Rates on home loans reach all time low.
The demand for refinance has rose significantly as hundreds of thousands of home owners take advantage of new government programs designed to help qualify even those who are underwater on their homes.
There’s never been a better time to buy and housing experts are predicting this year could be the last chance to grab a bargain due to the weak housing market. It’s predicted that house prices will flatten out by the third quarter and start climbing by next year. The combined effect of a decline in foreclosures and continued job growth all help to bolster the housing market. In addition, homebuyers will have better access to home loans as they get their finances in order and improve their credit scores.
Some economists expect home prices to pick up even more quickly. Data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011. One major factor that will drive the trend is the cooling of the foreclosure crisis. The percentage of residential loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.” That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.
However, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement. Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties.
Bargain home prices have jump-started sales on second homes, but more purchasers are opting to buy properties much closer to their primary residence. In the past, second-home buyers tended to buy properties out-of-state or were lured to vacation homes near far-flung resorts and tourist destinations. People prefer their second home to be within driving distance to have a better control and a network of people locally to maintain the property
Over the past year, consumer knowledge about credit scores improved significantly, including awareness of who collects information on which most scores are based, the importance of checking this information, what good scores are, how to raise them, and what service providers use these scores. But most consumers still do not know how costly low scores can be, when multiple inquiries hurt their scores, and the risks of purchasing credit repair services.
In a sample of over 1000 adult Americans by phone in late April 2012 by ORC International only 29 percent are aware that, on a $20,000, 60-month auto loan, a borrower with a low credit score is likely to pay at least $5000 more than a borrower with a high credit score.