Find out about the latest news in Madisonville, Louisiana as well as St. Tammany Parish. We will keep you “tuned in” to all of the information about Southeast Louisiana as well as the real estate industry in general. Many new home buyers are concerned about the market, mortgage information, and builder trends. We plan on keeping you as up to date as possible on these and many more topics. There is a lot going on in the Greater New Orleans area, so you will have plenty to read!

The Housing Market’s Historic Rebound

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This photo captures a view from the kitchen area to the breakfast area. The natural light is coming through the wall of windows.The National Association of Realtors (NAR) has been tracking pending home sales for almost 20 years now. In fact, May 2020 marked the highest month-over-month gain for pending home sales with an increase of 44.3%.

 

For the real estate market, pending home sales is an important gauge in the housing market’s vitality. The Pending Home Sales Index (PHS) is defined by the National Association of Realtors as, “A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”

The COVID-19 pandemic and the shutdown of the U.S. economy caused a two-month decline in the PHS. In May, however, there was a huge jump in pending home sales. The housing market is recovering with buyers currently purchasing homes.

“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce-back also speaks to how the housing sector could lead the way for a broader economic recovery,” said Lawrence Yun, Chief Economist at NAR.

Yun goes on to explain that more listings are coming on the market helping with inventory choices but inventory is still low. Home construction still needs to catch up from “the persistent underproduction of homes over the past decade.”

Builders are taking notice and we are seeing a good increase in the production of new homes. As the graph shows, there has been a huge decrease in year-over-year in the supply of homes for sale. The bottom line is the inventory is not keeping up with the demand from potential homebuyers.

Click Here For the Source of the Information.

The Size of a Down Payment Is Just As Important as Your Credit Score When It Comes to Applying for a Mortgage

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One of the biggest parts of purchasing a home is the financing. Shopping around for the lowest interest rates will allow you to spend more on a house and keep your monthly payments lower. Experts recommend to make sure your credit is good and you have saved a good amount for a down payment.

Traditionally it is recommended that a potential homeowner should be able to put 20% of the purchase price down at closing. Nowadays this is not necessarily the case. Depending on where you live and what kind of mortgage you are obtaining you might not have to put 20% down.

For a conventional mortgage, you need to put at least 20% down to avoid private mortgage insurance (PMI). Private mortgage insurance is an extra charge that is added to your monthly mortgage to protect the lender in case you default on your loan. The Consumer Financial Protection Bureau (CFPB) explains that PMI is put in place to protect the lender only, a buyer who puts less than 20% down is more of a liability for a lender.

PMI does not go toward paying off the mortgage so a buyer will be paying more each month and not getting any closer to the end goal. This is one of the main factors of why a down payment can affect your mortgage just as much as your credit score.

“In essence, a bigger down payment may allow you to buy a higher-priced home,” Movement Mortgage loan officer Heidi Gage said.

Lenders have a system in place to decide who gets a mortgage and who does not. According to Heidi Gage, there are the “four Cs” lenders should consider when looking at prospective mortgage applicants, 1) credit history and score; 2) collateral (type of property being secured); 3) cash (your down payment) and 4) capacity (how much debt you have versus income every month).

″Underwriters review the loan based on the above criteria, as well as layered risk factors,” explains Gage.

Basically, if your debts are high and your income is stretched too thin you would need a big down payment in order to be approved for a mortgage. Gage says that someone with a “risky debt-to-income ratio” can be approved with a lot of cash for a down payment and excellent credit history.

Have no fear if you cannot put down 20%, there are some flexible mortgage options that allow as little as a 3% down payment. Examples of these options are VA loans, USDA loans, FHA loans, Fannie Mae loans and Freddie Mac loans. First time home buyers also have special programs that allow lower down payments. According to the National Association of Realtors (NAR) the average first-time homebuyer in 2019 put down as little as 6% down on the purchase of their home.

“The closer a borrower comes to 20% down, the lower their monthly payments will be,” says Gage.

Click Here For the Source of the Information.

First Time for 30-Year Fixed Mortgage Rate to Drop Below 3%

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The week ending July 16th was a historic time for mortgage rates. The Mortgage rates in the U.S. dropped below 3% the lowest it has been since record-keeping began in 1971.

