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!

Navigating the Housing Market During These Unpredictable Times

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Everyone and everything is being challenged around the world by the coronavirus outbreak. Businesses and residences alike are having to learn how to cope. The real estate market is no different. The good news is that you can still buy a home even if the process is not that same as it was just six months ago.

Through the pandemic, we have seen some big changes in the home buying landscape. Some lenders throughout the country are requiring a higher credit score for mortgage approval, a higher minimum down payment and many are slowing down on the issuance of loans. There is no need to worry or put your house search on hold. Here is what you need to know if you are going to purchase a home during this uncertain time.

It might take a little longer from start to finish. There are open houses but most are virtual. Home inspections and appraisals are taking a little longer because of the new safeguards and procedures. Closing Attorneys and Lenders are shorter staffed and it may take more time and extra effort on their part to get all the paperwork and title searches completed.

The mortgage process also has changed. Many lenders such as JPMorgan Chase have raised the required minimum credit score for new borrowers during the pandemic. Before the pandemic, A FICO score of 620 was the minimum and now many lenders are looking for at least a 700 score and a downpayment of 20%. If you have decided to follow through with purchasing a home, you want to shop around for a lender as this will increase your mortgage success during COVID-19. A good thing is a plunge in mortgage rates. The beginning of 2020 saw a 4% mortgage rate, but when COVID-19 hit the rates around 3%.

“It doesn’t seem like mortgage rates will fall below 3% — that’s where the floor appears to be,” says Holden Lewis, who produces NerdWallet’s mortgage interest rates forecast. “We probably saw the highest rates of 2020 back in early January.”

There is one thing that has not changed during these uncertain times and that is a preapproval letter. A buyer with a preapproval letter is much more attractive to a seller.

“With a preapproval, [sellers] feel comfortable that, ‘Hey, this guy is a legit person who is going to buy and close,’” says Mat Ishbia, CEO of United Wholesale Mortgage in Pontiac, Michigan.

Anyone can purchase a home in this day in age and be successful at it. The bones are still there. Make sure you calculate how much you can afford and get a mortgage preapproval so your process will run smoothly.

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What to Expect When Buying a New Home

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Buying a home is both exciting and daunting. Going into the home buying process with a full understanding can take some of the unknown stress away. Here is what you can expect are some things you want to consider.

Before you make an offer ask yourself, are you ready to be a homeowner? Everyone has a dream home, but everyone can’t afford that dream home. Think realistically about how much space you need in your new home.  Make sure your financial situation is in good standing. Determine if you have enough money for a down payment.

Communicate and rely on others for help. If this is a family decision make sure you are all on the same page, talk through your options and support each other by splitting up tasks. Let friends help out. Many of your friends have personal experience when it comes to buying a home. Friends can give you advice on where to buy, what to look for and recommendations on professionals to use. A professional such as a Realtor is a great source of information. A Realtor can help you determine what fits best with your needs and preferences. Using an agent can help the process run smoother and faster.

Do your homework. Like any life experience, home buying requires both discipline and self-education. There are a plethora of resources available for a novice home buyer to a seasoned home buyer. Research neighborhoods you are interested in by making sure you find out how long your commute to work will be, are there good schools in the area, and is the area the scene you want to thrive in. A good way to judge a neighborhood is to physically explore it during the weekend. Make time for your home research. Make a document or spreadsheet tracking your progress and comparing your chosen listings.

Keep a tab on your expectations. Remember your dream home will not just fall out of the sky. It takes time, sometimes even months to find the right house. Some price points and neighborhoods are so sought after that you might have to make several offers on several different listings.

The emotional decision is sometimes just as important. Follow your gut. If something feels off or there are too many compromises you might want to keep looking. A home is a huge purchase that you will probably live with for a long time. Go with your heart and choose something you love.

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What the Housing Market Will Bring to 2020

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The year 2020 has started with a strong job market and low mortgage rates and should stay that way for the remainder of the year. This means the housing market for 2020 will be strong.

