Windermere and Zillow Economists Come Together To Discuss Housing

Earlier this week, nearly 200 Windermere brokers came together at Windermere’s monthly luxury breakfast at Overlake Golf Club in Medina, WA. The featured speakers were Windermere Chief Economist, Matthew Gardner, and Zillow Senior Economist, Skylar Olsen. Matthew interviewed Skylar on a number of topics related to the housing market and economy, including interest rates, inventory levels, Millennials, and where they predict Amazon will open their second headquarters (they both are betting on Austin, TX).

The two economists discussed the overall health of the housing market. Both predict sales to soften a little this year, but still remain strong overall. When asked about interest rates, Skylar stated that she believes they will land just below 5 percent by the end of 2018 and rise to around 6 percent by early 2019. They noted that luxury home prices have slowed a little in certain cities, with the exception of places like Seattle and San Francisco, where the economies and job growth are very strong.

On the opposite end of the spectrum, Matthew and Skylar addressed first time buyers – and more specifically – Millennial home buyers. Both say this generation will play an increasingly important role in the health of the housing market, but their biggest obstacle is saving enough money for a down payment. Skylar stated that more than 25 percent of first time buyers end up borrowing from the “bank of Mom and Dad” in order to be able to afford a home. With rapidly rising prices in many cities across the US, both agree that there probably isn’t much relief in sight in the near term for these buyers.

It was an honor to have two such well-respected economists on hand to provide their insights into the housing market. For more information about Matthew Gardner, and to read his analysis of regional markets throughout the Western. U.S., please visit: https://www.windermere.com/economics.

The post Windermere and Zillow Economists Come Together To Discuss Housing appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

How are inventory shortages impacting the housing market?

The shortage of homes for sale has been a major concern for buyers and real estate agents over the last few years. Windermere Chief Economist, Matthew Gardner, explains the impact these shortages are having on the housing market.

The post How are inventory shortages impacting the housing market? appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Should We Be Concerned About Another Housing Bubble?

Over the last several years, many of the circumstances that triggered the previous housing bubble have changed. Windermere’s Chief Economist, Matthew Gardner, breaks down how tax policy, bank regulations, interest rates, lending standards, and home equity have improved our ability to avoid another bubble.

The post Should We Be Concerned About Another Housing Bubble? appeared first on Best Real Estate Agents in Northern Colorado.

Do You Have ‘Average’ Credit? If so, Getting a Mortgage May Be Tough

This article originally appeared on Inman.com 

In the early 2000s, getting a mortgage was hardly difficult thanks in great part to lax lending standards.

This practice eventually led to a bubble forming in the nation’s housing market — which, as we all know, subsequently burst.

Since that time, the pendulum has swung the other way — to an extreme.

Today, lenders require nothing short of pristine credit to obtain a mortgage. We can never return to the reckless lending policies of the past, but I believe they’ve gone too far, and it concerns me.

What will your credit score get you?

I took a look at data produced by the Federal Reserve and was shocked by what I saw. Of the $426.6 billion in mortgage origination during the second quarter of this year, almost 62 percent went to households with a credit rating of 760 or higher.

Borrowers with a credit score in the range of 620 to 659, which many lenders view as below-prime credit, received just 6.3 percent of the dollar volume of mortgages in the second quarter.

Now, when we compare that with the same quarter of 2004, the group with 760-or-higher credit received 23.5 percent of the mortgages, and the 620-to-659 borrowers received 8 percent.

Although surveys say credit is loosening for some types of loans, standards are still far tighter than necessary.

Too risk-averse?

The data raises questions about whether regulators and banks have become too risk-averse. It’s also possible that borrowers without prime credit have just given up owning a home for now.

Figures from property-data provider CoreLogic show that home-purchase mortgage applications from borrowers with credit scores below 640 fell to 6 percent in 2015, from 29 percent in 2005. In other words, lower-rated borrowers aren’t even applying.

But why?

Rising home values might simply be putting property out of reach for a lot of lower-income people.

For example, prices in Seattle are up 55 percent from their 2012 post-crisis low, according to the Case-Shiller Index. Nationally, prices are up 35 percent from their 2012 low.

Higher prices require larger down payments and bigger mortgage payments, especially for borrowers with lower credit scores.

But equally as culpable as rising home prices are homeowners who went through a foreclosure between 2004 and 2015.

Of these 7 million homeowners, only 7.3 percent have obtained a mortgage again, and 69 percent still have a foreclosure on their credit score, thus precluding them from buying again.

The market is making it remarkably hard for many families to buy a home.

I would never suggest that we consider returning to the “old days” of sub-prime lending, but understanding that there are a large number of families who want to buy — and who meet acceptable standards for risk — should give lenders some pause for thought.

Matthew Gardner is the Chief Economist for Windermere Real Estate, the second largest regional real estate company in the nation. Matthew specializes in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

The post Do You Have ‘Average’ Credit? If so, Getting a Mortgage May Be Tough appeared first on Best Real Estate Agents in Northern Colorado.

How are inventory shortages impacting the housing market?

The shortage of homes for sale has been a major concern for buyers and real estate agents over the last few years. Windermere Chief Economist, Matthew Gardner, explains the impact these shortages are having on the housing market.

The post How are inventory shortages impacting the housing market? appeared first on Best Real Estate Agents in Northern Colorado.

Baby Boomers: Impact on the U.S. Housing Market

75 million Baby Boomers control nearly 80% of all U.S. wealth, and as this generation ages, retires, and inevitably downsizes, they will have a significant impact on the housing market. Windermere’s Chief Economist, Matthew Gardner, explains when we can expect to see Boomers start to sell, opening much-needed inventory and making home ownership available to younger generations.

 

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