Category Archives: Mortgages

Monthly Mortgage Payments Versus Monthly Rent
Not so long ago, the housing market ballooned so high that monthly mortgage prices were much higher than monthly rental prices. This disparity hasn’t been seen since the early 80s. Typically, as mortgage rates rise, rent prices also rise along a normal rate of disparity. These rates allow buyers or renters to decide whether they can afford the monthly mortgage rate, or would be better off with just renting a home. Usually, the mortgage rate will be higher than the rental rate. However, after the housing market crashed, mortgage rates fell so sharply that they were actually lower than the average rental rate. With so many calamities in the housing marketing, especially the high rate of foreclosures, many potential buyers opted to pay higher rents. The scary prospect of trying to own a home, alongside the risk of foreclosure, forced people to become or stay renters. However, the...
As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
Single-Family Home Rental Boom: Who Wins, Who Loses?
For two years, a single-family home rental boom has been sweeping through the Tampa, FL area. Investors are buying up hundreds of single-family homes in attractive neighborhoods and counting on renting them to both the thousands of local residents affected by foreclosures and short sales, and new residents arriving from across Florida or from the north. Demand Keeps Pace with Supply Property management firm Home Encounter reports an increase in leased homes between early 2011 and this past September from about 120 to more than 500 in Hillsborough County. But rather than reducing rents, as some renters wish, average rents have remained fairly flat across three years, running $1300-$1500 in Hillsborough and Pinellas counties. The biggest buyer of Tampa-area rental homes is Dallas-based Invitation Homes, a division of giant investment firm Blackstone Group.  Property records reveal the purchase of 1,801 homes in Hillsborough and Pinellas counties for at...
Will Unintended Consequences of Dodd-Frank Make a Mess of the Mortgage Market?
The Dodd-Frank Wall Street Reform and Consumer Protection Act that passed was enacted into law in 2010, commonly referred to as simply "Dodd-Frank", is supposed to lower risk in various parts of the U.S. financial system. It was named after former U.S. Senator Christopher J. Dodd and former U.S. Representative Barney Frank because of their significant involvement in the act’s creation and passage. Dodd-Frank established new government agencies such as the Financial Stability Oversight Council and Orderly Liquidation Authority, which monitors the performance of companies deemed “too big to fail” in order to prevent a widespread economic collapse. Ultimately, the purpose is to protect consumers from the crazy home-lending excesses that caused the Great Recession of 2008. Banks are exiting from the mortgage business in large numbers, primarily because of the high operating costs and heightened litigation risks imposed by the Dodd-Frank financial-reform law. As banks...