Waiting to sell? There are good reasons to list now

With interest rates well under 5 percent, and home prices at or near rock bottom, the real estate mantra that "now's a great time to buy" seems like a bit of a no-brainer.

But is there any reason to sell right now? Plenty of consumers are holding off from listing their homes because they want a tidier profit. Pose that question — why sell? — to local real estate professionals, and they tick off a number of reasons, with caveats attached.

1. You really need to sell. It could be a job transfer or it could be a need to have less house or a smaller mortgage payment at a lesser interest rate.

A homeowner who has been in a property more than five years, and who didn't tap into a large home equity line of credit or a cash-out refinancing, still has a chance of coming out ahead. Keep in mind that buyers in the market during the fourth quarter typically are serious buyers.

2. You want to trade up. It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.

A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath.

But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.

Keep in mind the spread may be even greater. There's a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.

3. You want to live in a worse-hit market. It depends on the debt load carried on the current residence, but if you've dreamed of moving to a "sunshine" state like Florida, Nevada or California, your money will go far.

4. You're the new supply. There's an abundance of properties that have been sitting on the market six months or more, many of them with multiple price reductions. A home that has just come on the market, particularly if it's priced competitively, will get the attention of serious buyers tired of the existing inventory.

Bad timing: Last week, the White House said the president would not sign a bill that would have, according to critics, made it easier for lenders to reclaim ownership of homes in foreclosure.

The bill, the Interstate Recognition of Notarizations Act of 2010, would have required federal and state courts to recognize the work of a notary public on a document, even if the notary was licensed or commissioned in a state different from that of the court. It was introduced a year ago and was easily passed by the House of Representatives in the spring and by the Senate late last month.

That, of course, was before some of the nation's largest mortgage servicers began temporarily halting foreclosure sales, as it became clear that some of the paperwork on foreclosures may contain factual errors, and employees were signing off on cases without reviewing documents on property ownership.

"It is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized," communications director Dan Pfeiffer wrote on the White House's blog.

Final fix-it event: The last of six 2010 Fix Your Mortgage events is scheduled for 9:30 a.m. to 2 p.m. Saturday at Westinghouse College Prep, 3223 W. Franklin Blvd., Chicago.

Volunteer attorneys, city personnel and housing counselors certified by the U.S. Department of Housing and Urban Development will be available to help delinquent borrowers determine if they qualify for mortgage loan modifications.

Preregistration is encouraged. For more information, call 773-329-4185 or 773-329-4181 (Spanish). Doors to the event will close at 12:30 p.m., or when 1,000 people have been registered. If all goes according to plan, organizers say, about 2,300 families will have received help this year in applying for mortgage loan modifications.

Source: Chicago Tribune by Mary Ellen Podmolik

Property Values Fall Again

U.S. home values declined another 5 percent in the fourth quarter, compared to the previous year. This was the 12th straight quarter of year-over-year declines, reported Zillow.com.

More than 29 percent of homes sold in 2009 in the U.S. went for less than sellers originally paid for them, Zillow said, estimating that more than 20 percent of U.S. home owners owe more on their mortgages than their properties are worth.

“While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year,” Zillow Chief Economist Stan Humphries said in a statement. “Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.”

Source: Bloomberg, Daniel Taub (02/10/2010)

Home Values Have Been Stabilizing

U.S. homes lost $489 billion in value during the first 11 months of 2009. That’s significantly less than the $3.6 trillion lost during 2008 and evidence that home values are stabilizing, says Zillow.com, online real estate research firm.

Properties in 48 of the 154 markets tracked by Zillow rose in value this year, but Zillow’s Chief Economist Stan Humphries believes prices could decline again in 2010.

“We believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high. Both these factors will challenge the recent stabilization of home prices," Humphries said in a statement.

Areas where home prices rose the most in 2009 were:

• Boston
• Providence
• Denver, Colo.
• Atlanta, Ga.
• Rochester, N.Y.

Areas where homes continued to lose the most value:

• Los Angeles
• Chicago
• New York
• Miami-Fort Lauderdale
• Phoenix

Source: Zillow.com (12/0920/09)

Application Index for Purchases Falls

Application Index for Purchases Falls
Mortgage applications rose 3.2 percent on a seasonally adjusted basis last week compared with the previous week, but most of the increase was in refinances.

