Today we issued our May 2011 housing data and sales of both single-family homes and condos were down compared to the same time last year. While sales were down, median prices for both single-family homes and condos were up compared to the year before and from April. Month-to-month sales were up, which is typical from April to May.
If sales being down wasn’t challenging enough, we are concerned about a provision being considered by regulators as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed provision would define a “Qualified Residential Mortgage” (QRM) as any loan that has at least 20% down. There’s more, keep reading…
What does this means in practical terms? Let’s say you have very good credit with no debt, a good job and some savings. And let’s say you are interested in buying a home (the median price of a single-family home this month is $300,375). Under this provision being considered by banking regulators, in order to get a loan with the best rate, you’d have to come up with a 20% downpayment or approximately $60,000. If you couldn’t come up with that money, or didn’t want to become house poor, it is anticipated that a loan could cost you up to an extra 2 and 1/4 percent. In addition to making it more difficult and expensive to buy a home, the provision could also severely impact any housing recovery.
There is a lot to this and we suggest that you read more about the “QRM’ by going to http://www.realtor.org/topics/qrm
Click the link to see the May 2011 Housing Release and listen to the monthly podcast with MAR President-elect Trisha McCarthy.
Highlights from the release:
- Single-family home sales were down 16.9% compared to last year.
- Single-family median prices were up 0.5%
- Condo sales were down 20.8% compared to the same time last year.
- The median price for a condo was up 7.3% compared to last year.