Market Matters

U.S. Home Sellers Return for Spring as Buyers Get Relief Source: Bloomberg As the housing market’s busiest season approaches, escalating values are spurring more listings as homeowners regain equity lost in the worst crash since the 1930s. With more sellers looking to cash in on rising prices, would-be buyers likely will have more choice and therefore, relief from the bidding wars of last year. Read the full story

If investors bail on housing, what then? Source: CNBC   After the housing crash, investors bought thousands of distressed properties with billions of dollars in cash. It is estimated that institutional investors have purchased well over 100,000 homes, but some experts are concerned that if investors pull out of the housing market this year, there could be a "significant" or "somewhat significant" impact on the markets. Read the full story

Finding ways to help young adults make their first home purchases Source: LA Times Stricter mortgage underwriting standards, higher unemployment, and heavy student debt are among the key factors that stand in the way of many potential buyers in their 20s and 30s. But first-time home buyers in this age group may be able to turn to effective techniques that family members, friends, and even employers can use to bridge the generational gap by offering a helping hand. Making sense of the story Americans who were 30 to 34 in 2012 had the lowest homeownership rate of any similarly aged group in recent decades at 47.9 percent. In comparison, Americans born between 1948 and 1957 had a 57.1 percent ownership rate by the time they hit the 30-to-34 bracket. This is despite record low mortgage rates and bargain-priced foreclosures and short sales. A new federal rule imposing a 43 percent maximum debt-to-income ratio for "qualified mortgages" is particularly difficult for younger buyers with high student debt. Student debts average $21,402 but can balloon as high as six figures. According to one industry estimate, 27 percent of first-time buyers last year received gift money from relatives to help defray the down payment and closing costs. With professional help, some family members are providing either second mortgages or first mortgages, and properly structured, these loans provide annual returns to family members well in excess of money-market funds or bank deposits. Money provided as a loan cannot be disguised as a loan. If the money is a gift, there needs to be a formal letter making the purpose of the gift explicit and the specific transaction for which it is to be used. Documentation is also needed to attribute the source of the funds and the capacity of the gift giver to provide the money. Read the full story