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38 SURVEY: MISCONCEPTIONS HOLDING BACK HOMEBUYING While nearly seven in 10 Americans agree that now is a good time to become a homeowner, a large number remain reluctant due to their own misguided understanding of the financing process, according to survey results released Monday. In a poll of more than 2,000 consumers, Wells Fargo found 68 percent feel that now is a good time to buy a home, and 95 percent want to own if they don't already. e results jibe with Fannie Mae's latest consumer housing survey, in which 64 percent of Americans said now is a good time to buy (matching the survey's record low). "Although the homebuying process has changed in many ways in recent years, our survey found Americans still view homeownership as an achievement to be proud of, and many believe that now is a good time to buy a home," said Franklin Codel, head of Wells Fargo Home Mortgage Production. On the other hand, while nearly three- quarters of respondents in Wells Fargo's survey said they "know and understand" the financial process involved in buying a home, large numbers also expressed doubt or misguided notions about homebuying requirements. For example, Wells Fargo reported, 30 percent of respondents expressed belief that only people with high incomes can obtain a mortgage at this point, and 64 percent said they believe only those with a "very good" credit score can buy a home right now. While 64 percent of respondents said they have an understanding about how much of a down payment is needed to purchase a home, nearly half said 20 percent is required. Forty-four percent also said they know little or nothing about closing costs. While most lenders report that lending requirements at the moment are still high as a result of enhanced regulations and reluctance to take risks, Codel says lenders would be well served to work on educating homebuyers about all programs available to them—especially the millennial crowd, most of which pointed to lack of down payment funds as one of their biggest hurdles to homeownership. "It is important for prospective homebuyers to feel empowered to ask lenders and real estate agents questions about available options, such as down payment assistance or FHA (Federal Housing Administration) or VA (Veterans Affairs) loans for veterans," he said. "Informing prospective homebuyers about their options is the first step toward helping them realize their goals." On the other hand, the survey also found most Americans are confident in managing their personal finances, with 82 percent saying they know how to save, invest, and work within a budget. In addition, 63 percent said they have a "rainy day fund," including more than half of millennial-aged respondents. With so many Americans focused on keeping their financial houses in order, Codel says there's a decent opportunity to turn those consumers into responsible homeowners with an educational push. "[W]e have an opportunity as lenders, nonprofit agencies, and real estate agents to better inform Americans about credit ratings, mortgage costs, and housing affordability," he said. "is would help demystify the homebuying experience for many consumers." JUDICIAL FORECLOSURE STATES SEEING FASTER GAINS IN HOME ASKING PRICES Home asking prices are on the rise nationwide, according to the August 2014 Trulia Price Monitor released on September 9, but they are rising at a faster rate in judicial states where the foreclosure process takes longer. e latest Trulia report found that home asking prices are increasing faster in hard- hit metros in such judicial states as Florida, Illinois, and New York, where the foreclosure process takes longer because it has to go through the courts, than it is in such non- judicial states as California, Michigan, and Texas, where court action is not required. Trulia reported this is a reversal from the recent trend in which home asking prices have risen more quickly in non-judicial states because the "foreclosure wave" in certain areas came and went faster. Home prices tend to increase at the end of a foreclosure wave because of a tightening of inventory; a slower wave usually means that prices are slower to increase. For August, asking prices for homes in judicial states increased by 6.9 percent year-over-year, which is close behind the 7.8 percent jump in non-judicial states. By comparison, there was a much wider gap between the two in August 2013 when asking prices in judicial states rose by just 5.1 percent compared to 14.1 percent in non-judicial states. Trulia reported an average 1.0-percent increase in home asking prices from July to August and an average 7.8-percent jump from August 2013 to August 2014 for the nation's 100 largest metro areas. Seven of the 10 metro areas with the largest year-over- year asking price increases were located in the South, according to Trulia. Miami and Birmingham were the top two, each with a 15.6-percent increase. e three outliers were Riverside-San Bernardino, California (fifth, 13.8 percent); Chicago (ninth, 12.5 percent); and Oakland (10th, 12.4 percent). Only four metros out of the top 100 experienced a year-over-year decrease in home asking prices from August 2013 to August 2014: Albany, New York (0.3 percent); El Paso, Texas (0.9 percent); New Haven, Connecticut (0.9 percent); and Little Rock, Arkansas (4.8 percent).

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