July 2017

Fannie Mae loosening lending standards
Almost ten years later since the US housing crash, the largest lender in the nation, Fannie Mae, is adjusting the ceiling for the debt-to-income ratio (DTI) for loan applicants starting next month, bumping the current ratio from 45% to 50%. What exactly does that mean for potential borrowers? The DTI ratio is a figure most lending institutions use to calculate the maximum amount each applicant can borrow and the rate they're given, based upon the borrower's overall debts and overall income - thus, calculating their ability to repay the loan. The ratio used is arrived at by calculating a percentage of the borrower's monthly income, matched against their debts - things like credit card bills, car loans, student loans, etc. - and finding enough money left over for a mortgage payment. In order to qualify for a home loan, the borrow's debts need to be within that specified percentage range (under the "ceiling" or cap) when compared to their income. Basically, the lower DTI the applicant has, the more favorable loan terms they are likely to receive (and the more they're allowed to borrow). Historically, Fannie Mae was created following the Great Depression to allow a secondary market of home loans, making it possible for more Americans to become homeowners. Making the decision to raise the DTI ceiling now could allow more potential homeowners to enter the market - particularly, within the millennial generation (many who have been slowly chipping away at large student loan debts). Read more about this in the article below!

Keep the good vacation vibes going strong!
Taking a vacation can be exhausting work! As much as we enjoy leaving our everyday behind to start on an adventure for a week or two or more, how much more enjoyable it usually is to see our own front door again...unless that front door is standing open! Here are some suggestions for keeping the good vibrations from your summer vacation alive by following a few safety tips before heading out:

A quick visit to the USPS online service to put a “HOLD” on mail delivery should be the first order of business. Don’t forget to arrange stopping any newspaper delivery as well. Or perhaps, just ask one of your neighbors to scoop that up when they give the place a quick once over daily. Your Neighborhood Watch captain would most likely welcome the opportunity to help in this area.

Unplug small appliances and electronics like the TV that won’t be used while you’re gone. Not only will you save on electricity, you’ll protect your gear from any electrical surges. (Unplug even if you have surge protection. It could prevent an electrical fire.)

Mountain Suburbs Market Insight
May 2017 Snapshot
  2017 2016 % Change
Active Units 193 210 -8.1%
Units Sold 75 74 1.4%
Average Days on Market 28 31 -9.7%
Median Sales Price $515,000 $513,500 0.3%
Source: REColorado | Information deemed reliable but not guaranteed
If you want to know whether this year is going to be good for buyers or sellers or both we need to look at several factors. First, looking at the housing market we see a recent uptick in mortgage rates. Second, we are seeing home prices move upwards and third, low inventory does not appear to be changing anytime soon. This has made buying a home slightly less affordable than it was a couple of years ago, but that doesn’t seem to be stopping the flood of buyers in the marketplace.

They may realize that mortgage rates, still at historically lows, means buying a home remains a very affordable choice. This does appear true when taken together with recent economic data.

According to the most recent outlook from Fannie Mae’s Economic & Strategic Research Group, how things play out will depend largely on young Americans who are just beginning to enter the real estate market in greater numbers.

The National Association of REALTORS’ Pending Home Sales Index is a good indication of where home sales will be a month or two down the road. Lawrence Yun, NAR’s chief economist, says we may be seeing fewer contracts signed simply because of the lack of available listings. The number of buyers in the market is strong and hasn’t abated, in spite of the inventory struggles.notes that early indicators show buyer demand is still strong. In fact, both pending home sales and demand for loans to buy homes have recently shown an upswing.