A Alpharetta GA cash out refi may soon be a thing of the past, and has in fact, already tumbled from a peak of $320 billion in 2006 to just $32 billion in 2013.
During the housing boom of the mid-2000's, a Alpharetta GA cash out refi became a popular outlet for homeowners. Homeowners were encouraged to think of their homes as ATM's they could easily withdraw cash from, in the form of a cash out refinance.
Decrease in Alpharetta GA cash out refi popularity is due to three reasons:
1. A Alpharetta GA cash out refi is closely tied to an increase in home prices.
Despite jumping 11.5% year-over-year nationally in 2013, inflation adjusted housing prices are still down about 30% from the bubble peak.
In addition, analysts don't expect home prices to continually rise as they did in the bubble years, which could make borrowers less likely to withdraw equity from their homes. Home prices are projected to increase by 4% in 2014 and 2% in 2015 followed by a 2% increase on average in the long term. As a result, many borrowers would still be unable to use a Alpharetta GA cash out refi due to the lack of home equity.
2. A shift in borrower mentality from using their homes as an ATM.
Homebuyers are making more of a concerted effort to pay down or pay off their debts instead of expanding or upgrading. As lending standards tightened after the crash, borrowers' credit quality has improved.
3. A Alpharetta GA cash out refi is not always cheap when compared to alternatives like home equity loans.
While the interest rates on a Alpharetta GA cash out refi are usually lower than those on a home equity loan, they can become expensive once additional loan level pricing adjustments are factored into the equation.
Depending on the FICO/LTV combination, a borrower could pay up to 3% of their mortgage balance upfront or 0.75% additional annual interest rate for a cash out refi. Additionally, cash-outs are not available to high LTV borrowers. Guidelines stipulate that a Alpharetta GA cash out refi is not permitted for borrowers with LTV greater than 85. Finally, closing costs are required for cash-out refinances, but they are not needed for home equity loans.
Given these 3 factors, it would seem unlikely for the Alpharetta GA cash out refi to make a comeback or return to pre-crash levels.
For more mortgage tips and information, check out the link to our Alpharetta GA Mortgage Info under Alpharetta GA Real Estate Categories to your right.
The cost of Alpharetta GA homeownership continues to rise, and is now partly to blame for the recent housing woes.
It had been thought that home sales had slowed due to unusual winter weather in many parts of the country, but buyers seem to be contradicting that theory now that spring has arrived.
According to an analysis by RealtyTrac, the average monthly payment for a three-bedroom home purchased in the fourth quarter of 2013 shot up by 21 percent in the past year. The calculation includes the estimated cost of a mortgage, homeowners insurance, property taxes and maintenance and subtracts the estimated income tax benefit.
Average Cost of Alpharetta GA Homeownership Still Cheaper Than Renting
The average monthly house payment for a three-bedroom home in the 325 counties included in the analysis was $865 in the fourth quarter of 2013, based on a 30-year fixed rate mortgage with an interest rate of 4.46 percent and a 20-percent down payment. That's up from $714 for the same size home in the fourth quarter of 2012, using an interest rate of 3.35 percent.
The rise is due to median home price increases of 10 percent in the 325 counties, along with that increase in the average 30-year fixed mortgage rate, as reported by Freddie Mac.
The danger in the affordability statistics is that median monthly incomes (the minimum income needed to qualify for a median-priced home) are not keeping pace with the rising cost of homes. Even with the increase in the cost of Alpharetta GA homeownership with a mortgage, it's still cheaper to own here and in 91 percent of the counties analyzed than it is to rent a three-bedroom home.
Check out our other articles and news affecting Alpharetta GA homeownership and the Alpharetta GA real estate market in general by clicking on the Alpharetta GA Real Estate News link to your right under Alpharetta GA Real Estate Categories.
Alpharetta GA home sales are beginning to look like the start of a perfect storm for real estate. A combination of frustrated buyers from a lack of inventory, and sellers starting to put their homes on the market may mean the spring selling season could poised for a surge… one for the record books.
