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<ul> <li>Housing sales rose by a whopping 71% in the first quarter of the current year, as compared to the same quarter two years back.</li><li>As many as 6.65 lakh units are yet to be sold across top seven cities</li><li>Bangalore was the biggest winner in this trend as its unsold inventory went down by 44%</li></ul>Indians buyers are coming home to the real estate sector. In the top seven cities, the housing sales rose by a whopping 71% in the first quarter of the current year, as opposed to the mere 46,000 units sold in the same quarter, two years back, according to ANAROCK Property Consultants. The <keyword id="7695553" type="UNKNOWN" weightage="20" keywordseo="Indian-Housing-sector">Indian housing sector</keyword> has started coming out of the shadows after a state of stagnation for over four years. Favourable property prices along with cuts in Goods and Services Tax (GST) and home loan rates are helping the sector recover from its lows. “The extremely worrisome trend of rising inventory since 2014 onwards has effectively been arrested, with data clearly suggesting a q-o-q unsold stock decline in the seven main cities from Q1 2017 onward. In the coming quarters, a stable government at the Centre will boost buyer confidence further and increase housing sales velocity,” said a report by ANAROCK Property Consultants. Bangalore clocks in sales As many as 6.65 lakh units are yet to be sold across the top seven cities of Delhi-NCR, Mumbai metropolitan region, Bangalore, Hyderabad, Chennai, Pune and Kolkata. Currently, these seven cities are holding on to inventory which will probably get sold in 30 months. In the same quarter two years back, it was at 50 months. In real estate, an inventory overhang of over 18-20 months is considered healthy. Bangalore was the biggest winner in this trend as its unsold inventory went down by 44%, indicating high sales. Hyderabad’s pent up inventory went down by 21%. Delhi NCR went down by 18%, but the only city which remained untouched by this trend is Mumbai metropolitan. Its unsold inventory went down by a mere 4%! This increase in interest in the sector has come even without large scale movement in prices of properties. “Average property prices across cities have largely maintained status quo and saw less than 2% rise in the last two years – from INR 5,480 per sq. ft. in Q1 2017 to INR 5,570 per sq. ft. in Q1 2019,” said Anuj Puri, chairman of ANAROCK Property Consultants.

Cuts in home loan rates push sales across top cities

<keyword id="1390483" type="General" weightage="20" keywordseo="housing-sales" source="Orion">Housing sales</keyword> rose 36 per cent year-on-year to a record 1,20,280 units across seven major cities during the July-September period on robust demand amid stable mortgage rate, according to Anarock. Housing sales stood at 88,230 units in the year-ago period across the seven major cities. Releasing the data, real estate consultant Anarock said average <keyword id="6468581" type="General" weightage="20" keywordseo="housing-prices" source="Orion">housing prices</keyword> across the seven cities grew 11 per cent annually in the July-September period this year. Hyderabad saw the highest rise of 18 per cent. Anarock highlighted that quarterly sales in July-September touched an all-time high. In housing data, sales of apartments, villas and independent floors are included while plots are excluded. Anarock Chairman Anuj Puri highlighted that Mumbai Metropolitan Region (MMR) and Pune contributed 51 per cent of the total sales. Puri noted that the continued healthy sales momentum is at least partially attributable to the repo rate pause maintained by the Reserve Bank of India in the two recent monetary policies. "This has kept <keyword id="173069" type="General" weightage="20" keywordseo="home-loan-interest" source="Orion">home loan interest</keyword> rates stable, keeping housing purchase sentiment high," he added. According to the data, housing sales in Delhi-NCR rose 6 per cent to 15,865 units during July-September 2023 from 14,970 units in the year-ago period. In MMR, housing sales increased 46 per cent to 38,500 units from 26,400 units during the period under review. Housing sales in Bengaluru went up 29 per cent to 16,395 units during July-September this year from 12,690 units in the corresponding period of last year. In Pune, sales grew maximum by 63 per cent to 22,885 units from 14,080 units. Sales of <keyword id="135249" type="General" weightage="20" keywordseo="residential-properties" source="Orion">residential properties</keyword> in Hyderabad increased 41 per cent to 16,375 units from 11,650 units. In Chennai, housing sales rose 42 per cent to 4,940 units from 3,490 units. Housing sales in Kolkata went up 7 per cent to 5,320 units during July-September from 4,950 units in the year-ago period. "The ever-rising aspiration of owning a home mainly driven by rising income levels has meant a strong demand for housing over the last couple of years. The trend is expected to continue in the foreseeable future," Gurugram-based realty firm Krisumi Corporation Managing Director Mohit Jain said. The demand for <keyword id="457183" type="General" weightage="20" keywordseo="luxury-housing" source="Orion">luxury housing</keyword> too is likely to remain strong amid the desire for upscale living experiences, he said. "Keeping pace with the demand for luxury homes, the supply is also expected to remain strong," Jain said.

