The Warren Report

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Net Household Wealth: Home Equity is 10 Times that of Stock Wealth

By Sophia Stuart, Research Economist

• The median value of home equity for homeowners was nearly 10 times the median value of stock wealth for stockholders at the end of 2007.
• Among seniors, home equity makes up a large portion of portfolios, accounting for 26 percent of household wealth among all elderly and 59 percent among the low-income elderly in 2007.
• The Federal Reserve estimates that real home equity fell by $2.5 trillion in 2007 and 2008- BUT still these declines combined are less than the $5.3 trillion plunge in the real value of stocks and mutual funds held by household in 2008.

Source: The State of the Nation’s Housing 2009, Joint Center for Housing Studies of Harvard University

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.

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3 Factors to Take Into Consideration Before Jumping Into Housing Market

By Jim Gallagher

St. Louis Post-Dispatch Print Article

 RISMEDIA, February 6, 2010—(MCT)—If you have a good job and good credit, the next few months might be a good time to go house hunting. Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. Buyers and sellers should consider the following factors as they consider jumping into the housing market.

-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5% last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30, 2010. The likely result is an uptick in rates. Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1% rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage

-The home buyer tax credit expires on April 30, 2010 and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit. To qualify for the credit, you must sign a purchase contract by April 30, 2010 and close by July 1, 2010. First-time buyers get up to $8,000. “First-time” is defined as someone who hasn’t owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.

-There are indications that home prices are near a bottom in some areas and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.

Things might look different if you’re a seller though. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter—those who can still pay their mortgages—are largely saying no. Inventories of homes for sale are down about 10% from this time last year, and 30% from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group. On the other hand, if you’re planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.

Home sales peaked in some areas October and November, as buyers raced the expiration date of the original first-time home buyer’s credit. Congress later extended and expanded it. That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. “People will wait to the very last second,” said Mike Travaglini, a vice president of Coldwell Banker Gundaker’s office in south St. Louis County.

Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. “It’s getting tighter and tighter,” he said.

Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA—which guarantees loans for people with low down-payments—has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.

(c) 2010, St. Louis Post-Dispatch.

Distributed by McClatchy-Tribune Information Services.

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First Annual Gain in Home Prices Since 2006 Reports Clear Capital

Even though we are just entering the Spring Selling Season, home prices are already beginning to trend upwards.

DSNEWS.com

With last month’s numbers in and tallied, national home prices registered a 1.8 percent quarterly increase in January, and for the first time in 37 months, yielded a national year-over-year gain of 2.3 percent, Clear Capital said Thursday

Dr. Alex Villacorta, senior statistician with Clear Capital, a California-based valuation firm, said, “The stabilization in prices is significant in that it has occurred despite near record levels of unemployment and REO saturation.”

According to Clear Capital’s latest Home Data Index (HDI) Market Report, all regions of the country saw positive quarterly returns, except for the Northeast, where prices dropped 1 percent for the three-month rolling quarter ending in January. In the Midwest, home prices climbed 5 percent. The South recorded an increase of 1.5 percent, and the West saw prices rise 1.3 percent.

Despite the Northeast’s modest quarterly slowdown, Clear Capital said all regions improved their yearly numbers which contributed to the national annual gain. The Midwest continues to take the top spot in year-over-year returns, posting prices 11.0 percent higher than a year ago in January.

Severely distressed Detroit, Michigan led all markets once again, maintaining a 14.6 percent quarterly price change. Nine of the 15 best performing major markets saw quarterly prices improve over last month, and yearly price changes for all the highest performing markets improved by an average of 6.1 percent.

Only the Florida markets of Jacksonville and Miami, and Riverside, California maintained yearly losses. However, Clear Capital said the recent improvement for all three markets has them headed toward positive territory for the year—possibly within a month’s time. Clear Capital noted though, that if the two Florida markets continue to see their condominium segments deteriorate, in contrast with gains on single family properties, their overall home price recovery could be slowed down.

While all of the 15 lowest performing markets in Clear Capital’s study – all except for Birmingham, Alabama – saw their quarterly prices degrade in January, the company says the list is far from bleak compared to recent years because year-over-year numbers continue to improve for nearly the entire list. Six markets on this list experienced positive yearly gains, and eight markets saw just single digit declines.

Based on Clear Capital’s analysis, the national REO saturation rate declined 0.7 percentage points to 24.8 percent in January. However, the company says an interesting trend has developed over the past few months in regions with the highest level of REO influence – recovery of home prices has been more notable where REO saturation is the highest. Clear Capital says this is apparent with the higher levels of REO saturation experienced in the West (35.4 percent) and Midwest (28.4 percent).

While the rise in prices within REO-saturated markets runs counter to traditional expectations (higher rates of REO saturation usually create downward price pressures), it’s a reflection of the broad appetite for the steeply discounted REO segment. Clear Capital says increased REO activity in 2010 will be a true test of investor appetite for distressed sales.

“While it is a very positive sign that the overall national trends show yearly improvements in prices and REO saturation, market trend volatility and prices continue to vary considerably by micro market and price tier,” said Villacorta. “The sustainability of current price gains will be challenged in 2010, given that most lenders and analysts predict a significantly larger number of REOs will reach the markets.”

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Even in Tough Times, 77 Percent of Americans View Homeownership as a Part of Their Own Personal American Dream

 RISMEDIA, February 4, 2010—A national survey recently released by real estate leader Trulia shows that many Americans feel that President Barack Obama has not lived up to the hope he created during his campaign and his first 30 days in office. In Trulia’s latest American Dream survey conducted online on its behalf by Harris Interactive from January 19-21, 2009, President Barack Obama scored considerably lower marks on the topic of restoring the American dream of homeownership compared to a survey conducted February 20-24, 2009 after his first 30 days in office.

The current survey found that 37% of Americans gave President Obama a grade of “D” or “F” on the decisions he’s made towards restoring the American dream of homeownership compared to only 22% in the February 2009 survey.

Additionally, 54% gave him a grade of “A” or “B” in February 2009 compared to only 37% in January 2010. Despite these lower grades, and the troubles that have continued to plague the U.S. housing market, the survey found that the “American Dream” of homeownership continues to be alive and well with more than three out of four Americans considering owning a home as a part of achieving their personal American dream.

“I am thrilled to see that the American dream of homeownership is alive. If the dream had died we would be in a lot of trouble,” said Pete Flint, CEO and co-founder of Trulia. “Everyone realizes there is no easy fix and we have a long road ahead. Until there is a reversal in unemployment and the growing number of home foreclosures, the U.S. real estate market will continue to see significant volatility. I agree with the results of our survey that job creation and job security have to be the President’s top priority.”

President Obama’s Report Card
Democrats currently rate President Obama’s performance higher than Republicans, but both downgraded the President’s performance in the January 2010 survey compared to the survey Trulia conducted in February 2009. The current survey shows that “A” ratings from Democrats decreased by 19 percentage points and a 3 percentage point decrease from Republicans. Additionally, “F” ratings from Democrats increased by 3 percentage points and by 13 percentage points from Republicans.

Priorities Going Forward
Democrats and Republicans agree on the areas President Obama needs to focus on in 2010 to stabilize the U.S. real estate market. Creating jobs and job security continues to be at the top of the list with 62% of adults referencing it as a key priority for the President. With foreclosures reaching record levels in 2009 and expected to grow even more this year, it’s not surprising that 45% of adults included this as an important area of focus. Rounding out the top three priorities for President Obama is bringing/keeping low interest rates at 39%. Only 27% of Americans surveyed believe extending the home buying tax credit through the end of 2010 should be a key initiative to help stabilize the housing market.

This sentiment was also echoed on Trulia Voices Community, with many users feeling that President Obama tried to do too much, and that the key to fixing the economy and housing market will be to focus on creating new jobs and job security.

Positive and Negative Views
The majority of Americans surveyed were unaffected by the events that have transpired during the past year in the housing market, with 60% saying their view toward homeownership is unchanged. Slightly more of those surveyed have a more pessimistic than positive outlook with 21% saying they have at least a somewhat more negative view toward owning a home compared to 20% having at least a somewhat more positive view.

For more information, visit www.trulia.com .

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Pending Home Sales Stabilize in December

by Brittany Dunn

DSNEWS.com

Following a market swing driven by response to the homebuyer tax credit, pending home sales in December have leveled off, according to a report Tuesday by the National Association of Realtors (NAR).

In November, the Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed during the month, fell to 95.6, a 16.4 percent decrease from surging activity in preceding months due to the anticipated expiration of the homebuyer tax credit. Following the extension and expansion of the credit, though, the PHSI in December jumped 1 percent to 96.6 and remained 10.9 percent above December 2008 when it was 87.1.

December’s PHSI varied from region to region. Compared to November, the PHSI in the Northeast jumped 2.3

percent to 76.1 and was 14.9 percent higher than December 2008. The Midwest’s index of 86.9 was 5.2 percent higher than November and 8.7 percent above a year earlier.

In the South, pending home sales in December rose 2.2 percent from November to an index of 98.4, a 5.5 percent surge year-over-year. However, the index in the West fell 3.8 percent in December to 119.9 but was still 18.6 percent higher than the index one year earlier.

Lawrence Yun, NAR chief economist, said it is important to recognize how the tax credit is skewing market data.

“There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he explained. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”

Yun projects 2.4 million households will take advantage of the extended and expanded tax credit. While new-home sales will remain low due to a lack of construction, Yun expects existing-home sales to rise to around 5.6 million this year, up from 5.16 million in 2009. He said one of the greatest benefits of rising sales will be firming home prices.

“For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun said. “As a result, the housing wealth for many middle class families has begun to stabilize.”

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Lenders Must Respond to Short Sale Offers Within Ten Days

by John Adams
from the Atlanta Journal-Constitution HomeFinder

One of the real drags on the Atlanta real estate market recovery is the huge inventory of bank-owned homes that are clogging our neighborhoods. In many cases, they sit vacant for several months while they are being processed, and become vandalized. A favorite targets for theft in these houses is the copper in the air conditioning compressor and the pipes of the plumbing system.

Once those systems are damaged, the house will no longer qualify for conventional financing due to its' condition, so only a cash buyer or an investor would be able or willing to buy it. Eventually, the house sells at a greatly discounted price, pulling down property values as appraisers report the sale as a "comparable" home to others in the neighborhood.

This self-destructive scenario has been playing out all over the metro area, and continues to this day.

But things may change for the better this spring.

One of the ways to prevent a house from going into foreclosure is for the lender to accept a reduced payoff on the loan securing the property.

An owner knows he can't keep making payments, so he tries to sell. The only offer forthcoming is from an investor or a buyer offering less than the amount owed on the loan. The owner is willing to walk away with nothing in exchange for release from further liability.

If the lender agrees, it will take a financial hit on the loan shortfall, but it will avoid the costs of foreclosing the house and taking possession, then entering the lengthy sales process. In addition, who knows what the house will sell for after it sits empty on the market for a year? Perhaps much less than the offer in hand.

That process is called a "short sale," and it represents one of the best opportunities that lenders have to stem the tide of foreclosures. But in the past, lenders have typically been so slow to respond to these offers that buyers have walked away. Four to six weeks is common, up to three months not unusual. No typical buyer can wait that long for a response to any offer.

But a new rule issued recently by the Treasury will require that lenders respond to short sale offers within ten business days.

Effective April 5 of this year, the rule applies only to the 83 loan servicers participating in the president's Home Affordable Modification Program. These include Bank of America, Wells Fargo and JPMorgan Chase. But the hope is that the lending industry, including Fannie and Freddie, will adopt the 10 day rule for all short sale offers.

The rule also makes up to $1,500 available to the seller for moving expenses, and appears to release the borrower from further liability.

This is a step in the right direction for real estate recovery.

This article first appeared in the Atlanta Journal-Constitution.

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U.S. Economy Grows Faster than Expected in Fourth Quarter 2009

RISMEDIA, February 1, 2010—(MCT)—The U.S. economy grew at an accelerated pace in the last quarter of 2009, driven largely by a rebound in manufacturing and better-than-expected gains in consumer spending and commercial investments, according to Commerce Department statistics.