The seasonally adjusted purchase index declined 11.7 percent from the previous week and is at its lowest level since December 2000. On an unadjusted basis, the purchase index fell 13.7 percent compared with the previous week and was down 21.6 percent compared to the same week a year ago.

The refinance index increased rose 11.3 percent and represented 71.5 percent of total applications.

Overall, interest rates declined:

• 30-year fixed-rate mortgages decreased to 4.90 percent from 4.97 percent.
• 15-year fixed-rate mortgages remained unchanged at 4.33 percent.
• 1-year ARMs increased to 6.85 percent from 6.83 percent.

Source: Mortgage Bankers Association (11/12/2009)

Now is the time to buy

Now is an ideal time to buy, in most markets prices won’t go any lower
and there is an abundance of inventory. Inventory of homes for
sale is at a 15-year high. There are many options out there for
many buyers and many sellers who are willing to negotiate and work
towards a win-win situation that works for both parties.
Go to www.REALTOR.com to see over 4 million active listings.
The Market is Getting Stronger and
Every Market is Different
Remember that all real estate is local and that all markets are
different. There are opportunities out there for a buyer if you’re
willing to look. The Homebuyer Tax Credit contained in the Housing
and Economic Recovery Act of 2008 was updated in the American
Recovery and Reinvestment Act of 2009. For 2009 purchasers
the credit is $8000 and does not need to be repaid. The credit is
available through December 1, 2009, meaning qualified buyers
only have a short window of opportunity to take advantage of this
special program.
A modest recovery for existing-home sales is expected
in 2009. Pent-up demand, coupled with an abundance of safer
mortgage products, will lead to near-term market improvements.
The Emergency Economic Stability Act enacted on October 3, 2008
will help to improve credit markets and allow housing to lead the
economic recovery.
FHA Loans Set to Increase
There are many choices for buyers looking for mortgages in this
market. One option, FHA home loans, are a viable alternative for
many first time buyers. The Federal Housing Administration (FHA)
— which is part of HUD — insures the loan, so your lender can
offer you a better deal, offering low down payments, low closing
costs, and easy credit qualifying. FHA market share for home
purchases is expected to rise significantly over the next 3 years, from
an estimated 4% in 2007 to an estimated 35% in 2009.

Find out about FHA and other loans, go to www.Hud.gov/buying/loans
and www.REALTOR.org and do a search for Consumer Literacy.
Benefits of Ownership
Owning a home is the American dream. It not only provides amazing
tax benefits but it also provides shelter and security to families. Did
you know that:
— Dollar for dollar, the rate of return on an individual’s cash
down payment on a house is substantial? And that repeat
buyers are able to put 19% more down on a new home due
to appreciation?
— Home owners move less often and are more likely to vote
and volunteer time for political and charitable causes than
renters?
— When you own a home you can deduct the property taxes and
mortgage interest from your income taxes?
— The gains that you make on a primary residence that you’ve
occupied for two years out of 5 can be tax free?

Housing Market Facts
NAR has created a new website www.HousingMarketFacts.com to
help consumers find out the latest information about the housing
market and the issues that affect you, information specifically for
buyers, how to do more research, and learn more about the benefits
of home ownership.
Mortgages are at Historically Low Rates
For buyers who qualify, mortgage rates are near historical
lows. Rates are well under 6%. According to data provided by
Freddie Mac, rates averaged 9.2% in the past 30 years.
Go to www.FreddieMac.com and look at the Primary Mortgage
Market Survey® for more information on the latest rates. In addition,
low interest rates, coupled with recent corrections, give people
looking to upgrade a unique opportunity to take advantage of
market conditions.
The Value of Your Investment
Despite some contrary media reports and some moderate losses in
value in the short-term, home values long-term have and
will continue to rise. Real estate is a long-term investment.
Home values could fall in some years, though, on average over the
past 30 years, the median price of existing homes has increased
more than 6 percent every year. Thanks to the power of leverage,
a homeowner’s return on investment is even more impressive over
time. Visit www.HousingMarketFacts.com to learn more.

Homebuyers Tax Credit Buy a home and you get a tax break!

As part of the Housing and Economic
Recovery Act of 2008 and the American
Recovery and Reinvestment Act of 2009,
a First-time Homebuyer Tax Credit is now
available. But this special
tax break ends in 2009.
A homebuyer tax credit has been
available for first-time homebuyers in
Washington, D.C. for many years, and
now first-time homebuyers nationwide
can take advantage of a similar benefit.
In this brochure we’ll discuss some of the
provisions of the credit, changes based
on the new legislation, and explain how
to use it.