Housing sales up 36 pc in Jul-Sep in top 7 cities to record 1,20,280 units: Anarock

<keyword id="6354730" type="UNKNOWN" weightage="20" keywordseo="Home-loan">Home loan</keyword> advisory is a fairly new concept in India, and while homebuyers and lenders have started to taste the success of partnering with mortgage advisory firms, <keyword id="6354553" type="COMPANY" weightage="20" keywordseo="real-estate">real estate</keyword> developers are still in the dark on the way it will benefit them. All real estate developers understand the importance of home loans in their business as in most cases 75-80% of the entire cost of a home will come via a mortgage, but does this alone justify a need for them to get a home loan advisory on board? Absolutely! 
 Managing and balancing <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">finance</keyword> is one of the biggest hurdles for any developer. Many developers offer interest rates of anywhere from 13-22% to borrow money from the market, financial institutes, family, friends, etc. to purchase land and support construction of their projects. After selling a property to a home buyer and accepting the initial 20-25% down payment, there is a cost to every passing day until the home buyer finally gets their mortgage disbursed. This is not realized at the time of sale as the sales team of any developer defines it as a ‘win’ as soon as they accept the booking amount or at best the down payment, but of course in the bigger scheme of things, this is not the ultimate destination. The unit 'sold' is for the sole purpose of acquisition of funds towards constructing the building &amp; to deter, defer &amp; avoid borrowing at the higher rate of interest. Hence, the developer starts selling his property at the inception at a lower cost, rather than having a wait-period and enjoy the appreciation himself. Let’s take a closer look at the key advantages that developers acquire by partnering with home loan advisory firms. 
 
Sooner than later Once a sale is made, the sooner the home-buyer has his loan sanctioned the better. Although many developers tie up with lenders, many times the purchasers will have their own assumptions on the best lender and will spend time to evaluate the <keyword id="100080" type="ORGANIZATION" weightage="20" keywordseo="housing-finance">housing finance</keyword> market to choose the best one. It is a common misconception amongst them to go straight to the bank with who their salary accounts are with, or to their fund managers in the bank, who are expert on <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword>, but not specialized on mortgage products. In this analysis and window-shopping, the developer loses precious time and continues to pay interest on the capital finance opted for at the beginning of the project. 
 
Time is costly 
If we assume that a developer borrows capital finance from the market at even 10%, the delay from the homebuyer in getting his home loan sanctioned loses money for the developer every passing month. The developer will lose money to the extent of interest borrowed upon, which at times could be as high as 25%. Even if you calculate this loss on Rs 1 crore home, the loss is significant. On 1 crore @10% a month, it is a lakh of rupees lost on interest alone. Multiply this by the number of flats sold and you will find this argument starts to gain much more ground. The situation is even worse for a developer who is deep into construction, nearing completion, or worst yet, already completed. 
 
Control, transparency &amp; the real facts Many home buyers while speaking to the sales associates and/or lending partners of a property share misleading information verbally to build a perception of a strong loan eligibility profile, but when submitting the actual documents, many truths may come out. On the other hand, prospective borrowers will actually be completely transparent to <keyword id="681174" type="ORGANIZATION" weightage="20" keywordseo="Home-Loan-Advisors">home loan advisors</keyword>, as they know sharing the truth only can help them identify the perfect mortgage product and ultimately save money. Third-party partners, such as home loan advisory firms, can enable honesty and get the consumer to open up to the real facts or issues the potential borrower has. The quicker the real facts are in the open, the quicker a suitable mortgage product can be offered, chosen, sanctioned and disbursed, and the quicker the developer can get the money. 
 
Responsible &amp; expert advice 
A home loan advisory partner on board can help home buyers receive responsible and expert advice on the home loan product, type of home loan, deciding the home loan term, etc. Customers would understand that home loan advisory companies are there to help them with unbiased input and they have experience of handling various types of loan, profiles and they know structuring better than a person who has worked with only one or two lenders. The exposure the advisory firm has leads the borrower towards the right and quick decision. Making such experts available to help the developer to strengthen their brand image with the customer, and this could be an important aspect leading to a feeling of enhanced customer service from the developer brand. 
 
Deters cancellations 
Many cancellations of home-buyers occur due to their inability to get home loans sanctioned &amp; the rejection makes them shy away from the decision of staying with the property. This could be because of complex financial situations and their lack of understanding of all the home loan products available. With a home loan advisory team on board, the probability of each customer being able to sanction in home loans significantly increases due to the home loan advisory’s knowledge of offered products, updated information on each lender and product, and their strong lender network. Not allowing a borrower to opt for a specific lender initially saves the time as well as the trauma of applications getting rejected. 
 Developers need to quickly understand the value of a <keyword id="2740119" type="UNKNOWN" weightage="20" keywordseo="home-loan-advisor">home loan advisor</keyword> that can add to their business. And if not for the key reasons listed above, then for this one: It’s free to the developer. Home <keyword id="2740120" type="UNKNOWN" weightage="20" keywordseo="loan-advisors">loan advisors</keyword> make their income from lenders, which mean the service will not cost any money to the developer or the customer. For an advisory that costs nothing and adds tremendous value, the question is not 'why developers should partner with home loan advisors', but why haven’t they already? 
 
