Rise of the Rentals

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32 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION The LaTesT Putting a spotlight on Prime First-time Buyer Markets Metros in Texas and Florida top the list, with parts of pennsylvania thrown in. r released its list of the top markets for first-time homebuy- ers for the spring and summer seasons. To compile the list, analysts compared cities across five categories that have the biggest impact on buyers new to the market: list price affordability, time on market, employment rates, supply of inventory (and thus chances of competition), and—as the mantra goes—location, location, location. Markets ranking on the 2014 list include Tampa-St. Petersburg-Clearwater, Orlando, and Jacksonville, Florida; Fort Worth-Arlington and Dallas, Texas; and Philadelphia and Pittsburgh, Pennsylvania. Also included on this year's list are Raleigh-Durham-Chapel Hill, North Carolina; and Phoenix- Mesa, Arizona. Steve Berkowitz, CEO of's operator, Move, explained how these markets' economies can expect to benefit from the crucial first-time buyer segment: "First-time buyers have a widespread impact on the local housing markets," he said. "In transitioning from renters to own- ers, new buyers pay property taxes and other fees and taxes associated with homeownership that benefits local schools and services." Of course, whether first-timers in those top markets decide to make their move this year remains to be seen, especially as the youngest among them con- tinue to struggle with debt. In a profile of recent homebuyers, the National Association of Realtors found one-fifth of Millennials had to delay their search due to difficulties saving for a down payment; out of that group, more than half said student loans are the biggest obstacle. credit standards show 'little sign of easing' There's plenty of opportunity if lenders are willing to look down a bit. B y the same token, Black Knight Financial Service's Mortgage Monitor Report shows the effective loan modification efforts have shown far fewer defaults, which helps those underwater already in homes. However, those looking to get a home that have had some trouble in the past may hit a brick wall, as only 30 percent of loans last year went to borrowers with credit scores below 720, which isn't even close to the subprime score of 620. According to the CheckMyCreditScore blog, Quicken chief loan economist Bob Walters said, "Many poten- tial homebuyers have the idea that they will need perfect credit to get a mortgage and therefore do not apply for a refinance or purchase loan. They fear being rejected," which is a fair concern. In the report, New York, New Jersey, and Florida had the highest rate of seriously delinquent loans, but Mississippi, Nevada, Rhode Island, Alabama, and Louisiana had an alarming number of the same, which are those considered past 90 days late. This does not bode well for those looking to get a home loan in these states, as the banks have already overextended, and despite any commentary on lending practices, the outlook is somewhat grim. "Credit standards have shown little signs of easing," Blecher said, which only shows signs of promise for those who are on the other side of the coin in the situ- ation. As he pointed out, there is "significant opportunity to expand mortgage origination activity . . . if risk appetites allow."

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