Buying a first home is a big step.
Fortunately, trained professionals like
your Realtor® are willing and able to help
you through the process. In addition to
the many benefits of homeownership,
the homebuyer tax credit and more
affordable prices make now an especially
opportune time to purchase. Still, the
commitment is a substantial one, and the
National Asociation of Realtors®
encourages you to ask questions and
be informed about the decision you are
making so that the home you buy is a
home you can enjoy for years to come.

Practitioners Say Homes Prices Have Hit Bottom

Practitioners Say Homes Prices Have Hit Bottom

Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.

More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.

Source: Inman News (05/18/2009)

Homes May Be Undervalued Today

After dropping for two years, home prices appear to be bottoming out, and any further declines would be an overcorrection, NAR Chief Economist Lawrence Yun told thousands of practitioners at the REALTORS® Midyear Legislative Meetings in Washington, D.C., on Thursday.The median national home price today is about $169,000, down almost 14 percent from a year ago and an estimated 30 percent from its peak. Today’s prices are justified by the fundamentals of the economy and may even represent an undervaluation, Yun said.Lender Policies Hinder RecoveryDistressed sales, which today comprise about 50 percent of transactions nationwide, are creating market distortions in otherwise stable neighborhoods. “We’re only capturing transaction prices,” he said, and those prices might be 20 percent to 25 percent below actual values. For that reason, it’s possible that widely cited projections that a third or more of homeowners are underwater might be off the mark, he said. The consequences of these missed projections could be huge. Lenders, shying away from refinancing mortgages of troubled owners, exacerbate the downward spiral of homeowners’ financial position and that, by extension, hurts the broader economy

.Contributing to the problem is the lack of reasonably priced financing for higher-cost homes at a time when declining prices, low rates, and the home buyer tax credit are helping the entry-level market. Indeed, while housing overall is at a 9.5 month supply, down from double digits not that long ago, homes above $729,750—the threshold for jumbo loans—face a 40-month supply.Key TestBy summer, all of the incentives that have been put into place by the government will have had several months to work, Yun said. If sales start picking up significantly, then prices should stabilize and trigger a broader economic recovery. If sales don’t show a significant response, then the federal government might have to look at another big injection of funds into the economy, something no one has an appetite for.Yun’s forecast reflects the brighter scenario: “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010,” he said.

—Robert Freedman, REALTOR® Magazine

Fight Inflation: Buy a Home

Some economic analysts say that the possibility that the economy will go into overdrive and inflation will skyrocket is a much more frightening possibility than the current recession.One inflation hedge nearly all of them point to is real estate.

Owning it outright is the best scenario, but if that’s not possible, a low-rate, 30-year fixed mortgage is the next best thing. As inflation drives up salaries, mortgage payments will stay the same, analysts point out.

Source: USA Today, John Waggoner (04/24/2009)

Home Sales Slip, But First-Time Buyers Rise

Home Sales Slip, But First-Time Buyers Rise Existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits, according to the NATIONAL ASSOCIATION OF REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008.

The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.First-Time Buyers Drive MarketAn NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

NAR President Charles McMillan said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said. “Although homeownership builds wealth over the long term, buyers need to evaluate their options. In this market, buyers and sellers who use a REALTOR® to represent them are making a smart move,” McMillan said.Affordability Looking GoodAccording to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February; the rate was 5.97 percent in March 2008; data collection began in 1971.“Record-high housing affordability conditions are helping markets recover, with home sales higher than a year ago in Minneapolis, Northern Virginia, Las Vegas, Phoenix and most areas of California and Florida.”Total housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.

Single-family home sales slipped 2.8 percent to a seasonally adjusted annual rate of 4.10 million in March from a pace of 4.22 million in February, and are 5.7 percent below the 4.35 million-unit pace in March 2008. The median existing single-family home price was $174,900 in March, which is 11.5 percent lower than a year ago.Existing condominium and co-op sales fell 4.1 percent to a seasonally adjusted annual rate of 470,000 units in March from 490,000 in February, and are 17.8 percent below the 572,000-unit pace a year ago. The median existing condo price was $177,600 in March, down 18.7 percent from March 2008.Regional Sales, Pricing DataRegionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008.Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million but are 11.1 percent lower than March 2008. The median price in the Midwest was $141,300, which is 6.1 percent below a year ago. In the South, existing-home sales slipped 1.7 percent to an annual pace of 1.71 million in March and are 10.9 percent below a year ago. The median price in the South was $146,900, down 12.2 percent from March 2008.