(About the author: This article has been contributed by Sukanya Kumar, Founder and Director of <keyword id="2740118" type="UNKNOWN" weightage="20" keywordseo="RetailLending-com-">RetailLending.com.</keyword>)

5 reasons why developers need to partner with home loan advisors

The recent trend in home sales has shown a significant uptick based on price point, writes Bank of America Merrill Lynch economist Michelle Meyer. 
As of February, sales of homes priced over $1 million were up 14.4% year-over-year, while sales of homes under $100,000 were down 18% on the year.
She points to a few key reasons for this divergence between lower and higher priced homes:
First, the share of distressed sales in overall sales was down to 16% in February, from 25% a year ago. These properties usually go at under $100,000. "There are still 1.4 million properties in foreclosure inventory and another 1.2 million that are seriously delinquent, but the flow of these homes into the market is slow."
<div class="KonaFilter image-container display-table"><div><div class="image">BAML</div></div></div>
Second, in terms of higher-priced existing homes, Meyers writes that "lenders have been eager to originate jumbo loans. Indeed, the spread between jumbo and conforming loans has narrowed to a historically low 9bp." A conforming loan is one in which the size of the loan is equal to or under an amount set by Freddie Mac and Fannie Mae and is well under $1 million (The limit for a one-unit property is currently $417,000). Bottom line: credit is easing for jumbo borrowers.
<div class="KonaFilter image-container display-table"><div><div class="image">BAML</div></div></div>
Third, "higher-income borrowers have also become wealthier over the past year," writes Meyer. Household financial assets climbed about 13% after a stellar run in the U.S. stock market last year. And since 60% of financial wealth is held by the top 10%, this has worked out well for higher-income households in the market for expensive properties.
And this trend can be seen through homebuilders. The size of new homes under construction are bigger, which means they're more expensive properties. "Builders have been targeting move-up buyers in this cycle rather than first-time buyers," she writes.
<div class="KonaFilter image-container display-table"><div><div class="image">BAML</div></div></div>

Americans Are Increasingly Buying Bigger, More Expensive Houses

The latest data on new home sales is due from the Census Bureau at 10:00 a.m. ET.Economists estimate that sales of new single-family houses fell 0.6% in September compared to the prior month at an annualized rate of 549,000.Last week, data from the National Association of Realtors showed that <a href="http://www.businessinsider.com/existing-home-sales-september-2015-10">existing-home sales</a> rose 4.7% at an annualized pace of 5.55 million in the month - more than expected. In a preview to clients, Bank of America Merrill Lynch economists noted, "Mortgage purchase applications have increased at a solid rate at the end of the month, likely reflecting a rush in loan applications before the new disclosure rule went into effect on October 3. The new rules will mean that mortgage lenders need to adjust their technology to process loans, creating delays in the process. As such, mortgage brokers may have advised clients to apply for a loan and sign a contract in September. If we do see a notable gain in new home sales in September, we would expect it to be partially reversed in October, however."<a href="http://www.businessinsider.com/new-home-sales-september-2015-10">We'll be back with the latest data once they cross.</a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/best-buy-robot-retail-shopping-2015-10">Best Buy is using a robot that could change the way we shop forever</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="80NDdkeDrh2feqGWHyDLLAgnaoUJOXWS" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Here come new home sales ...

Realtors' apex body <keyword id="6393312" type="General" weightage="80" keywordseo="credai" source="Orion">Credai</keyword> on Thursday requested the <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> not to increase the repo rate in the upcoming monetary policy as this would raise the borrowing cost of builders and customers, impacting housing sales. With retail inflation remaining above the comfort level of 6 per cent and most global peers, including the <keyword id="117388" type="General" weightage="50" keywordseo="us-fed" source="Orion">US Fed</keyword>, continuing their hawkish stance, industry experts feel the Reserve Bank of India may go in for a 25 basis points hike in the bi-monthly monetary policy to be announced on April 6. Confederation of Real Estate Developers' Association of India (Credai), having more than 13,000 developers as members, has "urged the RBI to not to increase the repo rate any further, citing the financial challenges faced by developers and the potential impact on housing sales due to the consequential rise in prices and home loan rates". In the last one year, the body said, the repo rate has increased from 4 to 6.5 per cent and another hike would lead to even higher borrowing costs for developers. Credai National President Harsh Vardhan Patodia said, "In the last 1 year, the cost of construction has risen rapidly due to the gradual increase in repo rates by the RBI, which has adversely impacted many developers as they struggle to cope financially. Another repo rate hike would not only make certain projects financially unfeasible, but it would also deter homebuyers as home loan rates will be at an all-time high". The association said housing prices rose by 5-6 per cent in the last one year and any hike in the repo rate would lead to even higher project costs and housing prices. It argued that the profit margins of builders would reduce. Interest rates on home loans would touch almost double-digit home loan rates, deterring customers from purchasing properties, especially in tier 1 cities, Credai said. "This could lead to a slowdown in the real estate market and result in homebuyers postponing their purchase plans, reversing a trend in the post-CODVID era wherein homebuying was on the rise," it cautioned. Property consultants and developers also feel that sales could be hit in case of a further rise in mortgage rates. Housing.com CEO Dhruv <keyword id="274894" type="General" weightage="80" keywordseo="agarwala" source="Orion">Agarwala</keyword> said the RBI would probably stick to a moderate increase in its benchmark lending rate in the upcoming policy announcement, before hitting a pause button on hikes later in 2023. "The move is likely to have limited impact on real estate demand as home purchase decisions are driven and determined by several factors other than just home loan rates. That said, borrowers would feel the pinch of this increase in rates as home loan EMIs for existing and new loans would go up," Agarwala added. Realty firm Signature Global Chairman Pradeep Aggarwal said any further increase in policy rates could push the home loan interest rate beyond the psychological barrier of 10 per cent, "which could have a substantial impact on buyer sentiments and affordability". <keyword id="12503468" type="General" weightage="50" keywordseo="vimal-nadar" source="Orion">Vimal Nadar</keyword>, Head of Research at Colliers India, said home loan interest rates are already at an alarmingly higher level of 9.5 per cent and above. "With homebuyers already stretched on EMIs and loan tenures, a further hike in interest rate will hit them hard. The impact will be compounded in the current environment where the industry expects a lesser increase in income levels with housing prices remaining firm," Nadar said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/small-stocks-lag-behind-in-fy23-take-bigger-hit-than-bluechip-firms/articleshow/99117250.cms">Small stocks lag behind in FY23; take bigger hit than bluechip firms</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/tamil-nadu-says-nahi-to-dahi-over-hindi-name-on-curd-packets/articleshow/99116854.cms">Tamil Nadu says 'nahi to dahi' over Hindi name on curd packets</a>

