housing turnover someone, web, housing, actually

LorrinCFA

Hello can someone please tell me what does housing turnover actually mean? and how it affects prepayment rates?? cant seem to find a a defination on the web. thanks

kkn006

I understand housing turnover to be the buying and selling of homes...thus increasing prepayment rates if there is increased housing turnover.

With that being said, take note that there are seasonality effects (increased buying and selling in the spring and summer and thus increased prepayment rates) and during the winter and fall, there is a lower level of housing turnover (decreasing prepayment rates).

Also the general health of the economy comes into play...stronger economy leads to higher level of housing turnover..higher prepayment rates.

liquidity

where is the link between "increased buying and selling of homes" with "increased prepayments" that is people paying principle quicker".???? seems no logical link to me as they are independent things?

RMontgomery

The existing mortgages will be paid off as the properties are sold. When the house is sold, the mortgage becomes due and the remaining amount owed will be paid.