The nation’s gross domestic product (GDP)—or total goods and services produced in the United States—expanded at a robust 5.7% annual rate in the fourth quarter. That’s more than double the 2.2% growth in the third quarter and a dramatic turnaround from the first three months of 2009, when the economy shrank by 6.4%.

The latest GDP growth rate was about a percentage point higher than most economists’ forecasts, with consumer spending and an upturn in commercial investments contributing more than what was expected. These are encouraging signs and could prompt analysts to raise their growth forecasts for this year. Even so, the fuel behind the fourth-quarter acceleration won’t last as it was mostly temporary: an extraordinarily big swing in inventory levels that accounted for 60% of the quarterly growth. With manufacturing recovering from the recession and consumers purchasing more, producers stopped their massive liquidation of stocks and many have begun to boost inventories.

It remains to be seen whether consumer purchases, exports and capital spending can grow enough to keep lifting production and sustain the economic recovery. Analysts had predicted economic growth this year at between 2-3%, a moderate pace that would not be enough to spark much job creation or drive down unemployment significantly from its current 10% rate. For all of 2009, the nation’s total output of goods and services, after adjusting for inflation, contracted 2.4% from the previous year.

(c) 2010, Tribune Co.

Distributed by McClatchy-Tribune Information Services.

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Are you the reason your home won’t sell?

Many homeowners are losing money because they’re determined not to sell for less than they paid, but that faulty logic can be costly.

By Marilyn Kennedy Melia of Bankrate.com

Many home sellers are losing money -- precisely because they're determined not to lose money. So why won't your home sell?

One reason homes are languishing on the market is that owners are suffering from “sunk cost fallacy,” says Ohio State University economist John Kagel.

This fallacy describes the reluctance people have to sell for less than they paid or put into a home, even when hanging on and waiting for the right price will ultimately prove costly.

It can be hard to shake this faulty logic, even when homeowners’ income has dropped precipitously or they're living off a limited amount of money, like a severance package, says financial planner William Suplee of Structured Asset Management in Paoli, Pa.

Here are three questions to determine whether you could benefit by losing money on a home sale:

1. Will you slash your housing costs with a move? Owners under financial pressure who could find relief on their monthly cash flow by moving to a lower-cost home that they either buy or rent are the ones grappling with the sunk cost fallacy.

Suplee tries to help owners get a clear view of their best option by preparing spreadsheets that lay out the costs of different living arrangements.

Don't forget all the ancillary expenses, like commuting costs that go along with a particular housing choice, adds D. Scott Neal, a financial planner in Lexington, KY.

Laying out the annual costs of staying in a home that cost his client $800,000 several years ago was the only way to convince her that she would soon deplete her savings if she stayed put, says Rick Kahler, a financial planner in Rapid City, S.D.

Even though she'd probably sell for about $300,000 less than she paid, the monthly outlay was unsustainable, Kahler says. The pain of loss is softened somewhat, he adds, because she can buy a home that is also valued at less than it was several years ago. And the recently passed tax credit of up to $6,500 for repeat buyers under certain income levels also applies to many people in this position.

2. Do you know what a realistic price is?
Recognizing that conditions dictate selling at a loss doesn't mean that you're ready to accept any offer, however.

Indeed, experts stress that the only way to proceed confidently with selling at a loss is to thoroughly research the housing market in your area.

Ask your agent to provide lots of recent prices on sales of comparable homes.

In some states, agents can also provide very recent sales data by getting the prices of homes under contract, says John Huggins, president of Coldwell Banker Legacy Real Estate Group in Bowling Green, Ky. Home sellers can also ask to tour other homes for sale to get an idea of how their home compares with properties being offered at various price levels, he says.

Homeowners who owe more in mortgage than they can likely net in a sale must investigate whether they'll have to add in their own cash to pay off the loan, or whether the mortgage lender will agree to accept a lower amount. In cases where owners have to pay out-of-pocket to sell, that outlay could alter the advantage of moving, Neal says.

3. If you hold out, could you avoid a loss?
Going against the natural inclination to avoid loss means that you’ve analyzed the cost of holding the property and are reasonably confident prices won’t spring back up.

The National Association of Realtors forecasts that home prices nationwide will end 2010 with an increase of just under 4% from the end of 2009.

Moody’s Economy.com predicts that prices will stabilize in mid-2010, but that there will be no appreciation. Economy.com’s housing economist Celia Chen says that she expects some middle and higher-end housing to be at risk for further decline this year, and that some homeowners will not see prices return to what they paid for at least several years.

Real-estate trends are local, Huggins adds. He advises looking at prices of similar homes in your area and gauging demand against inventory.

When he prepares spreadsheets for homeowners to examine the costs of holding versus moving, Suplee asks, “What rate of appreciation does the house need for a holding strategy to make sense?” Then, he asks for an honest determination of how plausible it would be to see that appreciation.

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Around the Home – Take Time to Get Organized and Create a Stress-Free Haven

by Nancy A. Herrick

 RISMEDIA, January 30, 2010—(MCT)—”The place where you feel happy.” In an interview in Esquire magazine, that’s how novelist Salman Rushdie described “home.” After a busy day or a long time away, most of us look forward to just being home, where we can be ourselves and surround ourselves with the familiar.

Many people, however, have trouble relaxing at home, especially where there are piles of clutter and unfinished projects at every turn. Sometimes, home can be a place that reminds us of what we haven’t gotten around to doing. If you sometimes feel that way, perhaps it’s time to make some residential resolutions. The New Year isn’t just about losing weight or quitting smoking. It can be about finding time to turn your home into more of a haven.

“If you take time to make your home the way you want it, you don’t have as many things hanging over your head, distracting you, getting in the way,” says Jennifer Linnig, a home organization specialist who lives and blogs in Cudahy, Wis. “Being organized frees the mind,” she says. “It lets you focus on what really matters.”

Paula Constable says being organized is a way to create a comfortable environment. “It’s not about perfection,” says Constable, of Johnson Creek, Wis., who has been a residential organizer for more than a decade, specializing in moms and families. “The mission is to make life smoother and less stressful.”

The following tips will help you turn your home into a stress-free haven.

1. Be responsible. Get serious about recycling by setting up a sorting center, perhaps in your garage to help you stay on top of things. Start by finding out what the guidelines for recycling are in your community, then clear a space, find appropriate containers and make them accessible all in one spot. Label them so that recycling becomes easy for everyone to do.

2. Be frugal. Turn some of your unwanted gifts and household items into cash by selling them on eBay and Craigslist. “There are so many things that we basically are just storing in our homes,” Constable says. “We don’t use them or need them, but they are still around. Why not turn these things into cash?”

3. Be generous. Donate your unused household goods to Goodwill or other charitable groups. Don’t forget about the Habitat for Humanity ReStore, which accepts usable building materials that can be sold to finance more building projects. Be sure to check out www.freecycle.org, a sharing website that allows you to be both frugal and generous by posting items and giving them away to people who have a real need.

4. Be tidy. Make this the year you set up a system for mail that comes into your home. Stay on top of bill-paying, too. Constable suggests three choices for every piece of mail. “First, you can throw it out; second, take action on it (such as following up or making a payment); or, third, file it. As for a system for paying bills, she suggests making a master list and listing when each bill is due each month, how it gets paid (online or by mail) and what a typical amount is. That way you know what is due when and you won’t be caught by surprise. It also allows someone else to take over bill-paying duties if necessary.

5. Be discerning. Clutter and overcrowding are most often the result of having too many things rather than inadequate storage space. If you resist impulse buying and don’t buy something unless you really need it, you can keep your possession count as low as possible. As often as possible, try to make do with what you own.

6. Be inclusive. Involve your family in the home organization process. Getting kids involved teaches skills and responsibility. Linnig suggests setting a timer or playing a fun song when children are helping. “You can do anything for 10 or 15 minutes,” she says. Often when kids start to make progress on straightening up their rooms or putting away toys, they ignore the time limit and keep going until the job is done, taking pride in what they have accomplished.

7. Be mindful. You want to have a sense of safety and comfort at home, which can, in part, be achieved by having working smoke detectors, a carbon monoxide detector and a radon meter (in areas where radon is a concern). Taking safety a step further, consider replacing candles with alternatives such as scented globes or battery-operated flickering pillars that help create the same mood.

8. Be health-conscious. When tackling home improvement projects, educate yourself about products that have less of an impact on your home environment, such as low-VOC paint and eco-friendly carpet.

9. Be aware. Energy costs are going up, and environmental awareness is an important topic these days. You can do something about it. Obvious changes include replacing incandescent light bulbs with fluorescents, using a setback thermostat and buying Energy Star appliances when possible.

(c) 2010, Milwaukee Journal Sentinel.

Distributed by McClatchy-Tribune Information Services.

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Home Sizes Fall as Builders, Buyers Embrace Economic Reality

 RISMEDIA, January 28, 2010—(MCT)—New-home buyers responded to the tough times in 2009 by opting for smaller houses, driving down the average size of a house built in the United States for the first time in 27 years.

Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.

“You’ve heard the mantra ‘downsize me’ and ’small is the new big?’ Well, last year was definitely a downer,” said Carol Lavender, president of Lavender Design Group, a residential design firm in San Antonio, Texas.

Homeowners surveyed by Better Homes and Gardens magazine said downsizing was becoming a bigger priority: 36% said in November 2009 that they expected their next home to be “somewhat smaller” or “much smaller” than their current home versus 32% who said that in 2008. “Not surprisingly, we see a ‘cents and sensibility’ approach when it comes to buying or improving a home, with practicality and price being the top priorities,” said Eliot Nusbaum, the magazine’s executive editor of home design.

While the small-house movement in the United States has been gaining steam for a number of years, the recession has accelerated it and home builders have responded.

“The era of easy money is over. You really have to think before you go out and decide you need that five-bedroom, five-bath home,” said Rose Quint, the NAHB’s assistant vice president for survey research. “Couple that with the energy cost concerns of consumers today and I think we will continue this trend. Houses will not shrink drastically, but they will shrink.”

Although actual square footage of homes didn’t fall until 2009, the percent of homes with four or more bedrooms in them has been falling since 2007, NAHB data show. And in 2009, the number of homes with three or more bathrooms fell for the first time since 1992.

Two other trends in home construction are contributing to the declining square footages: The prominence of first-time buyers in the housing market and the increasing number of households with members 55 and older who are buying homes.

First-time buyers, driven into the market in good part by the availability of an $8,000 tax credit, are more likely to compromise on home size in exchange for a lower price. And the 55-plus crowd tends to purchase single-story homes, which generally are smaller because of the land costs that favor the more-efficient two-story plans.

“Barely over half of new homes today are built with two stories or more,” Quint said. Two-story homes peaked at about 55% of the market in 2006. For 2010, home builders say they will focus on lower-priced models and smaller homes. More than 95% of builders surveyed by NAHB in January said that was the way they saw their business evolving this year.

The penchant for smaller homes will necessitate some design changes. Builders, attempting to respond to those consumer demands as well as hold the line on prices, told the NAHB surveyors that they were most likely to include these features as standard in their houses this year:

-Walk-in closets in the master bedroom.
-Laundry rooms.
-Insulated front doors.
-Great rooms.
-Energy-efficient windows.
-Linen closets.
-Programmable thermostats.
-Energy-efficient appliances and lighting.
-Separate shower and tub in master bathrooms.
-Nine-foot ceilings on the first floor.

Among the things that builders said they were least likely to add to houses in 2010:

-Outdoor kitchens.
-Outdoor fireplaces.
-Sunrooms.
-Butler’s pantries.
-Media rooms.
-Desks in kitchens.
-Two-story foyers.
-Eight foot ceilings on the first floor.
-Multiple shower heads in the master bath.
-Smaller kitchens.

“You can see that builders are concentrating heavily on energy-saving features,” Quint said. “But a lot of the luxury items are on the chopping block or on hold as builders try to lower costs.”

