Talking about mortgage delinquencies, foreclosures and the price difference between new homes, existing homes and foreclosed homes…
Does Refinancing Lower the Chance of Foreclosure?
Think about all the various proposals to help the real estate market we have heard. Many home owners might want to refinance to take advantage of the super low mortgage rates available today. Which makes this study from the Federal Reserve Bank of New York that says that the risk of foreclosure or mortgage default is reduced when the mortgage is refinanced very interesting.
They think that improving HARP would help the economy by increasing the disposable income to households that refinance and saving taxpayers money by reducing credit losses by Fannie Mae and Freddie Mac. Sounds great but getting any thing done during an election year may be be impossible…
Fewer Delinquent Mortgages
LPS just released their First Look Mortgage report for August 2012 and they are saying that the number of delinquent mortgages has fallen again. Which hopefully means fewer foreclosures! The delinquency rate is 10.6% lower than back in August 2011 so we are seeing yet another positive indicator for the real estate market. Also the number of mortgages less than 90 days delinquent is close to what would be considered normal. However, the number of loans that are over 90 days delinquent or in the foreclosure process is still high.
3-Way Dance: New Homes, Foreclosed Homes and Existing Homes
Is the gap between new home prices and existing prices going to favor home sellers in the near future? Lawrence Yun, chief economist for the NAR, seems to think so. But in our area, it is still tough for anyone selling a home to compete with some of the prices of newly constructed homes. And competing with the prices on foreclosed homes can really be tough. However, location can often be a deciding factor and often new homes do NOT have as good of a location as an existing home. With foreclosures, there are often some serious condition issues that gives sellers an advantage.
For buyers, it does not matter if you buy a new home, a foreclosed home or even an existing home. Prices and mortgage rates makes right now a great time for home buyers.
For sellers, this does not really change the fact that your home must beat the competition. Whether it is a new home or a foreclosed home, you have to beat it. I know you might think your home is special but remember to think like a buyer. Buyers look at price, condition and location. Unless you are beating all the competition on price, condition & location…