From Realtor Magazine Online, Daily Real Estate News October 31, 2008
Freddie Mac reports a jump in the 30-year fixed mortgage rate to 6.46 percent during the week ended Oct. 30 from 6.04 percent the prior week, as long-term mortgages rates moved in line with long-term Treasury bonds.
The 15-year fixed mortgage rate rose as well, climbing to 6.19 percent from 5.72 percent.
Meanwhile, the five-year hybrid adjustable mortgage rate moved up to 6.36 percent from 6.06 percent; and the one-year ARM increased to 5.38 percent from 5.23 percent.
Freddie Mac chief economist Frank Nothaft expects short-term rates to remain low due to the Federal Reserve's recent cut in the discount and federal-funds rates, and he notes that falling home prices have jump-started residential sales in some markets by making properties more affordable.
Source: The Wall Street Journal (10/31/08)
Friday, October 31, 2008
Thursday, October 30, 2008
Fed Drops Key Rate to 1 Percent
From Realtor Magazine Online, Daily Real Estate News October 30, 2008
The Federal Reserve trimmed a half point off the key federal funds interest rate Wednesday, dropping it to 1 percent.
In a statement, the Fed acknowledged that the economy has few bright spots. “The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” the central bank said.
It left open the possibility of further cuts, saying it would “act as needed” to stabilize prices and encourage growth.
Unemployment has risen to 6.1 percent from 5 percent in January as a result of the loss of 700,000 jobs. Analysts say this news is particularly alarming since job losses usually come early in a recession.
Source: The New York Times, Edmund L. Andrews (10/29/2008)
The Federal Reserve trimmed a half point off the key federal funds interest rate Wednesday, dropping it to 1 percent.
In a statement, the Fed acknowledged that the economy has few bright spots. “The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” the central bank said.
It left open the possibility of further cuts, saying it would “act as needed” to stabilize prices and encourage growth.
Unemployment has risen to 6.1 percent from 5 percent in January as a result of the loss of 700,000 jobs. Analysts say this news is particularly alarming since job losses usually come early in a recession.
Source: The New York Times, Edmund L. Andrews (10/29/2008)
Tuesday, October 28, 2008
Even Good Credit Doesn't Guarantee Loan
From Realtor Magazine Online, Daily Real Estate News October 28, 2008
The ongoing credit crunch has prompted the nation's lenders to forsake the generally lax practices that fueled the rise of zero-down mortgages over the past decade and contributed to the run-up in home prices that peaked in the summer of 2006.
Today's lenders are requiring much higher down payments and credit scores, while many private banks are no longer investing at all in "jumbo" home loans--those for an amount greater than the limits set by Freddie Mac and Fannie Mae.
In addition, both buyers and properties are being put through additional layers of scrutiny, with some lenders even requiring a second home appraisal to boost their confidence--which can inflate closing costs--and proof from borrowers that they can repay the debt.
To top it all off, a wave of consolidations among financial institutions has resulted in much confusion and many delays in the mortgage process nationwide. According to the Mortgage Bankers Association, each time a foreclosure goes to sale, lenders take an average net loss of between $30,000 and $60,000.
Source: USA Today, Stephanie Armour (10/28/08)
The ongoing credit crunch has prompted the nation's lenders to forsake the generally lax practices that fueled the rise of zero-down mortgages over the past decade and contributed to the run-up in home prices that peaked in the summer of 2006.
Today's lenders are requiring much higher down payments and credit scores, while many private banks are no longer investing at all in "jumbo" home loans--those for an amount greater than the limits set by Freddie Mac and Fannie Mae.
In addition, both buyers and properties are being put through additional layers of scrutiny, with some lenders even requiring a second home appraisal to boost their confidence--which can inflate closing costs--and proof from borrowers that they can repay the debt.
To top it all off, a wave of consolidations among financial institutions has resulted in much confusion and many delays in the mortgage process nationwide. According to the Mortgage Bankers Association, each time a foreclosure goes to sale, lenders take an average net loss of between $30,000 and $60,000.
Source: USA Today, Stephanie Armour (10/28/08)
Inventory Shrinks of Homes for Sale
From Realtor Magazine Online, Daily Real Estate News October 28, 2008
Bargain hunters and home owners who pulled their properties off the market hoping for better days down the road helped shrink the inventory of available homes in September, according to a Wall Street Journal survey.
The largest year-over-year declines in inventory were 32.1 percent in Sacramento, 27.1 percent in Orange County, Calif., 21.6 percent in Los Angeles, 21.5 percent in Boston, 21.1 percent in Denver, and 20.6 percent in San Diego.
Demand for housing has slowed even as the population has increased, according to Census Bureau figures. Mortgage Bankers Association chief economist Jay Brinkmann blames lack of jobs, noting that young people don’t go out on their own nearly as frequently during tough times.
Source: The Wall Street Journal, James R. Hagerty (10/28/08)
Bargain hunters and home owners who pulled their properties off the market hoping for better days down the road helped shrink the inventory of available homes in September, according to a Wall Street Journal survey.
The largest year-over-year declines in inventory were 32.1 percent in Sacramento, 27.1 percent in Orange County, Calif., 21.6 percent in Los Angeles, 21.5 percent in Boston, 21.1 percent in Denver, and 20.6 percent in San Diego.
Demand for housing has slowed even as the population has increased, according to Census Bureau figures. Mortgage Bankers Association chief economist Jay Brinkmann blames lack of jobs, noting that young people don’t go out on their own nearly as frequently during tough times.
Source: The Wall Street Journal, James R. Hagerty (10/28/08)
Friday, October 24, 2008
NAR: Home Sales Rise as Affordability Improves
From Realtor Magazine Online, Daily Real Estate News October 24, 2008
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August. Home sales are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.
