Mortgage Rates Creep Back Up
After last week's decrease to a record 4.71 percent, interest on 30-year fixed mortgages rose to 4.81 percent this week, Freddie Mac reported.
While the Federal Reserve's effort to purchase $1.25 trillion in mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae has helped keep rates attractive, Freddie Mac chief economist Frank Nothaft says they rose because a favorable unemployment report pushed long-term bond yields up slightly.
With the Fed program projected to end in March, the Mortgage Bankers Association forein October that 30-year fixed mortgages will rise to 5.4 percent next year, increase to 6 percent in 2011, and hit 6.3 percent in 2012.
Source: Inman News (12/11/09)
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Daily Real Estate News November 23, 2009
Existing-Home Sales Record Big Gains
Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.
Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
Tax Credit Fuels Surge
Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”
Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through—there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.
Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.
Inventory Declines
NAR President Vicki Cox Golder said strong demand by first-time buyers is creating some unusual conditions. “In parts of the country, especially in Southwestern states but also in Florida and suburban Washington D.C., we’ve been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly,” she said.
“In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive. In this kind of environment it’s important to work with a REALTOR®who can walk you through the process and help you negotiate a satisfactory deal,” Golder said.
Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.
“The supply of homes on the market is now at the lowest level in over two-and-a half years – we’re getting closer to a general balance between buyers and sellers,” Yun said. The last time the relative housing inventory was this low was in February 2007 when it also was at a 7.0-month supply.
Existing Home Price by Type
The national median existing-home price for all housing types was $173,100 in October, down 7.1 percent from October 2008. Distressed properties, which accounted for 30 percent of sales in October, continue to downwardly distort the median price because they usually sell at a discount relative to traditional homes in the same area.
“In the second half of 2010, if home values show consistent stabilization or even a modest increase, then home sales could remain at normal healthy levels because consumers would no longer be worried about a price overcorrection,” Yun said.
He added that low home prices also are contributing to extremely favorable affordability conditions. “With the abnormal drop in home prices over the past few years, the price-to-income ratio has fallen below the historic trend line,” Yun said. “This is adding to the buying power of the typical family, with affordability conditions this year at the highest on record dating back to 1970, but prices are beginning to flatten and are poised to rise next year.”
Single-family home sales rose 9.7 percent to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4 percent above the 4.39 million-unit pace in October 2008. The median existing single-family home price was $173,100 in October, down 6.8 percent from a year ago.
Existing condominium and co-op sales surged 13.2 percent to a seasonally adjusted annual rate of 770,000 units in October from 680,000 in September, and are 40.8 percent above the 547,000-unit level a year ago. The median existing condo price was $172,900 in October, which is 10.4 percent below October 2008.
Regional Views
Here’s a look at existing-home sales figures in different regions of the United States:
Northeast:Existing-home sales rose 11.6 percent to an annual level of 1.06 million in October, and are 27.7 percent higher than October 2008. The median price in the Northeast was $235,400, down 2.6 percent from a year ago.
Midwest:Existing-home sales surged 14.4 percent in October to a pace of 1.43 million and are 28.8 percent above a year ago. The median price in the Midwest was $146,600, a gain of 1.1 percent from October 2008.
South:Existing-home sales rose 12.7 percent to an annual level of 2.30 million in October and are 25.7 percent higher than October 2008. The median price in the South was $151,100, down 6.3 percent from a year ago.
West:Existing-home sales increased 1.6 percent to an annual rate of 1.31 million in October and are 12.0 percent above a year ago. The median price in the West was $220,200, which is 14.7 percent below October 2008.
—NAR
Existing-Home Sales Record Big Gains
Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.
Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
Tax Credit Fuels Surge
Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”
Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through—there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.
Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.
Inventory Declines
NAR President Vicki Cox Golder said strong demand by first-time buyers is creating some unusual conditions. “In parts of the country, especially in Southwestern states but also in Florida and suburban Washington D.C., we’ve been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly,” she said.
“In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive. In this kind of environment it’s important to work with a REALTOR®who can walk you through the process and help you negotiate a satisfactory deal,” Golder said.
Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.
“The supply of homes on the market is now at the lowest level in over two-and-a half years – we’re getting closer to a general balance between buyers and sellers,” Yun said. The last time the relative housing inventory was this low was in February 2007 when it also was at a 7.0-month supply.
Existing Home Price by Type
The national median existing-home price for all housing types was $173,100 in October, down 7.1 percent from October 2008. Distressed properties, which accounted for 30 percent of sales in October, continue to downwardly distort the median price because they usually sell at a discount relative to traditional homes in the same area.
“In the second half of 2010, if home values show consistent stabilization or even a modest increase, then home sales could remain at normal healthy levels because consumers would no longer be worried about a price overcorrection,” Yun said.
