How do I analyze the mortgage market?
Mortgage analysis is made by searching for changes in several key indicators. These indicators include interest rates from long -term fixed mortgages, new house sales, existing market inventory, house prices and mortgage activity types. A larger number of mortgages for new purchases versus refinancing existing loans can indicate a stronger market. Another common indicator used in the mortgage market analysis is the amount of outstanding loan debt. While a change in one key indicator can pretend to be a period of decline or growth, it usually reflects a short -term market response to the external factor. For example, the number of refinance mortgages may temporarily increase in response to a sharp reduction in interest rates. This change may not be the result of a weakening market, as this could also be related to investors to release cash flow to make further purchases of real estate.
The new sales of houses versus sales actsVita in existing homes is another factor that needs to be explored in the analysis of the hypothesis market. A larger number of new house sales may indicate an increase in construction activities as a result of the influx of new buyers. In other words, the growth and activity of the market is attributed to the first buyers of home, holidays or second house purchases. This may indicate expansion because buyers have sufficient income to maintain more mortgages or home spending and do not have to rely on the disposal of current property assets.
Increasing the existing house sales may be due to a high level of market closure or the need for homeowners to get rid of mortgage liabilities. This can be seen in times of economic weakness, because the average earnings of income loses one -time income due to JOB Loss, loss of income or high inflation rate. The disproportionate amount of existing house sales in relation to new supplies may also be caused by a high amount of demand compared to the offer of a new design.
the interestOutside the market inventory, it can be used in the analysis of the hypothesis market to determine whether the market is oriented to the buyer or seller. The presence of a high amount of stock aging usually reflects a buyer -oriented market where supply is greater than demand. This may occur as a result of incorrect house builders on request in a geographical location, a weak economy or a high amount of sales activity. A similarly high amount of outstanding mortgage debt may indicate a healthy purchasing activity, the average inability of the house owner to pay his monthly obligation or severe dependence on the financing of banks to afford the house.