As San Diego Home Prices Continue To Rise, Some Mortgage Lending Eases

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Government controlled mortgage giant Fannie Mae is allowing borrowers to have higher levels of debt and still qualify for a home loan. Previously, the debt-to-income ratio was capped at 45 percent. Now it’s at 50 percent, making room for a larger house payment.

For example, for a household making approximately $7,000 in gross income a month, with a few hundred dollars in debt payments, it could mean a significant loan increase, said Mark Goldman, senior loan officer with C2 Financial Corporation and real estate instructor at San Diego State University.

Credit: KPBS San Diego
Posted: Friday, August 4, 2017
By: Susan Murphy
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U.S. Home Prices Surpass Pre-Recession Peak Amid Healthy Sales

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U.S. home prices have fully recovered from their steep plunge during the housing bust and Great Recession, according to a private measure.

The Standard & Poor’s CoreLogic Case-Shiller national home price index, released Tuesday, is slightly above the peak it set in July 2006, after rising 5.5 percent in September from a year earlier. The milestone comes after more than four years of steady gains.

Still, prices have not fully recovered in many cities and other gauges show that home prices remain below their peaks.

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San Diego Housing Crisis Drives Some To Relocate, Others To Invest

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Behind the numbers is a major housing supply problem.

“Some of the estimates are approximately 35,000 units short in San Diego County,” said Mark Goldman, a real estate instructor at San Diego State University.

“Our population is expanding, our housing supply is already too small and the growth in our housing supply is not fast enough,” Goldman said. “We’re getting further behind every year.”

Low-income and middle-class families are being hit hardest, and impacts of the housing deficit could become increasingly visible as more people are forced to double up, Goldman said.

“More people are seeking fewer units, so the obvious solution is there’s going to be more people per room,” Goldman said. “There’s just not that many places for people to live and have a home.”

Goldman said people in the upper-income bracket are the ones buying homes and sustaining the competitive market, for now.

“People who are buying those homes have incomes that are keeping pace with the rate of increase, more or less,” Goldman said. “So that’s a good thing because that reduces the possibility of another housing crash.”

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Local Home Price Sales Up 1.1 Percent Last Month

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San Diego State Real Estate Lecturer Mark Goldman said home prices are lining up with the cost of actually living in the house and it’s a good time to jump into the market.

“For people who are planning to live in their homes for three or five years or even longer, it’s a great time to buy,” he said. “Prices are good they’re heading up.”