“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri, and Rhode Island,” he says. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord says low home prices and low interest rates have helped attract buyers.
“This is the first time since November 2005 that home sales have been above year-ago levels,” Gaylord says. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun says there may still be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac," Yun says. "Inventory remains high, and price declines are pressuring owners." Yun says that an additional housing stimulus would stabilize prices more quickly and help bring faster stability to Wall Street. "
Removing the repayment feature on the [$7,500] first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory,” Yun says.
A Closer Look at the Numbers
* Total housing inventory: at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
* National median existing-home price: $191,600 in September, for all housing types. That's down 9 percent from a year ago when the median was $210,500.
“Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions," Yun says. "These are pulling the median price down because many are being sold at discounted prices. The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales: increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales: were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.
By Region
Here's a breakdown across the country of existing-home in September:
* West: sting-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. Median price: $253,600, down 18.5 percent from a year ago.
* Midwest: sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. Median price: $152,500, which is 7.9 percent lower than September 2007.
* South: sales rose 2.2 percent in September to a pace of 1.9 million but remain 7.8 percent below September 2007. Median price:$167,200, down 4.1 percent from a year ago.
* Northeast: sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. Median price: $246,800, down 5.4 percent from September 2007.
Source: NAR
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August. Home sales are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.
“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri, and Rhode Island,” he says. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord says low home prices and low interest rates have helped attract buyers.
“This is the first time since November 2005 that home sales have been above year-ago levels,” Gaylord says. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun says there may still be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac," Yun says. "Inventory remains high, and price declines are pressuring owners." Yun says that an additional housing stimulus would stabilize prices more quickly and help bring faster stability to Wall Street. "
Removing the repayment feature on the [$7,500] first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory,” Yun says.
A Closer Look at the Numbers
* Total housing inventory: at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
* National median existing-home price: $191,600 in September, for all housing types. That's down 9 percent from a year ago when the median was $210,500.
“Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions," Yun says. "These are pulling the median price down because many are being sold at discounted prices. The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales: increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales: were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.
By Region
Here's a breakdown across the country of existing-home in September:
* West: sting-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. Median price: $253,600, down 18.5 percent from a year ago.
* Midwest: sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. Median price: $152,500, which is 7.9 percent lower than September 2007.
* South: sales rose 2.2 percent in September to a pace of 1.9 million but remain 7.8 percent below September 2007. Median price:$167,200, down 4.1 percent from a year ago.
* Northeast: sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. Median price: $246,800, down 5.4 percent from September 2007.
Source: NAR
Mortgage Rates Drop to 5-Week Low
From Realtor Magazine Online, Daily Real Estate News October 24, 2008
Mortgage rates moved south this week, reaching their lowest point in five weeks, according to Freddie Mac's nationwide survey.
The company reported a drop in the average interest on a 30-year fixed loan to 6.04 percent from 6.46 percent last week and a slide in the 15-year fixed rate to 5.72 percent from 6.14 percent.
Meanwhile, interest on adjustable-rate mortgages slipped to 6.06 percent from 6.14 percent for five-year ARMs but bumped up to 5.23 percent from 5.16 percent for one-year ARMs.
Source: San Diego Union-Tribune (10/24/08)
Mortgage rates moved south this week, reaching their lowest point in five weeks, according to Freddie Mac's nationwide survey.
The company reported a drop in the average interest on a 30-year fixed loan to 6.04 percent from 6.46 percent last week and a slide in the 15-year fixed rate to 5.72 percent from 6.14 percent.
Meanwhile, interest on adjustable-rate mortgages slipped to 6.06 percent from 6.14 percent for five-year ARMs but bumped up to 5.23 percent from 5.16 percent for one-year ARMs.
Source: San Diego Union-Tribune (10/24/08)
Sales of Existing U.S. Homes Up
From CNN.com, The CNN Wire, October 24th, 2008
NEW YORK (CNNMoney.com) — Sales of existing homes in the United States rose in September, according to the latest reading on the battered housing market by an industry trade group.
The National Association of Realtors reported Friday that sales by homeowners jumped 5 percent in September to an annual pace of 5.18 million, up from the August reading of 4.91 million. It was the largest month-to-month increase since July of 2003.
September sales were up 1.4 percent from a year earlier. Economists surveyed by Briefing.com expected the report to show existing home sales rose to an annual pace of 4.95 million.
But prices still continued to fall. The median price of all homes sold during the month fell to $191,600, down 9 percent from $210,500 a year ago. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier.
NEW YORK (CNNMoney.com) — Sales of existing homes in the United States rose in September, according to the latest reading on the battered housing market by an industry trade group.
The National Association of Realtors reported Friday that sales by homeowners jumped 5 percent in September to an annual pace of 5.18 million, up from the August reading of 4.91 million. It was the largest month-to-month increase since July of 2003.
September sales were up 1.4 percent from a year earlier. Economists surveyed by Briefing.com expected the report to show existing home sales rose to an annual pace of 4.95 million.
But prices still continued to fall. The median price of all homes sold during the month fell to $191,600, down 9 percent from $210,500 a year ago. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier.
Thursday, October 23, 2008
Housing Downturn Could Be Approaching Bottom
From San Diego Tribune, Tuesday Oct. 21st
The following statistics were notable:
September 08 as compared to September 07 for combined Resale houses & condos and new homes and condos as per DataQuick
* +56.4% increase in the number of sales
* -30.2% decrease in the median price
* 47.3% of all resales were foreclosures
SDAR
* 17,447 Active listings as of October 20, 2008 down 16.1% from year-ago levels and lowest since April last year.
