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)
Foreclosures Decline for Third Month
Foreclosures were filed on 332,292 U.S. properties in October, a decrease of 3 percent from September, but still up nearly 19 percent from October 2008, according to foreclosure sales site RealtyTrac.
October marks the third-straight month of declines in foreclosures, which many see as an encouraging sign that the worst of the foreclosures are behind us. Still, some skeptics predict another wave. “The real issue is we don’t know what inventory banks are holding that they have yet to put on the market,” said Stephen Miller, chair of the economics department at the University of Nevada at Las Vegas, during an interview with Bloomberg News.
States with the highest foreclosure rates are Nevada, California, Florida, Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah.
Four states accounted for 52 percent of the nation’s total foreclosure activity in October: California, Florida, Illinois, and Michigan. The rest of the states in the top 10 for actual numbers of foreclosures were Nevada, Arizona, Georgia, Texas, Ohio, and New Jersey.
Source: RealtyTrac (11/12/2009)
Distressed Sales Remain a Concern
Twenty-nine percent of recent buyers purchased a home in foreclosure or through a short sale, according to the latest REALTORS® Confidence Index. REALTORS® who participated in the survey are also concerned about a growing number of foreclosures and the hurdles buyers face in short sales.
The RCI is a key indicator of housing market strength based on a monthly survey of more than 50,000 REALTORS®; in a typical month there are more than 3,000 usable responses. Practitioners are asked about their expectations for home sales, prices, and market conditions; they also share their insights regarding buyer preferences and financing options and how those factors are influencing real estate markets nationwide.
“REALTORS® are on the front lines with buyers and sellers in today’s market and have valuable insights into real estate trends,” NATIONAL ASSOCIATION OF REALTORS® President Charles McMillan said. “The volume of distressed sales that our members are reporting underscores the importance of the recent tax credit extension. By putting cash in the hands of financially healthy home buyers, the credit will continue to help draw down inventory and stabilize home prices to encourage a strong and sustainable housing recovery.”
Despite the high volume of distressed sales, REALTORS® report that their buyers encounter various challenges associated with these types of sales. Buyers who present a short sale offer can wait months before hearing whether their offer will be accepted. In addition, REALTORS® are also seeing increased competition for foreclosed properties, and multiple bids are sometimes driving sales prices over list prices.
Aside from the demand for short sales and foreclosed homes, today’s buyers are increasingly interested in a home’s energy efficiency and proximity to transportation corridors, reflecting concerns about rising energy costs. Many REALTORS® are seeing a growing preference among buyers for smaller homes, as people look to downsize and cut expenses.
Mortgages insured by the Federal Housing Administration are the primary lending vehicle for many buyers; 24 percent of recent buyers used an FHA loan to finance their purchase. However, more than one in five recent buyers—21 percent—paid all cash.
Source: NAR
Google has been improving the usability of real estate information in its Google Maps function.
Users can now select the “real estate” option from the “more” button on the top right of any Google Map. They’ll automatically see balloons on the maps of listings, as well as a pop-up real estate refinement panel on the left.
From there, they can refine what they are searching for by checking the boxes for renting or buying, apartment or house, as well as price range, square footage, numbers of bedrooms and bathrooms, and foreclosure listings.
Google is also inviting real estate practitioners to list homes on Google Maps.
Source: eWeek, Clint Boulton (10/30/2009)
Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of REALTORS®.
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9.
The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Lawrence Yun, NAR chief economist, said the momentum is understandable.
“What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”
Watch a video interview of Yun as he talks about these latest pending-home sales trends.
NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”
The Pending Home Sales Index in the Northeast slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago. In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.
Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”
— NAR
Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.
The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.
More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.
Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.
NAR's Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.
Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.
Listen to NAR President Charles McMillan's podcast announcement.
NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.
Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)
Vacant homes in the U.S.—including foreclosures, residences for sale, and vacation properties—rose to 18.8 million in the third quarter, according to the U.S. Census Bureau.
The record high for vacancies was 18.95 million in the first quarter of this year. There were 18.4 vacancies in the third quarter last year.
In total, there were 130.3 million homes in the U.S. in the third quarter, according to the census. About 2 million were for sale, 4.6 million for rent, and 4.6 million were vacation homes that are only used a portion of the year.
Source: Bloomberg, Kathleen M. Howley (10/29