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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THE COUNTDOWN HAS COMMENCED

Three Months, Seven Days, and Counting

by John Adams
from the Atlanta Journal-Constitution HomeFinder

From today, January 24, you have exactly ninety-seven days to find a house, negotiate with the seller, and get it under contract. If you can do that by midnight on Friday, April 30th, you'll likely qualify to pick up a check from the government for as much as eight thousand dollars. But after that moment, don't look for an extension of the program - it probably won't happen.

The First Time Home Buyer Tax Credit has been a success. Sales of existing homes have increased almost steadily since last April. And the National Association of Realtors reported recently that first time home buyers accounted for about 30 percent of all sales last year.

The IRS defines first-time buyers as anyone who has not owned a principal residence in the last three years. The tax credit is for 10 percent of the purchase price, up to a maximum of $8,000, and does not have to be paid back. The credit begins to phase out for buyers with an income of $125,000 for singles and $225,000 for joint filers.

The tax credit was extended and expanded to include more Americans in November. At the same time, a Repeat Home Buyers Tax Credit was initiated to encourage existing homeowners to move and purchase another house. Again, there are income limits, and the home being purchased must cost less than $800,000. And once again, the credit is for 10 percent of the purchase price, up to a limit of $6,500. "Repeat Buyer" is defined as anyone who has owned their own principal residence for at least 5 of the past 8 years.

An often overlooked benefit of a tax credit is that the payment is not considered income, so it is totally tax-free. If you qualify, you get the full benefit of each and every dollar, undiminished by your friendly tax collectors.

But the fun is set to end on midnight on Friday, April 30th at the stroke of midnight. Any buyers whose contracts are not binding by then will be ineligible to participate in the program.

And don't look for another extension of time for the credit. With government deficits at an all time high and the real estate market mounting at least the beginnings of a recovery, politicians are unlikely to continue what can only be described as a substantial subsidy for the American dream.

The $8,000 First Time Homebuyer Tax Credit and the $6,500 Repeat Homebuyer Tax Credit are both set to expire at the end of April, although if you have a binding contract by that date, you can have until the end of June to get it closed. My advice is to take the money and run.

This article first appeared in the Atlanta Journal-Constitution.

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Are You a Victim or a Vitamin?

Are We Victims?

Some people allow events, people and circumstances to impact them permanently negative!  These people are victims. You recognize a VICTIM like so:

1. Victims mope, whine, opine and wish things were like they used to be….way back when.
2. Victims bleat, it’s never their fault, there is no forgiveness or acceptance.
3. Negativity poisons their passion?
4. Setbacks cripple compassion and chinks their soul.
5. Hopelessness brittles their heart and turns their futures fruitless.
6. Misery loves company.  Victims throw impromptu pity parties to infect friends with their victim-virus.
7. Victims are mean and small and petty.

At times, life’s hard, unfair and brutal.  How we handle accidental adversity and unexpected impact is up to us.  Victimhood is a choice, so is Vitaminhood.

Are We Vitamins?

Some people allow events, people and circumstances to impact them permanently positive!  These people are Vitamins.  You recognize a VITAMIN like so:

1. Vitamins get that change is life and life is a wild, sometimes quiet and often scary adventure.  They change, reinvent, improve and adapt.
2. Vitamins take responsibility, they support and forgive and they try to forget. Sometimes they succeed at all four.
3. Negative and positive experiences power their passions.
4. Setbacks and triumphs deepen their understanding, juices their compassion and levels their humility.
5. Vitamins learn, grow and share from their experiences, turning futures fruitful.
6. Vitamins throw impromptu parties to celebrate, recognize, congratulate and compliment.  They infuse their friends with hope, confidence, camaradery and self responsibility.

Yeah, I know.  Humans are imperfect and living life as a Vitamin is a challenge.  When life kicks you in the balls, it’s natural and normal to cry, scream, go fetal, mourn, anger and depress…and that’s the point…it’s normal.  To shine, lead and succeed, we can’t wallow long or hang with victims.  We gotta take our lumps, learn and be THE Vitamin.

AgentGenius - Real Estate News & Opinion Magazine 

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New iPhone, BlackBerry, Treo, etc App Discovered - Will Revolutionize Communications

We have just discovered a NEW Application for the iPhone, Blackberry, Palm Treo, and virtually any other Brand or Model of Cell Phone. It even works on Landlines!

This application is very simple and easy to use. On your Mobile or Home Device, enter the 10 digit Unlock Code. This is an Open Source Code so feel free to share it with anyone. You can even save it in your Mobile Device's Address Book.

The Unlock Code is 770 722 0099 .

Just that simple. Enter the 10 digit code and Press SEND.

Amazingly, this Application will connect your with a LIVE PERSON (probably Warren) who is prepared to assist you with all your Real Estate needs. This LIVE PERSON can expertly answer your questions about all aspects of real estate, conduct searches of available properties that may fit your needs, and even MEET WITH YOU IN PERSON. This LIVE PERSON will even RIDE YOU AROUND IN HIS CAR and CONDUCT PERSONALLY ESCORTED TOURS of the properties you select.

This Application works DAY or NIGHT, although, at certain times due to multiple requests or need to sleep, you will be directed to our AUTOMATED ATTENDANT who will record your message and promise a QUICK RESPONSE to your request. 

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Visit http://flavors.me/warrenowen - One Click for Karen and Warren Owen's Internet Resources

This is worth saving as a Favorite!

With just one click you can access all the internet Resource links for Karen and Warren Owen

Click http://flavors.me/warrenowen for direct access to all our important links:

• Our Phone Numbers
• Our Email
• Our Web Site (Our Listings, Schools Info, and Home Search Engine)
• This Weblog (News and Information about Real Estate)
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December Existing-Home Sales Down but Prices Rise; 2009 Sales Up

Washington, January 25, 2010

After a rising surge from September through November, existing-home sales fell as expected in December after first-time buyers rushed to complete sales before the original November deadline for the tax credit. However, prices rose from December 2008 and annual sales improved in 2009, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate¹ of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.

For all of 2009 there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008; it was the first annual sales gain since 2005.

Lawrence Yun, NAR chief economist, said there were no surprises in the data. “It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,” he said. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.”

An NAR practitioner survey² shows first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. Repeat buyers rose to 42 percent of transactions in December from 37 percent in November; the remaining sales were to investors.

The national median existing-home price³ for all housing types was $178,300 in December, which is 1.5 percent higher than December 2008. “The median price rose because of an increased number of mid- to upper-priced homes in the sales mix,” Yun said. It was the first year-over-year gain in median price since August 2007.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said market conditions are challenging in some areas. “There’s a shortage of lower priced homes for sale in much of the country, resulting in multiple bids in some areas,” she said.

“Raw unsold inventory has been trending down. As the market heats up again this spring, buyers may need to be prepared to move quickly on a particular home – the best advice is to begin working with a Realtor® now to be able to use the tax credit and benefit from the increased buying power in the current market,” Golder said.

Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply⁴ at the current sales pace, up from a 6.5-month supply in November. Raw unsold inventory is 11.1 percent below a year ago, is at the lowest level since March 2006, and is 28.2 percent below the record of 4.58 million in July 2008.

Distressed homes, which accounted for 32 percent of sales last month, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area. For all of 2009, the median price was $173,500, down 12.4 percent from $198,100 in 2008; distressed homes accounted for 36 percent of total sales last year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.93 percent in December from 4.88 percent in November; the rate was 5.29 percent in December 2008.

Single-family home sales fell 16.8 percent to a seasonally adjusted annual rate of 4.79 million in December from a pace of 5.76 million in November, but are 12.7 percent above the 4.25 million level in December 2008. For all of 2009, single-family sales rose 5.0 percent to 4,566,000.

The median existing single-family home price was $177,500 in December, which is 1.4 percent above a year ago. For all last year, the single-family median was $173,200, down 11.9 percent from 2008.

Existing condominium and co-op sales fell 15.4 percent to a seasonally adjusted annual rate of 660,000 in December from 780,000 in November, but are 34.7 percent higher than the 490,000-unit pace a year ago. For all of 2009, condo sales rose 4.8 percent to 590,000 units.

The median existing condo price⁵ was $183,700 in December, up 1.0 percent from December 2008. For all of last year, the median condo price was $176,100, which is 16.1 percent below 2008.

Regionally, existing-home sales in the Northeast dropped 19.5 percent to an annual level of 910,000 in December but are 21.3 percent above a year ago. The median price in the Northeast was $241,700, up 3.2 percent from December 2008.

Existing-home sales in the Midwest fell 25.8 percent in December to a level of 1.15 million but are 8.5 percent higher than December 2008. The median price in the Midwest was $143,200, which is 1.8 percent above a year ago.

In the South, existing-home sales dropped 16.3 percent to an annual pace of 2.01 million in December but are 15.5 percent above December 2008. The median price in the South was $152,000, down 1.0 percent from a year ago.

Existing-home sales in the West declined 4.8 percent to an annual rate of 1.38 million in December but are 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

http://www.realtor.org/press_room/news_releases/2010/01/december_down

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Top 10 Must-Have Features in Today’s New Homes

 RISMEDIA, January 25, 2010—(MCT)—Americans want smaller houses and they are willing to strip some of yesterday’s most popular rooms—such as home theaters—from them in order to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show.

“This is a traumatic time in this country and the future isn’t something we’re 100% sure about now either. What’s left? The answer for most home buyers is authenticity,” said Heather McCune, director of marketing for Bassenian Lagoni Architects in Park Ridge, Ill. Buyers today want cost-effective architecture, plans that focus on spaces and not rooms and homes that are designed ‘green’ from the outset,” she said. The key for home builders is “finding the balance between what buyers want and the price point.”

For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio, Texas. Large kitchens that are open to the main family living area, old-fashioned bathrooms with clawfoot tubs and small spaces such as wine grottos are design features that will resonate today, she said. “What we’re hearing is ‘harvest’ as a home theme—the feeling of Thanksgiving. It’s all about family togetherness—casual living, entertaining and flexible spaces,” Lavender said.

Paul Cardis, CEO of AVID Ratings Co., which conducts an annual survey of home buyer preferences, said there are 10 “must” features in new homes:

1. Large kitchens, with an island. “If you’re going to spend design dollars, spend them where people want them—spend them in the kitchen,” McCune said. 2. Granite countertops are a must for move-up buyers and buyers of custom homes, but for others “they are on the bubble,” Cardis said.

3. Energy-efficient appliances, high-efficiency insulation and high window efficiency. Among the “green” features touted in homes, these are the ones buyers value most, said Cardis. While large windows had been a major draw, energy concerns are giving customers pause on those. The use of recycled or synthetic materials is only borderline desirable.

4. Home office/study. People would much rather have this space rather than, say, a formal dining room. “People are feeling like they can dine out again and so the dining room has become tradable,” Cardis said. And the home theater may also be headed for the scrap heap, a casualty of the “shift from boom to correction.”

5. Main-floor master suite. This is a must feature for empty-nesters and certain other buyers, and appears to be getting more popular in general. That could help explain why demand for upstairs laundries is declining after several years of popularity gains.

6. Outdoor living room. The popularity of outdoor spaces continues to grow, even in Canada. The idea of an outdoor room is even more popular than an outdoor cooking area, meaning people are willing to spend more time outside.

7. Master suite soaker tubs. Whirlpools are still desirable for many home buyers, but they clearly went down a notch in the latest survey. Oversize showers with seating areas are also moving up in popularity.

8. Stone and brick exteriors. Stucco and vinyl don’t make the cut.

9. Community landscaping, with walking paths and playgrounds. Forget about golf courses, swimming pools and clubhouses. Buyers in large planned developments prefer hiking among lush greenery.

10. Two-car garages. A given at all levels; three-car garages, in which the third bay is more often than not used for additional storage and not automobiles, is desirable in the move-up and custom categories.

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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Repeat Buyers Need to Act Fast to Capitalize on Expanded Tax Credit

 RISMEDIA, January 23, 2010—By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.

This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.

“The expanded tax credit offers a great financial opportunity for existing homeowners, particularly those looking to trade up,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independent real estate companies. “Not only can you receive a large sum of money from the government, you’ll also likely purchase your next home for less money and at a lower interest rate than you could have in years past or years to come.”