* At current pace of sale, that represents about 5.6 months of inventory. Typically a balanced market between buyers and sellers occurs when there is three to six months unsold inventory.
Six Rules for Selling Fast in a Slow Market
From Realtor Magazine Online, Daily Real Estate News October 23, 2008
Anyone looking for advice on how to close a deal in a tough market might get some inspiration from William Bronchick and Ray Cooper, authors of How To Sell A House Fast In A Slow Real Estate Market(2008: John A. Wiley & Sons).
Here are some of their most useful ideas:
Position the house in the right price range. Buyers search by price range. Positioning a property in the middle of the range increases the likelihood people will see it.
Have info available. Deals fall apart when the buyer has unanswered questions. Work with the seller to have key information available, including cost of utilities and taxes, neighborhood liens and covenants, and an evaluation of the schools.
Put out a good flier. People are much more likely to read the flier than they are to call the number on the “For Sale” sign.
Market to the neighbors. Market to people who have just listed their own homes in the same areas. Chances are they like the neighborhood and could be persuaded to stay in the area by the right property.
Talk to the seller about offering creative financing. For many people these days finding money is the biggest stumbling block.
Explain the first-offer rule to clients. In this market holding out for a better offer is a big mistake.
Source: Forbes, William Bronchick and Ray Cooper (10/21/2008)
Anyone looking for advice on how to close a deal in a tough market might get some inspiration from William Bronchick and Ray Cooper, authors of How To Sell A House Fast In A Slow Real Estate Market(2008: John A. Wiley & Sons).
Here are some of their most useful ideas:
Position the house in the right price range. Buyers search by price range. Positioning a property in the middle of the range increases the likelihood people will see it.
Have info available. Deals fall apart when the buyer has unanswered questions. Work with the seller to have key information available, including cost of utilities and taxes, neighborhood liens and covenants, and an evaluation of the schools.
Put out a good flier. People are much more likely to read the flier than they are to call the number on the “For Sale” sign.
Market to the neighbors. Market to people who have just listed their own homes in the same areas. Chances are they like the neighborhood and could be persuaded to stay in the area by the right property.
Talk to the seller about offering creative financing. For many people these days finding money is the biggest stumbling block.
Explain the first-offer rule to clients. In this market holding out for a better offer is a big mistake.
Source: Forbes, William Bronchick and Ray Cooper (10/21/2008)
Tuesday, October 21, 2008
New Rule Adds Mortgage Rate Disclosures
From Realtor Magazine Online, Daily Real Estate News October 21, 2008
The Federal Reserve on Monday approved regulations requiring mortgage lenders to tell borrowers how much interest rates differ between prime mortgages and the higher-priced ones offered to less-affluent borrowers.
New Regulation C rules will require disclosures to prospective borrowers if the difference between prime and subprime rates is equal to or greater than 1.5 percentage points on a first-lien loan or greater than 3.5 percentage points on a second mortgage.
The Fed said that in defining the rules for rate disclosure, it tried to avoid requiring comparisons among prime mortgages why demanding disclosures only for subprime mortgage rates.
Source: Reuters News (10/20/08)
The Federal Reserve on Monday approved regulations requiring mortgage lenders to tell borrowers how much interest rates differ between prime mortgages and the higher-priced ones offered to less-affluent borrowers.
New Regulation C rules will require disclosures to prospective borrowers if the difference between prime and subprime rates is equal to or greater than 1.5 percentage points on a first-lien loan or greater than 3.5 percentage points on a second mortgage.
The Fed said that in defining the rules for rate disclosure, it tried to avoid requiring comparisons among prime mortgages why demanding disclosures only for subprime mortgage rates.
Source: Reuters News (10/20/08)
Home Sales Skyrocket in Southern California
From Realtor Magazine Online, Daily Real Estate News October 21, 2008
Home sales in southern California rose 65 percent in September compared to the same month a year ago.
A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties. It was the largest increase MDA DataQuick has recorded in the 20 years it has been keeping records, the company said Monday.
The increase was fueled by foreclosures, which drove down prices, MDA DataQuick said, pushing the median price down 33 percent from a year earlier to $308,500.
Sales so far this month appear to have been slowed by bad financial news, says Andrew LePage, an analyst with MDA DataQuick.
Source: Bloomberg, Daniel (10/20/08)
Home sales in southern California rose 65 percent in September compared to the same month a year ago.
A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties. It was the largest increase MDA DataQuick has recorded in the 20 years it has been keeping records, the company said Monday.
The increase was fueled by foreclosures, which drove down prices, MDA DataQuick said, pushing the median price down 33 percent from a year earlier to $308,500.
Sales so far this month appear to have been slowed by bad financial news, says Andrew LePage, an analyst with MDA DataQuick.
Source: Bloomberg, Daniel (10/20/08)
Sunday, October 19, 2008
Renters Kicked Out When Foreclosures Strike
From Realtor Magazine Online, Daily Real Estate News October 17, 2008
Nearly 15 million renters, 40 percent of the total, live in single-family homes, townhouses, condos or duplexes, according to the U.S. Census.
These types of properties tend to be owned by small investors, and those investors have recently been plagued by foreclosures. When a home is taken back by the bank, renters are forced to leave.
"It's a huge issue, and it's one that until recently has flown under the radar," said Danilo Pelletiere, research director at the National Low Income Housing Coalition. "Renters haven't been addressed by some localities because they have been focusing on home owners."
Some states, including California, Ohio and Illinois, have passed laws making it mandatory for mortgage holders to give tenants of foreclosed properties time to find an alternative.
Other states, including Indiana, Minnesota, Rhode Island and Washington, have considered tenants’ rights bill, but they have died before coming to a vote.