Existing-home sales in the West declined 4.2 percent to an annual rate of 1.13 million in March but are 18.9 percent higher than a year earlier. The median price in the West was $252,400, which is 11.1 percent below March 2008.

Source: NAR

States Contemplate Loans for Home Buyers

States Contemplate Loans for Home Buyers The $8,000 first-time home buyer mortgage tax credit, which is part of the Recovery and Reinvestment Act of 2009, is a great boon. But, it doesn’t help people who don’t have money for a down payment and closing costs. Now some states are contemplating offering an $8,000 loan to home buyers before they close on the condition that they repay the loans as soon as they get their federal tax credits.

The idea has been adopted in Missouri, which advances the money to those who take out first mortgages offered through the state’s housing finance authority. The New York State Builders Association is lobbying the State of New York Mortgage Agency to adopt a similar strategy.“A lot of states are trying to get through the technical aspects of this," says Gregory Brown, an assistant vice president for government affairs at the National Association of Home Builders. "I feel very confident they’ll find a way to make it work.”Meanwhile, some home builders are taking matters into their own hands, offering programs that purchase the tax credit from borrowers prior to closing.

“This is a legitimate monetizing program that actually works,” says David Abrahamson, vice president of S.E. operations for American Home Key Mortgage Company, which makes the loans for many participating builders in the southeast.

Source: The New York Times, Bob Tedeschi and HousingWire.com, Paul Jackson (04/10/2009)

Signs Point to Improving Economy

Signs Point to Improving Economy Economic observers point to several factors that indicate the economy in general and the housing market in particular may be on the mend.Positive signs include:

● Sales of single-family homes in March remained flat compared to January and February at $358,000, the U.S. Commerce Department reported.

● The Labor Department reported claims were down in the week ending April 11. While some argued this could just reflect the shortened Easter/Passover holiday, others took the optimistic view that some segments of the economy are stabilizing.


● New-home construction remains low because there is so much inventory—but the situation doesn’t appear to be worsening."The economy is still very weak, but there are some encouraging signs that support cautious optimism," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech Thursday.


Source: The Wall Street Journal, Sudeep Reddy (04/17/2009)

Fed Report: Real Estate Stabilizing in Key Cities

Fed Report: Real Estate Stabilizing in Key Cities While real estate and other industries remained weak in all 12 of the Federal Reserve districts, there is reason for optimism in several areas, according to the Federal Reserve, which released its periodic “Beige Book” report of economic activity on Wednesday.

In Boston, Fed contacts reported “early signs of improvement” in the residential real estate sector, and the news was equally good in New York where the book said banks are reporting “the most widespread rise in demand for residential mortgages in more than seven years.”In Richmond, Va., commercial real estate is reporting moderate increases in activity and residential lending is rising because of strong demand for refinancing, the report said. Demand for refinancing is "hard to keep up with," one of the Fed's contacts said.Meanwhile, commercial real estate weakened in Kansas City while residential real estate is holding steady, the report concluded.


Source: The Wall Street Journal, Meena Thiruvengadam (04/15/2009

FHA Loans Become Popular Choice

FHA Loans Become Popular Choice Newly discovered FHA loans, which require low down payments but charge higher interest to borrowers with lower credit ratings, have quickly become a wildly popular choice for home buyers.

The loans require a down payment of only 3.5 percent, while conventional loans require down payments of 10 percent or higher.However, the products also are drawing some unfavorable comparisons to now-abolished subprime loans.

Finance professionals, however, stress that unlike the infamous subprime mortgages of years past, FHA lenders go out of their way to verify income and ensure that they are not approving "liar loans."


Source: Palm Beach Post (Fla.), Jeff Ostrowski (03/16/09)

ZIP Codes Where Housing Sales Are Increasing

ZIP Codes Where Housing Sales Are Increasing Housing sales are improving significantly in key ZIP codes around the country where prices have moderated, according to information compiled for BusinessWeek.com by First American CoreLogic.ZIP codes in California, Florida, Arizona and Nevada dominated the list, but there were also ZIP codes on the top 25 most-improved sales list from the suburbs around Detroit and Minneapolis and in the metro areas of Atlanta and Chicago.

