More baby-boomers are putting money into second homes. Despite talk of real estate slowdown, buyers still snap up vacation homes. Others are still seeking a second, third or even a fourth home for investment purposes because they are disenchanted with the stock market. And despite talk of an impending break in the housing market bubble, those who own or want to own a second home are steadfast in their decision. In 2004, nearly 23 percent of all homes purchased were for investment purposes, while 13 percent were purchased for vacation use. And between 2003 and 2004, there was a 16.3 percent increase in second-home purchases. “I don't want to sound materialistic, but it's nice to have something tangible after working so hard for years and years,” said Dorio, a mortgage broker from Orange County. “I also did it for the investment. Meaning, it's something the kids will be able to use in the future.” To read more click here.
With the popularity of exotic mortgages, it's never been easier for homebuyers to afford their dream house even if it's out of their preferred price range. But the increasing use of interest-only and option adjustable rate mortgages has put federal regulators on high alert. This fall, the Office of the Comptroller of the Currency, along with other financial regulators, will issue guidelines for mortgage lenders that could make lenders think twice before readily offering exotic mortgages to potential buyers. According to the National Association of Realtors (NAR), prices for existing homes nationally have climbed 13.6 percent in the second quarter from a year ago. Growth in the West outpaced the rest of the country with prices 19.5 percent higher. Click here to read more.
The rapid rise in house prices — which has made Americans feel wealthy and inclined to spend over the past several years — won’t continue indefinitely, the president’s top economist said Thursday. Still, a mild slowing in the buoyant housing market shouldn’t pose a danger to the country’s overall economic health, Ben Bernanke, chairman of the Council of Economic Advisers, told Congress’ Joint Economic Committee. “House prices are unlikely to continue rising at their current rates,” he said. “However, as reflected in many private-sector forecasts ... a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year.” Many private analysts would consider such growth to be around 3.25 percent. Click here to read more.
~Tina Jan~
Coldwell Banker Kivett-Teeters
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