Friday Five: Foreign Buyers Lift Housing Market as Echo Boom Gears Up

An increase in mortgage applications, a new generation of home buyers, and a sneak peek at FHA financing in 2013 — all in this week’s Friday Five.

A surge of mortgage applications bodes well for the housing market. Could some of this activity be coming from the new generation of home buyers, or is the American dream being outsourced to foreign investors? A look at these issues and more in our weekly housing news roundup.

CNBC: Mortgage Applications Could Mean Hot Summer for Housing

After holding in lackluster territory for much of the spring season, weekly mortgage applications took a huge jump, signaling that the usual summer slowdown is perhaps holding off. The mortgage applications number is just that, applications, and with tight credit standards in the market today, many of those applications will be rejected. Still it’s a positive sign for the overall housing recovery.

U.S. News and World Report:
Echo Boomers to Shape Housing Market for Next 2 Decades

About 62 million strong, echo boomers — Americans roughly between the ages of 17 and 31 — will shape the next two decades of the housing market, according to the NATIONAL ASSOCIATION OF REALTORS®, noting that young home buyers already make up 31% of all recent home purchases. But rescuing the ailing housing market is a tall order for a group that faces mounting student loan debt and dwindling employment opportunities.

Bloomberg Business Week: U.S. Home Sales to Foreigners Rise as Low Prices Draw Investors

The dollar volume of U.S. homes sold to foreign buyers rose 24% in the 12 months through March as investors from Canada, China, India, Mexico, and the U.K. took advantage of low prices and favorable exchange rates. Foreign buyers spent about $82.5 billion in the period, up from a revised estimate of $66.4 billion a year earlier, the NATIONAL ASSOCIATION OF REALTORS® said. That accounted for 4.8% of the $928.2 billion U.S. market for home sales.

Home Buying Institute: Current State of FHA Financing, and a 2013 Sneak Peek

FHA financing currently accounts for about one-third of all mortgage activity in the U.S., a trend expected to continue through 2012. And there’s a good chance the agency’s market share will rise again in 2013 if new regulations for mortgage-qualification procedures are introduced.

Huffington Post: Few Home Owners See Benefit From National Mortgage Settlement, Three Months Later

As part of the national mortgage settlement signed in March, five large banks — Ally Financial, Bank of America, Chase, Citigroup, and Wells Fargo — agreed to offer at least $10 billion in loan forgiveness, or principal reduction, to some of the estimated 11.1 million home owners who owe more on their mortgage than their home is worth. But three months later, the banks’ progress in distributing that relief is slow, said housing counselors at 12 agencies.