Inventories are shrinking and prices are stabilizing in several markets, according to the survey. Here are the top 10 ZIP codes with improved home sales:94533, Fairfield, Calif. (Fresno) 92376, Rialto, Calif. (Riverside-San Bernardino-Ontario) 91342, Slymar, Calif. (Los Angeles-Long Beach-Santa Ana) 92126, San Diego, Calif. 33914, Cape Coral, Fla. (Fort Meyers) 93065, Simi Valley, Calif. (Oxnard-Thousand Oaks-Ventura) 95123, San Jose, Calif. 85379, Surprise, Ariz. (Phoenix-Mesa-Scottsdale) 93722, Fresno, Calif. (Madera) 95624, Elks Grove, Calif. (Sacramento-Arden-Arcade-Roseville)

Source: BusinessWeek.com, Prashant Gopal (03/05/2009)

Pending Sales Down, Affordability at Record

Pending Sales Down, Affordability at Record The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.7 percent to 80.4 from a downwardly revised reading of 87.1 in December, according to NAR's latest report.

The index is 6.4 percent below January 2008 when it was 85.9. The index is at the lowest level since tracking began in 2001, when the index value was set at 100.Lawrence Yun, NAR chief economist, says the downturn in the economy weighed heavily on the data. “Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” he says. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit.”

Breakdown By RegionHere's how the PHSI fared across the country:


Northeast: dropped 12.7 percent to 57.8 in January and is 19.7 percent below a year ago.
Midwest: declined 9.2 percent to 72.6 and is 13.8 percent below January 2008.
South: fell 11.9 percent to 82.2 in January and is 9.1 percent below a year ago.
West: rose 2.4 percent to 103.6 and is 13.5 percent higher than January 2008.Buying Power Rises SignificantlyNAR President Charles McMillan says it’s ironic with the weak housing market that affordability conditions have improved dramatically. “Housing affordability is at a record high – the buying power of a typical family has risen significantly,” McMillan says. “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment.

With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.” Indeed, NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high. The HAI, a broad index of affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.The HAI indicates a median-income family, earning $59,800, could afford a home costing $283,400 in January with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest; affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. A year ago, the typical family could afford a home costing $263,300.Yun: Hopeful for Spring Turnaround “Conditions have been aligning very favorably for home buyers with the exception of consumer confidence," Yun says. "But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises.”


Source: NAR

Existing-Home Sales Show Surprising Gain

Existing-Home Sales Show Surprising Gain Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.

For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.

Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”

Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.

Yun said the market is underperforming and hurting the broader economy.
“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
Housing Stats National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.

Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.
Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.

Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.

Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.

Existing-Home Sales By Region Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007. South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago. West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
A Good Time to Buy


NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.


“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”
McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.


Source: NAR


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New Home Sales Hit Record Low

Sales of new homes fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000 from 388,000 in November, the Commerce Department reported Wednesday.That sales pace is the lowest recorded in the last 46 years.

Builders sold 482,000 homes in 2008, the fewest since 1982, when 412,000 were sold, the Commerce Department said. Also, the median sales price fell about 7 percent to $230,600, from $247,900 in 2007.Sales in December were off 15 percent from the previous month and prices were 9.3 percent lower than a year earlier, slowed by the financial crisis, which made it hard for buyers to get mortgages.Source:

The Associated Press (01/29/2009)

Lender Shopping: Multiple Applications on Rise

LenderA flood of borrowers are applying to more than one lender in hopes of refinancing into a mortgage with record low interest rates. Many applicants are having trouble refinancing, however, because lenders have toughened their underwriting criteria and also are swamped with applications that have overwhelmed their downsized staffs. Fannie Mae chief economist Doug Duncan says anecdotal evidence shows that about half of refinancing applicants are getting approved, down from 60 to 70 percent during previous refinancing booms.


Source: The Washington Post, Dina ElBoghdady (01/16/09)

30-Year Rates Fall Below 5 Percent

Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent. The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates. "The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.

Other rates were mixed for the week: 15 year fixed rates: averaged 4.65 percent, up from 4.62 percent. 1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week. 5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises. Freddie Mac started recording mortgages in 1971.


Source: Reuters, Julie Haviv (1/15/09)