Source: The Associated Press, Adrian Sainz (10/16/2008)
Nearly 15 million renters, 40 percent of the total, live in single-family homes, townhouses, condos or duplexes, according to the U.S. Census.
These types of properties tend to be owned by small investors, and those investors have recently been plagued by foreclosures. When a home is taken back by the bank, renters are forced to leave.
"It's a huge issue, and it's one that until recently has flown under the radar," said Danilo Pelletiere, research director at the National Low Income Housing Coalition. "Renters haven't been addressed by some localities because they have been focusing on home owners."
Some states, including California, Ohio and Illinois, have passed laws making it mandatory for mortgage holders to give tenants of foreclosed properties time to find an alternative.
Other states, including Indiana, Minnesota, Rhode Island and Washington, have considered tenants’ rights bill, but they have died before coming to a vote.
Source: The Associated Press, Adrian Sainz (10/16/2008)
30-Year Rates Rise to 8-Week High
From Realtor Magazine Online, Daily Real Estate News October 17, 2008
Interest rates for 30-year fixed-rate mortgages rose this week to an 8-week high, according to Freddie Mac, while ARM rates showed smaller gains.
The 30-year fixed mortgage rate rose to 6.46 percent during the week ended Oct. 16, up from 5.94 percent the prior week. Last year at this time, the 30-year fixed rate mortgage averaged 6.40 percent.
The 15-year fixed mortgage rate climbed to 6.14 percent from 5.63 percent over the same period.
"Recent economic reports suggest the economy is still slowing. For instance, retail sales fell for the third consecutive month by 1.2 percent in September," said Frank Nothaft, Freddie Mac vice president and chief economist.
"In addition, in its latest Beige Book, released October 15th, the Federal Reserve indicated that economic activity weakened in September across all 12 Federal Reserve Districts and that several Districts also noted that their contacts had become more pessimistic about the economic outlook."
Source: Freddie Mac
Interest rates for 30-year fixed-rate mortgages rose this week to an 8-week high, according to Freddie Mac, while ARM rates showed smaller gains.
The 30-year fixed mortgage rate rose to 6.46 percent during the week ended Oct. 16, up from 5.94 percent the prior week. Last year at this time, the 30-year fixed rate mortgage averaged 6.40 percent.
The 15-year fixed mortgage rate climbed to 6.14 percent from 5.63 percent over the same period.
"Recent economic reports suggest the economy is still slowing. For instance, retail sales fell for the third consecutive month by 1.2 percent in September," said Frank Nothaft, Freddie Mac vice president and chief economist.
"In addition, in its latest Beige Book, released October 15th, the Federal Reserve indicated that economic activity weakened in September across all 12 Federal Reserve Districts and that several Districts also noted that their contacts had become more pessimistic about the economic outlook."
Source: Freddie Mac
Wednesday, October 15, 2008
Pending Home Sales Up Strongly
From National Association of Realtors, Research Update
Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the latest report. The Pending Home Sales Index jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C. region,” he said. "It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.” Read the story
View the commentary
View the forecast
View Pending Home Sales Index
Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the latest report. The Pending Home Sales Index jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C. region,” he said. "It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.” Read the story
View the commentary
View the forecast
View Pending Home Sales Index
Tuesday, October 14, 2008
Co-Ownership Gets Popular as Lending Tightens
From Realtor Magazine Online, Daily Real Estate News October 14, 2008
Real estate co-ownership arrangements are becoming increasingly popular, especially in cities where prices—even after the real estate meltdown—remain out of reach for many buyers.
"Lending guidelines have become twice as hard to meet because of the housing market," says Joe Schiller, an associate with Rubloff Real Estate in Chicago. "People just don't qualify like they used to. But if they get some friends and put money together, they can afford that 20 percent down that you now need to purchase."
Schiller says that while financing is easier, these arrangements have the capacity to fail. He recommends that people who are considering a joint purchase hire a lawyer to draw up a co-ownership agreement, including a plan to get out of the arrangement.
Here are some other tips for co-buyers:
* Before you begin looking for property, decide the geographic and financial ranges for the search.
* Understand potential co-buyers’ finances; lenders will look hard at the finances of all partners in the deal.
* If the property is a condo, understand the rules regarding rentals, just in case one partner needs to move out.
* Put everything in writing, particularly the escape plan.
Source: The Chicago Tribune, Kyra Kyles (10/13/2008)
Real estate co-ownership arrangements are becoming increasingly popular, especially in cities where prices—even after the real estate meltdown—remain out of reach for many buyers.
"Lending guidelines have become twice as hard to meet because of the housing market," says Joe Schiller, an associate with Rubloff Real Estate in Chicago. "People just don't qualify like they used to. But if they get some friends and put money together, they can afford that 20 percent down that you now need to purchase."
Schiller says that while financing is easier, these arrangements have the capacity to fail. He recommends that people who are considering a joint purchase hire a lawyer to draw up a co-ownership agreement, including a plan to get out of the arrangement.
Here are some other tips for co-buyers:
* Before you begin looking for property, decide the geographic and financial ranges for the search.
* Understand potential co-buyers’ finances; lenders will look hard at the finances of all partners in the deal.
* If the property is a condo, understand the rules regarding rentals, just in case one partner needs to move out.
* Put everything in writing, particularly the escape plan.
Source: The Chicago Tribune, Kyra Kyles (10/13/2008)
Monday, October 13, 2008
Law Makes Housing Affordable for Veterans
From Realtor Magazine Online, Daily Real Estate News October 13, 2008
Veterans across America now have expanded homeownership opportunities due to the Veterans’ Benefits Improvement Act of 2008, which President George W. Bush signed into law last Friday.