Repo rate hike will slow down real estate, reverse post-Covid trends, says industry body to RBI

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Reuters/Alexei KolchinThis is the latest in a series of gloomy results for the housing market, which took a dark turn toward the end of 2018.</div></div></div><ul class="summary-list"><li>The housing market got more bad news this week.</li><li>Existing home sales fell again in January, hitting a three-year low. </li><li>This is the latest in a series of gloomy results for the housing market, which took <a href="https://www.businessinsider.com/falling-home-sales-could-signal-us-recession-2019-1">a dark turn toward the end of 2018</a>.</li><li>Loosening lending standards and rising delinquencies are in the offing as well, according to Moody's. </li></ul>Another month, another rash of bad news for the US housing market. The National Association of Realtors on Thursday <a href="https://www.nar.realtor/newsroom/existing-home-sales-drop-1-2-percent-in-january">released the January numbers</a> for existing home sales, which fell 8.5% from last year to a rate of 4.95 million. That's the lowest level in more than three years, and it follows a series of gloomy results in the closing months of 2018. <a href="https://www.nar.realtor/newsroom/existing-home-sales-see-64-percent-drop-in-december">US existing-home sales cratered to 4.99 million</a> in December, 10.3% below the mark from the year-ago period. That followed year-over-year declines of 7.8% in November and 5.1% in October, according to the NAR.NAR released data earlier this month showing that <a href="https://www.marketwatch.com/story/pending-home-sales-tumble-to-lowest-in-nearly-five-years-in-december-2019-01-30">pending home sales also fell</a> in December to 2.2%, the lowest point since 2014.UBS analysts, amid the ugly housing numbers, wrote in a note last month that "the deterioration in housing and its intensification since midyear raise the possibility of underlying weakness in the household sector." Causes for the slowdown are myriad, but experts have pinned much of the blame on higher interest rates and home prices. The median home increased to $247,500 in January, the 83rd straight month of year-over-year gains, according to the NAR.That's dampening enthusiasm from <a href="https://www.businessinsider.com/redfin-most-affordable-cities-for-millennials-to-buy-a-home-2019-2">cash-strapped and debt-burdened millennials</a>.But Lawrence Yun, NAR's chief economist, said the home-sales drought had hit its cyclical low and that he expects sales to rebound going forward."Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months," Yun said in an NAR statement. Loosening standards by mortgage lenders could also contribute to a turnaround in sales, though lower credit standards also carry the risk of ramping up loan delinquencies. The housing malaise has taken a toll on mortgage companies, as revenues got whacked in 2018 and <a href="https://seekingalpha.com/news/3416446-mortgage-lender-profit-outlook-falls-nine-straight-quarters-fannie-mae?dr=1#email_link">profit outlook for 2019</a> remains bleak. "Over the last year, residential mortgage loan profitability has declined significantly as loan originations and margins have fallen given higher interest rates, and as refinance originations have plummeted," Moody's wrote in a report last week. The ratings agency expects residential mortgage originators, crunched by these economic headwinds, to "loosen underwriting standards for purchase loans, which will lead to modest growth in residential mortgage balances."That could precipitate a run-up in mortgage delinquencies, which ticked up to 3.55% in the fourth quarter, according to Federal Reserve data. Moody's projects delinquent mortgage loans, which are hovering near post-crisis lows, will increase modestly over the coming year. <ul class="read-more-links"><li>Read more:</li><li><a href="https://www.businessinsider.com/falling-home-sales-could-signal-us-recession-2019-1">Americans stopped buying homes in 2018, mortgage lenders are getting crushed, and an economic storm could be brewing</a></li><li><a href="https://www.businessinsider.com/chase-credit-cards-suddenly-shut-down-2018-7" data-read-more-link="" data-e2e-name="read-more-link">Credit-card super users are searching for answers amid a string of shutdowns from Chase, as billions in costs on lavish rewards pile up</a></li><li><a href="https://www.businessinsider.com/redfin-most-affordable-cities-for-millennials-to-buy-a-home-2019-2" data-read-more-link="" data-e2e-name="read-more-link">Rust-belt cities that got killed in the recession are making comeback, and they've become the best places for millennials to buy a home</a></li><li><a href="https://www.businessinsider.com/restructuring-investment-bankers-clean-up-distressed-companies-feels-like-2007-2018-5" data-read-more-link="" data-e2e-name="read-more-link">The Wall Street bankers who feast during recessions say there's a 'smell in the air' and it's starting to feel like 2007</a></li></ul><a href="http://newsletter.businessinsider.com/join/4np/wall-st-insider&amp;hash=f4e91136c13f3c40c496d77bc7347502">Sign up here</a> for our weekly newsletter Wall Street Insider, a behind-the-scenes look at the stories dominating banking, business, and big deals. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/vitalik-buterin-created-ethereum-one-of-the-worlds-three-largest-cryptocurrencies-2019-1">Vitalik Buterin created one of the world's largest cryptocurrencies in his early twenties - here's how he did it and why</a></h3> <div> </div> </div>

