Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.
Can rates go lower? Sure they can. My crystal ball won't tell me. Maybe the economic winds will blow more towards lower rates. Maybe not.
Can you imagine buying a home for $300,000 at 4% and paying a monthly mortgage payment that includes Interest and Principal for only $1,432.25 in November 2010? Definitely more affordable today.
Can you imagine buying a home for $300,000 at 6.5% and paying a monthly mortgage payment that includes Interest and Principle for only $1,896.20 in November 2006? Not cheaper.
Drum Roll please !!! Total 30yr payment on the 4% loan = $515,608.52
Total 30yr payment on the 6.5% loan = $682.633.47
So which loan do you want? I have left out many variables that go into getting a mortgage, and I won't cover them at this writing. Please seek out a Mortgage Banking Professional for all your mortgage needs.
Till next time
NY REAL ESTATE NURSE
Saturday, November 13, 2010
Monday, October 11, 2010
WHAT IS THE HOUSING AFFORDABILITY INDEX ANYWAY?
The NATIONAL ASSOCIATION OF REALTORS® affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.
To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.
The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of a the median family monthly income.
This is good stuff, because without the HOUSING BUBBLE, this is not happening. See the graph below. One decade long, that's10 years and you don't have to look back any farther. Mortgage rates have fallen to historical lows and the Housing Affordability Index (HAI) has risen to affordable levels.
During most of the decade they were separated by their economic forces. After the fall of Leman Brothers "Oh Brother" and the unleashing of TARP "Thank You Mr. Paulson" they now have crossed and the HAI has formed a new ceiling and Mortgage Rates have dug into a new basement. This is a screaming buy signal. More affordable.
Median Sales Price of Closed Sales $K
August year over year
By Property Type: RESIDENTIAL CONDO-TOWNHOUSE CO=OP
Queens County
2008 523,500 380,000 216,000
2009 480,000 325,000 210,000
2010 449,000 343,000 195,000
Nassau County
2008 489,000 460,000 221,000
2009 430,000 365,000 208,000
2010 460,000 562,000 * 208,500
Suffolk County
2008 380,000 260,000 149,500
2009 355,000 259,000 145,000
2010 340,000 267,500 132,500
* Good Month of August
Did you think I would leave out the Da Bronx, Brooklyn and Staten Island in this overview? Not at all, you can form the same picture with median home prices in these Boroughs. Manhattan is its own island. Median home prices are down and that is the bottom line from the housing crisis. More affordable.
Housing affordability is an important issue, especially here in the New York City/Long Island area where median housing prices are far above median housing prices nationally. Looking at the HAI from NAR is somewhat deceiving because it is a national picture, but it is a tool to track over time whether housing is becoming more or less affordable.
So where are we now and how much earnings are needed to purchase a median priced home in Queens?
HAI = ( Median Family Income / Qualifying Income ) = 100
The HAI has a value of a 100 when the median-income family has sufficient income to purchase a median-priced existing home. Unfortunately, the median-income family in Queens is not producing the qualifying income to afford a median-priced home. Then how much do we need to be buyers of that median-priced home.
With all that said, where are we today? Lets look at the month of August year over year and compare. In 2008 you would of needed to earn $127,000/YR and have a down payment of $104,600 to have a HAI = 100. Today you would only need to earn $87,400 and have a down payment of $89,800 to buy that same home in Queens County.
2008 vs 2010
MEDIAN SALE PRICE 30 YR FIXED RATE QUALIFYING INCOME
2008
$ 523,000 6.5% $127,000/YR
2010
$ 449,000 4.5% $87,400/YR
The two key factors today are low mortgage rates and reduced home prices. Home buying is more affordable than the last decade and should remain more affordable for time to come.
Only you can decide when the time is right to purchase a home.
Till next time
To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.
The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of a the median family monthly income.
This is good stuff, because without the HOUSING BUBBLE, this is not happening. See the graph below. One decade long, that's10 years and you don't have to look back any farther. Mortgage rates have fallen to historical lows and the Housing Affordability Index (HAI) has risen to affordable levels.
During most of the decade they were separated by their economic forces. After the fall of Leman Brothers "Oh Brother" and the unleashing of TARP "Thank You Mr. Paulson" they now have crossed and the HAI has formed a new ceiling and Mortgage Rates have dug into a new basement. This is a screaming buy signal. More affordable.
Median Sales Price of Closed Sales $K
August year over year
By Property Type: RESIDENTIAL CONDO-TOWNHOUSE CO=OP
Queens County
2008 523,500 380,000 216,000
2009 480,000 325,000 210,000
2010 449,000 343,000 195,000
Nassau County
2008 489,000 460,000 221,000
2009 430,000 365,000 208,000
2010 460,000 562,000 * 208,500
Suffolk County
2008 380,000 260,000 149,500
2009 355,000 259,000 145,000
2010 340,000 267,500 132,500
* Good Month of August
Did you think I would leave out the Da Bronx, Brooklyn and Staten Island in this overview? Not at all, you can form the same picture with median home prices in these Boroughs. Manhattan is its own island. Median home prices are down and that is the bottom line from the housing crisis. More affordable.
