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Originally published November 2, 2012 at 8:00 PM | Page modified November 3, 2012 at 5:38 PM

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Fall housing trends includes low inventories, more remodeling

Buyers facing higher mortgage fees, changes to short-sale rules

Bankrate.com

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Homebuyers and refinancers seeking the best deal possible: You are running out of time.

While it’s too early to even consider calling this a seller’s market, buyers will have to work a little harder to find the home of their dreams at a bargain this fall.

You may get a good deal on a short sale now, since new rules just went into effect that might make the short-selling process less painful.

If you are not interested in buying, selling or refinancing your home, that might be because you are too busy with home-improvement projects. If that’s the case, know you are not alone.

Here are some fall housing trends.

Faux buyers market

Potential homebuyers entering the housing market this fall will face a harsh and somewhat confusing reality: It looks like a buyer’s market, but it’s not.

The inventory of for-sale homes, including foreclosed properties, continues to shrink in many parts of the country. As a result, it will probably take longer for buyers to find their ideal home. And they may not necessarily find the bargains they expect.

“Yes, there are good deals today, especially in the distressed-property market,” says Shaun White, a vice president for the Re/Max real-estate network. “But because the inventory is so greatly reduced, it is more difficult to get your offer accepted. There are bidding wars going on in many parts of the country.”

The average inventory of homes for sale nationwide was about 4.6 months in August, according to the U.S. Census Bureau.

But the market hasn’t really turned into a seller’s market yet. Many underwater homeowners have taken their homes off the market, contributing to the low inventory. And there are millions of foreclosures in the pipeline that will eventually hit the for-sale market.

Borrowers who want to grab a low rate should act.

The Federal Reserve has been doing whatever it can to hold rates down, including printing billions of dollars per month to buy mortgage bonds. But higher mortgage fees, imposed by the Federal Housing Finance Agency, will push rates up this fall.

On Nov. 1, Fannie Mae and Freddie Mac raised the guarantee fees they charge loan originators. On average, the increase translates into about a quarter of 1 percentage point in interest.

Return of the remodel

As prices stabilize, more homeowners will tackle remodeling projects this fall.

Spending on home renovations is expected to rise to $120.7 billion in the fourth quarter from $114 billion in the fourth quarter of 2011, according to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

Fall is a great time to get materials at a discount as home-improvement stores unload summer inventory.

New short-sale guidelines that went into effect Nov. 1 are supposed to make the process easier and speedier.

Fannie and Freddie will allow servicers to streamline the short-sale process for borrowers who are in financial hardship and homeowners who have to sell because of a divorce, disability or job transfer.

The expedited process will open the door to more short sales as an alternative to foreclosures, White says.

Under the new guidelines, servicers must respond to a short-sale request within 30 days and give the borrower a final decision within 60 days.


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