Home sales continue to get whacked, falling to a 3-year low, and an increase in mortgage delinquencies is looming

<ul class="summary-list"><li>President Joe Biden's administration is canceling millions of dollars in student loan debt.</li><li>With some loan relief, millions of buyers can join the housing market, a housing CEO said.</li></ul>Student loan forgiveness could make it easier for millions of people to join the path to homeownership, a housing organization CEO said.David Dworkin, CEO of the National Housing Conference, <a href="https://nhc.org/press-release/statement-of-david-m-dworkin-president-and-ceo-national-housing-conference-on-president-biden-student-loan-announcement/?campaign_id=4&amp;emc=edit_dk_20220825&amp;instance_id=70194&amp;nl=dealbook&amp;regi_id=84097998&amp;segment_id=102320&amp;te=1&amp;user_id=d8b50a44d56b5015c083cfbca06fc5c4">called the Biden administration's plan</a> to cancel up to $10,000 in student loan debt for tens of millions of Americans, "one of the most consequential administrative actions for housing in a generation.""Student loan debt burden is a major impediment to first-time homebuyers," <a href="https://nhc.org/press-release/statement-of-david-m-dworkin-president-and-ceo-national-housing-conference-on-president-biden-student-loan-announcement/?campaign_id=4&amp;emc=edit_dk_20220825&amp;instance_id=70194&amp;nl=dealbook&amp;regi_id=84097998&amp;segment_id=102320&amp;te=1&amp;user_id=d8b50a44d56b5015c083cfbca06fc5c4">Dworkin said</a>. "This decision will make homeownership more attainable for millions of low-, moderate- and middle-income Millennials, Gen Zs, and people of color."Biden on Wednesday revealed his plan to <a href="https://www.businessinsider.com/biden-cancels-student-loan-debt-100000-people-making-125k-income-2022-5">cancel $10,000 of student debt</a> for most borrowers, fulfilling a key campaign promise just days before payments were due to resume. Pell Grant recipients will have up to $20,000 of their debt forgiven, while non-recipients will see up to $10,000 wiped from their loan balances. The administration also extended the deadline for the loan repayment freeze one last time to December 31, giving borrowers four more months of relief.The aid will directly lower one of the housing market's biggest barriers to entry, Dworkin said. A study on the impact of student loan debt by the National Association of Realtors, found that <a href="https://online.flippingbook.com/view/866398061/3/">almost a third of people</a> with student loan debt said their debt has affected their decision or ability to buy a home. Forty-seven percent of people with student loan debt said it's delaying their ability to buy a house because <a href="https://online.flippingbook.com/view/866398061/47/">they can't save for a down payment</a>, and 45% said they <a href="https://online.flippingbook.com/view/866398061/47/">don't think they can get a mortgage</a>.Separately, an <a href="http://kamilasommer.net/Student_loans_homeownership.pdf">analysis</a> from the Federal Reserve found the homeownership rate falls by nearly 2 percentage points for every additional $1,000 in student loan debt held by a borrower.The debt relief is only for individuals earning less than $125,000 yearly or couples filing jointly and earning less than $250,000. That means the Americans left on the sidelines through the recent home-buying frenzy will finally get a leg up in the housing market, Dworkin said.Biden's announcement also comes at a perfect time for prospective buyers looking to reenter the market. Housing market activity has cratered through 2022 as rising mortgage rates weigh on demand. Sales of new homes plummeted through July to <a href="https://www.businessinsider.com/housing-market-new-home-sales-prices-july-real-estate-recession-2022-8">the slowest pace in six years</a>, the Census Bureau said Tuesday. Existing home sales <a href="https://www.businessinsider.com/housing-market-outlook-existing-home-sales-july-mortgage-rates-prices-2022-8">have also slowed dramatically</a>, and the number of homes available on the market has rebounded at the fastest rate since 2017.In short, demand is cooling off and supply is quickly recovering. That stands to slow home-price inflation and even bring some deals to buyers pushed out of the pandemic-era market. Mortgage rates have also eased somewhat in recent weeks, offering even more relief to prospective homeowners.With student loan balances poised to shrink and the market balancing out, home ownership is looking much more feasible for millions of Americans than it did at the start of the year.

