Friday, June 20, 2014

Buy a house no longer as attractive

The homeownership rate has fallen in the first quarter to its lowest level in 19 years, according to census figures. The percentage of Americans who own their homes was 64.8%. In the case of Latinos, 45.8% own. In the first quarter of 2007, 50.1% of the members of this community had its own housing but this rate has ebbed since then as has happened with the rest of the population.

The reasons for the decline are many.

The latest economic crisis has made clear that housing is not stable investment than previously thought. And it must be added that the dream of homeownership is now more expensive than a year ago.

The housing prices have recovered much of the country, due to the improving economy, and mortgages have become more expensive because the Fed is starting to withdraw the stimulus to the economy, which has pushed up the references mortgage rates.

The rates of these loans have risen from historic lows and although still much cheaper than at other times in recent history, after years of cheap credit, buyers still have to digest a 30-year fixed mortgage ronde 4.26%. This is almost one percentage point higher than last year at this time.

Banks have seen their mortgage lending has collapsed both when selling new loans as at the time of refinance. In the latter case, the lack of activity is even greater. Wells Fargo, one of the banks that has recently awarded more mortgages, has seen in the first quarter has been relegated to that effect their business by 67% over the first quarter.

According to Inside Mortgage Finance, a trade publication, even during the worst of the financial crisis, "the mortgage industry was making more loans in the first quarter of 2014." The figures show that we are in the deepest slump of the past 14 years with a fall of 58% in the initiation of new mortgages when compared with the figures for the first quarter of last year.

Many analysts expect rates to rise this year to 5%.

As a result, the rental is gaining popularity. According to the census, the vacancy rate in rental housing is very low (8.3%). It is something that is driving up the asking price for rents.

The average price nationwide is $ 776 per month, a record. In the northeastern part of the country, this figure is $ 1.043, up 16% from a year ago. In the West, the average price is $ 886. The increase in rental prices is forcing more and more citizens to devote more income to pay monthly obligations although wage growth has not followed the same upward trend. According to figures from the Zillow real estate, since 2000, the rental prices have increased by 52.8%.

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