Article source: http://www.cnbc.com/id/45306545?__source=RSS*blog*&par=RSS

It was barely a few months ago, albeit a few thousand degrees ago, that I moderated a panel of mortgage types from the major banks, including the Mortgage Bankers Association’s new president David Stevens, formerly FHA commissioner.

Stevens and I have been talking housing for many years now, so I’m well aware that he is not exactly the ambivalent type.

When I suggested to the panel that the risk of a double-dip in housing was great and that winding down Fannie Mae and Freddie Mac now could be detrimental to the housing market, Stevens was adamant that housing was well into recovery, and all those home price and mortgage delinquency reports I was citing were backward looking and not indicative of the current state of the market.

Now Stevens is reversing course.

This morning he put out a statement advocating a continuation of the higher loan limits at the GSE’s (Fannie and Freddie) and the FHA for one more year. “The temporary loan limits authorized by Congress have benefited consumers and the housing market during what has been a turbulent period for our nation’s economy,” Stevens said in the statement. “That decline is not over yet.”

The statement was a little dry for me, knowing the source, so I called Stevens for a little elaboration. He stated right from the get-go that he is still bullish about the future of the housing market, which is not exactly saying he feels great about it right now.

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Article source: http://www.cnbc.com/id/43859013?__source=RSS*blog*&par=RSS

The report on inventory and price activity, released Thursday, pointed out that the median price of a single-family home in L.A. County was $301,300 last month, compared to $271,540 in May— an 11 percent rise.

But compared to a year ago, prices were down 3.9 percent. The median level represents the midpoint of values.

Median home prices in California in June rose 1 percent to $295,300, from $292,420 in May, according to the report. 

Compared to a year ago, prices across the state were off 5.9 percent as the median price of a single-family home was $313,890.

As for home sales in the county, figures showed that existing home sales were up 2.4 percent from May to June, and down 11.6 percent from June 2010.

Sales of existing homes statewide rose 1.2 percent month-to-month, according to the report. The median number of days it took to sell a home was 50.3.

“Looking across the state, a number of areas are showing signs of strength, especially in the San Francisco Bay Area, primarily because of the strong performing tech industry,” said California Association of Realtors Chief Economist Leslie Appleton-Young in a statement.   

But the association’s president, Beth Peerce, warned in a statement that the positive signals shouldn’t be interpreted as a turnaround for the state’s real estate market.

Federal changes to mortgage loan limits and down payment requirements set to take effect Sept. 30 could “adversely affect the market,” she said.

June 2011 county sales and price activity for existing single-family detached homes:

(Source: California Association of Realtors)

— City News Service contributed to this report.

Article source: http://hermosabeach.patch.com/articles/home-prices-rise-countywide

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

A few weeks ago the National Association of Home Builders put out a report asserting that new lower loan limits going into effect in October at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) “will reduce housing demand and place downward pressure on home prices in major housing markets.”

On the blog that day, I wrote that the games were only beginning.

Now another report, this time from researchers at George Washington University, is suggesting just the opposite, that lower loan limits may raise cost for a very few borrowers, but overall will not affect most mortgage shoppers.

The report focuses on the FHA, claiming, “The FHA still could serve 95 percent of its historic targeted market even if the maximum FHA loan limit were reduced by nearly 50 percent.” Its market share right now (30 percent) far exceeds its target population.

“FHA’s expansion played a major role in keeping the housing market afloat during the economic collapse of 2008 and 2009,” said Robert Van Order, co-author of the report. “However, we now are left with large loan limits that were set when home prices at the top of the bubble. They don’t reflect current market conditions and are unlikely to assist the FHA in reaching its historical constituencies – first time, minority and low income homebuyers.”

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Article source: http://www.cnbc.com/id/43643094?__source=RSS*blog*&par=RSS

The summer has barely started, but the fight is on against changes to loan limits that don’t take place until the first of October.

Today the National Association of Home Builders released its own study claiming that lowering the loan limits at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA), “will reduce housing demand and place downward pressure on home prices in major housing markets.”

The loan limits were raised when the mortgage market crashed, investors in mortgage backed securities ran for the hills, and the government-owned entities were the only ones left writing mortgages. Originally at $417,000 for a so-called “conforming loan,” they rose to as high as $729,000 in the nation’s higher-cost markets, in order to keep mortgages moving. That will drop to $625,000 in October in those markets, with the base limit remaining at $417,000.

The builders say that homes above those limits “would likely require financing with higher mortgage interest rates and other less favorable loan terms, such as higher required down payments and more stringent credit history thresholds.”

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Article source: http://www.cnbc.com/id/43526306?__source=RSS*blog*&par=RSS