To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.

There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.

“Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline.”

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Real Estate Analysts Cautiously Optimistic for 2010

by Steve Kersh

 RISMEDIA, January 21, 2010—(MCT)—According to David Crowe, chief economist of the National Association of Home Builders, home builders, mired in their deepest slump since the Great Depression, are likely to see a rebound in sales in 2010 as stabilizing home prices and record-high affordability conditions draw buyers into the market.

“The stage is set for the consumer to return,” said Crowe. “It won’t be a strong recovery, but it will be a recovery.” Crowe predicts that housing starts will rise more than 25% in 2010, to 700,000 units, from 550,000 in 2009. Low interest rates will continue to help the housing industry: Even though they are expected to rise, the 30-year mortgage—now just above 5%—will stay below 6% through the year, predicted Frank Nothaft, chief economist for mortgage agency Freddie Mac.

But Crowe and other economists speaking at the International Builders show, being held this week in Las Vegas, cautioned that there are plenty of reasons to be cautious about the home building outlook for 2010. Even home builders themselves are reluctant to embrace the positive predictions.

Any optimism on home building should be tempered on a number of counts, said Ed Sullivan, chief economist for the Portland Cement Association, whose members provide concrete used in residential and commercial projects. “I’m much more cautious as to the magnitude and timing of when that optimism comes,” Sullivan said. “There are hurdles still facing this industry and the issues don’t start to abate until the second half of this year.” Single-family starts could rise 20% in 2010, but that is “from a desperately low level and pathetically mild in absolute numbers,” he said.

Sullivan laid out six items that work against any big recovery in housing in 2010:

-A slow labor market recovery. “Much hinges on the labor market and when that turns,” Sullivan said. But both the government’s payroll survey and the household survey show continuing, if moderating, job losses. “Employment is the No. 1 reason caution persists,” Crowe said. “We’re not going to add jobs for at least several more months.”

-Payback from the expiration of the home buyer tax credit. “The tax credit is pulling people forward who were in the market anyway. So the sales pace isn’t quite as vibrant as suggested by the raw data. There could be a payback that materializes in July when the current version expires,” Sullivan said.

-Rising foreclosures. Moratoriums on foreclosures and an unworkable backlog that paralyzed many lenders made it look as if the foreclosure situation was easing in the second half of 2009. Expect the pace to accelerate this year. “Serious-delinquency rates haven’t peaked yet,” said Nothaft. “That usually happens six to 12 months after the employment recovery begins.”

-Price pressures. A rise in bank repossessions of homes will undoubtedly create additional pressure on home prices, Sullivan said. “Home prices have stabilized, but is that permanent?” asked David Berson, chief economist for PMI Group, a mortgage-insurance firm. “You’ll see more price declines—part is seasonal because we always see declines in the winter, but we’ll see more delinquencies and foreclosures,” and that could add to inventory increases and price cuts. “It could be three years before we get back to the long-term trends of home price appreciation,” Berson said.

-Tight lending standards. Mortgage lenders are unlikely to ease underwriting standards with the labor market soft and home prices unstable. That will crimp housing demand, Sullivan said.

-The potential for interest-rate increases. Lenders may demand a bigger risk premium for home loans in this environment and with the Fed about to wind down its purchases of mortgage-backed securities, there is a potential that interest rates will rise this year.

The good news? “Once we get out of this, there is going to be a lot of pent-up demand that is going to be released in 2011, 2012 and 2013,” Sullivan said.

Though December 2009 was another slow month for housing, sales and traffic picked up immediately following Christmas and continue to show more strength into the New Year, according to John Burns Real Estate Consulting’s January survey of home builders. “Traffic improvements are more about quality than about sheer numbers,” said Jody Kahn, a vice president with the firm. “Still, this better end to the year buoyed builders’ perspectives for the next six months.”

Kahn said new home prices were mostly flat around the country, with four key regions—Southern California, Texas, Midwest and southern Florida—showing stable prices for the first time since the downturn began. That price stability, though, may have contributed to slowing sales in all but the southern Florida region.

According to the survey, many builders are starting the year with low inventories of homes for sale, following a strong fall for deliveries. But Kahn said a rise in inventory is expected through March as home builders anticipate a strong spring selling season, sparked in part by the April 30 deadline to qualify for the home buyer tax credit.

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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Home-buying mistakes to avoid

By John Adams

For the AJC 

 

If my guess is right, a lot of prospective buyers who have been sitting on the real estate fence will be thinking more seriously about a home purchase in the year ahead. And why not? Interest rates are still very attractive, prices are still competitive, and more buyers than ever may qualify for a substantial tax credit just for making a purchase.

With a little planning, inexperienced buyers can sidestep some common mistakes and make their home purchase a successful one.

Here are four home-buying mistakes you don’t want to make:

● Not getting prequalified by a reputable local lender.

Until you sit down with a reputable lender and tell him or her all about your financial situation, you are not in a position to even consider buying a home.

You can’t know what you can afford, and you can’t know how much you can likely borrow. In addition, a good lender will match various loan products to your personal needs. For example, if you only plan to stay in Atlanta for the next five years, you may save money with a 5 /1 ARM rather than pay a higher rate for a 30-year fixed loan.

● Not working with a real estate professional.

After you have met with a local lender, your next stop should be the office of a seasoned real estate professional.

Trying to buy a home without representation is like trying to tune up a car engine by yourself. Yes, it can be done, but there is no benefit in doing so.

If you end up buying a listed home, the seller will pay for all commissions. And if you end up buying from an owner, both of you will be fighting over the same dollars. Take my advice and ask someone you trust to recommend a veteran real estate broker.

● Failing to shop and compare.

The primary purpose of seeing more than one available home is to match your wants and needs with the features of the properties that meet your criteria. Because each house is unique, it pays to take some time to shop and compare until you find the best possible match.

In other words, don’t rush the process.

● Not buying by April 30 and missing a federal tax credit.

The $8,000 First Time Homebuyer Tax Credit and the $6,500 Repeat Homebuyer Tax Credit are both set to expire at the end of April of this year, although if you have a signed contract by that date, you can have until the end of June to get it closed. Don’t miss the deadline.

John Adams is an author, broadcaster and investor. He answers real estate questions at noon on Saturdays on WGKA, 920 AM.

http://www.ajchomefinder.com/mortgage-center/home-buying-mistakes-to-276035.html

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HUD Takes Action to Speed Resale of Foreclosed Properties to New Owners

RISMEDIA, January 19, 2010—In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan recently announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration’s commitment to addressing foreclosure. Secretary Donovan recently announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential home buyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many home buyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping,” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

-All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
-In cases in which the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
-The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

For more information, visit www.hud.gov .

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Fed Beige Book Shows Lower-Priced Homes Faring Better

by Carrie Bay - dsnews.com

The Federal Reserve’s first Beige Book of 2010 shows that toward the end of 2009, home sales increased across the country, especially for lower-priced homes.

Ten of the 12 federal districts reported gains in residential sales at the end of last year, all except San Francisco, where demand for housing has been steady, and Kansas City, where activity has eased since the last Beige Book.

In all districts, sales of lower-priced homes – which are typically purchased by first-time buyers – increased noticeably more than sales of high-end homes, due in part to the federal tax credit, district bankers said.

Several districts reported that the original expiration date for the credit boosted sales in November and led to a more than usual slowdown in sales in December. However, they

say the extension of the credit into 2010 should give some additional momentum to the expected seasonal sales upturn this spring.

Residential construction activity remained at low levels in most districts, although home building was reported to have increased in Chicago and Minneapolis.

Home prices appeared to have changed little since the last Beige Book, overall. Boston, Philadelphia, and Cleveland reported declines in home prices since the last report. Richmond says prices there are holding steady, and Dallas is seeing some “firming” in values.

Commercial real estate was still weak in nearly all districts, with rising vacancy rates and falling rents.

Several districts reported that landlords were focused on tenant retention and that slack demand was allowing tenants to negotiate lease extensions at low rental rates and with favorable allowances.

Since the last report, loan demand continued to decline or remained weak in most districts, with credit quality deteriorating further and delinquencies still climbing.

Overall, reports from the 12 Federal Reserve districts indicated that while economic activity remains at a low level, modest improvements are more geographically widespread than in the last report. Labor market conditions remained generally weak with modest wage increases appearing in just a few districts.

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Daily Forecast Update: Mortgage Applications and Home Value Projections

 

January 13, 2010

By Lawrence Yun, Chief Economist 

Daily Forecast Update

• NAR's monthly official forecast as of January 5th
• GDP 2009 Q4: +4.3%
• GDP 2010 Q1: +3.0%
• GDP 2010 Q2: +2.5%
• Unemployment rate by the mid-2010: 9.8%
• Average 30-year fixed mortgage rate by mid-2010 2009: 5.7%

What does today's data mean for REALTORS® and consumers?

• Refinancing activity rose solidly in the past week. But mortgages taken out for home purchases remained low.
• A majority of economists now say home prices have already bottomed. Most REALTORS® also say the same.
• As this sentiment spills over to the general public, there will be lessening consumer fear impact on home purchases.

Mortgage Applications

• Mortgage brokers were busier the past week as they witnessed 22 percent jump in refinance applications according to weekly survey by the Mortgage Bankers Association. But mortgages for home purchase barely moved, with less than one percent rise.
• Compared to a year ago, both refinancing and home purchase applications are much lower. Refinancing is down by nearly 70 percent and purchase applications down by 27 percent.
• Take caution in reading the mortgage applications data. Actual home sales are comfortably above levels from one year ago. Either more home buyers are using all-cash without a mortgage or there is something wrong with the mortgage applications data. It is possible, due to mortgage industry consolidations and several major companies going under, that the data sampling can no longer provide valid comparisons with past data.

Home Value Projections

• According to the latest Blue Chip economic forecast, based on forecast submissions by about 60 economists, 57 percent now say that existing home prices have bottomed. This is the first time in recent years to my recollection where more economists are saying that there will be no further fall in home prices.
• Separately, according to a NAR REALTOR® survey with over 3,000 respondents, 69 percent say home values will rise over the next year.
• There is something called the 'wisdom of the crowd' which miraculously becomes correct in many incidences.  For example, if you were to make a guess to how much I weigh (after having looked at me), you are sure to be wrong. But if I took the average of all the guesses in the room then the answer will be very close to my actual weight. One person's forecast is wrong, but the average of many forecasts can become remarkably accurate or at least less inaccurate than most individual forecasts. With this in mind, are the home values really bottoming?
• There are great local market variations, so some markets will surely experience further price declines. But the majority may begin to see prices rise. On average, there could indeed be no further measurable price declines from this point onwards. However, knowing that forecasting is a hazardous sport, my own projection is for low single-digit price gains in 2010 and 2011.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.

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Trulia Says Levels of Price Reductions are Lower - Prices Stabilizing

RISMEDIA, January 14, 2010—Trulia.com recently announced that 21% of homes currently on the market in the United States as of January 1, 2010 have experienced at least one price cut. This represents the second straight month price reduction levels have decreased and the lowest level since Trulia started tracking price reductions in April 2009. The total amount slashed from home prices also dropped to $21.2 billion compared to $24.7 billion in December, a 14% decrease. The average discount for price-reduced homes continues to hold at 11% off the original listing price. This was also the second straight month where inventory levels have dropped for single-family homes and condos across the United States.

South Continues With Least Amount of Homes Reduced
The South has the lowest overall level of price reductions, with 20% of current listings experiencing at least one price cut, while the Northeast saw the biggest decrease in price reductions compared to the previous month- 12%. (Regions according to the U.S. Census Bureau)

South- 20% of listings with price reductions
West- 22% of listings with price reductions
Midwest- 22% of listings with price reductions
Northeast- 22% of listings with price reductions

“Consumers have a golden window of opportunity to find a great home and take advantage of the tax credit before mortgage rates start to rise,” said Pete Flint, Trulia co-founder and CEO. “Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for home buyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase price ceiling.”