Data shows that the housing market is better than it was this time last year. In 2019, fear caused by global trade tensions, stock market volatility and a partial government shutdown caused doubt in the US economy. The average rate for a 30-year fixed mortgage has remained below 4% for the past 32 weeks according to Freddie Mac.

Purchase applications for 2020 will rise over the number of purchase applications recorded for 2019. As far as numbers, there will be a 1.6% increase for mortgages that will amount to just under $1.3 trillion in 2020. According to Bankrate.com, even if the mortgage rates rise “from the sub-4 percent levels of 2019” the HELOC rates would not change if the Federal Reserve will not change the interest rates.

“The benchmark 30-year fixed-rate mortgage will hopscotch back and forth over the 4 percent mark for much of 2020, remaining low enough to facilitate home-buying and providing ample refinancing opportunities on those trips below 4 percent,” said Greg McBride, Bankrate.com’s chief financial analyst.

According to the National Association of Realtors, the year will bring more growth in the housing market. New-home sales are predicted to rise 11% to 750,000 making this a 13-year high. Existing-home sales will rise 4% to 5.6 million with the national median sale price of $270,400 which is a 4.3% increase from 2019. The National Association of Home Builders predicted that new-home sales will rise to approximately 708,000 making it a 2.5% gain from last year’s numbers.

As far as location, the National Association of Realtors predicts 10 markets throughout the country that will outpace the rest of the US market over the next 3 – 5 years. These markets include Ogden, Utah; Las Vegas; Fort Collins, Colo.; Colorado Springs; Dallas/Fort Worth; Columbus, Ohio; Raleigh/Durham/Chapel Hill, N.C.; Charlotte; Charleston, S.C.; and Tampa/St. Petersburg, Fla.
Realtor.com predicts the top markets to include Boise, Idaho; McAllen, Tex.; Tucson; Chattanooga, Tenn.; Columbia, S.C.; Rochester, N.Y.; Colorado Springs; Winston-Salem, N.C.; Charleston, S.C.; and Memphis. Redfin predicts that Charleston and Charlotte will have the highest home price growth.

Homebuilders are excited about what is to come in the industry for 2020. National Association of Home Builders measured the industry sentiment and discovered that builder confidence is at its highest it has been in two decades. NAHB foresees single-family construction (for-sale housing, custom builds and built-for-rent) will be around 920,000 units making a 4% increase from 2019.

“Low resale inventory and generally healthy economic conditions — including the longest economic expansion in American history — have lifted builder sentiment,” wrote NAHB chief economist Robert Dietz in “Eye on Housing,” the organization’s blog.

“Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021,” said Doug Duncan, Fannie Mae’s chief economist. “In our view, residential fixed investment is likely to benefit from ongoing strength in the labor markets and consumer spending, in addition to the low-interest-rate environment. Risks to growth have lessened of late, as a ’Phase One’ U.S.-China trade deal appears to be in place and global growth seems likely to reverse course and accelerate in 2020.”

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Federal Reserve Maintains Rate

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In the past, the Federal Reserve would fret over the U.S. unemployment rate worrying if it dipped below 5%. If the rate did drop below 5% it would cause inflation leading to higher borrowing costs and higher mortgage rates. CME Group’s FedWatch maintains that 91% of investors predict the Fed keeps its current rate in the January 2020 meeting.

Fed officials “discussed how maintaining the current stance of policy for a time could be helpful for cushioning the economy from the global developments that have been weighing on economic activity,” the minutes said.

Data showed that in November 2019, the jobless rate was 3.5%; making it the lowest since 1969.  The average annual salary rose to $69,181 which was up 3.4% from November 2018. As for the median household income, it was 7.5% higher than it was at the start of the Great Recession.

What the Federal Reserve does worry about is the decline in the U.S. manufacturing sector. According to the Institute for Supply Management index for factory activity in December 2019 the factory activity fell to the lowest level it has been in over 10 years.

“Overall manufacturing production appeared likely to remain soft in coming months, reflecting generally weak readings on new orders from national and regional manufacturing surveys, declining domestic business investment, slow economic growth abroad, and a persistent drag from trade developments,” the Fed minutes said.