The bill includes housing provisions for veterans who are already home owners and those who aspire to homeownership, according to the NATIONAL ASSOCIATION OF REALTORS®.
“This [bill] will go a long way toward helping veterans buy and keep their homes,” says NAR President Dick Gaylord.
Three provisions in the legislation are critical to help veterans during the current housing turmoil.
1. The law will make it easier for veterans who have fallen victim to risky subprime loans to refinance their loans into safer, more affordable loans backed by the U.S Department of Veterans Affairs.
2. The legislation also makes the VA loan limit increases permanent, which will help veterans living in high-cost areas.
3. The VA also can now offer adjustable-rate mortgages to veterans. That would make homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.
“We need to support and protect those who serve our country,” Gaylord says. “Helping ensure that every veteran who can afford to own a home and wants to do so will have the opportunity and that everyone who responsibly owns a home is able to keep it is part of that commitment.”
--NAR
Veterans across America now have expanded homeownership opportunities due to the Veterans’ Benefits Improvement Act of 2008, which President George W. Bush signed into law last Friday.
The bill includes housing provisions for veterans who are already home owners and those who aspire to homeownership, according to the NATIONAL ASSOCIATION OF REALTORS®.
“This [bill] will go a long way toward helping veterans buy and keep their homes,” says NAR President Dick Gaylord.
Three provisions in the legislation are critical to help veterans during the current housing turmoil.
1. The law will make it easier for veterans who have fallen victim to risky subprime loans to refinance their loans into safer, more affordable loans backed by the U.S Department of Veterans Affairs.
2. The legislation also makes the VA loan limit increases permanent, which will help veterans living in high-cost areas.
3. The VA also can now offer adjustable-rate mortgages to veterans. That would make homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.
“We need to support and protect those who serve our country,” Gaylord says. “Helping ensure that every veteran who can afford to own a home and wants to do so will have the opportunity and that everyone who responsibly owns a home is able to keep it is part of that commitment.”
--NAR
Saturday, October 11, 2008
"Saving Our Economy - What's Next?"
To obtain a factual and truthful understanding of how we got to the point of this global economic meltdown - and to learn exactly who is to blame - go to this link:
http://www.teleprompterpresident.com/2008/10/fnc-fbn-inves-6.html
If it doesn't work immediately by clicking the link, simply copy and paste it into your browser's address space and click "Enter" or "Go".
This is the 60-minute program produced and aired on Fox.
http://www.teleprompterpresident.com/2008/10/fnc-fbn-inves-6.html
If it doesn't work immediately by clicking the link, simply copy and paste it into your browser's address space and click "Enter" or "Go".
This is the 60-minute program produced and aired on Fox.
Friday, October 10, 2008
Housing Inventory Declines Slightly
From Realtor Magazine Online, Daily Real Estate News October 10, 2008
In line with seasonal trends, the U.S. home supply dipped in September from August levels in 28 metro areas monitored, but the drop was about half the norm for this time of year.
ZipRealty Inc. reports that the number of residences on the sale market fell 1.6 percent--3 percent is more typical--and that inventories remain swollen.
However, the California brokerage notes that exact inventory levels are difficult to pinpoint because foreclosures account for a large share of the current supply but often are not sold through multiple-listing services, which is how ZipRealty tracks the data.
The National Association of Realtors, meanwhile, counts 4.26 million existing homes up for sale at the end of August--equivalent to a supply of roughly 10.4 months at the current sales pace.
Supply and demand in the housing market is considered balanced when the inventory settles at about six months, according to the trade group.
Source: Wall Street Journal (10/09/08) P. D2; Hagerty, James R.
In line with seasonal trends, the U.S. home supply dipped in September from August levels in 28 metro areas monitored, but the drop was about half the norm for this time of year.
ZipRealty Inc. reports that the number of residences on the sale market fell 1.6 percent--3 percent is more typical--and that inventories remain swollen.
However, the California brokerage notes that exact inventory levels are difficult to pinpoint because foreclosures account for a large share of the current supply but often are not sold through multiple-listing services, which is how ZipRealty tracks the data.
The National Association of Realtors, meanwhile, counts 4.26 million existing homes up for sale at the end of August--equivalent to a supply of roughly 10.4 months at the current sales pace.
Supply and demand in the housing market is considered balanced when the inventory settles at about six months, according to the trade group.
Source: Wall Street Journal (10/09/08) P. D2; Hagerty, James R.
30-Year Mortgage Rates Fall Under 6%
From Realtor Magazine Online, Daily Real Estate News October 10, 2008
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 5.94 percent during the week ended Oct. 9, marking the first decrease in three weeks.
The 15-year fixed rate slipped to 5.63 percent from 5.78 percent the previous week.
Meanwhile, the five-year adjustable mortgage rate dropped a notch to 5.9 percent from 6 percent; and the one-year ARM dipped slightly to 5.15 percent.
Source: Miami Herald (10/10/08)
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 5.94 percent during the week ended Oct. 9, marking the first decrease in three weeks.
The 15-year fixed rate slipped to 5.63 percent from 5.78 percent the previous week.
Meanwhile, the five-year adjustable mortgage rate dropped a notch to 5.9 percent from 6 percent; and the one-year ARM dipped slightly to 5.15 percent.
Source: Miami Herald (10/10/08)
Thursday, October 9, 2008
First-Time Buyer Tax Credit: Buy NOW!
From Realtor Magazine Online, Daily Real Estate News October 9, 2008
The homeownership tax credit that the federal government created earlier this year is a hard-won tool at your disposal to encourage your customers to jump off the fence and get into the home buying market.