The number of major U.S. cities with price reduction levels at 30% was cut by 50% in January. In December, 14 major cities saw a reduction of 30% or greater and that number has been reduced to just seven cities in January. Additionally, Minneapolis, which has the held the top spot for the past two months, experienced a 33% decrease compared to the previous month. Cities experiencing the largest decreases in percentage of listings with price reductions compared to the previous month include:

Los Angeles, CA – 46% decrease in price reductions
New York, NY – 36% decrease in price reductions
Memphis, TN – 34% decrease in price reductions
Minneapolis, MN – 33% decrease in price reductions
Honolulu, HI – 33% decrease in price reductions

Luxury Market Still Hardest Hit
Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with the average discount rising to 15% for the first time since Trulia started tracking in April 2009. Additionally, luxury homes represent less than 2% of all current listings on Trulia, but are responsible for 24% of the $21.2 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10%.

For more information, visit www.trulia.com .

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Expanded Home Buyer Tax Credit: Small Window, Big Opportunity

 RISMEDIA, January 8, 2010—The countdown is under way. As of January 1, you have four months to take advantage the expanded U.S. Homebuyer Tax Credit and get your new home under contract by the April 30 deadline.

Fueled by the original November 30, 2009 deadline, sales of existing homes had increased steadily since April, with the exception of a slight dip in August. NAR surveys show that about 30% of all closed transactions during that period involved first-time buyers.

In November, Congress extended the tax credit and amended it to include some repeat buyers in hopes of securing a more sustained real estate upswing. However, the narrow window suggests none of us should count on another extension.

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Pending Home Sales Down from Surge but Higher than a Year Ago

RISMEDIA, January 7, 2010—Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit but remains comfortably above a year ago, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November 2009, fell 16.0% to 96.0 from an upwardly revised 114.3 in October, but is 15.5% higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

The PHSI in the Northeast dropped 25.7% to 74.4 in November but is 14.7% above a year ago. In the Midwest the index fell 25.7% to 82.0 but is 9.2% higher than November 2008. Pending home sales in the South fell 15.0% to an index of 97.8, but are 14.7% higher than a year ago. In the West the index declined 2.7% to 124.6 but is 21.4% above November 2008.

Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit. “Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

For more information, visit www.realtor.org .

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The Expanded Home Buyer Tax Credit Could Chase Away the Winter Blues

by Ken Trepeta, Director, Real Estate Services

 RISMEDIA, January 7, 2010—As we begin 2010, both real estate professionals and home buyers have something to look forward to and more importantly, take advantage of—the extended and expanded home buyer tax credit.

Originally created in 2008, the home-buyer tax credit has evolved from a $7,500 credit, which had to be repaid by the home buyer over the course of 15 years, to an $8,000 tax credit with no repayment required in 2009. Now, for a limited time in 2010, the $8,000 home buyer tax credit will still be available to first-time home buyers and certain current homeowners will also be eligible for a $6,500 credit.

To help everyone better understand the extended and expanded home buyer tax credit, here are some highlights of the changes.

Who can claim the credit?

“First-time home buyers” who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

For current homeowners purchasing a home during the same time frame, they are also eligible for a tax credit, so long as the home being sold or vacated was their principal residence for five consecutive years within the last eight. To elaborate, it must be the same home; it is not enough that they have been homeowners for five consecutive years, they must have been in the same home for five consecutive years.

Another key point is that the existing home does not need to be sold. One must, however, occupy the new home as a principal residence and do so for three years or risk recapture of the credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at “move up” buyers.

How much is the credit and what are the income limits?

The maximum allowable credit for first-time home buyers is $8,000 or 10% of the sales price, whichever is less. For current homeowners, it is $6,500 or 10% of the sale price, whichever is less. Under the extended home buyer tax credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit.

The credit decreases for single buyers who earn between $125,000 and $145,000 and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit deceases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income – over $145,000 for singles and over $245,000 for couples – are not eligible for the credit.

What are the deadlines for qualifying for the credit?

Under the extended home buyer tax credit, as long as a written binding contract to purchase a home is in effect on April 30, 2010, and the deal is closed by July 1, 2010, one can claim the credit.

Will the tax credit need to be repaid?

No, the buyer does not need to repay the tax credit if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale. Another provision of the law waives the recapture provisions for service members who receive orders that require them to move.

Are there any other critical provisions?

-There are three provisions people should be aware of:
-There is an $800,000 limitation on the cost of the home
-The purchaser must be at least 18 years old on the date of purchase
-For a married couple, only one spouse must meet this age requirement and dependents are not eligible to claim the credit

Finally, as an anti-fraud measure, purchasers must attach documentation of purchase to his/her tax return claiming the credit. Normally this would be a copy of the HUD-1, but could include other documents memorializing the settlement.

As with all tax matters, responsibility for complying with the tax code belongs to the taxpayer. Real estate professionals should recommend that their buyers consult their tax professionals to ensure eligibility for the credit and the proper way to claim the credit. For more information including the required IRS forms please contact the Internal Revenue Service at 800-829-1040.

Ken Trepeta is the Director, Real Estate Services for the National Association of REALTORS® Real Estate Services program.

For more information, visit www.realtors.org/res .

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HGTV’s FrontDoor.com Identifies Top 10 Real Estate Predictions for 2010

(BUSINESS WIRE)--With some subtle signs of recovery in the housing market, the real estate industry is due to bounce back – but more challenges could lie ahead for buyers and sellers alike. HGTV’s FrontDoor.com identifies the top 10 must-know real estate trends for the coming year:  ( http://www.frontdoor.com/top10 )

#10: Cash is king. All-cash offers will become even more popular for foreclosures and short sales, as banks would rather get less money than deal with the hassles of loan transactions.

#9: Smoother short sales. As lenders and real estate professionals become more accustomed to short sales (sales in which the proceeds are less than the outstanding debt), the process will become more streamlined and successful for all parties involved.

#8: Tricky appraisal rules. Due to the government’s Home Valuation Code of Conduct passed in May, property appraisals will be more expensive and take longer, sometimes hindering (or breaking) real estate deals.

#7: A conflicted construction market. Though lenders are still reluctant to finance new housing projects for builders, there’s a chance of double-digit increases in new construction next year (according to the McGraw-Hill Construction Outlook Report).

#6: Rising mortgage rates. The Fed’s effort to keep mortgage rates at historic lows is scheduled to end in March. Homebuyers should act now to capitalize on the lowest interest rates in years.

#5: Lending standards still tight. With the subprime mortgage debacle in recent memory, lenders will continue to require stellar credit and thorough documentation from borrowers.

#4: Some stabilizing home values. Nationally, the outlook for home values is good, with a rise in home prices during the last two quarters of 2009. Locally, however, many markets are a long way from full recovery.

#3: More foreclosures to come. Though more homes will go into foreclosure in 2010, some homeowners will be able to lease back their property at market rental rates for a year’s time, allowing more people to stay in their homes longer.

#2: More buyers entering the market. The government’s first-time homebuyer tax credit was extended to April 30 and to a broader range of buyers, which should bring even more buying activity to bear.

#1: Still a buyer’s market. As 2010 looks to be another year of low home prices and a robust inventory of homes for sale, it will still be the best opportunity for buyers to cash in on some great real estate deals.

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New Tax Credit Includes Current Homeowners

(NAPSI)-Many current homeowners can now qualify for up to a $6,500 home buyer tax credit. The initial success of the $8,000 first-time home buyer tax credit convinced Washington to expand the program and extend it until April 30, 2010. This extension, however, will be the last.

Under the extended home buyer tax credit, current homeowners are eligible as long as they have lived in their present residence for five consecutive years within the past eight. First-time home buyers who haven't owned a home in the past three years are still eligible for up to an $8,000 tax credit. Singles who make up to $125,000 and married couples who make up to $225,000 can qualify for the full credit. Those who exceed those income limits may qualify for a reduced amount.

"The new provisions and modifications make an already enticing real estate market even more attractive and accessible. Interest rates are low and home prices are more affordable now than they have been in decades," said National Association of Realtors® (NAR) Chief Economist Lawrence Yun. "There's never been a better time for potential buyers to invest in their future through homeownership."

Many areas are already seeing a rise in home prices and demand, with multiple bids on properties becoming more common. According to the NAR Profile of Home Buyers and Sellers, first-time home buyers became homeowners in record numbers over the past year, comprising 47 percent of all home sales between July 2008 and June 2009. This flood of activity helped shrink housing inventory levels. Reduced inventory is a sign the market is returning to a more balanced state and helps sustain home values.

Yun said that while the housing crisis isn't over, the extended and expanded tax credit is a step in the right direction.

"The bottom line is that the housing market is doing much better now than one year ago, and the home purchases using the tax credit should continue to reduce inventory to acceptable levels. The extension is a big win for consumers, but to take advantage of this rare opportunity, would-be buyers need to get the ball rolling and contact a Realtor® who can help them on the path toward owning a home."

For more information about the tax credit, visit www.HouseLogic.com/homebuyertaxcredit.
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Home Sales Surge in Markets across the Country

 RISMEDIA, December 28, 2009—(MCT)—November 2009 was a positive month for the real estate industry as home sales surged in a majority of markets across the country. Spurred by low prices and the extended and expanded home buyer tax credit, home sales were up in Las Vegas, Nevada; Ohio, the Midwest; and upstate New York, according to reports late last week. While other reports point to sales being down in California, home prices nationally were up—causing for a wave of optimism to be felt throughout the industry.

Here’s a look at some of the markets across the country that received positive news in the housing sector for the month of November 2009:

Las Vegas, Nevada

By Hubble Smith

Spurred by low prices and the extension of the federal tax credit, existing home sales in Las Vegas increased 50.8% to 3,952 in November 2009, Las Vegas-based SalesTraq recently reported. The surge ended a seven-month streak of sales topping 4,000, but still shows strong demand for home purchases heading into the traditionally slow holiday period.

The median resale price of $125,000 is down 27.5% from the same month a year ago. However, it’s a $2,000 bump from the previous month. The new-home segment continues to struggle, though November’s 598 escrow closings were the highest monthly total for the year, a decrease of just 1.3% from a year ago. Median price tumbled 19.4% to $198,466, the first time it’s been below $200,000 since 2002.

Locally, the avalanche of foreclosures predicted for Las Vegas has failed to materialize. November’s 1,477 foreclosures represent a 27% decrease from a year ago, the fifth month of the year with declining year-over-year numbers. “In our view, Las Vegas may be entering a new real estate era,” consultant Steve Bottfeld of Marketing Solutions said. “Whether you call it the end of the beginning or the beginning of the end, there is no question that the residential market is in a transition from what it was to what it will become.”

Housing analyst Dennis Smith of Home Builders Research counted 604 new home sales and 3,696 existing home sales in November, a 6.1% decrease and 46.8% increase, respectively, from the same month a year ago. “Bottom line is this indicates a very flat recovery,” Smith said.

Ohio

By Jim Weiker

During November 2009, 1,839 homes were sold in the Columbus, Ohio area, nearly 60% more than in the same month last year and the highest November sales in four years, the Columbus Board of Realtors reported.

Jill Rudler, who runs the Rudler Professional Group, part of Real Living HER and other real estate experts attribute the boom to the federal tax break for first-time buyers who were racing to complete deals before the original Nov. 30, 2009 expiration date. The National Association of Realtors estimated that about 2 million homebuyers have taken advantage of the credit and predicts that an additional 2.4 million will use it by the middle of next year. First-time buyers made up about half of all transactions last month.

The abundance of new homebuyers also accounts for November’s average sales price of $145,589 in central Ohio, up slightly from a year ago, but well below the $179,000 peak of 2006, during the height of the housing boom.

Statewide, sales rose 31% compared with those of last November, with Columbus leading the way. Among large markets, Cincinnati and Dayton also posted better-than-average gains.

Midwest

By Courtney Hudson

Home sales in the Midwest jumped 58% in November 2009, the strongest showing of any region, as first-time buyers rushed to claim a temporary federal tax credit.