Student-debt relief gives homebuyers a once-in-a-generation boost, CEO of National Housing Conference says

<ul class="summary-list"><li>Foreclosures are rising due to the expiration of mortgage forbearance and moratorium programs from the CARES Act.</li><li>One real estate expert says that it's no cause for alarm as current market fundamentals remain strong.</li></ul>With fewer Americans purchasing homes — even in pandemic housing hotspots like <a href="https://www.businessinsider.com/home-prices-fall-home-buyers-see-more-discounts-2022-11">Austin and Phoenix</a> — experts <a href="https://www.businessinsider.com/housing-outlook-this-is-how-far-us-home-prices-could-fall-and-when-2022-11">predict</a> that US home prices could tank as much as 20% in 2023. And in previous housing booms and busts, downturns have been accompanied by a rise in short sales — when a homeowner and their lender agree to sell a house for less than the balance owed on the loan — and foreclosures, especially if the economy's health is deteriorating. In 2008, a combination of cheap debt, predatory lending practices, and complex financial engineering led to a spectacular <a href="https://www.businessinsider.com/what-is-housing-bubble-will-us-real-estate-market-crash-2022-4">housing</a> bust that triggered a crisis of short sales and foreclosures among homeowners who could either no longer afford to pay their mortgage or believed that it no longer made financial sense to do so.While <a href="https://www.businessinsider.com/home-prices-fall-home-buyers-see-more-discounts-2022-11">some of the factors</a> that contributed to the foreclosure spike of the mid-2000s have reemerged in today's housing downturn, Rick Sharga, the executive vice president of market intelligence at real estate data and research firm ATTOM, told Insider that this time around, today's homeowners are at less risk of losing their property as market fundamentals are stronger and there are more programs to assist struggling borrowers. "Historically, normal foreclosure activity means about a single percent of loans are in foreclosure," he told Insider. "Right now we're looking at about half a percent of loans that are in some stage of foreclosure. The pretty low levels of foreclosure activity are because the quality of the loans that have been issued over the last 10 years have been very strong." Indeed, American borrowers are in a far better position than they were in 2008. US regulatory agencies have since enacted the <a href="https://www.congress.gov/bill/111th-congress/house-bill/4173/text">Dodd-Frank Wall Street Reform and Consumer Protection Act</a> to help prevent some of the pervasive predatory lending practices that gave rise to the last housing crisis. There is also the <a href="https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/homeowner-assistance-fund">Homeowner Assistance Fund</a>, which is designed to help those who have fallen behind on their mortgages. These initiatives paired with high levels of home equity — roughly <a href="https://markets.businessinsider.com/news/commodities/housing-market-crash-unlikely-despite-14-year-highs-mortgage-rates-2022-9">$29 trillion</a> as of the second-quarter of the year, according to the Federal Reserve — are likely to prevent an upcoming wave of short sales and foreclosures, Sharga suggests. According to him, that's because "market conditions are day and night" today compared to 15 years ago. <h2>Foreclosure rates are rising but remain below historical levels</h2>Data from ATTOM's December <a href="https://www.prnewswire.com/news-releases/us-foreclosure-completions-increase-annually-by-64-percent-in-november-2022-301697706.html">foreclosure report</a> shows there were 30,677 foreclosure filings in November, specifically homes that either had default notices, scheduled auctions, or bank repossessions. While the rate jumped 57% from the same period in 2021, the figure remains well below 2019 levels, prior to the pandemic. The spike in foreclosure activity between 2021 and 2022 stems from the expiration of temporary financial safety nets enacted through the <a href="https://www.businessinsider.com/cares-act-stimulus-checks-impact-saved-12million-poverty-boosted-economy-2020-7">CARES Act</a>. The legislation gave financially burdened homeowners the ability to either temporarily pause or to reduce their mortgage payments during the early stages of the pandemic. The CARES Act was also notable for introducing a foreclosure moratorium on home loans backed by the Federal Housing Administration or public-private entities like Fannie Mae and Freddie Mac.Sharga says the combination of these two intervention programs "virtually stopped foreclosure activity for much of 2020 and 2021," dropping the numbers to the lowest levels on record — "albeit somewhat artificially." While the foreclosure rate is now rising, Sharga does not foresee activity climbing to worrisome levels as "economic fundamentals are pretty strong" in today's housing market. However, he warns that if the US does enter a recession next year, Americans who purchased a home near the peak of the market will be most at risk of going underwater on their homes. But even with this prospect, Sharga suggests that a substantial uptick in foreclosures or short sales is unlikely as many recent homebuyers have positive equity in their homes."What's interesting about this cycle is that even if a borrower does find themselves in foreclosure today, 93% of those folks have positive equity in their homes, which is the complete opposite of where we were last time," he said."They have the opportunity to potentially refinance their loan if they are temporarily out of a job or if they have to, they can at least sell the home at a profit and get a fresh start, whereas if you go back to 2008, a lot of the borrowers that were in foreclosure just really had no alternative other than to lose the property to a foreclosure sale," Sharga added. "Right now there's a very, very small percentage of people experiencing that."

