By: Nicole Hale
Aapex Financial Solutions
http://www.aapexfinancial.net/
http://www.aapexfinancial.blogspot.com/
Speculations have been made from some knowledgeable mortgage industry professionals regarding the market for 2011. Among these individuals included Lawrence Yun, Chief Economist for the National Association of Realtors and Holden Lewis, award winning mortgage reporter for Bankrate.com. The Mortgage Bankers Associations also shared their predictions for the upcoming year in the following list:
1. Mortgage rates will slowly rise throughout 2011
Even though rates are historically low, they have been slightly increasing and are predicted to hang around the 5 percent area in 2011 and then rise to about 6 percent in 2012.
2. Overall demand for mortgage loans will decrease
Total originations will decline to less than $1 trillion due to the lack of consumer confidence and slow economic growth.
3. Refinances will drop
In 2010, 80 percent of all mortgages were refinances. This is expected to drop to 40 percent in 2011 and even further to 26 percent in 2012.
4. Home purchases will gain market share
Stabilizing prices and modest increases in home sales will help purchases grow in 2011.
5. Jumbo loans will rise
In 2009 and early 2010, rates for jumbo loans were much higher than conforming. In the last quarter of 2010, the rates for jumbo loans have decreased and are predicted to continue doing so which will allow the higher-end housing market to flourish.
6. Cash purchases will escalate
A fourth of all purchases in the last quarter of 2010 were from all cash purchases and this is expected to continue into 2011.
7. The mortgage loan process will continue to be a complex one
The new levels of documentations and verifications that are needed to close a loan have intensified which makes the loan process proceed at a slow rate. The complexity of second mortgages and home equity lines of credit also make it more difficult for lenders to close.
Monday, January 24, 2011
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