AFFORDABILITY INDEX AT ALL TIME HIGH IN ABQ

The National Association of Realtors on Housing Affordability study shows that NOW is the time to buy a house. The Housing Affordability index shows how well the person with an average income can qualify for the average home. The index shows that, with today’s low interest rates and housing prices, buying a home has never been more affordable.
As reported on March 3rd, “NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high. The HAI, a broad index of affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.” Additionally, another report just releases shows that New Mexico has money flowing unlike say, California. We’re cooking here!! And to top that Salary.com ranked Albuquerque in the top 5 cities to build wealth.
Lawrence Yun, NAR’s chief economist added, “Conditions have been aligning very favorably for home buyers with the exception of consumer confidence. But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises.”

Homeowner Affordability and Stability Plan

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is an incentive for homeowners who have less than 20% equity in their homes, or who owe more than their home is worth. The second part attempts to lower monthly payments for homeowners at risk of losing their home. Here is a brief overview of both initiatives.
Less than 20% equity in your home? Under current rules, those families who own less than 20% equity in their homes have a difficult time taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans that are guaranteed by Fannie Mae and Freddie Mac. The plan would enable them to move to a new loan for up to 105% of their homes value.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The new loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost option may help reduce their monthly payments by up to thousands of dollars per year. As with the rest of the plan, details about this initiative will be released at a future date-including what, if any, credit score requirements will be included.
On the verge of default? This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their monthly payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." Homeowners who are current on their loans but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
These plans-combined with today's historically low interest rates-have created an unprecedented opportunity for homebuyers. If you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

Lightning Tax About to Be Eliminated

Initiated by my good friend, Stephanie Dzur who lead a formal challenge to the property tax increase on her home, the State Legislature has passed on the the State Senate two bills to curb the lightning tax. One will limit the tax increase to 20% for buyers of homes compared to the unlimited tax increase they are hit with now. And the second bill requires that title companies and realtors disclose the possibility of the tax increase. Well, hey I was doing that already and lost a sale to a CA buyer just last month because of it. This is fair legislation and a step in the right direction.