“I think it’s going to be a very good year this next year,” said Sedalia, Missouri real estate agent Mark Pohl. While the Sedalia area has been in a downhill market for about three years, Pohl believes that the area hit rock bottom in March 2009. Since March, there has been a slow increase in the number of homes sold in the area. “I think it’s progressively gotten better,” Pohl said.

The National Association of Realtors recently reported that there were 106,000 completed sales in the 11-state Midwest region and the median home price was flat at $140,800.

The tax credit deadline drove sales across most of the Midwest. “It got everybody moving,” said Don Godwin, owner of the Re/Max Real Estate Group in Des Moines. “First-time home buyers have probably been most of my business,” Pohl said.

California

By Kevin Smith

Home prices rose in Los Angeles County and California last month but sales were off from October 2009, the California Association of Realtors (CAR) recently reported.

The county’s median home price hit $359,670 in November 2009, a 3.9% gain from the previous month and up 0.1% from a year earlier. Home sales in the county showed a 10.8% decline compared with October but were up 7.2% from November 2008, according to CAR figures.

“The decline in activity is normal,” said David Baldridge, a Realtor with First Team Real Estate, Inc. in Whitier. “You don’t see nearly as many buyers in November as you would in August or September, but prices are still going up.”

“The extension and expansion of the tax credit until April 30, 2010, along with low interest rates, should continue to positively impact the market in coming months,” said CAR President Steve Goddard.

Several area cities posted big year-over-year price gains. La Mirada’s median price rose 14.3% in November to $400,000 compared with $350,000 a year earlier. Other notable gains included Diamond Bar (13.9%), Alhambra (12.6%), La Crescenta (12.3%) and Monterey Park (10.9%).

On the other hand, many communities saw their median home prices fall, including San Gabriel (-13.4%), Baldwin Park (-9.7%), El Monte (-6.1%) and La Verne (-8.9%).

Albany, New York

By Chris Churchill

The federal tax credit for first-time buyers sparked a rush to buy homes in November 2009, boosting property sales across the Capital Region. The numbers led some observers to proclaim that the region’s housing market is now headed for full recovery. But the November surge was apparently fueled by the tax credit’s anticipated expiration date, leading to worries that the boost won’t last.

The one-month numbers from the Greater Capital Association of Realtors are certainly impressive: In the Capital Region’s four core counties, the number of closed single-family home sales jumped 46% from the same month a year ago. They were even up significantly compared to sales from 2007.

“It’s been a tough year, but I’ve seen a resurgence,” said Miguel Berger, president of TechValley Homes Real Estate. “I think we hit bottom in the summer, and now it’s on the way up.”

Yet home prices are down in much of the region, despite the uptick in activity. And not everyone is sure the sales surge will continue. James Ader, chief executive of the Realtors’ association, warned that December home sales might slump, because so many buyers rushed to complete sales in November.

But there are reasons to believe the real estate economy may avoid a crash. First, Congress has extended the $8,000 tax credit until June, 2010, and even expanded it with a new tax credit of up to $6,500 for buyers who already own homes. Also, the overall economy seems to be improving, which could make potential buyers more confident about a purchase. Home prices are relatively affordable, when compared to recent years. And mortgage interest rates remain very low.

Distributed by McClatchy-Tribune Information Services.

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Existing-Home Sales Rise 7.4% as Buyers Respond to Tax Credit

Washington, December 22, 2009

Existing-home sales rose again in November as first-time buyers rushed to close sales before the original November 30 deadline for the recently extended and expanded tax credit, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate¹ of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

An NAR practitioner survey² shows first-time buyers purchased 51 percent of homes in November, compared with an upwardly revised 50 percent of transactions in October.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008. Last month’s mortgage interest rate was the second lowest on record after bottoming at 4.81 percent in April 2009.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said conditions are optimal for buyers in the current market. “Inventories have steadily declined and are closer to balanced levels, which indicate home prices in many areas are either stabilizing or could soon stabilize and return to normal appreciation patterns,” she said. “This means buyers still have good choices but are purchasing near the bottom of the price cycle with historically low mortgage interest rates. Throw a tax credit on top and it really doesn’t get any better for buyers with secure jobs and long-term ownership plans.”

Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply³ at the current sales pace, down from an 7.0-month supply in October.

Raw unsold inventory figures are 15.5 percent below a year ago. The last time there was a lower supply of homes on the market was April 2006 when it was at a 6.1-month supply.

“Nearly all markets experienced a solid sales gain from one year ago,” Yun said. “The only markets with measurably lower sales were in San Diego, Riverside, and Sacramento, where inventory shortages for lower priced homes are limiting sales.”

For the second month in a row, sales have risen in all price classes from a year earlier. Prior to October, the only consistent gains were in the lower price ranges.

The national median existing-home price⁴ for all housing types was $172,600 in November, which is 4.3 percent below November 2008. Distressed properties, which accounted for 33 percent of sales in November, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales jumped 8.5 percent to a seasonally adjusted annual rate of 5.77 million in November from a level of 5.32 million in October, and are 42.1 percent above the pace of 4.06 million in November 2008. The median existing single-family home price was $171,900 in November, down 4.4 percent from a year ago.

Existing condominium and co-op sales in November were unchanged from a seasonally adjusted annual rate of 770,000 in October, but are 60.1 percent above the 481,000-unit pace a year ago. The median existing condo price⁵ was $178,000 in November, which is 3.1 percent below November 2008.

Regionally, existing-home sales in the Northeast rose 6.6 percent to an annual level of 1.13 million in November, and are 52.7 percent higher than November 2008. The median price in the Northeast was $223,400, down 13.1 percent from a year ago.

Existing-home sales in the Midwest increased 8.4 percent in November to a pace of 1.55 million and are 53.5 percent above a year ago. The median price in the Midwest was $140,800, a decline of 0.4 percent from November 2008.

In the South, existing-home sales rose 4.8 percent to an annual level of 2.39 million in November and are 44.8 percent higher than a year ago. The median price in the South was $151,400, down 1.4 percent from November 2008.

Existing-home sales in the West increased 10.6 percent to an annual rate of 1.46 million in November and are 28.1 percent above November 2008. The median price in the West was $231,100, which is 4.1 percent below a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

See the entire report at: http://www.realtor.org/press_room/news_releases/2009/12/another_respond .

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39 Percent of Recent Buyers Relied on FHA Loans to Purchase Home

 RISMEDIA, December 22, 2009—According to the most recent Realtors® Confidence Index (RCI), 39% of recent buyers purchased a home with a Federal Housing Administration-insured loan. Realtors who took part in the November 2009 survey also reported that the number of first-time home buyers continued to climb to 51%.

“FHA helps provide affordable mortgage financing to homeowners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric.”

The RCI results also indicated that distressed sales increased to 33% of all home sales last month, and that both investors and first-time home buyers are competing for these properties. The preponderance of distressed properties on the market has also influenced buyers’ perceptions of other homes for sale. Realtors report that many buyers have pricing expectations that treat every property as if it were in foreclosure.

In addition, Realtors expressed ongoing concerns with the impact of the Home Valuation Code of Conduct on recent appraisals. According to some survey respondents, inexperienced or out-of-area appraisers continue to rely heavily on sales prices of distressed properties, even when other comps are available.

“As the first, best source for real estate information, Realtors have their finger on the pulse of current housing trends, and their knowledge and experience offer valuable insights into today’s real estate market,” said Golder. “We know that an economic recovery is not possible without a housing recovery, and we will continue to work with policymakers at all levels to ensure that this happens.”

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. Participants are asked about their expectations for the demand for homes, price of homes, and other economic conditions.

For more information, visit www.realtor.org .

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WSJ Reports: Leading Economic Indicators Rise 0.9% in November

by Jeffrey Bartash

WASHINGTON (MarketWatch) -- The index of leading economic indicators rose for the eight straight month, pointing to an improved economy in 2010, the private Conference Board said Thursday. The index increased 0.9% in November after a 0.3% gain in October, the research group said. Six of the 10 leading indicators were positive. For the first time since December 2007, employment did not make a negative contribution to the index, potentially a good sign for future job growth, the board said.

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Housing Starts Regain Ground in November 2009

 RISMEDIA, December 18, 2009—Nationwide housing production rose 8.9% to a seasonally adjusted annual rate of 574,000 units in November 2009, according to figures released by the U.S. Commerce Department. The gain represented a partial bounce-back from an exceptionally slow month for housing activity in October, and was largely attributed to a big increase on the multifamily side.

“The fact that both starts and permits for new housing production rose last month is a good sign that we’re headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “That said, the November improvement was primarily on the multifamily side, and poor job markets and other economic factors are still keeping many potential buyers on the fence for the time being.”

“Home builders remain very cautious about starting new homes, and overall housing production is still down on a three-month average basis,” noted NAHB Chief Economist David Crowe. “Understandably, it will take some time for the newly extended and expanded home buyer tax credit to start boosting sales in individual markets–just as it did the last time such an incentive was enacted. However, the fact that permits increased in November is a hopeful indication that the desired impact of the tax credit on housing demand may be forthcoming early in 2010. In the meantime, credit for new housing production remains extremely difficult to come by, posing significant obstacles to builders with viable projects.”

Single-family housing starts made up some of the ground they lost in October, posting a modest 2.1% gain to a seasonally adjusted annual rate of 482,000 units in November. Meanwhile, multifamily starts rebounded from an all-time record low in the previous month with a 67.3% gain to a seasonally adjusted annual rate of 92,000 units in November.

Gains in housing production were registered across all regions of the country in November, with a 16.4% increase in the Northeast, a 3% gain in the Midwest, a 12.3% increase in the South and a nearly 2% gain in the West.

Permit issuance, which can be an indicator of future building activity, rose 6% in November to a seasonally adjusted annual rate of 584,000 units, its highest level in a year. Single-family permits rose 5.3% to 473,000 units, while multifamily permits rose 8.8% to 111,000 units.

Three out of four regions posted gains in housing permits for November, with a 4.7% increase reported in the Northeast, a 10.7% increase posted in the South, and a 2.7% gain registered in the West. The Midwest posted a 1.9% decline.

For more information, visit www.nahb.org .

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5 Questions to Consider Before Purchasing a Home

by Mary Ellen Podmolik

 RISMEDIA, December 15, 2009—(MCT)—Interest rates on the benchmark 30-year, fixed-rate mortgage dipped to a 38-year low recently, giving consumers another reason to consider purchasing a home or refinancing their current one.

Freddie Mac recently stated the average rate on a 30-year loan was 4.71% with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1% of the loan amount, payable as a lump sum at closing. While the decline wasn’t overly dramatic, the dip is likely to get people wondering whether it’s time to sign on the dotted line.

The 5 following questions may help you decide if now is the time to go ahead and purchase a home or refinance your current home.

Q: Why are rates so low?
A: Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to stabilize the housing market by making homes more affordable for consumers. The Federal Reserve Bank of New York, which is managing the program, plans on purchasing $1.25 trillion of securities.

Q: Are rates expected stay this low?
A: It’s hard to tell, but don’t count on it because the lending landscape is likely to change next year. In September 2009, the Fed said it would gradually wind down the purchase program, ending it by March 30, 2010. That has some in the mortgage lending industry worried.

In a recently published mortgage survey, more than 60% of Bankrate.com’s panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone’s guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53%.

Q: Why do different mortgage surveys come up with different average interest rates?
A: It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.

But regardless of the survey, the general consensus is that rates are ultra-low right now and may be the lowest the market will see.

Q: What else does a consumer need to know?
A: The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.

If you’re refinancing, remember the bigger the loan, the greater the payoff for finding a lower interest rate. Savvy customers put in their paperwork with a lender and set a “strike” interest rate at which to lock in the loan, a good move considering rate volatility.

Several refinancing calculators are available online that let borrowers plug in all the required numbers and determine the monthly savings and how long it will take to recoup the expense of a refinancing.

Q: So is now the best time to buy a home?
A: It depends on personal situations. Homebuyers certainly have a lot of factors working in their favor right now—low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in the spring.

On the flip side, there’s growing sentiment among analysts that housing prices, which are showing ever-so-minor improvement, may fall further. The reason? Lenders are expected to get better at determining which borrowers will qualify for loan modifications. That means lenders also will get faster at moving homes through the foreclosure process.

