Home Price Gains Over 6% Year-Over-Year

With generally low mortgage rates and 30 day underwriting times home sales have been strong; especially in the first quarter of 2016.  In some markets you are seeing far greater demand than current supply and lenders have been eager to build a robust new purchase loan portfolio.  In the first quarter of 2016 home prices jumped by 1.3 percent compared to the fourth quarter of 2015. The Federal Housing Finance Agency said this was the 19th straight quarter its Housing Price Index had posted a gain. The index was almost 6% higher than the first quarter of 2015.

The month over month change in the HPI was 0.7% (February to March), 0.2% points higher than the consensus estimate.  On an annual basis prices were up 6.1% over the most recent 12-month period.  Home price estimates are calculated using sales information from purchase only mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.   Wells Fargo and Fannie Mae have received some criticism lately a new product called “YourFirst Mortgage”.  The problem; with a 620 credit score you can by home with only a 3% down payment AND that down payment can be a gift from someone.  So if your parents have money you too can by home with no money down…..just like 2006.  Wells Fargo is defending the new mortgage program saying only people that manage debt responsibly will qualify.  But if you have a 620 or 680 credit score….how is that managing debt responsibly?