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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Investments

Monday Morning Cup of Coffee: Home purchases weak despite easing credit

40-year mortgages, risky U.S. bonds and investing in Cali?

June 8, 2014

Monday Morning Cup of Coffee takes a look at news crossing HousingWire's weekend desk, with more coverage to come on bigger issues.

For reasons unfathomable to the American mind, our friends across the pond aren’t keen on that all-American mainstay – the 30-year mortgage.

Never near as popular in the UK as here, there’s been a huge upsurge in homebuyers taking out 30-year loans in London especially. Why? Because especially in London, home prices are rising at about 20% a year.

If things keep on the same track here – could we see 40-year mortgages in America? (That may sound weird, but people are living longer, and borrowers buy the monthly payment, not the mortgage. So it may be stupidish, but not truly stupid – not like chewing gum all the way through a D-Day memorial service.)

First-time homebuyers are drivers and – right now – impediments to housing recovery. They aren’t forming new households like they should and because of student debt, economic uncertainty, and the jobless economic recovery under the watch of the current administration.

Tight lending standards and down payment requirements aren’t helping, either. HousingWire has one great story on where Millennials can cut down on expenses to save their down payment, and here are three more tips to help out.

If you’re not still spinning in hopes a recovery is just around the corner, you know home sales have been weak. But there is good news from the Mortgage Bankers Association: Mortgage access is loosening, and not just for upper-income households.

The MBA’s gauge of mortgage-credit availability rose in May to the highest level in more than three years, thanks to greater access to jumbo loans and easing standards for loans insured by the Federal Housing Administration.

(This is great for the high-end of buyers and the perennially  income challenged, but not much word on anything for the middle -- in other words, a Tuesday.) 

The you-know-what is still running the printing presses hard every month to buy up Treasurys and bonds, even if they are slowing their pace. You know who else buys U.S. bonds? People with a lot of money who want to have less of it later.

Between inflation, the real and very real possibility of default (it was once so unthinkable the fact that it’s possible deserved a little redundancy), the whims of the Fed board of governors, and the creeping nationalization of the bond market, they are not the safe bet they used to be.

If you think the California real estate market has stabilized and you’re looking to invest, here are some of the best ideas for investing in California real estate out there. (If you think the California real estate market is back to normal because of its instability, you may be right too.)

The Federal Deposit Insurance Corp. didn't close any banks last week.

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