When you combine the tax credit with today’s continuing low interest rates, large selection of for-sale inventory, and low home prices, many of the pieces are in place for your customers to buy now.
How the Tax Credit Works
The First-time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on July 30 and targets any individual or household that hasn’t owned a home for at least three years. Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9.
It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so if your customers wait to buy in the first half of 2009 they can take the credit on their 2009 tax return.
The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500.
Income limits are $75,000 for individuals and $150,000 for households. Individuals whose income exceeds the $75,000 limit but isn’t more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it’s a primary residence and is in the United States.
Buyers Have 15 Years to Pay Back
To help keep the program cost effective for taxpayers, the federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable.
There’s one restriction on the type of financing that your customers can use if they plan to take the credit. That restriction is on tax-exempt mortgage financing.
That only applies if your clients are using below-market interest-rate financing from a public agency or nonprofit that’s funding the loan using proceeds from a tax-exempt mortgage-revenue bond issue. For most buyers, this won’t be an issue. It’s mainly an issue for low-income buyers using special mortgage financing.
Be a Resource for Clients
NAR Government Affairs has created two helpful documents that you can share with your clients to help them learn more about how the tax credit works. The documents are on downloadable and printable PDFs:
First-time home buyer tax credit chart
First-time home buyer tax credit FAQ
The IRS Web site also offers tax-credit guidance in an article that provides answers to many frequently asked questions. And don't forget about REALTOR.org, which is a great source for more information on all aspects of the Economic Stimulus Bill passed July 30.
Source: REALTOR® Magazine Online
The homeownership tax credit that the federal government created earlier this year is a hard-won tool at your disposal to encourage your customers to jump off the fence and get into the home buying market.
When you combine the tax credit with today’s continuing low interest rates, large selection of for-sale inventory, and low home prices, many of the pieces are in place for your customers to buy now.
How the Tax Credit Works
The First-time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on July 30 and targets any individual or household that hasn’t owned a home for at least three years. Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9.
It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so if your customers wait to buy in the first half of 2009 they can take the credit on their 2009 tax return.
The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500.
Income limits are $75,000 for individuals and $150,000 for households. Individuals whose income exceeds the $75,000 limit but isn’t more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it’s a primary residence and is in the United States.
Buyers Have 15 Years to Pay Back
To help keep the program cost effective for taxpayers, the federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable.
There’s one restriction on the type of financing that your customers can use if they plan to take the credit. That restriction is on tax-exempt mortgage financing.
That only applies if your clients are using below-market interest-rate financing from a public agency or nonprofit that’s funding the loan using proceeds from a tax-exempt mortgage-revenue bond issue. For most buyers, this won’t be an issue. It’s mainly an issue for low-income buyers using special mortgage financing.
Be a Resource for Clients
NAR Government Affairs has created two helpful documents that you can share with your clients to help them learn more about how the tax credit works. The documents are on downloadable and printable PDFs:
First-time home buyer tax credit chart
First-time home buyer tax credit FAQ
The IRS Web site also offers tax-credit guidance in an article that provides answers to many frequently asked questions. And don't forget about REALTOR.org, which is a great source for more information on all aspects of the Economic Stimulus Bill passed July 30.
Source: REALTOR® Magazine Online
Housing Inventory Tightens in September
From Realtor Magazine Online, Daily Real Estate News October 9, 2008
The number of homes for sale in the 28 markets tracked by online real estate company ZipRealty fell 1.6 percent in September.
Overall, the September inventory is down 7 percent from a year ago in the Zip Realty-tracked metro markets. Zip's accounting includes only homes listed in multiple-listing services and many foreclosed homes aren’t included in those databases.
Barclays Capital estimates there are 811,000 bank-owned homes in the U.S., up from 129,000 two years ago, and predicts that the total will rise 60 percent before peaking late next year.
Source: The Wall Street Journal, James R. Hagerty (10/09/2008)
The number of homes for sale in the 28 markets tracked by online real estate company ZipRealty fell 1.6 percent in September.
Overall, the September inventory is down 7 percent from a year ago in the Zip Realty-tracked metro markets. Zip's accounting includes only homes listed in multiple-listing services and many foreclosed homes aren’t included in those databases.
Barclays Capital estimates there are 811,000 bank-owned homes in the U.S., up from 129,000 two years ago, and predicts that the total will rise 60 percent before peaking late next year.
Source: The Wall Street Journal, James R. Hagerty (10/09/2008)
Wednesday, October 8, 2008
McCain Wants to Buy Up Bad Mortgages
From Realtor Magazine Online, Daily Real Estate News October 8, 2008
Republican presidential candidate John McCain proposed during Tuesday night’s debate using $300 billion of the $700 billion of the financial bailout money to buy up bad home mortgages, instead of rescuing the financial markets.
"I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes — at the diminished values of those homes — and let people be able to make those payments and stay in their homes," he said.
Democratic nominee Barack Obama last month sounded a similar theme, proposing that the government consider taking such a step.
But McCain's approach was far more unequivocal.
A background paper provided by the McCain campaign said the plan "could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government's conservatorship of Fannie Mae and Freddie Mac."
It was unclear, either from McCain's remarks or from the backup materials provided by the campaign, how such a massive plan would be administered. Though McCain, a budget hawk and critic of rising federal spending, did concede one point. "Is it expensive? Yes," he said.
Source: The Associated Press, Jim Kuhnhenn ((10/08/08)
Republican presidential candidate John McCain proposed during Tuesday night’s debate using $300 billion of the $700 billion of the financial bailout money to buy up bad home mortgages, instead of rescuing the financial markets.
"I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes — at the diminished values of those homes — and let people be able to make those payments and stay in their homes," he said.
