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December 19, 2014
It’s that time of the week again.

The year might be coming to a close, but mortgage news never stops, and you deserve to know every recent development when it happens. This roundup is meant to be used as your resource. We stay on top of the latest headlines so you don’t need to, and we bring them all to you here in our weekly mortgage news roundup.

From Minneapolis to mortgage speculations, this week we have the latest news for homebuyers, sellers, and anyone who’s about to enter the fray—telling you what’s going on, and why it matters.

These stories about the housing market and mortgage laws reveal the latest updates of 2014.

image by Kent Landerholm

How Will Mortgage Lending in 2015 Compare to 2014?

What it’s about: This in-depth article examines the top five mortgage predictions from the end of 2013, analyzes how accurate each one was, and offers further forecasts for 2015. Though the rental market expanded hugely as expected—with the lowest vacancy rates since 2000—mortgage rates did not rise like predictions declared. In fact, they’ve dropped even below the rates from this time a year ago, but HousingWire doesn’t expect that to continue. 2014 has revealed that everything changes, a trend that’s sure to continue into the next year.

What it means: Or, perhaps we should say, “Why it matters.” If you’re thinking about investing in a first or second home, you have to do what all investors do: Speculate. Rental properties have skyrocketed in value this year, but before you hop on board with a rental property of your own, you should know where analysts expect the market to be in the future. This article offers a great snapshot of the next year in terms of home values, mortgage originations, rental markets, mortgage rates, and home sales.

Related Resource: Get Your Instant Online Rate Quote


Minneapolis Home Prices Rise As Sales Take a Dive

What it’s about: November home sales dropped in Minneapolis according to the Minneapolis Area Association of Realtors: 17% from the same time a year ago. Despite this, home prices rose over 5%, the 33rd consecutive month to reveal year-over-year gains, reaching a median sales price of $205,000. This increase is due in large part to luxury condo sales, which are becoming quite popular in downtown Minneapolis, bolstering the overall market. As more major development projects begin in 2015, this increase in home prices should continue.

What it means: Fewer home sales generally signify a lower demand, which often results in lower prices. While it’s true that buyers are gaining an edge on the Minneapolis housing market, they’re willing and eager to buy pricier properties, which keeps the median sales price high. If you’re selling an older home in Minneapolis, you may not benefit from this rise in home prices, since demand in the city is lower, especially for existing properties. If you need to sell now, you need to market your home as an attractive alternative to the costly condos downtown, but if you can wait out the winter, do. More homebuyers will be ready to visit open houses and older listings once the weather warms up.

Related Resource: 10 Development Projects That Will Transform Minneapolis-St. Paul in 2015


Revisiting Mortgages with Low Down Payments

What it’s about: We touched on this story last week, but everyone in the mortgage industry is still reeling from the news that Freddie Mac and Fannie Mae loans will soon require just 3% down, this change continues to dominate the news. This article from The New York Times examines the two dominant opinions about the change: Will these lower restrictions cause another housing market bubble and crash, or will new regulations keep the market safe? The answer really depends on the buyer. The risk of defaulting on a loan comes not so much from home values as from the buyer.

What it means: To say the housing market crash stemmed from low down payments is a simplified narrative. The reality is, many factors led to the flurry of defaults that precipitated the Great Recession, and today’s rules and regulations do protect against such an outcome. With lower fixed rates and a recovering economy, buyers and lenders remain more cautious, which is good news. Defaulting on a loan has less to do with putting just 3% down than with your own financial stability. If you trust your job security and staying power as a couple (if you’re buying with someone else), you’re likelier to retain your home and loan, regardless of housing market trends.

Related Resource: 30-Year Fixed Rate Mortgage at Lowest Level Since May 2013


Construction Stalls in November, but U.S. Housing Market Is Improving

What it’s about: Initially, the Commerce Department reported strikingly low new construction figures for November, but recent revisions have changed them—for the better. Many more new homes broke ground in November than in October, signaling continued improvement in the overall housing market. These revisions, however, did not increase the number of permits reported in the month of November. They remained low, which suggests less construction in the coming months.

What it means: On the whole, even in the new construction sector, the U.S. housing market has improved throughout 2014. While permits may have dropped, reducing the number of homes to be built this upcoming winter, gains in other areas of the market should keep it strong. Certain cities are poised to show tremendous growth in the coming year, and the current low mortgage rates continue to attract new buyers.

Related Resource: The 10 Hottest Housing Markets in 2015


Whatever market you’re in, we’d love to help you buy or refinance a home, or just talk to you about mortgage rates. To talk to one of our talented professionals about these and other trends, contact us today!

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