Housing affordability is an important issue, especially here in the New York City/Long Island area where median housing prices are far above median housing prices nationally. Looking at the HAI from NAR is somewhat deceiving because it is a national picture, but it is a tool to track over time whether housing is becoming more or less affordable.
So where are we now and how much earnings are needed to purchase a median priced home in Queens?
HAI = ( Median Family Income / Qualifying Income ) = 100
The HAI has a value of a 100 when the median-income family has sufficient income to purchase a median-priced existing home. Unfortunately, the median-income family in Queens is not producing the qualifying income to afford a median-priced home. Then how much do we need to be buyers of that median-priced home.
With all that said, where are we today? Lets look at the month of August year over year and compare. In 2008 you would of needed to earn $127,000/YR and have a down payment of $104,600 to have a HAI = 100. Today you would only need to earn $87,400 and have a down payment of $89,800 to buy that same home in Queens County.
2008 vs 2010
MEDIAN SALE PRICE 30 YR FIXED RATE QUALIFYING INCOME
2008
$ 523,000 6.5% $127,000/YR
2010
$ 449,000 4.5% $87,400/YR
The two key factors today are low mortgage rates and reduced home prices. Home buying is more affordable than the last decade and should remain more affordable for time to come.
Only you can decide when the time is right to purchase a home.
Till next time
Friday, October 1, 2010
Monday, August 9, 2010
ARE YOU LURKING IN THE SHADOWS?
Call the FBI, CIA and Homeland Security because someone is lurking in the shadows. Don't do that. This is not Cloak & Dagger stuff. It is an opportunity to purchase a home at a different price, a more affordable price. Banks are selling homes or letting the home owner sell for less than what is owed on the mortgage, also known as a Short Sale. More Affordable.
Shadow Inventory are properties that are 90 days late in mortgage payment, in foreclosure, or Real Estate Owned (REO), also known as Bank Owned. These are properties that have not hit the market yet. A recent report from Standard & Poor's Ratings services shows that the New York Metro area will take approximately 103 months to clear at current liquidation rates. The New York Metropolitan area is part of the 20 Major Statistical Areas in the S&P/Case-Shiller Home Price Index. The research was collected in all 20 (MSAs) and the New York area is your leader in distressed properties. New York, New York. I want to wake up to a city,you get the idea. A number 1. I am not picking on the city, just citing some research data.
Mortgage rates dropped to the lowest level. The average 30 year fixed rate was 4.49% a new low according to Freddie Mac. Oh ya. Will Freddie Mac become a Shadow? They will talk about that next week on Tuesday with a public conference on the future of the motgage system. You go White House.
Till next time
Shadow Inventory are properties that are 90 days late in mortgage payment, in foreclosure, or Real Estate Owned (REO), also known as Bank Owned. These are properties that have not hit the market yet. A recent report from Standard & Poor's Ratings services shows that the New York Metro area will take approximately 103 months to clear at current liquidation rates. The New York Metropolitan area is part of the 20 Major Statistical Areas in the S&P/Case-Shiller Home Price Index. The research was collected in all 20 (MSAs) and the New York area is your leader in distressed properties. New York, New York. I want to wake up to a city,you get the idea. A number 1. I am not picking on the city, just citing some research data.
Now if you are bored you can read the data: "The Shadow Inventory Of Troubled Mortgages Could Undo U.S. Housing Price Gains." Feb. 16, 2010, and "Variations In U.S. Shadow Inventories Could Spell Home Price Declines In Some Areas, Stabilization In Others." June 9, 2010. and updated with "Variations In U.S. Shadow Inventories: City-By-City Data," June 28, 2010. Hopefully the Groundhog won't see his shadow and keep his hole, lets all pray.Are you ready to purchase distressed property? Get out of the shadows? Only you can answer that.
Mortgage rates dropped to the lowest level. The average 30 year fixed rate was 4.49% a new low according to Freddie Mac. Oh ya. Will Freddie Mac become a Shadow? They will talk about that next week on Tuesday with a public conference on the future of the motgage system. You go White House.
Till next time
Friday, July 30, 2010
Can I buy that property?
Welcome all to the Real Estate Nurse Blog. I am Bob Ritchie your author. I am a Registered Professional Nurse and a Licensed Real Estate Salesperson with Exit Realty Central in New York City.
The Blog is to demonstrate the affordability of housing in New York City and the surrounding area after the Housing Bubble burst. Housing affordability, Home ownership and Real Estate investment for the Health Care worker is more real now and in time to come. Being a RN I work in the Health Care Industry.
