Obtaining a Mortgage to Get More Difficult
New mortgage rules are going into effect January 10.
The new rules were written by the Consumer Financial Protection Bureau to protect homebuyers from risky mortgages like the ones that led so many homeowners into foreclosure in recent years. The rules also protect investors from buying shoddy mortgage-backed investments.
The Ability to Repay Rule requires lenders to evaluate your financial fitness to repay a loan, even if it's an adjustable-rate mortgage with low payments compared with a fixed-rate loan.
Now, lenders will have to evaluate your ability to pay back a mortgage based on these points:
- Your income or assets.
- Your employment.
- The monthly payment on the mortgage you want.
- Monthly payments on your other debts.
- Monthly payments on other mortgage-related costs (home and mortgage insurance and property taxes, for example).
- Any commitments for child support or alimony.
- What's left every month after you've paid your debts. In most cases, your total monthly debt payments can't exceed 43% of your monthly gross income.
- Your credit history.
Desert Home Prices Rises
|Trends at a Glance|
|Data||Oct 13||Sep 13||Oct 12|
|Sale/List Price Ratio:||96.5%||95.4%||97.0%|
|Days on Market:||87||86||95|
The median price for single-family, re-sale homes in the Desert after falling three straight months, rebounded in October gaining 7.3% from September.
The median price was up 33.1% year-over-year. That is nineteen months in a row the median price has been higher than the year before.
Sales of single-family, re-sale homes fell 23% last month compared to October 2012. Year-to-date, home sales are down 8.9%.
We believe slowing sales is a result of investors leaving the market, regular home buyers having difficulty in obtaining mortgages, high unemployment, and the government shutdown last month which put a hold on mortgage processing.
Attached homes and condo sales were down 20.8% year-over-year. Year-to-date, condo sales are up 5.2%. The strength in attached home sales is because most buyers for them are from out of the area and buy them as vacation/retirement homes.
The median price for attached homes and condos dropped 13.6% from September, but was up 11.1% year-over-year.
Since January 2012, the 3-month moving average median price is up 27.2% for attached homes. It is up 30.2% from the bottom of the market which was in October 2011.
|Desert Price Differences|
|from January 2012 & Peak & Trough|
|YTD||Peak %||Trough %||Peak||Trough|
for homes fell 2.5 points to -9.2. Sales momentum for condos dropped 4.2 points to +5. (See charts below)
momentum by using a 12-month moving average to eliminate seasonality. By comparing this year’s 12-month moving average to last year’s, we get a percentage showing market momentum.
In the chart below…
the blue area shows momentum for home sales while the red line shows momentum for the median price.
for homes rose 0.3 of a point to +24.3. Pricing momentum for condos was flat at +15.2.
This is an extraordinarily tough market for buyers. It’s important to be calm and realistic. If you don’t know what to do or where to begin, give me a call and let’s discuss your situation and your options.
As you can see by the following charts, the largest swings in prices has been in the under $500K segment of the market. Above that, pricing has been pretty stable.
The median price for the under $500,000 segment of the market was up 20.5% year-over-year in October. The median price is up 23.4% for the year. This segment constituted 74.9% of sales in October.
By contrast, the $500,000 to $1,000,000 segment of the market was 18.5% of sales. The median price was up 11% year-over-year in October, and it was up 2.4% for the year.
The million dollar plus market was 6.6% of total sales in September. The median price for this segment of the market was up 17.1% year-over-year, and it was up 3.7% year-to-date.
See our Annual Report for year-end numbers.
The graphs below show monthly prices and sales since 2005. We have used a three month moving average to smooth out monthly fluctuations yet retain seasonal flow.
For full details see the tables below and the Monthly Trends section which breaks out each city's statistics. That menu is at the left.
Also, check out our Annual Trends section for charts and graphs for the past eight years.
The following table provides the median price, the average price and the number of units sold for residential re-sale single family homes.
|Desert Home Statistics|
|Homes||Change from last year||Change from last month|
|Desert Hot Springs||$122,000||$131,743||40||37.1%||20.2%||-18.4%||-12.8%||-8.2%||-2.4%|
|Sun City - PD||$338,000||$341,976||21||13.6%||7.0%||5.0%||4.0%||1.7%||61.5%|
|Desert Condo/Attached Statistics|
|Condos||Change from last year||Change from last month|
|Desert Hot Springs||n/a||n/a||n/a||n/a||n/a||n/a||n/a||n/a||n/a|
Trend charts for individual cities can be reached by clicking on the City Trends menu to the left.
For our opinion of what your home will sell for in today's market, call or e-mail us.