He added that low home prices also are contributing to extremely favorable affordability conditions. “With the abnormal drop in home prices over the past few years, the price-to-income ratio has fallen below the historic trend line,” Yun said. “This is adding to the buying power of the typical family, with affordability conditions this year at the highest on record dating back to 1970, but prices are beginning to flatten and are poised to rise next year.”
Single-family home sales rose 9.7 percent to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4 percent above the 4.39 million-unit pace in October 2008. The median existing single-family home price was $173,100 in October, down 6.8 percent from a year ago.
Existing condominium and co-op sales surged 13.2 percent to a seasonally adjusted annual rate of 770,000 units in October from 680,000 in September, and are 40.8 percent above the 547,000-unit level a year ago. The median existing condo price was $172,900 in October, which is 10.4 percent below October 2008.
Regional Views
Here’s a look at existing-home sales figures in different regions of the United States:
Northeast:Existing-home sales rose 11.6 percent to an annual level of 1.06 million in October, and are 27.7 percent higher than October 2008. The median price in the Northeast was $235,400, down 2.6 percent from a year ago.
Midwest:Existing-home sales surged 14.4 percent in October to a pace of 1.43 million and are 28.8 percent above a year ago. The median price in the Midwest was $146,600, a gain of 1.1 percent from October 2008.
South:Existing-home sales rose 12.7 percent to an annual level of 2.30 million in October and are 25.7 percent higher than October 2008. The median price in the South was $151,100, down 6.3 percent from a year ago.
West:Existing-home sales increased 1.6 percent to an annual rate of 1.31 million in October and are 12.0 percent above a year ago. The median price in the West was $220,200, which is 14.7 percent below October 2008.
—NAR
States See Surging Sales, Moderating Prices
Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest surveyby the NATIONAL ASSOCIATION OF REALTORS®.
Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rateof 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the 5.01 million-unit pace in the third quarter of 2008.
Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.
Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”
During the third quarter, 123 out of 153 metropolitan statistical areas2reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.
The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16 percent in the third quarter from a record low 5.03 percent in the second quarter, but was dramatically lower than the 6.32 percent average rate in the third quarter of 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he is encouraged by recent actions in Congress. “Extending and expanding the tax credit to more buyers through the middle of next year is the right medicine,” he said. “Congress understands the impact of housing on the economy, so consumers who aren’t able to complete a transaction before the end of this month now have a second chance but must have a contract in place by April 30.”
The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.
The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2 percent from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3 percent to $115,600, followed by Oklahoma City, at $144,100, up 9.1 percent from a year ago.
“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”
Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.
In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was $178,000 in the third quarter, down 15.4 percent from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.
The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3 percent; followed by the Cincinnati-Middletown area, up 2.0 percent to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7 percent from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8 percent.
Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700.
Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.
Regionally, existing-home sales in the Northeast surged 16.7 percent in the third quarter to a pace of 930,000 units and are 6.9 percent higher than a year ago.
The median existing single-family home price in the Northeast declined 9.4 percent to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8 percent from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6 percent; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.
In the Midwest, existing-home sales jumped 13.2 percent in the third quarter to a pace of 1.20 million and are 5.2 percent above a year ago.
The median existing single-family home price in the Midwest was down 5.5 percent to $150,200 in the third quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Cedar Rapids, Iowa, where the median price of $145,700 was 7.6 percent higher than a year ago; followed by Bismarck, N.D., at $157,200, up 7.5 percent; and Ft. Wayne, Ind., where the median price rose 6.9 percent to $102,500.
In the South, existing-home sales rose 11.3 percent in the third quarter to an annual rate of 1.97 million and are 5.9 percent higher than the third quarter of 2008.
The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9 percent from a year earlier. After Cumberland and Oklahoma City, the next strongest price increase in the region was in Shreveport-Bossier City, La., at $152,300, up 8.6 percent from the third quarter of 2008; Jackson, Miss., at $141,200, up 4.6 percent; and Durham, N.C., where the median price rose 3.6 percent to $184,300.
Existing-home sales in the West increased 5.6 percent in the third quarter to an annual rate of 1.19 million and are 4.6 percent above a year ago.
The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4 percent below the third quarter of 2008. The best metro price performance in the West was in Yakima, Wash., where the median price of $158,400 rose 2.7 percent from a year earlier; the Denver-Aurora area at $229,100, up 1.8 percent; and the Kennewick-Richland-Pasco area of Washington, where the median price rose 0.7 percent to $172,200.
Source: NAR
Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest surveyby the NATIONAL ASSOCIATION OF REALTORS®.
Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rateof 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the 5.01 million-unit pace in the third quarter of 2008.
Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.
Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”
During the third quarter, 123 out of 153 metropolitan statistical areas2reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.
