Tag Archives: lending
Easy mortgage access for home buyers in the US tightens
Access to mortgage credit in the United States tightened in the first quarter of 2015, marking a pause in easy accessibility for buyers. It had been getting progressively easier to obtain a mortgage since 2012, but the first several months of this year marked a change, according to according to the latest Zillow Mortgage Access Index (ZMAI). Mortgage credit availability is almost unchanged from a year ago, meaning despite fluctuations from quarter to quarter, there has been little progress toward making mortgages easier to obtain over the last year. In the long term, experts expect mortgage access to continue improving. In a survey earlier this summer of more than 100 economists and housing experts, more than 60% said they expect mortgage regulations to loosen further, with many expressing concern the market will become too lax over the next year. A high number in the Zillow Mortgage Access Index means credit is easier to obtain, while a lower number means credit is tighter. Mortgage credit was easiest to obtain in July 2004, when the ZMAI reached 136.4. But availability tightened over the next few years. In May 2007, both the housing and mortgage availability began a multi year plunge, leaving home values down more than 22% and credit the tightest in recent history. Mortgages were the toughest to obtain in September 2010, when the ZMAI was at 11.8. Today, access to mortgage credit has improved significantly, and is at 65, more than two thirds of the way back to 2002 pre-crisis levels. 'Recent market volatility is causing some lenders to be more cautious in their underwriting. Tighter mortgage access will make it harder for people with low credit scores to get a home loan, and even people who can get approved for a mortgage will have fewer options in terms of available mortgage products,' said Zillow chief economist Svenja Gudell. Continue reading
UK mortgage approvals highest since beginning of 2014
Approvals for mortgages in the UK increased in July to their highest level since February 2014, according to the latest figures published by the Bank of England. The data shows that there were 68,764 mortgages approved in July, up 16.4% from last November’s 17 month low of 59,100. Experts said that it shows that the housing market is heating up again and point out that mortgage approvals have risen in five of the past seven months at a time when house prices are also rising. Net mortgage lending, which lags approvals, also increased, up by £2.709 billion in July, the biggest increase since July 2008. Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), pointed out that it is also the highest number of approvals since the introduction of the Mortgage Market Review (MMR) last year which cooled the market. ‘With 7% more approvals compared with the six month average, it is a clear indication that health is returning to a market that has been under significantly pressure to perform while adjusting to new working practices,’ he explained. However, he also pointed out that the European Mortgage Credit Directive (MCD) rules begin to come into effect this month and there is likely to be an extra element of uncertainty and instability ahead for the market. ‘With more regulation on the way and a potential rise in the cost of borrowing on the cards, the six month window to implement the MCD rules will be a challenge for all concerned,’ he warned. ‘On the positive side, rising approvals suggest consumer appetite is strong and lenders will also be striving to meet their end of year targets, which should support some competitive deals. We must hope that the impacts of change do not weigh down too heavily on what otherwise looks like a strengthening market recovery,’ he added. Howard Archer, chief economist at IHS Global Insight, said it was possible July’s performance was lifted by some house buyers looking to lock in a low mortgage interest rate before they start rising. ‘While we currently expect the Bank of England to first hike interest rates in February 2016, there is now a very real prospect that they could act before the end of 2015. However, the Bank of England is stressing that interest rates will only rise gradually and to a limited extent,’ he explained. Continue reading
Record number of Australian suburbs have homes at over a million dollars
The number of suburbs in Australia with homes values at a millions dollars or over has climbed to 437, a new record and an increase of 23.1% year on year. The data from CoreLogic also shows that the number the number of suburbs with a median value of at least $1 million comes off the back of an 11.1% rise in combined capital city home values over the past 12 months. The rise in values has been strongest in Sydney and Melbourne and the jump in the number of suburbs on the list is evidence of these strong value rises. To be eligible for ranking as a million-dollar-suburb, each suburb had to achieve a minimum of 10 sales over the past year. Sydney suburbs clearly dominate the record board and account for 17 of the 20 most expensive suburbs nationally. Only one Melbourne suburb and two Perth suburbs made it to the millionaire suburbs list. In other states the most expensive suburbs are a long way from making it into the top 20. For units, Dawes Point in Sydney at 14th spot is the most expensive suburb and is the only suburb on the top 20 list for units. A breakdown of the figures shows that New South Wales had the greatest number of suburbs at 302, up from 232 the previous year. New South Wales's share of suburbs with a median value of $1 million or higher is also rising quite sharply. In 2010 57.6% of $1 million suburbs nationally were in New South Wales, the proportion has now increased to 69.1%. With 61 suburbs, Victoria is the state with the second highest number of suburbs with a median value in excess of $1 million and far less than New South Wales's number, but 14% overall. The rest of Australia has very few. According to Tim Lawless, CoreLogic RP Data research director, the data reflects the effect of strong capital growth rates which show that Sydney values are growing substantially faster than all other areas and the cost of housing in Sydney is much higher than elsewhere. Additionally, those that have owned a Sydney property for at least several years are likely to have built up a substantial level of equity in their home. Of the 437 suburbs with a median value of at least $1 million over the past year, 427 or 97.7% of suburbs were located in a capital city. There were also significantly more suburbs making the list for houses at 424 than units at 13. In fact, all of the suburbs listed for units were situated in Sydney and were located adjacent to or on the water. While the number of suburbs with a median value of at least $1 million has risen sharply over recent years, CoreLogic RP Data also recorded a sharp rise in suburbs with a median value of at least $2 million. In June 2014, 32 suburbs had a median value in excess… Continue reading
