Our Federal Housing Administration is starting to make changes to their fee structures by reducing the interest rate on the Mutual Mortgage Insurance (MMI), a fee charged by the FHA for loans with less than 80% equity. This rate was reduced by .5%, from $1.25% to .85%. Our government administration estimates that 2 million borrowers will be able to save an average of $900 annually over the next 3 years, and 250k first time home buyers will enter the market after the premium reductions.  

Let's all give gratitude for a beginning of changes in mortgage fees and hopes that this trend will continue. We hope to see the current upfront fee of 1.75% of the loan balance go through a similar procedure. We hope to see a return to the former practice of removing the MMI once the home has 20% equity. This burden should not be borne by our first time home buyers, let's continue to let the government know that it is not in the people's interest to burden them with this unreasonable fee structure and insurance premium.  

Rising home prices, restrictive underwriting guidelines, lack of savings, high unemployment are continuing fueling a downward trending home-ownership rate. The current rate of 63.9% is where we were in 1988. It was 65.1% a year ago, and 69.2% at its peak in 2005.  

In 1995 Bill Clinton introduced the "National Home ownership Strategy" which was then bolstered in 2004 by Mr. Bush's loosening of underwriting standards. This led to the housing bubble, which resulted in our housing crisis of the last 8-9 years. Our current situation has our government struggling with how to make housing more affordable through low down payment programs and effective underwriting standards that ensure healthy, long term home ownership and healthy real estate markets.

Consider:

• Fannie Mae forecasts a 5.8% increase in home sales this year.
• Interest rates will likely remain steady through 2015.
• The Millennials are still not in the market and until they decide to buy, we will likely be stagnant.
• First time home buyers are at 27 year-low of 33%, below the long-term average of 40%.

Read more here and here.  

Be sure to take a look at this month's County Real Estate Report, See the links in column to the right at the top, as there is an added 2014 Annual report for each county.