National Real Estate - Government-Sponsored Programs May Act as Catalyst to Housing Market Recovery



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Government-Sponsored Programs May Act As Catalyst to Housing Market Recovery

 
While recent reports show housing market factors are growing, industry experts say more progress can still be made. Increased home sales have helped to eliminate the inventory of foreclosures and short sales on the market, which has in turn allowed home prices to increase. However, new government programs may help current homeowners avoid becoming delinquent in the first place. Kiplinger explores how new programs aimed at helping current homeowners could help the housing market.

Monday, November 5th, 2012

 

While recent reports show housing market factors are growing, industry experts say more progress can still be made. Increased home sales have helped to eliminate the inventory of foreclosures and short sales on the market, which has in turn allowed home prices to increase. However, new government programs may help current homeowners avoid becoming delinquent in the first place. Kiplinger explores how new programs aimed at helping current homeowners could help the housing market.

The Home Affordable Modification Program already helps those having difficulties keeping up with their monthly mortgage payments by reducing them via lower interest rates. This not only helps reduce the amount of interest paid on the loan, but frees up more income to afford other housing expenses that homeowners are responsible for, including taxes, insurance and home maintenance. Kiplinger notes this program has been extended throughout 2013, and is available to qualified homeowners. Over 500,000 additional people are expected to benefit from the recently improved program.

Another solution that could help prevent homeowners from falling into foreclosure includes a proposed mass refinancing plan. The source notes that this would allow borrowers who are underwater to refinance their current mortgage to one that uses current rates, which have been lingering near record lows in recent months. While this could benefit homeowners greatly, it needs approval from Congress, who would require funding.

The Federal Housing Finance Agency is piloting a new program that will be tested in markets that have accumulated a large inventory of delinquent homes during the housing market slump. Many metropolitan areas including Los Angeles, Atlanta, Chicago and multiple cities in Florida may be part of it. This program would allow investors to purchase foreclosures and short sales to then rent them out. This would help eliminate the inventory of delinquent homes, creating a better housing market for both buyers and sellers.

While programs will likely help other housing market factors improve, the recovery is expected to take a little time. Both home prices and mortgage rates are expected to increase before the end of the year, while strict lending standards that have been put in place to ensure buyers are well-qualified are expected to loosen slightly to allow potential buyers to make the investment.

National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.