Since the housing market crash in 2008, there are have been many predictions about the trends that will occur within the industry of real estate and mortgages. Wholesale mortgage providers have paid close attention to these trends, because the trends have a direct impact on interest rates. Also, these trends are a good indicator of the way the housing market is responding to the new rules and regulations that have been passed. Everything is interlinked in the housing industry, so mortgage brokers and lenders need to be familiar with the way the home prices are trending.
Home Price Trends Over the Years
If you look at a line graph of the prices of homes over the past 10 years, you will see that the prices spiked in 2005 before they started to decline. Then, in the end of 2008 and the beginning of 2009, the prices took a deep dive to the lowest point that we’ve seen in years. Shortly after that, home prices started to rise once again, although we’re not yet at the levels that we reached before the housing crash.
In fact, most areas in the United States have shown increases in home prices on a year-to-year basis, with the exception of a handful of locations. Since we’ve had two consecutive years of positive trends, many people are optimistic that it means we are experiencing sustainable growth and market activity.
What to Expect
Of course the housing market will continue to have ups and downs throughout the years, but many wholesale mortgage lenders are looking to the future with hope. Wholesale mortgage lenders are so confident in the possibility of these trends that they are continuing to work with investors in order to loan out money for home purchases.
The fact that wholesale mortgage providers are still offering competitive rates is a good sign that the housing market will continue to trend upward. When you are working with a wholesale lender, they have “skin in the game” because their name is on the closing paperwork. They have warehouse lines to fund the mortgages, because they know that they can turn around and sell those notes to investors. Things might go wrong in this process, causing the wholesale mortgage lender to be caught holding a loan that they won’t want to carry, but usually the investor transaction occurs seamlessly. If there were higher risks, then wholesale lenders wouldn’t be as willing to loan the money, because they wouldn’t be confident about the possible return on investment.
In the upcoming summer months, it is anticipated that home prices will continue to increase, but those price increases are expected to be moderate. Only time will show the way the housing market will respond, but there are many signs to indicate that the housing market is still in an appreciation trend.
If you have questions about the mortgage industry and need help understanding the changes that have been occurring to rules and regulations that impact mortgages, please call Dave directly at (303) 520-0004.
