United States Mortgages
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United States Mortgages
In the United States, several programs make mortgage lending easier and promote home ownership. For example, two government agencies, the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA), offer loans with low down payments and guarantee some home mortgage loans with loan down paymentsagainst loss to the lender.

Housing demand is rising in the U.S., but house price-rises are slowing.  Why this seeming contradiction?  The answer is simple: increased housing supply and more new-builds are coming onto the market, so demand pressures can more easily be met.

House prices aren't rising as fast as they were. The annual increase  of 4.26% y-o-y in the first quarter 2015 in the S&P/Case-Shiller seasonally-adjusted national home price index (4.34% in real terms) was the lowest since Q3 2012.  There was a 4.39% price rise during the year to May 2015 (4.43% in real terms).

A slowdown is also suggested by Federal Housing Finance Agency (FHFA) figures, with a 4.96% y-o-y rise in the seasonally-adjusted purchase-only U.S. house price index (5.03% in real terms). The index rose by 1.32% q-o-q (1.88% in real terms) during the latest quarter, Q1 2015.

Most tellingly, the median sales price of new homes sold in the U.S. actually fell by 1.8% during the year to June 2015, to US$ 281,800, according to the U.S. Census Bureau.

Yet demand has been shooting up. New house sales rose by 18.1% during the year to June 2015, according to the U.S. Census Bureau. Most sales transactions were in the South (58.5% of all houses sold), according to the U.S. National Association of Realtors.

The U.S. home builder sentiment in July 2015 was at 60, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) - the highest level since November 2005.

“The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace,” according to NAHB Chairman Tom Woods. A reading of 50 is the midpoint between positive and negative sentiment.

New privately-owned housing unit starts were up by 26.6% y-o-y to June 2015, while housing completions increased by 22%, according to the U.S. Census Bureau.

Not surprisingly, forecasters expect US housing prices to continue rising in 2015.CoreLogic projects a 5% to 6% increase in its national home price index.  The Zillow Home Price Expectations Survey expects U.S. home values to increase by an average 4.4% in 2015. Barclays Bank predicts 3% to 4% growth in 2015. The bank sees tighter credit conditions and higher mortgage interest rates, as factors that could limit the appreciation of home prices.

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