Average Home Prices Balloon by 17.2% over June 2020

Mortgage and Lending with The Federal Savings Bank/Lending in 50 states NMLS # 109616

CoreLogic reports that home prices nationwide, including distressed sales, rose 17.2% in June 2021 compared with June 2020, up month over month by 2.3% in June 2021 compared with May 2021. Prices continue to rise due to high demand and low inventories. "With plenty of cash on the sidelines, along with very low mortgage rates, prices are heading up and affordability will become a more acute issue for the foreseeable future," said Frank Martell, President and CEO of CoreLogic. Looking ahead, prices are expected to cool to just a 3.2% gain from June 2021 to June 2022.

The Federal Reserve released its July 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices addressing demand for bank loans to households for Q2 2021. Banks eased lending standards across most categories of residential real estate (RRE) loans, on net, and reported stronger demand for most types of RRE loans over Q2 of 2021. Banks also eased standards and reported stronger demand across all three consumer loan categories ... credit card loans, auto loans and other consumer loans.

As the nation climbs back to more normal times economically, rising home prices could be a positive for those still in forbearance programs. In the latest numbers, the share of Fannie Mae and Freddie Mac loans in forbearance fell two basis points to 1.79% while Ginnie Mae loans declined five basis points to 4.30%. Some homeowners coming out of the program may not be able to come to terms with their lender for a suitable plan to stay in the home. Unlike in the Great Recession, where those who were near foreclosure saw their home values plunge and were underwater, this time around prices and equity have increased and it is extremely easy to sell a home in most parts of the country. So the owner can most likely sell the home, pay off the debt to the bank and walk away without a negative mark on a credit report and possibly some equity thrown from the price increase.

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