Posts by Paul Mullings
Paul Mullings is senior vice president and interim head of Single-Family Business at Freddie Mac. In this capacity, Mullings has broad responsibilities over the Single-Family line of business, including the administration, relationship and performance management of Freddie Mac Seller/Servicers; performance of Freddie Mac's guarantee book of business; and all sourcing, servicing and business operations. Mullings is a member of the company's senior operating committee and reports directly to CEO Don Layton.
Now that we’re officially in the New Year, I want to share some of the expectations I and other Freddie Mac executives have for 2013.
Per Freddie Mac's latest forecast, as the housing recovery spreads and stabilizes, we're likely to see less refinancing and more purchase mortgages for homebuying. That’s because so much of the nation’s refi demand already has been met thanks to historically low mortgage rates and the Home Affordable Refinance Program’s success.
Mortgage rates are at 50-year lows – the 30-year fixed-rate mortgage averaged 3.95 percent at the close of 2011 – making homeownership more affordable than ever for families with a stable income and good credit. But before you begin house hunting in earnest, it's important that you get the facts about buying a home in today's market. Because whether you're shopping for your first home or your third, there are some "rules of the road" you'll need to understand.
Here are four steps you should take as soon as you start thinking seriously about buying a home:
"You can observe a lot just by watching." – Yogi Berra
One thing I observed recently was how few people seem to know the nation is experiencing a refinance surge. Pick up the paper or turn on the TV and you would think nobody can refinance a mortgage, when more than 10 million already have since 2009, saving billions of dollars in monthly payments.
You're thinking about buying a home, but you're worried by the reports of how tough it is to qualify for a mortgage these days and how big a down payment is required. Yes, credit standards are higher now than they were a few years ago. But they actually are about the same as in the mid-1990s. Factor in today's historically low interest rates and current home prices, and affordable mortgages are within reach for many qualified borrowers who may have been hesitant to enter the market.
Although owning a home is not for everyone, and renting might be a better option for some, here are several facts to keep in mind if you choose to pursue homeownership.
Like a rare astronomical event, America is experiencing a conjunction between very affordable home prices and historically low mortgage rates that hasn't been seen for at least 50 years. Since nobody knows how long this will last, today's market is a rare buying opportunity for working families with stable incomes and good credit.
There are even some hints the present combination of historically low rates and more reasonably priced homes are beginning to slip away in some markets. For example, the National Association of Realtors' housing affordability index, while still high, has dropped nearly six percentage points in the past few quarters as existing home prices in many areas have reversed course and begun to rise again. (See chart)