According to an article in the Toronto Star, homes are becoming more of a problem for consumers with escalalting debt.
In the past it was unusual for the family home or real estate to be the cause of bankruptcy in the last 10 to 15 years. It actually was a solution for many people. However, with the drop in the value of homes, their equity has disappeared and they come up with a deficit that the bank still wants repaid.
A bankruptcy trustee with Deloitte & Touche attributes the recent spike in consumer insolvencies to a seven-year high unemployment rate and people relying too much on credit as an income supplement. People worried about losing their job should be cutting expenses and aggressivley repaying debt. Always sound financial advice!
Warmly,
Mary Wozny
Monday, August 17, 2009
Friday, August 14, 2009
U. S. Mortgage Default Rates
It's interesting to note that the default rate for U. S. mortgages that have been modified to prevent house foreclosures may actually end up at 75% according to Fitch Ratings, because of "shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves".
Since the U. S. government announced assistance programs to help struggling homeowners and lower the rate of foreclosures, lenders have been trying to modify mortgage terms for borrowers to give them a better chance to get back on track. They reported that aproximately seven per cent of U. S. home loans packaged into securities without government support have been modified to date.
In a statement to Bloomberg, a Fitch representative stated that loan modifications hold clear value for many homeowners proved the modified payments are sustainable. Unfortunately, more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextened on other credit and expenses.
How will all this shake out? We'll have to watch and wait, only time will tell.
Warmly,
Mary Wozny
Since the U. S. government announced assistance programs to help struggling homeowners and lower the rate of foreclosures, lenders have been trying to modify mortgage terms for borrowers to give them a better chance to get back on track. They reported that aproximately seven per cent of U. S. home loans packaged into securities without government support have been modified to date.
In a statement to Bloomberg, a Fitch representative stated that loan modifications hold clear value for many homeowners proved the modified payments are sustainable. Unfortunately, more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextened on other credit and expenses.
How will all this shake out? We'll have to watch and wait, only time will tell.
Warmly,
Mary Wozny
Wednesday, August 12, 2009
Household Debt Burdening Canadians?
Canadians are carrying a larger household debt load than ever before, a total of $1.3 trillion in 2008 according to a survey by the CGA Association of Canada.
The study showed outstanding mortgages took up $900 billion worth of the debt load total, but the more concerning number to the association was the $400 billion in consumer debt carried by Canadians. Anothe red flag was that 49 per cent of families with one or more children under age 18 reported their debt had increased in recent years.
In the boom years, the housing market helped Canadians to maintain a slightly improving balance between mortgage debt and residential assets but it didn't offset the run up in consumer debt which was not well supported with accumulation of consumer durables or financial assets.
Canadians have to the more aware of and accountable for their spending habits, most particularly the use of credit cards and lines of credit and have to maintain their financial responsibility to maintain a healthy economic environment.
With mortgage rates at record low levels and assuming some equity in your home, now is an ideal time to refinance high cost credit card debt and bring your financial home to order.
Contact Mary Wozny at www.MaryWozny.com today.
The study showed outstanding mortgages took up $900 billion worth of the debt load total, but the more concerning number to the association was the $400 billion in consumer debt carried by Canadians. Anothe red flag was that 49 per cent of families with one or more children under age 18 reported their debt had increased in recent years.
In the boom years, the housing market helped Canadians to maintain a slightly improving balance between mortgage debt and residential assets but it didn't offset the run up in consumer debt which was not well supported with accumulation of consumer durables or financial assets.
Canadians have to the more aware of and accountable for their spending habits, most particularly the use of credit cards and lines of credit and have to maintain their financial responsibility to maintain a healthy economic environment.
With mortgage rates at record low levels and assuming some equity in your home, now is an ideal time to refinance high cost credit card debt and bring your financial home to order.
Contact Mary Wozny at www.MaryWozny.com today.
Tuesday, August 11, 2009
First Time Homebuyers in the Market
According to a report published by Royal LePage Real Estate Services, low interest rates and house prices are the driving forces for potential first-time homebuyers across Canada.
Although first-time homebuyers appreciate government incentives such as tax credits, it is the markedly improved affordability that is proving to be the powerful drawing card bringing them to the market and encouraging them to purchase. The survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.
When asked what the top incentive to purchase was for them, 86 per cent cited low interest rates followed by 81 per cent who said lower housing prices were the top motivating factor. Job security and a stable economy were the next ranked incentives.
