The Federal Housing Administration (FHA) announced that it is reducing its annual Mortgage Insurance Premium (annual MIP) rates for most FHA mortgages with Closing/Disbursement dates on or after January 27, 2017. These annual MIP rate reductions will expand access to mortgage credit, and are expected to lower the cost of housing for the approximately 1 million households that use FHA annually.
Paragon's Carol McConkey commented on the changes saying, "This will reduce the cost for borrowers utilizing FHA loans many of which are first time buyers. As we see an increase in purchase volume in 2017 it will be a welcomed change for buyers looking to make that home purchase."
The Federal Housing Administration (FHA) will reduce the annual premiums most borrowers will pay by a quarter of a percent. That is good news for borrowers: FHA's new premium rates are projected to save new FHA-insured homeowners an average of $500 this year. So...the FHA is reducing its annual mortgage insurance premium (MIP) by 25 basis points for most new mortgages with a closing/disbursement date on or after January 27.
Home Sales Heated Up Heading Into Winter
New and Existing Home Sales were something to celebrate in November, while home prices continued to heat up.
The National Association of REALTORS® reported that Existing Home Sales in November edged higher by 0.7 percent from October to an annual rate of 5.61 million units, a hot nine-year high. November New Home Sales were also up 5.2 percent from October, coming in above expectations at an annual rate of 592,000, per the Commerce Department.
In new home construction, Building Permits and Housing Starts cooled in November. Building Permits were 4.7 percent below October and 6.6 percent below the same time last year. Permits for single-family units, however, were up 0.5 percent from October. Housing Starts, which measure when excavation begins on a home, were down 18.7 percent from October and down 6.9 percent from November 2015. November's numbers could be a bit distorted to the downside as builders may have held back on projects ahead of the election.
Home price gains continue across much of the country. CoreLogic, a leading provider of consumer, financial and property information, reported that home prices, including distressed sales, rose by 6.7 percent from October 2015 to October 2016. Looking ahead, prices are expected to rise 4.6 percent from October 2016 to October 2017.