The 30-year fixed mortgage rate dropped to 2.98% and the 15-year fixed mortgage rate dropped to 2.48%. This dramatic drop has brought on a huge homebuyer demand according to Freddie Mac.

These record lows are no surprise as the Federal Reserve has been cutting interest rates to support the U.S. economy during the CoVID-19 pandemic. The U.S. economy needs support as over 51 million Americans have already filed for unemployment since the pandemic began.

The pandemic has wreaked havoc our the nation, but the housing market is booming. The cuts to help stimulate the economy have given buyers “enormous buying power,” Kenneth Leon, research director of industries and equities at New York-based CFRA Research, told FOX Business.

According to JPMorgan Chase & Co., their reported revenue from mortgage fees alone was up 229% from this time last year. Citigroup reported a 64% increase to 6.4 billion in mortgage originations. Wells Fargo & Co. reported residential mortgage originations held for sale jumped to $43 billion, a 30% increase due to the lower mortgage rates.

Click Here For the Source of the Information.

St. Tammany Parish Schools Delaying First Day of School

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Monday, July 13, 2020, St. Tammany Parish Schools will have a delayed and staggered first day of school for the 2020-2021 school year. The school system will have brick and mortar learning but will keep safety the top priority during the coronavirus.

The original school start date was August 6th but now St. Tammany Parish public schools will stagger the first day of school August 11 – 14. One-fourth of the students will report to school each day based on the first letter of the student’s last name.

School board members decided the following schedule to begin the 2020-2021 school year. Students with last names beginning with A-D will report on Aug. 11; E-K on Aug. 12; L-Q, Aug. 13; and R-Z on Aug. 14. Then everyone will begin with the regular school schedule on August 17th.

Teachers and staff will take the extra time to train on safety protocols for coronavirus and any changes in the learning model. The board has come out with the “Safe Start Plan” which gives the teachers and staff extra days to prepare for when the students return. The teachers will return to school in person August 3 – 7 for training.

“We are still making plans for how the beginning of the school year will look depending on the phase the state is in at that time,” Interim Superintendent Pete Jabbia said in a prepared statement.

A survey was given to parents and employees asking their opinion on whether they were open to the “Safe Start Plan” and most agreed it was the best option. Depending on the phase Louisiana is in when it comes time to start, there will be three alternatives. The first will be fully brick and mortar learning, both virtual and brick and mortar learning or virtual learning only.

Click Here For the Source of the Information.

Thirty by Ninety Presents The Hallelujah Girls, August 1 – August 2, 2020

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Come see this play live in Mandeville.

The Hallelujah Girls

30 by Ninety Theatre
880 Lafayette St.
Mandeville, LA 70448

August 1 – 2, 2020

8pm Saturday, 2:30pm Sunday

Adult: $29 Senior/Military: $27 Student: $21.

 

Click Here for More Information.

Rearview of this exterior home found close to New Orleans. The house sits on a lot that looks over the private pond.

Housing Economy Strengthens From Rising Sales and Permits

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The NAHB’s forecast predicted the housing industry to lead in the economy’s upturn after the pandemic. This has wrung true as data from home building has shown a rise.

According to the National Association of Home Builders, single-family permits rose 12% in May. The U.S. Housing and Urban Development and Commerce Department reported that the total housing starts rose 4.3% to a seasonally adjusted annual rate of 974,000 units. This accounts for “the number of housing units builders would begin if they kept this pace for the next 12 months.”

“The May housing report is consistent with the positive results of the NAHB/Wells Fargo builder sentiment index, and we expect this momentum to continue as economic activity recovers,” said NAHB Chief Economist Robert Dietz. “In another promising sign, single-family permits are up almost 2 percent on a year-to-date basis and builders are bringing back thousands of workers laid off in March and April to meet renewed demand.”

Home sales are also on the rise, in fact, new single-family home contracts rose 13% year-over-year gain in May. The data also indicates “support growth for new home building” as inventory dropped to a sales-adjusted level of a 5.6 month supply (levels below a 6-month supply equals growth for new home building).

A rise in permits and sales along with an increase in builder confidence are good signs for a strengthening in this weathered economy.

Click Here For the Source of the Information.