Mortgage lenders are seen to be loosening lending towards borrowers with less-than-perfect credit as a way of drumming up business. Wells Fargo has started offering mortgages to subprime borrowers with credit scores of as low as 600. Non-bank lender Carrington has followed suit by lowering its minimum credit score requirement to 550. The money-making mortgage refinancing market has weakened in the past year due to rising mortgage rates, with the typical fixed rate for thirty-year mortgages growing to 4.4% after it fell in May last year to near-historic lows. A Carrington sub prime lender would be charged a 7.15% mortgage rate.
At present, the high end marketplace has become a better location for investors. According to Bank of America Merrill Lynch, sales of properties worth over $1 million improved by over 14% over the last year, while those of properties valued at less than $100,000 dropped by eighteen percent. Costs for higher-end houses also have seen considerably larger increases. Zillow data demonstrated that the top third of the marketplace, consisting of homes worth $305,700 and above, rose in value by an average 3.38% per annum over the previous eighteen years. These price increases were 20% higher than those seen by the bottom two thirds.
The typical buyer may soon have trouble buying properties in many important markets, property data company Zillow warned. 62.5% of Miami dwellings, for instance, are seen to be unaffordable for buyers with average income based on historic standards, followed by 57.2% of houses in Los Angeles. An estimated 33.6% of dwellings on a nationwide basis are considered unaffordable. The escalation in affordability issues raised concerns that trends may emerge similar to those that preceded the housing crash. In reality, some areas are already showing early signals of a real estate bubble, even though the total market is not yet in one.
Ernst & Young as well as the Urban Land Institute prediction in a brand new report that commercial property transactions increase during the next two years and even exceed 2008 quantities. According to the ULI forecast, overall trade values will grow to $230 billion by 2016, a more positive outlook than was recorded last autumn. Developments in the greater economy are found to support the overall greater favorable outlook for the US real estate market. Total yearly returns for the commercial property marketplace are expected to reach 9.4% in 2014, with the greatest returns found in the industrial and retail buildings sector.
Going into the 2014 spring buying season, the USA real estate market is facing an unusual situation: not enough sellers, while buyers find themselves unable to manage the properties which are on sale. Despite a 13.4% gain in the typical costs of homes sold last year, there are fewer homeowners listing their properties. But with higher prices as well as higher mortgage rates, many buyers can't manage the houses on sale, especially for first-time buyers as well as investors buying investment properties in cash. This dilemma means that the housing market continues to fight a half-decade after the downturn.
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