The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16 percent in the third quarter from a record low 5.03 percent in the second quarter, but was dramatically lower than the 6.32 percent average rate in the third quarter of 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he is encouraged by recent actions in Congress. “Extending and expanding the tax credit to more buyers through the middle of next year is the right medicine,” he said. “Congress understands the impact of housing on the economy, so consumers who aren’t able to complete a transaction before the end of this month now have a second chance but must have a contract in place by April 30.”
The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.
The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2 percent from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3 percent to $115,600, followed by Oklahoma City, at $144,100, up 9.1 percent from a year ago.
“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”
Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.
In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was $178,000 in the third quarter, down 15.4 percent from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.
The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3 percent; followed by the Cincinnati-Middletown area, up 2.0 percent to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7 percent from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8 percent.
Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700.
Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.
Regionally, existing-home sales in the Northeast surged 16.7 percent in the third quarter to a pace of 930,000 units and are 6.9 percent higher than a year ago.
The median existing single-family home price in the Northeast declined 9.4 percent to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8 percent from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6 percent; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.
In the Midwest, existing-home sales jumped 13.2 percent in the third quarter to a pace of 1.20 million and are 5.2 percent above a year ago.
The median existing single-family home price in the Midwest was down 5.5 percent to $150,200 in the third quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Cedar Rapids, Iowa, where the median price of $145,700 was 7.6 percent higher than a year ago; followed by Bismarck, N.D., at $157,200, up 7.5 percent; and Ft. Wayne, Ind., where the median price rose 6.9 percent to $102,500.
In the South, existing-home sales rose 11.3 percent in the third quarter to an annual rate of 1.97 million and are 5.9 percent higher than the third quarter of 2008.
The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9 percent from a year earlier. After Cumberland and Oklahoma City, the next strongest price increase in the region was in Shreveport-Bossier City, La., at $152,300, up 8.6 percent from the third quarter of 2008; Jackson, Miss., at $141,200, up 4.6 percent; and Durham, N.C., where the median price rose 3.6 percent to $184,300.
Existing-home sales in the West increased 5.6 percent in the third quarter to an annual rate of 1.19 million and are 4.6 percent above a year ago.
The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4 percent below the third quarter of 2008. The best metro price performance in the West was in Yakima, Wash., where the median price of $158,400 rose 2.7 percent from a year earlier; the Denver-Aurora area at $229,100, up 1.8 percent; and the Kennewick-Richland-Pasco area of Washington, where the median price rose 0.7 percent to $172,200.
Source: 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 factson 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 podannouncement.
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)
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 factson 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 podannouncement.
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)
Senate Approves Tax Credit Extension, Expansion
The Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years. Home prices are capped at $800,000.
The legislation was included in a bill to extend unemployment benefits and is expected to be passed by the House today or tomorrow. President Obama is expected to sign the legislation when it's sent to his desk.
Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction.The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.
Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.
More on the credit is available from NAR.
Source: The Associated Press (11/5/2009)
The Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years. Home prices are capped at $800,000.
The legislation was included in a bill to extend unemployment benefits and is expected to be passed by the House today or tomorrow. President Obama is expected to sign the legislation when it's sent to his desk.
Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction.The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.
Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.
More on the credit is available from NAR.
Source: The Associated Press (11/5/2009)
Daily Real Estate News August 21, 2009
Strong Gain in Existing-Home Sales
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rateof 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Largest Gain in a Decade
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment ratefor a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.
"First-Time Buyer Tax Credit is Working"
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillansaid the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.
“Realtorsare the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Inventory Up, Prices Down
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-Family Homes and Condos
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo pricewas $178,800 in July, down 18.9 percent from July 2008.
By Region:
Source: NAR
Strong Gain in Existing-Home Sales
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rateof 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Largest Gain in a Decade
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment ratefor a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.
"First-Time Buyer Tax Credit is Working"
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillansaid the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.
“Realtorsare the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Inventory Up, Prices Down
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-Family Homes and Condos
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo pricewas $178,800 in July, down 18.9 percent from July 2008.
By Region:
- The Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.
- Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.
- In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.
- Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.
Source: NAR
Come and see why you will want to make "The Estates at Whispering Oaks" your new Home!
Fed Will Keep Key Rates Low
When the Federal Reserve ends its meeting on Wednesday afternoon, it is almost certain to leave the key rate at or near zero and pledge to hold it there.
That makes it likely mortgages will stay historically low and rates on home-equity and other consumer loans will hug 3 percent.
But it is unclear whether the Fed will continue some programs that have kept mortgages and other consumer debt even lower than the market might expect. One such program involves buying U.S. Treasurys. The Fed is set to buy $300 billion worth of Treasury bonds by the fall. It has bought $235 billion already this year.
