5 Spring Housing and Mortgage Trends for 2013

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1. Fewer options, higher prices, and bidding wars – expect competition and bidding wars when buying a home this spring, demand is growing faster than supply and creating a shortage.  Currently there is a 4.7 month supply nationwide, and a balanced market requires a 6 month supply.

2. Loan modifications made easy (for some) – Starting in July FHFA will require mortgage services to offer streamlined modifications for loans through Fannie or Freddie for homeowners that owe at least 80% and who are 90 days – 2 years behind.

3. FHA loans loose appeal again – FHA loans issued after June 2 will require PMI to be paid for the life of the loan, versus the current 78% equity.

4. Equity loans and cash-out refinances are back (sort of) – 1.7 million people regained equity in their homes last year, and another 1.8 million just need home values to increase another 5%.  As home prices rise homeowners may consider turning to their homes as a potential source for a loan.  Lenders remain somewhat reluctant because of the contribution that this played in the mortgage meltdown.

5. Mortgage rates rise at a snail’s pace – Mortgage rates are expected to creep up, but remain low, and should stay that way through the year.

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