Mark Zandi, chief economist at Moody’s Economy.com, recently predicted that housing prices nationally will hit bottom in 2010’s third quarter. That means anyone buying a house now could see the value of their investment initially depreciate.

(c) 2009, Chicago Tribune.

Distributed by McClatchy-Tribune Information Services.

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NAR Reports Home Values Have Been Stabilizing Based on Zillow Data

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)

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Home Price Index Shows Prices Rise for Fourth Straight Month

But is it a Trend that Will Continue? 

We Can Only Hope

by John Adams
from the Atlanta Journal-Constitution HomeFinder

The widely watched S&P/Case-Schiller Index recently showed that home prices in the nation's largest cities continued to rise for the fifth straight month. And while the seasonally adjusted rate of increase was a modest one, it was a welcome relief from the seemingly endless (21 month) national price drops of 2007, 2008 and the first half of 2009.

The report showed that home prices nationally are still down over ten percent from their year-ago level, but it's beginning to look like homeowners may see a recovery in 2010. That's assuming, of course, that an economic recovery actually happens.

From an Atlanta perspective, this Case-Schiller report shows the fourth straight month of improvement, even though the most recent monthly prices refused to budge from the previous reporting period. That's because economists adjust the data for the season, and that adjustment shows the Atlanta area actually experienced a modest increase in home values during the period.

By almost any measure, one can say that the real estate market is greatly improved from six months ago.

Agents and brokers provide anecdotal evidence of renewed interest in buying from fence-sitters as well as a higher level of serious buying traffic. In addition, we hear reports of out-of-town big cash buyers hiring local reps to purchase literally millions of dollars of "bargain homes" while the getting is good.

Joe Ard, owner of Vestlet.com Realty, tells of getting a phone call from an unnamed out of town physician. He asked a lot of questions, then said he was transferring a massive amount of money into my escrow account to fund HUD home purchases. When I asked how massive, Joe replied "seven figures." The funds were not only for acquisition of these homes, but also for their rehab, rental, and management.

I have written in this column before that I believe no real recovery can occur until we begin to "mop up" the huge volume of vacant HUD and "bank-owned" homes that are literally poisoning Atlanta neighborhoods. That mop-up may have already started.

Increases in ATLANTA home values help the local real estate scene in a number of ways:

* Those homeowners who are trying to sell their homes are more likely to meet with success, and when they do, they are more likely to get an offer nearer to their asking price. I have not checkedGaMLS or FMLS listing-to-sell ratios recently, but let's watch for that number to rise.

* The inventory of new homes, while still an area of concern, is less now than it has been in recent months. This helps both new home sales (as there is less competition) and resales (as buyers shop and compare there also).

Remember that new home sales represent only about one in six home sales, with the remainder being resales. It is entirely possible that resales will start to see a recovery faster than new construction.

* Current owners who are "upside-down" in their mortgage loans move closer to a "break-even" position as home values rise. This has the effect of encouraging owners to avoid default and maintain hope of future equity in their investments.

One of the most worrisome parts of this possible recovery is the HUGE increase in advertised foreclosures since the year 2000. In that year, there were a total of about 15,000 advertised foreclosures for the entire year in the 13 county metro area. In 2008, there were about 80,000. And so far this year, according toEquityDepot.net guru Barry Bramlett , we have seen about 107,000 thru November. Look for another 8,000 or so in December for a yearly total of about 115,000 houses going into foreclosure in metro Atlanta in 2009.

That is a staggering blow to any potential recovery, and makes the current Case-Schiller numbers all the more amazing.

And there is another area that benefits when values rise:

* Bank-owned home sales spark greater interest as investors see a possible return to real estate profits in this bloated subset of the Atlanta market. These cash investors largely sat on the sidelines in the first half of the year. But now any reasonably priced post-foreclosure property is likely to draw multiple full price offers. In a maddening response, banks routinely reject all offers, then allow bidders 24 hours to make their "final and best" cash offer.

Bank-owned home buyer Snap Decoteau of MetroVestATL.com says it's getting harder and harder to find a good deal on a bank owned post foreclosure. He blames amateurs and out-of-towners who are willing to pay "too much."

The future of the Atlanta market looks promising, but as is the case with the larger economy, still uncertain. Perhaps our best hope for a full recovery lies in the reduction of the huge wave of foreclosures that has swamped many Atlanta neighborhoods.

Clearly, even modest increases in values will help that issue, but a return to stronger employment numbers is the key. People with jobs buy houses, while those without jobs may lose their homes to foreclosure. As we get ready to go into a new year, let's hope for a strong jobs market.

The announcement this week of a slight reduction in the unemployment rate can only help the real estate market. I know that four months does not truly indicate that Atlanta is firmly on the road to recovery, and I know that we may suffer some months of decline in the year ahead. But at least it seems that some people still want to buy homes in the Atlanta area, and I am going to accept that as a positive sign. As to the future, we'll watch and report.

Please share your thoughts and comments with me at johnadams@money99.com .

Click below for the PRESS RELEASE from Case Schiller:

http://www.money99.com/case-schillerNOV2009.pdf

Find more information on home prices and the S&P/Case-Schiller Home Price Index, visit my website: money99.com.

This article first appeared in the Atlanta Journal-Constitution in a modified format.

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If You Don't Buy a House Now, You're Stupid or Broke

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

By Marc Roth for BusinessWeek

Well, you may not be stupid or broke. Maybe you already have a house and you don't want to move. Or maybe you're a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let's look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren't happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We've since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let's assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let's put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is "more stable" and it's safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you're borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

Marc Roth is the founder and president of Home Warranty of America, which touches just about every part of the real estate industry since it sells through builders, real estate agents, title companies, mortgage companies, and directly to consumers.

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Changing the Way People Buy Homes: Using the 203k Program to Purchase ‘Dream Homes’

 RISMEDIA, December 9, 2009—Driving to work one morning earlier this summer, home buyer Lori Kramer was thinking about the homes she and her husband had looked at the day before. Then, she had a thought that would eventually change the direction of her home search completely.

“My home at the time was listed for less than what we were approved for and it needed some work. So I wondered if we could use that remaining money to upgrade a home we were considering and make it our own,” says Kramer of Jacksonville, Florida.

From there, Kramer called her Wells Fargo mortgage consultant, Diana Diallo, who told her about the 203k program. The FHA Section 203k program is specifically designed to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements.

“As the market turned and we began to see more and more distressed properties, Wells Fargo, as a company, has focused its efforts on developing a more streamlined version of the typical 203k loan,” explains Diallo.

After Kramer received preapproval from Wells Fargo, she consulted with her Realtor, Shawn Norton of Keller Williams Realty, about revisiting a home she and her husband had considered earlier; it needed a lot of work, but Kramer saw the home’s possibilities and later bought it. From there, Diallo worked with Kramer on choosing a home improvement vendor. She selected Lowe’s, a decision Kramer calls “one of the best decisions we made.”

“After comparing service and cost, Lowe’s out-delivered the other vendors,” explains Diallo. “Thus, Lori chose Lowe’s to complete her remodel repairs.” And the renovations were quite extensive.

With their 203k approval, the Kramers completely renovated the kitchen, replacing all cabinets and countertops. They also revamped two bathrooms and added new carpet and fencing to the home.

“Lowe’s was fantastic and they truly deserve some spotlight for their service,” lauds Kramer. “The Lowe’s team and their contractors helped with design, offered us some great tips and helped us with materials and product selection; they did all of this and offered us the selection we wanted for an affordable price—and within 45 days from closing.” The Kramers closed on their home on August 18 and the work was completed by October 1.

“We are extremely happy,” says Kramer. “This program changed the way we looked at buying a home. Thanks to Lowe’s, our home has turned out amazing. The before and after is unreal. My kitchen is particularly amazing.

“In this market, where so many homes have been vacant for so long or gutted in some cases, this program could really change the way people are buying real estate,” adds Kramer. “I would definitely do this again—and would work with Lowe’s to do it.”

Norton agrees.

“I learned so much from working on this with Lori and Diana,” says Norton. “This really opened all of our eyes to see that you can fix something if the structure’s good and you have the right people in place to do the work.”

In many cases, homes that would qualify for the 203k loan are in nice areas but have aesthetic problems. This program—because the home improvements are built into the loan—opens the whole market to the average home buyer. “I never would have bought this home without the program—and I could not be happier,” says Kramer.

“Lowe’s was just awesome,” she adds. “From the program manager and other managers to the contractors, everyone was just outstanding. Our cabinet installer was the best—he was on point and professional. All of our contractors were so good with us. Lowe’s was great to work with, and I would love for other people to experience working with them as well.”

For more information on the 203k loan program, visit www.hud.gov or www.re-buildusa.com .

Lowe’s contractors and installers are licensed where required. For more information, please visit www.lowes.com .

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Tax Credit Expands Home Buyer, Economic Opportunities; On Pace to Help 70% of Potential Home Buyers

 RISMEDIA, November 19, 2009—The National Association of Home Builders (NAHB) is spreading the word to consumers about an important new law that extends and expands an attractive tax incentive for potential home buyers. The Worker, Homeownership, and Business Assistance Act of 2009, signed into law by President Obama on Nov. 6, extends the deadline for the first-time home buyer tax credit and gives a larger group of home buyers the chance to take advantage of this government program.

“The tax credit has already proven to be an effective means of boosting economic activity,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We hope that the government’s action to enhance it will have the intended additional stimulative effect that will help get housing and the economy back on solid ground.”

The new law extends the $8,000 first-time home buyer credit through April 30, 2010, giving buyers who have signed a sales contract by that deadline until June 30 to close their deal. A new credit of up to $6,500 was created for repeat home buyers who buy a principal residence if they have been residing in the home they currently own (or previously owned) for five consecutive years out of the eight years preceding the purchase of the new home.

“It’s not just a first-time buyer tax credit anymore,” Robson said. “Move-up buyers, move-down buyers, and others who have previously owned a home can now qualify as well. In fact, close to 70 percent of all potential home buyers should now qualify for some form of the credit.”

Income limits for eligible buyers have also been increased to allow more consumers to qualify, particularly those in markets with a higher cost of living. Now single taxpayers with incomes up to $125,000 and married couples earning up to $225,000 may be eligible. Partial credits are available to home buyers who earn up to $20,000 more than the limits.

A leading source of consumer information on the tax credit is NAHB’s website at www.federalhousingtaxcredit.com, which saw a huge increase in visits in the days after the new law was signed. It provides basic information about the first-time and repeat buyer credits, detailed question and answer sections, and links to additional home-buying resources for consumers.

“The federalhousingtaxcredit.com website had more than 70,000 visits on the Monday after the President enacted the law,” said Robson. “Since the site was established in mid-2008, there have been more than 6 million visits by people seeking information about the home buyer tax credits. That tells you how hungry consumers are for easy-to-understand information on this great opportunity that has been opened to them.”

NAHB estimates that the home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.

For more information, visit www.nahb.org  or www.federalhousingtaxcredit.com .

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U.S. Real Estate Confidence Index Hits New High in November

RISMEDIA, December 3, 2009—Real estate professionals in the United States sent Point2 Technologies Inc.’s forward looking Real Estate Confidence Index (RECI) to new highs in the company’s November 2009 survey of 2,000 real estate brokers and agents nationwide.

A 7.87% jump in confidence signaled renewed optimism and more positive sentiment amongst real estate brokers and agents across the U.S., with the RECI recording a new high of 6.03 on the 1-10 Index scale (1 being “bad” and 10 being “good”), in a dramatic reversal that follows October 2009 results which saw the industry’s forward looking sentiment gauge dip to an all time low of 5.59 after two months of increased uncertainty about the future of the real estate market.

With a more overall positive tone underlying commentaries offered by real estate brokers and agents in the majority of U.S. markets and who participated in the Point2 survey, improved sentiment took all three RECI Index components to new highs.