Don't expect a wave of short sales and foreclosures during this housing downturn — homeowners have too much equity

<div class="image-container float_right" style="width:401px"><div class="image"></div><a href="http://www.apimages.com/OneUp.aspx?st=k&amp;kw=housing%20phoenix&amp;showact=results&amp;sort=date&amp;intv=None&amp;sh=10&amp;kwstyle=and&amp;adte=1358177876&amp;pagez=60&amp;cfasstyle=AND&amp;rids=255a3f126f884c83b3067dff2bbc6c00&amp;dbm=PY2012&amp;page=1&amp;xslt=1&amp;mediatype=Photo">AP Photo/Ross D. Franklin</a></div>Going into 2013, home prices are expected to rise 6 percent driven by steady demand, lower bank-owned (REO) sales, and lower inventory of unsold homes. This is according to CoreLogic's latest report.
The CoreLogic Home Price Index (HPI) increased 6.3 percent in 2012, the largest increase and highest level since 2006. And year-over-year home price increases were more widespread.
This increase in home prices across a broader geographic spread is expected to continue in 2013.
<a href="http://www.corelogic.com/about-us/researchtrends/the-marketpulse.aspx#.UPQeLOjaRyg">Here is CoreLogic's 2013 outlook:</a>
"The two major drivers of improvement in the market have been the decline of real estate owned (REO) sales and less available inventory. The decline in REOs drove a sharp turnaround in home prices, but the impact of the decline will be more muted in 2013.
The major factor driving the market in 2013 is the lack of inventory. Many trade-up borrowers have been locked out of the market because their outstanding loan balance is greater than the market value of their home. Current owners need to sell at prices high enough to extinguish their debt and provide equity for the next home purchase. Until home prices began to rebound in 2012, these borrowers had been effectively locked out and unable to list their homes for sale.
The lock-out phenomenon, combined with the rise in investors converting foreclosures into rentals, led to a lack of for-sale inventory. With home prices rising in 2012 and 2013, tight for-sale inventory will begin to ease.were to improve."
<div class="image-container float_right click-to-enlarge" style="width:274px"><div class="image"><a title_source="CoreLogic" title_caption="" class="zoomin" href="http://static2.businessinsider.com/image/50f4251669bedd795600002b-960/screen shot 2013-01-14 at 10.34.31 am.jpg"></a></div><a href="http://www.corelogic.com/about-us/researchtrends/the-marketpulse.aspx#.UPQeLOjaRyg">CoreLogic</a></div>An increase in inventory this year could impact prices, but declining REO sales continue to be good for the market because they typically sell at a 20 percent or more discount. And, these bank owned sales are believed to drive down prices of non-distressed sales by 30 percent.
Despite the improvements though, <keyword id="35061" type="ORGANIZATION" weightage="60" keywordseo="housing">housing</keyword> still faces some challenges. First, Housing government sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, and the FHA are slowly increasing premiums or guarantee fees.
Second, concerns remain over he impact of qualified mortgage and qualified residential mortgage, <a href="http://articles.washingtonpost.com/2012-08-24/news/35492116_1_mortgage-loans-disgruntled-borrowers-mortgage-market">defined as</a> a mortgage that a household can reasonably be expected to repay. "The main hurdle will be where the cut-offs for loan to value and debt to income (DTI) will be drawn. …Therefore, policymakers need to carefully craft the demarcations, otherwise they risk cutting off large segments of credit supply."
Increasing home prices, according to CoreLogic, would be the best shield against policy uncertainty.

CORELOGIC: Home Prices Will Jump 6% In 2013

New Delhi, May 16 () Realtors' body Credai on Saturday demanded that real estate regulators across States should allow execution of sale agreements for booking of flats on stamp papers during this lockdown so that banks can provide home loans to customers to buy properties. Participating in a webinar organised by the Ministry of Housing and Urban Affairs to celebrate the three years of RERA law, industry bodies demanded that the government should reintroduce subvention scheme as prospective buyers cannot pay both rent and EMIs on home loans at the same time. They demanded one time debt restructuring for the industry and tax sops to home buyers among other measures to boost liquidity and demand in the realty sector. CREDAI, NAREDCO, Assocham and FICCI took part in this video conference. Speaking at the conference, CREDAI Chairman Jaxay Shah requested that regulatory authorities across States should allow sale agreements to be executed on stamp papers during this lockdown period so that banks and other financial institutions can provide loans to prospective customers. He said the Rajasthan government has already allowed this and other States should follow suit. The registration of Agreements to Sale is not possible now, Shah said. This would boost housing demand and keep the cash flow cycle moving, he added. Shah also demanded that there is a lot of data with real estate regulators across states, which can be collated and analysed for proper policy formulation for the overall growth of the sector. Niranjan Hiranandani, President of Assocham and Naredco, demanded that more stress funds should be created for last mile funding of the real estate sector and pitched for one time debt restructuring of builders loan. He also urged the government to reintroduce subvention schemes, which was banned by the government. Under the scheme, builders used to pay EMIs on behalf of customers till a certain period of time. HDFC's MD Renu Sud Karnad said there should be uniformity in all the websites of RERA across various States. She strongly advocated for reintroduction of the subvention scheme, saying that customers are facing liquidity issues and are not in a position to pay both rents and EMIs. CREDAI President Satish Magar demanded that local authorities should be brought under the ambit of the RERA law. Naredco Maharashtra President Rajan Bandelkar demanded tax sops for home buyers and also an increase in the Rs 45 lakh cap for projects to fall in affordable housing definition. MJH SHWSHW

