Kay Monigold, Author at Avenue Mortgage, LLC

Housing Market Index Shows Builder Confidence Up 23 Percent Year- Over- Year According to the National Association of Homebuilders/Wells Fargo Homebuilders Market Index for December, builder confidence recovered in with a reading of 58. This surpassed both expectations of 56 and last month’s reading of 54.

Analysts noted that builder confidence has steadied after the government shutdown. December’s reading was the highest in four months. Dave Crowe, NAHB chief economist, said that his organization was expecting a “gradual improvement in the housing recovery” in 2014.

Any reading above 50 indicates that more builders are confident about overall housing market conditions than not.

Builder Confidence – Highest Reading Since 2005

Pent-up demand for housing is driving housing markets in spite of higher mortgage rates. Three components of builder confidence used to calculate the overall reading also rose in December. Builder confidence in current home sales rose to 64 from a reading of 58 in November; this is the highest reading since 2005.

Confidence levels in housing markets over the next six months rose to 62 from last month’s reading of 60. Builder confidence also grew in the area of buyer foot traffic in new developments and gained three points to a reading of 44.

All of this is good news, but the NAHB said that a gap remains between higher home builder confidence and the rate of new home construction. A seasonal lull in home construction is not unusual especially in areas experiencing harsh weather.

More Jobs, Low Refinance Numbers Could Mean More Mortgages Available

MarketWatch analysts suggest that if the economy continues to add jobs “at a brisk pace” and mortgage lenders ease lending requirements next year, the demand for homes could further strengthen the U.S. housing market next year.

Low numbers of refinance mortgages in 2013 may cause some lenders to loosen mortgage credit requirements, which were tightened after the housing bubble burst.

Economic News scheduled for today may provide a broader picture of economic health and likely trends for 2015. The Federal Reserve’s Federal Open Market Committee will provide its expected statement after its meeting, and Fed Chairman Ben Bernanke will give his last press conference as Fed chair as well.

Any indication of plans to reduce the Fed’s current quantitative easing program could upset financial and mortgage markets, but most economic analysts don’t expect an announcement of tapering the Fed’s asset purchases before next year.

Data on November Housing Starts and Building Permits will also offer clues as to how housing markets and the general economy are doing.

Get The Overview On Escrow Accounts Whether you are purchasing a new home or you are considering applying to refinance your home, chances are the lender will require an escrow account. These accounts are often a source of confusion for homeowners.

In reality, these accounts benefit the homeowner and help protect the lender.

What Is An Escrow Account?

Escrow accounts are sometimes called “impound” accounts. These accounts are set up to help manage payments of property taxes and homeowner’s insurance.

Depending on the individual requirements of the lender, you may be asked to pay as much as one-quarter of these upfront and they will be put into the account for the purposes of making payments.

Who Controls Escrow Accounts?

Lenders have complete control over escrow accounts. However, homeowners are entitled to receive an annual statement advising them of their escrow balance.

If there is an increase or decrease in insurance payments through the year, a homeowner may request the lender evaluate the escrow account and change the amount that is paid.

Is Interest Paid On Escrow Accounts?

There is no mandate to pay interest on escrow accounts. When you refinance your home, the funds for your taxes and insurance are calculated into your overall payment.

The portion that is to be used to pay taxes and insurance is placed in escrow. Arizona laws do not require lenders to pay interest on these accounts.

What Happens If I Sell My Home Or Refinance?

When you sell or refinance your home, your escrow account will be credited at closing. The amount may be used to lower your out-of-pocket costs or may be turned over to you as a direct payment.

What Happens If There Is Not Enough/Too Much Money In Escrow?

If your lender has underestimated your escrow payments, they may request you send an additional payment to make up the difference. In the event you are paying too much into escrow, your lender has the discretion to release the overage amount directly to you.

In most cases, shortfalls or overages of $50 or less are typically not a major concern.

If your lender requires you to have an escrow account for the taxes and insurance portion of your mortgage payment, it can be very helpful. Escrow accounts help ensure you do not have to come up with a large payment once a year for insurance or quarterly for taxes.

In some cases, if a lender does not require an escrow account, as a borrower, you may request they escrow your taxes and insurance for convenience.

Housing Market Index Shows Builder Confidence Up 23 Percent Year-Over-Year

Get The Overview On Escrow Accounts

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