Skip to main content

Government on the Hook for Larger Home Loans / team Thayer #realestate #housing #,arket #investor #news #oregon

The data reported on the housing industry in the last few days has been less than promising—tight inventory combined with near double-digit home price appreciation, a slower pace of existing-home sales from NAR, and a surprisingly disappointingnew home sales report from HUD and the Census Bureau.

Default risk is on the upswing as well. The composite Agency National Mortgage Risk Index (NMRI) for January 2016 released by AEI’s International Center for Housing Risk on Wednesday, covering both purchase loans and refinances, climbed by almost half of a percentage point (0.44) up to 11.70 percent for January 2016. This increase continues an upward trend that is 25 months long and counting—the NMRI has now risen year-over-year every month since January 2014.
The Agency NMRI covers 18.2 million mortgage loans with a government guarantee dating back to November 2012 (8.3 million Agency purchase loans and 9.9 million Agency refinance loans). The index measures how government-guaranteed loans with a first payment date in a given month would perform under the same adverse economic conditions experienced during the financial crisis of 2007-08. An NMRI value of 11.70 percent for a set of loans indicates that 11.70 percent of those loans would default under such adverse economic conditions.
“The NMRI data along with the NAR’s February 23 existing home sales release showing both an 8.2 percent year-over-year increase in median existing home prices and a seller’s market that has now entered its 41st month, confirms home prices are rising at unsustainable levels, feed by low interest rates, continued credit easing, and moderate economic growth,” said Edward Pinto, codirector of AEI's International Center on Housing Risk. “As NAR’s chief economist warned: ‘Home prices ascending near or above double-digit appreciation aren’t healthy—especially considering the fact that household income and wages are barely rising.’”
Within the composite NMRI, the index for Agency purchase loans rose by 0.33 percentage points year-over-year up to 12.23 percent for January 2016. For Agency refinance mortgages, the risk index climbed by more than half a percentage point (0.58) up to 11.10 percent, according to AEI.
The upward trend in the NMRI for Agency purchase loans is largely driven by a shift in market share of Agency purchase loan originations from banks to nonbanks in January. AEI reported that the large-bank share of purchase loans declined from 22.6 percent in December down to 17.3 percent in January. In November 2012, the large-bank share of purchase loans was at 65 percent. Nonbank lending is substantially riskier than the bank business it replaces, according to AEI.

justin lee thayer

Popular posts from this blog

UFC 227 play-by-play and live results #UFC #MMA #UFC227

LOS ANGELES – MMAjunkie is on scene and reporting live from today’s UFC 227 event, and you can join us for live play-by-play and official results beginning at 6:30 p.m. ET (3:30 p.m. PT). The event takes place at Staples Center in Los Angeles. The main card airs on pay-per-view following preliminary-card bouts on FX and UFC Fight Pass. In the main event, bantamweight champion T.J. Dillashaw (15-3 MMA, 11-3 UFC) rematches former champ and ex-teammate Cody Garbrandt (11-1 MMA, 6-1 UFC) for the title. In the co-feature, flyweight champion Demetrious Johnson (27-2-1 MMA, 15-1-1 UFC) has a rematch with Olympic gold medalist and former title challenger Henry Cejudo (12-2 MMA, 6-2 UFC). Follow along with our round-by-round updates and official results beginning at approximately 6:30 p.m. ET for the UFC Fight Pass prelims, 8 p.m. ET for the prelims on FX, and 10 p.m. ET for the main card on pay-per-view. To discuss the show, be sure to check out our  UFC 227 discussion thread...
Read more

First-Time Home Buyer Mortgage Risk Edge Up Team Thayer Real Estate news.

The first-time buyer share in April, May, and June was launched to new highs, supported by improvements in the labor market, riskier mortgage lending, and continuing low mortgage rates. The  American Enterprise Institute (AEI)  International Center on Housing Risk  recently released a  report , finding that first-time buyers account for 58.8 percent of primary owner-occupied home purchase mortgages with a government guarantee, up from 57.2 percent the prior June, according to the Agency First-Time Buyer Mortgage Share Index (FBMSI). The Combined FBMSI, which measures the share of first-time buyers for both government-guaranteed and private-sector mortgages reached an estimated 52.9 percent, up from 51.6 percent the prior June, according to the report. In addition, AEI determined that the Agency First-Time Buyer Mortgage Risk Index (FBMRI) stood at a series record of 15.83 percent, and increase of half of a percentage point from the average over the prio...
Read more

Team Thayer Real Estate House Flipping Traps! #flippinghouses #eugeneoregon #oregon #housing #market #realestate

If you’ve got several leads waiting to turn into potential deals, you can’t wait for one to suddenly come knocking at your door. Successful real estate house flippers have one trait in common: they place an emphasis on proper planning. Once you’ve secured a deal, you must decide what kind of rehab you will perform. Will you conduct a few simple cosmetic upgrades (like these  10 rehab projects you finish in one weekend )? Or, is the home nice enough to sell after  an easy prehab ? Are there structural damages that will require you to carry out more major renovations? Will you focus on implementing environmentally friendly renovations  – also known as “greenhabbing” – so that you  qualify for certain tax benefits ? Once you’ve determined your strategy, it is important to ask yourself these specific questions before diving into the construction action: What are the current market conditions in my area? What does my ideal buyer look like? Does my marketing cam...
Read more