Democratic nominee Barack Obama last month sounded a similar theme, proposing that the government consider taking such a step.
But McCain's approach was far more unequivocal.
A background paper provided by the McCain campaign said the plan "could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government's conservatorship of Fannie Mae and Freddie Mac."
It was unclear, either from McCain's remarks or from the backup materials provided by the campaign, how such a massive plan would be administered. Though McCain, a budget hawk and critic of rising federal spending, did concede one point. "Is it expensive? Yes," he said.
Source: The Associated Press, Jim Kuhnhenn ((10/08/08)
Mortgage Applications Rise
From Realtor Magazine Online, Daily Real Estate News October 8, 2008
Mortgage applications increased slightly last week, rising 2.2 percent on an adjusted basis from 455.4 to 454.4, according to the Mortgage Bankers Association’s weekly survey.
On an unadjusted basis, the index increased 2.2 percent, but was down 28.6 percent compared to the same week a year ago.
Most of the increase was in home purchases. That index rose 3.2 percent, while the index of refinances increased only 0.9 percent.
Mortgage rates were down slightly:
* 30-year fixed-rate mortgages decreased to 5.99 percent from 6.07 percent.
* 15-year fixed-rate mortgages decreased to 5.71 percent from 5.82 percent.
* 1-year ARMs remained unchanged at 6.60 percent.
Source: Mortgage Bankers Association (10/08/08)
Mortgage applications increased slightly last week, rising 2.2 percent on an adjusted basis from 455.4 to 454.4, according to the Mortgage Bankers Association’s weekly survey.
On an unadjusted basis, the index increased 2.2 percent, but was down 28.6 percent compared to the same week a year ago.
Most of the increase was in home purchases. That index rose 3.2 percent, while the index of refinances increased only 0.9 percent.
Mortgage rates were down slightly:
* 30-year fixed-rate mortgages decreased to 5.99 percent from 6.07 percent.
* 15-year fixed-rate mortgages decreased to 5.71 percent from 5.82 percent.
* 1-year ARMs remained unchanged at 6.60 percent.
Source: Mortgage Bankers Association (10/08/08)
Fed, Central Banks Cut Key Rates
From Realtor Magazine Online, Daily Real Estate News October 8, 2008
In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.
The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.
The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.
"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.
The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.
White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.
Source: Associated Press, Jeannine Aversa (10/8/08)
In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.
The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.
The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.
"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.
The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.
White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.
Source: Associated Press, Jeannine Aversa (10/8/08)
Pending Home Sales Up Sharply
From Realtor Magazine Online, Daily Real Estate News October 8, 2008
Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Improved Affordability
Lawrence Yun, NAR chief economist, says home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region,” he says.
“The improvement also reflects the drop in mortgage interest rates after the government takeover of Freddie Mac and Fannie Mae. It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales", adds Yun.
The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007.
The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.
Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”
He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun adds.
NAR President Richard F. Gaylord says despite all the turmoil in world financial markets, home mortgages are available. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit," he says.
Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.
Existing-home sales projected to rise next year
Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.
New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.
The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.
The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.
— NAR
Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Improved Affordability
Lawrence Yun, NAR chief economist, says home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region,” he says.
“The improvement also reflects the drop in mortgage interest rates after the government takeover of Freddie Mac and Fannie Mae. It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales", adds Yun.
The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007.
The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.
Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”
He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun adds.
NAR President Richard F. Gaylord says despite all the turmoil in world financial markets, home mortgages are available. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit," he says.
Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.
Existing-home sales projected to rise next year
Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.
New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.
The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.
The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.
— NAR
Tuesday, October 7, 2008
Abraham Lincoln said...
During this political season let's be reminded of these wise words...
You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away people's initiative and independence.
You cannot help people permanently by doing for them, what they could and should do for themselves…
~ Abraham Lincoln
You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away people's initiative and independence.
You cannot help people permanently by doing for them, what they could and should do for themselves…
~ Abraham Lincoln
Barney Frank Calls Housing Crisis Attacks Racist
From Realtor Magazine Online, Daily Real Estate News October 7, 2008
(HOMEJAMES COMMENTARY: IT IS FACTUAL HISTORY THAT THE SOURCE OF OUR CURRENT ECONOMIC CRISIS WAS BARNEY FRANK, CHRIS DODD, AND THE ILK OF BARACK OBAMA AND FRANKLIN RAINES. CHECK YOUR FACTS - THIS IS INDISPUTABLE.)
Massachusetts Rep. Barney Frank said those who try to lay blame for the current mortgage crisis on the push for affordable housing via the Community Reinvestment Act are racist.
Frank told attendees at a mortgage foreclosure symposium in Boston that loans under the act are issued by regulated institutions, while most of the foreclosures were triggered by high-cost loans made by unregulated entities.
"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."
House Minority Leader John Boehner of Ohio called Frank's remarks "a lame, desperate attempt to divert Americans' attention away from the Democratic party's obstruction of reforms that would have reined in Fannie Mae and Freddie Mac and helped our nation avoid this economic crisis."
Source: The Associated Press, Glen Johnson (10/06/08)
(HOMEJAMES COMMENTARY: IT IS FACTUAL HISTORY THAT THE SOURCE OF OUR CURRENT ECONOMIC CRISIS WAS BARNEY FRANK, CHRIS DODD, AND THE ILK OF BARACK OBAMA AND FRANKLIN RAINES. CHECK YOUR FACTS - THIS IS INDISPUTABLE.)
Massachusetts Rep. Barney Frank said those who try to lay blame for the current mortgage crisis on the push for affordable housing via the Community Reinvestment Act are racist.
Frank told attendees at a mortgage foreclosure symposium in Boston that loans under the act are issued by regulated institutions, while most of the foreclosures were triggered by high-cost loans made by unregulated entities.
