The Maryland housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation.
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Tougher standards have made subprime Maryland mortgage loans more difficult to qualify for - and that means they will have little affect on reducing the number of foreclosures in Frederick County.
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Though the state’s foreclosure rate remains one of the lowest in the nation, the number of Maryland mortgage borrowers in trouble spiked sharply in the first three months of the year.
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The average price of a home sold in Frederick County in the first quarter of 2007 fell by $5,800 and spent more time on the market, but Maryland real estate agents remain optimistic about an upturn.
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When mortgage lenders refuse to write home loans on central city row houses, does that violate federal fair housing rules?
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A much-anticipated recovery in Greater Washington’s housing market could face its next challenge from tighter mortgage lending restrictions.
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While the residential mortgage market is ‘‘tightening up” across most of the nation, Maryland mortgage industry players are more sanguine. Read the rest of this entry »
Fast growth and comparatively moderate Maryland mortgage costs helped price appreciation in Prince George’s County blow past the Greater Washington, D.C., area last year, even as the housing market wallowed in most of the nation.
Home sales across the Baltimore housing market tumbled nearly 10 percent in March from a year earlier, but the average sales price continued to rise as the region continued a fairly smooth transition from a seller’s to a buyer’s market, according to the Baltimore Sun.
Maryland’s subprime loan foreclosure rate of 2 percent for the last quarter of 2006 was among the lowest in the country, bucking the national trend toward alarming rates.
Nationally, the bad credit home loan foreclosure rate spiked to 4.5 percent late last year, according to the Mortgage Bankers Association.
“We’ve been a little more fortunate,” said Tom Shaner, executive director of the Maryland Association of Mortgage Brokers. “People here are generally doing better.”
The Maryland housing market is a high-income area, houses are more expensive and employment is solid, said Anirban Basu, chairman of the Sage Policy Group.
Subprime loans are given to those with blemished credit, with one in four going to a first-time home buyer. Anything from missed car payments to delinquent cell phone accounts can put a borrower in this market, said Mike Fratantoni, senior economist with the Mortgage Bankers Association.
Even though Maryland is insulated from the worst fallout from the proliferation of subprime loans in the past few years, it will still feel some consequences.
“People in Maryland should care about the rise because the greater the deterioration in the subprime market, the higher the level of foreclosures locally and nationally,” Mr. Basu said, adding that foreclosures put more houses into the market without the demand, which suppresses home prices.
These foreclosures also hurt lenders. To counteract any financial hit, lenders will try to clean up this “subprime slime” with tighter credit standards and higher interest rates, Mr. Basu said.
As lenders do this, it can price people out of the market or dissuade them from entering it all together. For anyone in Maryland looking to borrow money to buy a home, expand their home or to sell a home, higher home mortgage rates are not a pretty sight, Mr. Basu said.
“The last hurrah in the housing market was on the back of the subprime,” said Christian Weller, senior economist at the Center for American Progress.
Maryland had the 46th-lowest subprime loan foreclosure rate, while Ohio, Michigan and the Indiana housing markets were the top three in the Mortgage Bankers’ survey. Nearly one out of every 10 subprime loans issued in these states in the last three months of 2006 ended in foreclosure, the survey found.
Unemployment levels are high in these states, but “the rise in mortgage delinquencies and foreclosures is not due to unemployment,” Mr. Basu said. “Job growth is not slowing, the strength of the job market is holding us together.”
“It’s the Jenga tower effect,” Mr. Weller said. “You know the bottom is being pulled out, but you’re not sure when the whole thing will fall.”
Contrary to what the Jenga slogan suggests, a slumping subprime Maryland mortgage market is anything but “edge-of-your-seat fun for all ages.”
There is a whole generation of lenders who came into the industry with the housing boom beginning in the mid-1990s and who have never seen a downturn, Mr. Weller said. During this boom, there was a lot of money chasing too few good opportunities, which gave the lender a free rein, he said.