(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken Loans.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918

For those of you worried that the scheduled expiration of higher loan limits at Fannie Mae, Freddie Mac and the FHA will have a negative effect on the housing market by raising the cost of home ownership, you can be rest assured the chairman of the Federal Reserve is fine with it.

“As far as Fannie Mae and Freddie Mac are concerned, there is a tradeoff there between supporting the higher priced homes and weaning the housing finance system off of unusual limits it was put under during the crisis,” Ben Bernanke told a Congressional Committee today.

“I understand the private sector is taking at least a significant number of the jumbo mortgage market but at a higher cost,” Bernanke said.

There have been numerous and varied contentions about the future state of the mortgage market once loan limits drop from the maximum $729,750 to $625,500. The home builders think it will be catastrophic while some economists and academics say it will have little effect, especially at the FHA.

Bernanke admits that jumbo loans will come, “at a higher cost,” but we have to put in perspective what exactly that higher cost will be. Mortgage rates on conforming loans are already near historic lows, hovering around 4.5 percent on the 30-year fixed. Today’s talk about the potential for QE3 pushed bond yields lower, which in turn keep mortgage rates low.

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Article source: http://www.cnbc.com/id/43744143?__source=RSS*blog*&par=RSS