estimates say up to 30 percent of urban water loss comes from supplier...
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Housing taking a peak?

Posted by at 11:02 am

After rapid acceleration for most of the past two years, home prices in many parts of the country are slowing as interest rates rise and inventory in some markets increases. Evidence that the market is cooling can be seen in price drops. In October, 31.3 percent of homes for sale had at least one price drop of more than 1 percent after listing, 6.3 percent higher than last October’s level of 25 percent. Ten years after the financial crisis, the notion of a housing “peak” – which would naturally be followed by a downturn – seems downright spooky. Is it time to start talking about a “housing bubble?” Most economists say no. Historically, price crashes are usually caused by over-supply. In contrast, the present moment is probably a simple “cycle top” – the kind of correction normal in any consumer...
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November 14th, 2018

Builders feel pinch of fewer young workers

Posted by at 9:41 am

There is a shortage of construction workers, especially in the Northeast and California. The nation lost tens of thousands of workers during the economic downturn. Even as demand has returned, the industry is having trouble replenishing its ranks. The share of workers 24 years old or younger has declined in 48 states, according to an analysis of U.S. Census data. After hitting a peak of 11.7 million during the Housing Boom years, the number of construction workers fell to 10.2 million by 2016. States hit hardest by the housing bust saw the greatest decrease in younger workers between 2005 and 2010, led by Delaware, Vermont, Maryland, California and Arizona. Home construction per household has dropped to the lowest level in 60 years – a big reason why U.S. home prices are rising, and why the home ownership rate remains stuck...
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October 4th, 2018

Millennials moving out from the middle

Posted by at 9:32 am

Cities across America are facing similar infrastructure problems – a lack of housing suitable for middle-income residents. Starter homes within city limits are increasingly hard to find, forcing new workers to move further and further into the periphery. An appropriately balanced housing stock helps cities retain college graduates and other skilled workers. For most of the last decade, young adults have often been targeted as the reason for slowing home sales, supposedly shunning suburbia in favor of rentals in hip urban neighborhoods. But the number of Millennials buying homes in urban areas is declining – dropping from 21 to 17 percent in recent years. Millennials now make up the largest share of suburban buyers, according to the National Association of Realtors (NAR), and the rising prices are only pushing their search further out. Their younger counterparts in Generation Z are...
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A bit about buying via blockchain

Posted by at 12:20 pm

Though Bitcoin still hogs most of the blockchain headlines, it’s only the tip of the iceberg in terms of applications likely to be affected by this burgeoning technology. However, Bitcoin does provide a simple way to illustrate how many different blockchain transactions might be conducted in the future. As a publicly-accessible ledger, blockchain record-keeping is far more efficient and secure than traditional central-server transactions. When a Bitcoin sales transaction occurs, imagine the users of the blockchain as members of a large audience. The seller and buyer are on a digital “stage,” in front of thousands, or millions, of “people.” In front of all those people, the seller transfers an item to the purchaser, and the purchaser hands over the Bitcoin. Thousands of witnesses can now vouch that the buyer owns the item, and the seller received payment. Since all the...
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Lending in the gig economy

Posted by at 12:20 pm

Plans are underway at Fannie Mae and Freddie Mac to make home loan qualification easier for people earning money in the “gig” economy. For those not familiar, the “gig” economy refers to the pursuit of flexible, freelance employment instead of full-time work on a traditional career path. In today’s ever-changing economy, finding stable, salaried positions that cover the bills isn’t always so easy. Other people simply find working as an independent contractor better fits their lifestyle. Workers in the gig economy often make similar income to salaried positions. Arguably, their income is more dependable than that of salaried employees, whose jobs are closely tied to the success of their employer and stability of their field. But in many cases, gig earnings don’t qualify as income under existing mortgage-industry guidelines. Typical mortgages tend to require W-2 forms and IRS information going...
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Looking out for Generation Z

Posted by at 11:51 am

It seems that almost every segment of the real estate profession today is aimed at the Millennial Generation. Makes sense. At 80 million strong, Millennials, born between 1981 and 1996, are the largest demographic in history. And now, most have graduated college, begun careers and families, and are settling nicely into the prime spending years. But time moves inexorably forward, and it’s not too early to be talking about the next wave of potential homeowners – Generation Z. Made up of the 75 million Americans born since 1996, Generation Z is expected to start buying homes in earnest within five to 10 years. Analysts say they’re going to be a bargain-hunting, tech-loving, real estate–savvy force to be reckoned with. Watching the Great Recession unfold, most are financially conservative. They know the value of a dollar and the mathematics behind long-term...
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