“Participants remarked that there were some indications that further strengthening in overall labor market conditions was possible without creating undesirable pressure on resources,” according to the minutes of the Fed’s Dec. 10 to 11 meeting, released on Friday.

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Year 2020 To See Higher Loan Limits

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As of 2020, Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) are backing larger loans. This year each of the agencies has loan limits that are now in effect and are higher than those in 2019.

The Federal Housing Finance Agency’s (FHFA) home price index is the determining factor in all of the agencies’ loan limits. The highest dollar amount the agencies will back on a mortgage reflects in the reported home prices. The index rose in 2019 and home prices were 5% over 2018’s reported home prices.

As of January 1, 2020, all three agencies are backing larger loan amounts. Fannie Mae and Freddie Mac are backing loans that exceed $510,000 and FHA is backing loans above $331,000.

Fannie Mae and Freddie Mac 2019’s level were $484,350 and now in 2020 it is $510,400. The loan limits for these agencies were factored by the Housing and Economic Recovery Act of 2008. This act allows a baseline loan limit of $417,000 which is mandated. Once a period of price declines happens, the baseline loan limit cannot increase again until the home prices return to the amount they were before the decline took place.

The housing market is strong and has been on a good path since 2016. The FHFA increased the loan limit in 2016 for the first time in 10 years and since then increased it $93,400 to its current amount. FHFA reported that home prices increased by 5.38% on average between the end of 2018 to the end of 2019.

The FHA loan limit has increase $17,000 in 2020 to $331,760 from 2019’s loan limit of $314,827.

The FHA limit can be different in different areas of the country. The FHA minimum national loan amount, called a floor, is 65% of the Fannie Mae and Freddie Mac loan limit. According to Housingwire.com, the floor applies to low-cost areas. These areas are counties where 115% of the median home price is less than the floor limit.

The floor can also affect high priced homes. Around 70 counties across the country have a median home price that exceeds the FHA loan limit floor making these areas high-price areas. The FHA loan limit for these areas has increased to $765,600 making it a $40,000 difference over the 2019’s total.

As for most counties across the United States, the FHA loan limit increased but that was not the case for 11 counties. Those where the FHA loan limit decreased were Dutchess County, New York; Orange County, New York; and Lincoln County, Idaho.

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Proposal for New Hotel Adjacent to Fontainebleau State Park in Mandeville

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Wednesday, January 8, 2020, at the Mandeville community meeting, Lt. Gov. Billy Nungesser will address the proposal to build a 150-room hotel and conference center on land which is located next to Fontainebleau State Park. He will address Northshore residents at the Paul R. Spitzfaden Community Center and answer any questions or concerns.

A hand full of local leaders and residents are concerned with how the hotel might affect the environment. They also question the location because of other hotels struggling in the area such as The Clarion Inn & Suites Conference Center which closed its doors in May 2019.

A Tennessee hospitality consulting firm, Pinkowski & Co., conducted a $28,000 feasibility study for the St. Tammany Parish Tourist and Convention Commission. In the study, they concluded that the new hotel and conference center will generate close to $2 million annually in cash flow immediately if opened by January 1, 2021. They also projected it could possibly bring in almost $2.3 million by 2025.

The study concluded that the hotel has a full-service restaurant and lounge, an around-the-clock fitness center, retail outlets and an outdoor event space all encompassed by a hotel theme that tells the story of the local culture.

Although the report, which Lt. Gov. Billy Nungesser requested, did list nine advantages such as location near retail stores, restaurants, Pelican Park and the Castine Center it went on to state “poor performance of the local lodging market” and “potential price sensitivity of demand in the local market” as two disadvantages in constructing the hotel.

Nungesser believes that the partnership between state parks and private companies is a means to bring funds in to support state park’s upkeep and repairs.

Fontainebleau State Park currently brings in approximately $1.3 million annually and it is one of the few Lousiana state parks that is self-supporting. The state park costs around $1.2 million annually and includes rental campsites, lodges and cabins that sit along the shores of Lake Pontchartrain.

Click Here For the Source of the Information.