During the Housing Boom the median home price in NYC and the surrounding area soared to 12-14 times a Nursing Assistants salary, 7-10 times a Registered Nurse's salary and in between were the Respiratory Therapist, X-ray Technicians, Physical Therapist, Nutritionist and Social Worker's. Don't forget the Ward Clerk's, EEG Techs, EKG Techs and all the other important and necessary position's that maintain the foundation of a Health Care facility or system. Most of these salaries were uncomfortably out of the affordability of home ownership unless you were willing to take on the unmanageable debt, sacrifice most of your earnings to pay for your housing cost and live paycheck to paycheck day to day.
With easy access to mortgage's with no down payment and closing cost wrapped into your loan. It was easy to purchase real estate during the housing boom. Fortunately those day are gone. Now you must have some cash, a job, credit score and the value of the asset must coincide with the purchase. And, And you must prove it. Yes folk's the days of just smiling at the banker are gone but not forgotten. Just look where the economic world is today.
Four years after the housing bubble popped. The U.S. continues to slump and crawl along in its stagnation of a housing recovery. Good news and Bad news. Why the good news? Home affordability is being restored.That's what the Blogs is about. Since my Blogs focus is on the health care worker, the door to home ownership is now more open than ever for these workers. Why the bad news? A lot of people are hurting during these economic times and that is not what this Blog is about.
Let's talk about affordability.
Mortgage rates have dived to record lows. 30 year fixed rate today is 4.54% as I write. Lowest level in 39 years that Freddie Mac have been monitoring rates. That's a great rate to finance your housing cost.
Home prices in the New York metro area are off 20-40% from there peak values in 2006. No sign of a rebound yet?
Supply and Demand. Foreclosures and Short Sales, that's the buzz. Shadow Inventory coming on the market. Everybody is talking that it is going to take a while to clear all these properties. Pricing pressure from distressed properties will lower the median sale price of homes. More affordable. The picture is getting clearer that you won't have to spend a high percentage of your earnings on your housing cost. Now you can go on vacation or erase something from your Bucket List.
Affordability rewards the home owner with equity building in your loan payment, tax deductions, mortgage interest deductions and a sign that says Home Sweet Home. It is not always that simple, but at lease it is getting more affordable for the people in the health care industry who are employed and have a salary.
Question? Is it a great time to purchase a home? Only you can answer that question.
Till next time
The Blog is to demonstrate the affordability of housing in New York City and the surrounding area after the Housing Bubble burst. Housing affordability, Home ownership and Real Estate investment for the Health Care worker is more real now and in time to come. Being a RN I work in the Health Care Industry.
During the Housing Boom the median home price in NYC and the surrounding area soared to 12-14 times a Nursing Assistants salary, 7-10 times a Registered Nurse's salary and in between were the Respiratory Therapist, X-ray Technicians, Physical Therapist, Nutritionist and Social Worker's. Don't forget the Ward Clerk's, EEG Techs, EKG Techs and all the other important and necessary position's that maintain the foundation of a Health Care facility or system. Most of these salaries were uncomfortably out of the affordability of home ownership unless you were willing to take on the unmanageable debt, sacrifice most of your earnings to pay for your housing cost and live paycheck to paycheck day to day.
With easy access to mortgage's with no down payment and closing cost wrapped into your loan. It was easy to purchase real estate during the housing boom. Fortunately those day are gone. Now you must have some cash, a job, credit score and the value of the asset must coincide with the purchase. And, And you must prove it. Yes folk's the days of just smiling at the banker are gone but not forgotten. Just look where the economic world is today.
Four years after the housing bubble popped. The U.S. continues to slump and crawl along in its stagnation of a housing recovery. Good news and Bad news. Why the good news? Home affordability is being restored.That's what the Blogs is about. Since my Blogs focus is on the health care worker, the door to home ownership is now more open than ever for these workers. Why the bad news? A lot of people are hurting during these economic times and that is not what this Blog is about.
Let's talk about affordability.
Mortgage rates have dived to record lows. 30 year fixed rate today is 4.54% as I write. Lowest level in 39 years that Freddie Mac have been monitoring rates. That's a great rate to finance your housing cost.
Home prices in the New York metro area are off 20-40% from there peak values in 2006. No sign of a rebound yet?
Supply and Demand. Foreclosures and Short Sales, that's the buzz. Shadow Inventory coming on the market. Everybody is talking that it is going to take a while to clear all these properties. Pricing pressure from distressed properties will lower the median sale price of homes. More affordable. The picture is getting clearer that you won't have to spend a high percentage of your earnings on your housing cost. Now you can go on vacation or erase something from your Bucket List.
Affordability rewards the home owner with equity building in your loan payment, tax deductions, mortgage interest deductions and a sign that says Home Sweet Home. It is not always that simple, but at lease it is getting more affordable for the people in the health care industry who are employed and have a salary.
Question? Is it a great time to purchase a home? Only you can answer that question.
Till next time
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