Allow sale agreements on stamp papers during this lockdown for loan processing: CREDAI

<keyword id="6361420" type="DOMAIN" weightage="20" keywordseo="IDFC">IDFC</keyword> First Bank on Friday said its Managing Director and Chief Executive Officer <keyword id="390118" type="PERSON" weightage="20" keywordseo="V-Vaidyanathan">V Vaidyanathan</keyword> has sold 2.75 crore shares for approximately Rs 58 crore to close ESOP loan availed by him. Vaidyanathan intends to sell about Rs 35 crore worth of stocks on Friday to entirely repay the residual <keyword id="1478117" type="ORGANIZATION" weightage="20" keywordseo="employee-stock-option">Employee stock option</keyword> plan (ESOP) loan taken for exercising his ESOP shares to release his pledged shares, IDFC First Bank said in a filing to <keyword id="35140" type="COMPANY" weightage="20" keywordseo="BSE">BSE</keyword>. "We have received an intimation from V Vaidyanathan, Managing Director and Chief Executive Officer of the Bank that he has sold 2,75,58,412 shares on 19th March 2020 for approximately Rs 58 crore to close ESOP loan availed by him," IDFC First Bank Ltd said. "He has explained that with this sale he will have nil ESOP loan, and will not need to sell any more shares in the foreseeable future," IDFC First Bank said. "I would like to clarify that I still hold 4,23,47,144 shares (0.88 per cent) after yesterday's (Thursday) sale," Vaidyanathan said in an intimation to Compliance Officer. "The prices of the <keyword id="6368159" type="UNKNOWN" weightage="20" keywordseo="stock">stock</keyword> has come down recently due to the coronavirus related development in the stock market across all sectors including all banks which resulted in margin call, and at this stage I decided to sell the stock to entirely square the ESOP loans. With the sale of Rs 35 crores expected today, my loans against shares will be nil. I have no other loans other than a home loan," he said. The shares of IDFC First Bank were trading at Rs 21.15 a piece on BSE, up 2.42 per cent from the previous close. SID SID ANSANS

IDFC First Bank CEO Vaidyanathan offloads shares worth Rs 58 crore

Rajeev Mishra, a middle management professional at a private sector firm in Delhi, wanted to transfer a <keyword id="6354730" type="UNKNOWN" weightage="100" keywordseo="Home-loan">home loan</keyword> he had taken a few years ago as the interest being charged was higher than what’s available in the market and he also needed a top-up loan. With zero prepayment charges, discounted processing fees and top-up loans available with the home loan itself, along with balance transfer, Mishra thought he had a real opportunity to save money. 
 However, he had a shock when he realised that the life <keyword id="35450" type="COMPANY" weightage="100" keywordseo="insurance">insurance</keyword> cover he paid for and bought along with his existing home loan to ensure that his family wasn’t saddled with loan repayment in case of an unfortunate incident was not transferable. The reason the policy could not be transferred is that Mishra had only paid to become a member of a master policy that his bank had subscribed to and the policy stated that the cover would cease when the loan is refinanced, among other reasons. Now, there’s hardly any customer who reads this fine print in the insurance policy and there probably isn’t a sales executive who ever bothered to explain this to a customer. 
 
It means Mishra will have to buy another insurance cover and the current insurance company would, at best, pay him a cash surrender value for the residual tenure of his existing single-premium policy. 
 
This raises a dilemma that a lot of home-loan borrowers in India may not even be aware of. Should they or should they not buy an insurance with a home loan without restricting the future ability to shift the loan? 
 
Here’s a solution. Since buying life insurance with a home loan is surely a wise thing to do, people should surely do so. But instead of buying the insurance from the home loan provider, the customer may simply buy a term plan online (either single premium or annual premium) and the members of his/her family should become the beneficiaries. This way, all objectives will be met: 
 
1. The customer’s life is insured. 
2. The family will not be burdened with loan repayment in case of an unfortunate incident. 
3. The customer can freely change home loan provider if he/she wishes to. 
 
Another solution could be the regulatory intervention by the RBI and the IRDA to ensure that life policies sold by banks, along with long tenure loans like home loans, should be transferable from one lender to another (as beneficiary) as the customer is paying for these. However, complementary policies paid by the banks could possibly be exempted from this transferability requirement. In the absence of such a regulation, the entire effort to protect customer interest by making loan takeovers easy is likely to get compromised. 
 
This article is written by Gaurav Gupta. 
About the author: Gaurav Gupta is the founder and CEO of <keyword id="2450296" type="UNKNOWN" weightage="100" keywordseo="Myloancare">Myloancare</keyword>.in that focuses on helping individuals and SMEs manage their loans better. 
 
Image: Thinkstock

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