Giving Thanks for 7 Things that Surprised Me in Housing and Mortgages in 2014
Has it really been nearly a month since Halloween? Apparently so since traffic on the highways, near the mall mecca of Paramus, is reminding me that holiday shopping mode is in full swing! However, before we get there, we need to fulfill the American rite of giving “Thanks” for the overabundance of food in our country by gorging ourselves on turkey, stuffing and sides. We then leave room for dessert pies, including the season bellwether, pumpkin pie on which with we will “gourd” ourselves!
Like the variety of side dishes on Thanksgiving, some of which are tasty and satisfying such as stuffing and others which are sour and kind of mushy like cranberry sauce, there are many choices today in finding a mortgage lender. We try to be a popular choice like the stuffing by providing consistent, quality products at a reasonable cost. Though for some reason, many consumers who always enjoy the smaller, side dishes better when choosing a lender tend to go for the bloated, overstuffed Big Banks! It is ironic since the result will make you sleepy with their slow processes and poor service (as per reviews on www.creditkarma.com). But, I would urge you to avoid these “Turkeys” when shopping for a mortgage and find a mortgage banker who works for you and has great interest rates and excellent service. And, now on to our list…
As 2014 comes to a close, I am amazed about so many things in the housing market in general and the mortgage industry specifically. A few of the things that I want to give “Thanks” for are as follows:
- That despite predictions for higher interest rates by year-end, interest rates are actually the lowest they have been this year. The 30 year fixed rate loan is hovering now right around the 4% mark while ARMs are in the upper 2s and low 3s.
- The never ending and overreaching federal government regulations have not prevented banks from lending to qualified borrowers. The mortgage lending environment now is as friendly as it has been at any time in the past 5 years (albeit, with a LOT more paperwork and scrutiny).
- Low and middle class families are able to buy a house with low downpayments (i.e. 3.5% on FHA loans) and with less than perfect credit. They can even buy if they had a short sales or foreclosure which occurred more than 2 years ago!
- The Manhattan and Brooklyn real estate markets continue to move higher than anybody thought possible. It is still the engine for job growth and should, at some point, push housing prices higher in the nearby suburbs. Because the reality for most of us is that there are a limit to the number of people who can spent $1M on an “average” apartment and many millions more on larger apartments!
- Despite their later entry into the housing market, and their desire to remain in and around cities, the Millenials are finally reaching the point in their lives where home ownership is both necessary and desirable. Over the next few years, this should help the housing market continue to rebound.
- The new immigration policies announced by the President should have a huge impact on housing once all the specifics are sorted out. With millions of people eligible to remain in this country, they will want to own a piece of the American Dream by buying a house. And, you can bet, with a veritable “pot of gold” in front of them, lenders will find a way to make housing and mortgages to these folks.
- Health and family. If you have these, and a roof over your head, then it is time to give Thanks. For without those, items 1-6 above are just a meaningless list!
I wish all of you a very Happy Thanksgiving holiday. Also, I am now on Twitter (@mortgage_dan) and plan to tweet several times a week on mortgage trends. If you are interested, please follow me for the latest news and updates.