"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."
House Minority Leader John Boehner of Ohio called Frank's remarks "a lame, desperate attempt to divert Americans' attention away from the Democratic party's obstruction of reforms that would have reined in Fannie Mae and Freddie Mac and helped our nation avoid this economic crisis."
Source: The Associated Press, Glen Johnson (10/06/08)
Some Housing Markets Still Thriving
From Realtor Magazine Online, Daily Real Estate News October 7, 2008
Prices are holding up nicely in the ZIP codes of the rich and famous.
Forbes magazine examined the top 100 most expensive ZIP codes in the United States and concluded that most saw strong price appreciation in the last 12 months.
Here are the top-10 most expensive ZIP Codes and the median home sales prices:
1. Fisher Island, Fla., Miami-Dade County, 33109. Median sales price: $3.85 million
2. Alpine, N.J. Bergen County, 07620, $3.59 million
3. Mill Neck, N.Y. Nassau County, 11765, $3 million
4. Newport Coast, Calif., Orange County, 92657, $2.8 million
5. Water Mill, NY, Suffolk County, 11976, $2.72 million
6. Atherton, Calif., San Mateo County, 94027, $2.7 million
7. Santa Barbara, Calif., Santa Barbara County, 93108, $2.7 million
8. Wainscott, N.Y., Suffolk County, 11975, $2.56 million
9. Rancho Sante Fe, Calif., San Diego County, 92067, $2.47 million
10. Beverly Hills, Calif. Los Angeles County, 90210, $2.41 million
Source: Forbes, Matt Woolsey (10/07/08)
Prices are holding up nicely in the ZIP codes of the rich and famous.
Forbes magazine examined the top 100 most expensive ZIP codes in the United States and concluded that most saw strong price appreciation in the last 12 months.
Here are the top-10 most expensive ZIP Codes and the median home sales prices:
1. Fisher Island, Fla., Miami-Dade County, 33109. Median sales price: $3.85 million
2. Alpine, N.J. Bergen County, 07620, $3.59 million
3. Mill Neck, N.Y. Nassau County, 11765, $3 million
4. Newport Coast, Calif., Orange County, 92657, $2.8 million
5. Water Mill, NY, Suffolk County, 11976, $2.72 million
6. Atherton, Calif., San Mateo County, 94027, $2.7 million
7. Santa Barbara, Calif., Santa Barbara County, 93108, $2.7 million
8. Wainscott, N.Y., Suffolk County, 11975, $2.56 million
9. Rancho Sante Fe, Calif., San Diego County, 92067, $2.47 million
10. Beverly Hills, Calif. Los Angeles County, 90210, $2.41 million
Source: Forbes, Matt Woolsey (10/07/08)
Monday, October 6, 2008
Bank of America Will Modify Troubled Loans
From Realtor Magazine Online, Daily Real Estate News October 6, 2008
Bank of America on Monday said it is launching a "home retention program" on Dec. 1 to modify troubled mortgages for nearly 400,000 customers of Countrywide Financial Corp.
Bank of America acquired Countrywide on July 1.
The program, which can reduce up to $8.4 billion in interest payments and principal, was developed in partnership with state Attorneys General to help borrowers that financed their homes with subprime loans or adjustable rate mortgages.
The goal is to "help as many Countrywide customers as possible stay in their homes," says Barbara Desoer, president, Bank of America Mortgage, Home Equity and Insurance Services.
The centerpiece of the program is a proactive loan modification process to provide relief to borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of rate resets or payment recasts. For more information, visit Bank of America's Web site.
Source: Bank of America
Bank of America on Monday said it is launching a "home retention program" on Dec. 1 to modify troubled mortgages for nearly 400,000 customers of Countrywide Financial Corp.
Bank of America acquired Countrywide on July 1.
The program, which can reduce up to $8.4 billion in interest payments and principal, was developed in partnership with state Attorneys General to help borrowers that financed their homes with subprime loans or adjustable rate mortgages.
The goal is to "help as many Countrywide customers as possible stay in their homes," says Barbara Desoer, president, Bank of America Mortgage, Home Equity and Insurance Services.
The centerpiece of the program is a proactive loan modification process to provide relief to borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of rate resets or payment recasts. For more information, visit Bank of America's Web site.
Source: Bank of America
Friday, October 3, 2008
Mortgage Rates Hold Steady This Week
From Realtor Magazine Online, Daily Real Estate News October 3, 2008
Freddie Mac reports a small rise in the 30-year fixed mortgage rate to 6.10 percent during the week ended Oct. 2 from 6.09 percent the prior week.
The 15-year fixed mortgage rate nudged up to 5.78 percent from 5.77 percent.
However, the five-year adjustable mortgage rate slipped to 6 percent from 6.02 percent; and the one-year ARM dropped to 5.12 percent from 5.16 percent.
The report shows that the 30- and 15-year mortgage rates are down substantially from the same time in 2007, when they averaged 6.37 percent and 6.03 percent, respectively.
Source: Realty Times (10/03/08)
Freddie Mac reports a small rise in the 30-year fixed mortgage rate to 6.10 percent during the week ended Oct. 2 from 6.09 percent the prior week.
The 15-year fixed mortgage rate nudged up to 5.78 percent from 5.77 percent.
However, the five-year adjustable mortgage rate slipped to 6 percent from 6.02 percent; and the one-year ARM dropped to 5.12 percent from 5.16 percent.
The report shows that the 30- and 15-year mortgage rates are down substantially from the same time in 2007, when they averaged 6.37 percent and 6.03 percent, respectively.
Source: Realty Times (10/03/08)
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