"I think they'll let it expire. It seems the mood turned against Treasury purchases in the last couple of months, and there's been some skepticism whether it has worked in bringing rates down," says Michael Feroli, an economist at JPMorgan Economics.
Source: The Associated Press, Jeannine Aversa (08/11/2009)
When the Federal Reserve ends its meeting on Wednesday afternoon, it is almost certain to leave the key rate at or near zero and pledge to hold it there.
That makes it likely mortgages will stay historically low and rates on home-equity and other consumer loans will hug 3 percent.
But it is unclear whether the Fed will continue some programs that have kept mortgages and other consumer debt even lower than the market might expect. One such program involves buying U.S. Treasurys. The Fed is set to buy $300 billion worth of Treasury bonds by the fall. It has bought $235 billion already this year.
"I think they'll let it expire. It seems the mood turned against Treasury purchases in the last couple of months, and there's been some skepticism whether it has worked in bringing rates down," says Michael Feroli, an economist at JPMorgan Economics.
Source: The Associated Press, Jeannine Aversa (08/11/2009)
Daily Real Estate News July 28, 2009
New Home Sales Rise
Sales of newly built single-family homes rose 11 percent in June to an annualized rate of 384,000, according to a report released Monday by the U.S. Department of Housing and Urban Development.
Analysts called the report a good sign.
"That is really good news,” said Peter Morici, an economics professor at the University of Maryland. “With all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out."
Pat Newport, a housing industry analyst for IHS Global Insight, also applauded the report. "The tax credit is boosting demand, but what will happen when it goes away in December?" he asked.
Excess inventory still exists in some key markets:
But overall, business is better. "The time for getting deals is going away." Markstein said.
Source: CNNMoney.com, Les Christie (07/27/2009)
New Home Sales Rise
Sales of newly built single-family homes rose 11 percent in June to an annualized rate of 384,000, according to a report released Monday by the U.S. Department of Housing and Urban Development.
Analysts called the report a good sign.
"That is really good news,” said Peter Morici, an economics professor at the University of Maryland. “With all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out."
Pat Newport, a housing industry analyst for IHS Global Insight, also applauded the report. "The tax credit is boosting demand, but what will happen when it goes away in December?" he asked.
Excess inventory still exists in some key markets:
- California
- Florida
- Las Vegas
- Arizona
But overall, business is better. "The time for getting deals is going away." Markstein said.
Source: CNNMoney.com, Les Christie (07/27/2009)
Daily Real Estate News July 23, 2009
NAR: Existing-Home Sales Rise Again
Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of REALTORS®.
Existing-home sales including single-family, townhomes, condominiums, and co-ops increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of REALTORS®.
Existing-home sales including single-family, townhomes, condominiums, and co-ops increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
Lawrence Yun, NAR chief economist, is hopeful about the gain. The increase in existing-home sales occurred in all major regions of the country, he says. We expect a gradual uptrend in sales to continue due to tax-credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many REALTORS® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.
HVCC Issues
A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.
Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations, and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales, Yun says. In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition this is causing real harm to both buyers and sellers.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.
Inventory Declines
Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.
This is another hopeful sign if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year, Yun says.
An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.
NAR President Charles McMillan notes that there are very good opportunities. Despite some of the challenges, the housing market continues to demonstrate signs of recovery, he says. The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since its taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the Dec. 1 expiration date."
The national median existing-home price for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.32 million in June from a level of 4.22 million in May, and are 0.2 percent higher than the 4.31 million-unit pace a year ago. The median existing single-family home price was $181,600 in June, which is 15.0 percent below June 2008.
Existing condominium and co-op sales jumped 14.0 percent to a seasonally adjusted annual rate of 570,000 units in June from 500,000 in May, but are 3.1 percent below the 588,000-unit level in June 2008. The median existing condo price was $183,300 in June, down 18.9 percent from a year ago.
By Region
Northeast: Regionally, existing-home sales in the Northeast rose 2.5 percent to an annual pace of 820,000 in June, but are 4.7 percent below a year ago. The median price in the Northeast was $249,400, down 5.9 percent from June 2008.
Midwest: Existing-home sales in the Midwest increased 0.9 percent in June to a level of 1.10 million but are 1.8 percent lower than June 2008. The median price in the Midwest was $157,000, which is 9.1 percent below a year ago.
South: In the South, existing-home sales rose 4.0 percent to an annual pace of 1.81 million in June but are 3.7 percent below a year ago. The median price in the South was $163,200, down 11.9 percent from June 2008.
West: Existing-home sales in the West improved by 6.4 percent to an annual rate of 1.16 million in June, and are 11.5 percent higher than June 2008. The median price in the West was $214,800, which is 24.9 percent below a year ago.
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