Typically, the spring selling season (March through June) is when more than half of all homes in the U.S. are sold. The market is getting a later start than usual this spring due to the bad weather all over the country.
Alpharetta GA home sales declined in February to the lowest level since mid-2012, with the number of contracts signed with the intention of buying falling to the lowest level since 2011.
Applications for mortgages to purchase homes dropped in February to the lowest since 1995, according to an index from the Mortgage Bankers Association that is seasonally adjusted. By mid-March, the gauge regained about 12 percent from that low, while remaining about 17 percent below the level it was during the same week in 2013.
Nationwide, U.S. home prices rose 12.2 percent in February compared to February 2013, up slightly from January's year-over-year pace of 12 percent. The number of available homes remains below the level typical of a healthy market.
Alpharetta GA Home Sales May See Exaggerated Bounce
Fannie Mae and the Mortgage Bankers Association are predicting 2014 Alpharetta GA home sales to see a bit of an exaggerated seasonal bounce due to so many eager buyers wanting to purchase homes.
Lenders expect Alpharetta GA home sales to pick up because so many potential home buyers want to lock in a mortgage ahead of any possible uptick in mortgage rates.
Borrowing costs have risen as the Federal Reserve continues tapering stimulus efforts that have kept interest rates low. Policy makers cut monthly bond purchases to $55 billion this month, from $85 billion last year. Fed Chair Janet Yellen said the program could end this fall and that the benchmark interest rate, which has been close to zero since 2008, may rise six months after that.
Nationally, the supply of homes for sale is bigger than last year, according to the National Association of Realtors. At the current sales pace, it would take 5.2 months to sell the properties on the market in February, compared with 4.6 months a year earlier.
Alpharetta GA home sales are expected to pick up momentum as we head into the second half of April and into May and June. Watch for the housing market, like the rest of the economy, come to live in the next couple of months.
For more on Alpharetta GA home sales, including other news relating to Alpharetta GA real estate, visit our Alpharetta GA Real Estate News section of articles under our Alpharetta GA Real Estate Categories to the right.
Declining Alpharetta GA home sales doesn't seem to be worrying the Federal Reserve any these days. Fed Chair Janet Yellen indicated recently, the government is keen to continue its support of the economy via purchases of Treasurys and mortgage-backed securities. However, the amount of which it invests is being gradually phased out.
After the recent Federal Open Market Committee meeting, Yellen said that the Fed could start raising short-term rates "about six months" after it completed its ongoing tapering of Treasury and bond purchases, which most expect to be completed by the fourth quarter of 2014.
Alpharetta GA Home Sales Dependent on Jobs
With Alpharetta GA home sales largely dependent on good employment numbers, and with Yellen seemingly changing her tune on where the economy is as far as employment numbers are concerned, she gave four reasons why she thinks the employment numbers are still soft.
1 – The large number of part timers working who would prefer full time jobs, but just can't find them.
2 – Stagnant wages where compensation has increased an average of only a little more than 2% per year since the recession.
3 – The large number of long-term unemployed who have been out of work for six months or more.
4 – The historic low rate of labor market participation–the proportion of working-age adults that hold or are seeking jobs. This number now stands aat 63%, about the same as it was in 1978.
New home sales of single-family houses in February dropped 3.3% to 440,000, reaching a 5-month low, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The Fed often cites improving economic benchmarks, such as the nation adding more jobs, as necessary to justify the reduction of monetary support.
With spring comes new homebuyers into the market, and declining Alpharetta GA home sales should turn around. But Yellen's comments about the nation needing to add more jobs as necessary to reduce the monetary support, seems to suggest that declining Alpharetta GA home sales is actually one negative the Fed is willing to live with and is likely to continue on its path of pulling support for secondary markets.
We'll keep you posted on any further news coming from the Fed that may, or may not, affect not only Alpharetta GA home sales numbers, but the nation as a whole.
Get further news as it affects Alpharetta GA home sales by clicking the Alpharetta GA Real Estate News link to your right under Alpharetta GA Real Estate Categories.