Interesting to note - the survey also revealed regional differences when it came to the importance of certain incentives. Job security was more important in Western Canada compared to Atlantic Canada, which has seen a relatively resilient local economy. Ontario and Quebec buyers rated the recently implemented Home Renovation Tax Credit as having a bigger impact on their buying decision compared to the Canadian average.
Contact Mary Wozny today, www.MaryWozny.com, for your mortgage financing and make your dream of home ownership come true!
Although first-time homebuyers appreciate government incentives such as tax credits, it is the markedly improved affordability that is proving to be the powerful drawing card bringing them to the market and encouraging them to purchase. The survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.
When asked what the top incentive to purchase was for them, 86 per cent cited low interest rates followed by 81 per cent who said lower housing prices were the top motivating factor. Job security and a stable economy were the next ranked incentives.
Interesting to note - the survey also revealed regional differences when it came to the importance of certain incentives. Job security was more important in Western Canada compared to Atlantic Canada, which has seen a relatively resilient local economy. Ontario and Quebec buyers rated the recently implemented Home Renovation Tax Credit as having a bigger impact on their buying decision compared to the Canadian average.
Contact Mary Wozny today, www.MaryWozny.com, for your mortgage financing and make your dream of home ownership come true!
Monday, August 10, 2009
CMHC Says Mortgage Rates to Remain Stable
CMHC in their second quarter Housing Market Outlook says that Mortgage Rates are expected to remain with 25 to 75 basis points of their current level for the remainder of 2009, keeping them very low in a historical context.
Movements in mortgage rates are difficult to predict due to volatile economic conditions however rates are expected to remain steady this year and edge higher in 2010.
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebouding to 150,300 in 2010.
2009's decline in housing starts can be attributed to several factors, including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, states their chief economist.
Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.
Warmly,
Movements in mortgage rates are difficult to predict due to volatile economic conditions however rates are expected to remain steady this year and edge higher in 2010.
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebouding to 150,300 in 2010.
2009's decline in housing starts can be attributed to several factors, including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, states their chief economist.
Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.
Warmly,
Sunday, August 9, 2009
Growing Numbers Boost B.C. Real Estate Market
British Columbia saw its first year-over-year increase in residential sales in May 2009, with the B.C. MLS reporting a three per cent rise compared to May 2008.
The chief economist at the British Columbia Real Estate Association states that homes sales have bounced back from the extraorinarily low levels recorded during the winter months. Improved affordability and less uncertainty about the future are the main factors driving home sales higher.
Stronger consumer demand combined with fewer home listings is stabilizing prices in the province. MLS predicts residential prices in B. C. to decline eight per cent in 2009 to $420,600.
The majority of the decline in home prices has already occurred and balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There's now little downward pressure on home prices in these particular areas.
Warmly,
Mary Wozny
The chief economist at the British Columbia Real Estate Association states that homes sales have bounced back from the extraorinarily low levels recorded during the winter months. Improved affordability and less uncertainty about the future are the main factors driving home sales higher.
Stronger consumer demand combined with fewer home listings is stabilizing prices in the province. MLS predicts residential prices in B. C. to decline eight per cent in 2009 to $420,600.
The majority of the decline in home prices has already occurred and balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There's now little downward pressure on home prices in these particular areas.
Warmly,
Mary Wozny
Saturday, August 8, 2009
Ottawa Housing Market Hot!
Ottawa saw its best May on record for housing sales, with the capital city’s Real Estate Board reporting a 19 per cent increase in sales from the previous month and a 5.3 per cent increase in house prices over May 2008.
Homes in every price range are sell well, right from starter homes to luxury properties, according to the president of the Ottawa Real Estate Board. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market.
They reported that 1,969 residential properties were sold in May at an average price of $312,045, a slight rise in mortgage financing has been noted for the same time period. Ottawa hasn’t seen as much of a slowdown as the rest of the country because it is more isolated than the rest of the country and there is more guaranteed income due to the large number of government jobs the capital city has to offer.
Warmly,
Mary Wozny
Homes in every price range are sell well, right from starter homes to luxury properties, according to the president of the Ottawa Real Estate Board. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market.
They reported that 1,969 residential properties were sold in May at an average price of $312,045, a slight rise in mortgage financing has been noted for the same time period. Ottawa hasn’t seen as much of a slowdown as the rest of the country because it is more isolated than the rest of the country and there is more guaranteed income due to the large number of government jobs the capital city has to offer.
Warmly,
Mary Wozny
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