The Current Sentiment, which measures real estate professionals’ opinion of present market conditions, moved up 0.27 points to 5.16, a 5.52% increase versus the October reading of 4.89 and a 1.98% improvement versus the Index variable’s most recent high of 5.06 on the scale, recorded in September 2009.

At 5.96 on the 1-10 scale, the forward looking Short Term (3-6 months) Optimism/Pessimism gauge saw the largest improvement amongst the RECI’s three variables, increasing 10.99% versus the prior month’s reading. The 3-6 month outlook barometer’s November results are also its highest since registering 5.80 on the scale, in August 2009.

Long Term (12-18 months) Optimism/Pessimism also reached a new high, increasing 0.47 points versus October, or 7.22%. The Long Term Outlook’s previous high of 6.88 was also recorded in August 2009.

For more information, visit www.Point2.com .

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Fed survey finds recovery gaining momentum

By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer

WASHINGTON – The economic recovery gained traction in late fall as shoppers spent a bit more and factories bumped up production. That assessment Wednesday by the Federal Reserve marked its most upbeat view since the economy tumbled into recession two years ago.

The Fed's new snapshot of business barometers nationwide found that conditions have generally improved since the last report in late October.

Eight of the Fed's 12 regions surveyed reported some pickup in activity or improved conditions, the Fed said. Those regions were: Boston, New York, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco.

The four other regions — Philadelphia, Cleveland, Richmond and Atlanta — described conditions as little changed or mixed.

The new report adds to evidence that the economy is rebounding after the worst recession since the 1930s.

The main challenge for Fed Chairman Ben Bernanke, who will be on Capitol Hill on Thursday seeking confirmation for a second term, is to sustain the fledgling rebound, especially after the benefits of government support fade next year.

To that end, the Fed is expected to hold a key bank lending rate at a record low near zero when its meets on Dec. 15-16. Economists predict the Fed will keep rates at super-low levels well into next year.

With Wednesday's survey also finding that inflation remains under control, the Fed has leeway to hold rates at record-lows. The central bank hopes that will entice people and businesses to step up spending, which would bolster the economy.

Although the jobs market remains lousy, the Fed survey found some scattered signs of improvement in some markets.

In the Boston region, some businesses were starting to hire and reverse pay cuts or wage freezes implemented earlier in the year. The St. Louis region noted that the service sector recently started to expand.

Still, holiday hiring expectations nationwide were mixed, the Fed report said. And most private economists predict that even as the pace of massive job losses slow, the nation's unemployment rate — now at a 26-year high of 10.2 percent — will continue to climb into next year. Some predict it will rise as high as 11 percent by the middle of 2010 before slowly drifting down.

The Fed warned last week that it could take five or six years for the job market to return to normal.

That's why Bernanke and others think that consumers — while appearing to hold up fairly well now to all the negative stresses — may turn more cautious, restraining the recovery.

"This slow-motion recovery is going to take an extraordinary amount of patience," said Brian Bethune, economist at IHS Global Insight. He and other analysts predict the economy will see growth moderate in the months ahead.

Consumers in late November spent more, with general merchandise and auto sales improving across much of the country, the Fed report said. Unsure of customer demand, most merchants were keeping stocks fairly lean during the holiday season. Yet some retailers suggested that they have recently become more optimistic about the holiday sales outlook.

The Fed survey also found that manufacturing conditions generally showed some improvements.

Biopharmaceutical companies in the Boston region noted that revenue increased. The Dallas region reported stronger activity for makers of high-tech equipment, paper and petrochemicals. Upticks in food-related production also were mentioned in some regions.

Many manufacturers said they were "optimistic about the near-term outlook." But makers of construction-related materials were still pessimistic, mostly because of expectations that problems in the commercial real estate industry will be prolonged.

In fact, commercial real estate conditions continued to deteriorate, the Fed report said. Most regions were plagued by rising vacancy rates, downward pressure on rents and little, if any, new development.

By contrast, the housing market — sales and construction activity — improved across much of the country, according to the Fed survey. A collapse in the housing market, which dragged down home prices, thrust the country into a recession. A sustained turnaround in housing is a key ingredient for a lasting economic recovery.

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2 Million Americans Expected to Take Advantage of Extended, Expanded Homebuyer Credit

RISMEDIA, December 2, 2009—More American homebuyers will get tax relief thanks to changes made to the First-Time Homebuyer Credit. H&R Block advises the popular credit is now more accessible to existing homeowners and first-time homebuyers in three ways:

1. Through a tax credit worth up to $6,500 for existing homeowners in the market for a new home.
2. Through a new closing deadline of April 30, 2010- extended from Nov. 30, 2009- for the $8,000 First-Time Homebuyer Credit. Also, a special provision gives taxpayers two extra months to close if they’ve entered into a contract by April 30, 2010.
3. By increased phase-out limits that start at $125,000 for singles and $225,000 for married filing jointly- up from $75,000 and $125,000 respectively. The new limits apply to homes purchased after Nov. 6, 2009.

Under the new requirements, an estimated 2 million Americans are expected to claim the tax benefit. The IRS estimates 1.4 million people have already claimed earlier versions of the First-Time Homebuyer Credit.

“From seniors looking to downsize, to families wanting to move, to those shopping for their first home, this credit paves the way for more people to positively impact their taxes through the benefits of homeownership,” said Amy McAnarney, executive director of The Tax Institute at H&R Block.

Existing homeowners must have owned and lived in their current home continuously for five of the last eight years to claim the credit of up to $6,500. Taxpayers must close on the replacement home between Nov. 7, 2009 and April 30, 2010. If taxpayers have entered into a contract on a home by April 30, 2010, they have until June 30, 2010 to close.

“The tax credit of up to $6,500 for current homeowners could ease the sting of those wanting to move but worried they’ll take a loss in the down market,” McAnarney said. “More first-time and existing homeowners can take advantage of this valuable tax credit under the new law.”

A house must be valued at less than $800,000 to be eligible for the new $6,500 or the $8,000 credit for first-time homebuyers. Taxpayers can claim the credit on their 2009 or 2010 tax returns. A completed settlement statement must be attached to the return in order to claim the credit.

Owning a home can trigger many other tax benefits. Taxpayers should consult their tax professional to ensure they receive all the credits and deductions a new house affords them.

For more information, visit www.thetaxinstitute.com .

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Nine Consecutive Gains for Pending Home Sales Says National Association of Realtors

Washington, December 01, 2009

Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the National Association of Realtors®.

The Pending Homes Sales Index,* a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.

The PHSI in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago. In the Midwest the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008. Pending home sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago. In the West the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.

Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for November will be reported December 22 and the next Pending Home Sales Index will be on January 5; release times are 10 a.m. EST.

New-Home Sales Rise 6.2% in October 2009

by Ruth Mantell

 RISMEDIA, December 1, 2009—(MCT)—Sales of new homes rose 6.2% in October 2009 on strong results in the South, the Commerce Department estimated recently.

The rise in U.S. new-home sales to a seasonally adjusted annual rate of 430,000 was well above the 390,000 pace that economists surveyed by MarketWatch had expected.

Sales rose 23.2% in the South. By contrast, monthly sales fell by 20% in the Midwest, and by 5.1% in both the Northeast and the West.

“On the surface, one would have assumed that the surge in sales activity was induced by the rush of first-time home buyers trying to get ahead of the originally scheduled end of the first-time homebuyers’ tax credit at the end of October,” wrote Millan Mulraine, economics strategist with TD Securities, in a research note. “However, given the lopsided regional dimension to the increase in home sales, we are not entirely convinced that this was the only story.”

The government cautions that its housing data are subject to large sampling and other statistical errors, with large revisions common. It can take up to six months for a trend in sales to emerge.

The pace of new-home sales in September also was revised slightly higher, to a level of 405,000. New-home sales are up 5.1% compared with a year ago, the government’s data showed.

The supply of homes on the market fell to 239,000 in October, representing a 6.7-month supply.

The median sales price in October hit $212,200, compared with $213,200 in the prior year.

(c) 2009, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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Housing and Economy Headed for Sustainable Recovery; First-Time Homebuyers Lead the Way

 RISMEDIA, November 18, 2009—Aided by the home buyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”

The 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows first-time buyers accounted for a record 47% share of home sales over the past year, up from 41% in the 2008 survey. The share has risen steadily since a cyclical low of 36% in 2006.

Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010. “A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun said.

New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

The 30-year fixed-rate mortgage will probably average 5.3% in the fourth quarter, rising gradually to 5.8% by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.

“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appear to be in the early stages of stabilizing. With the expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5% in 2010, but with wide geographic differences,” Yun said. He expects growth in the U.S. gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.

The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.

“The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun said. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4% this year, then rising 1.6% in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4% this year and 1.2% next year.

For more information, visit www.realtor.org .

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Yahoo News Reports New US home sales rise 6.2 percent

By ALAN ZIBEL, AP Real Estate Writer

WASHINGTON – Sales of new homes rose last month to the highest level in more than a year as strong activity in the South offset weakness in the rest of the country.

The Commerce Department said Wednesday that sales rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Economists surveyed by Thomson Reuters had expected a pace of 410,000.

There were 239,000 new homes for sale at the end of October, the lowest inventory level in nearly four decades. At the current sales pace, that's a 6.7 months of supply, down from last winter's peak of more than a year.

"If you're looking for a sign that builders will need to start swinging their hammers again soon, this is it," wrote Mike Larson, real estate analyst at Weiss Research.

The report tallies signed contracts to buy homes, rather than completed sales. Home shoppers in October were acting before lawmakers decided to extend a tax credit for first-time buyers and expand it to some existing homeowners. The credit now covers contracts signed by April 30, and analysts expect it to further the housing recovery in the coming months.

"It's all thanks to the government," said Jennifer Lee, an economist at BMO Capital Markets. Sales are up 31 percent from the bottom in January, but down 69 percent from their peak in July 2005.

The surge in sales was driven entirely by a 23 percent increase in the South. Sales fell about 5 percent in the West and Northeast, and fell 20 percent in the Midwest.

Despite the lack of certainty about the tax credit that buyers faced in October, sales were up 5.1 percent from a year ago, the first yearly increase since November 2005.

The median sales price of $212,200 was almost even with $213,200 a year earlier, but up almost 1 percent from September's level of $210,700.

Last month, Ryder Homes of Nevada Inc. resumed construction on houses at two of its communities around Reno. "We're finding people aren't coming in willing to wait six months," said Rob Dunbar, Ryder's land development manager.

The resale market is also strong. the National Association of Realtors said Monday home resales rose 10 percent from September to October, the biggest monthly increase in a decade. Along with the tax credit, buyers are being attracted by low prices and mortgage rates.

The average interest rate for a 30-year fixed mortgage was 4.78 percent this week, matching a record low set at the end of April, Freddie Mac said Wednesday.

__

AP Real Estate Writer Alex Veiga contributed to this report.

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House Prices Increase Slightly in Third Quarter 2009; First Quarterly Increase since Second Quarter 2007

 RISMEDIA, November 25, 2009—U.S. house prices rose modestly in the third quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.2% higher on a seasonally adjusted basis in the third quarter than in the second quarter of 2009. Over the past year, seasonally adjusted prices fell 3.8% from the third quarter of 2008 to the third quarter of 2009.

FHFA’s seasonally adjusted monthly index for September 2009 was unchanged from August. The monthly change for the July-to-August period was revised to -0.5%, from an initial estimate of -0.3%. “These data provide some evidence of short-term stabilization in housing prices, a likely result of the many ongoing efforts to stabilize markets,” said DeMarco. “Given the headwinds facing markets across the country, including high unemployment rates and continued high levels of delinquency and foreclosures, the longer-term view remains uncertain.”

While the national, purchase-only house price index fell 3.8% from the third quarter of 2008 to the third quarter of 2009, prices of other goods and services fell 2.8%. Accordingly, the inflation-adjusted price of houses fell approximately 1.0% over the latest year.

Unlike the FHFA purchase-only index, FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, fell over the latest quarter. The index declined 2.4% in the latest quarter and 4.1% over the four-quarter period.

Additional findings include:
-Of the nine Census Divisions, the Mountain and Pacific Divisions, both in the Western U.S., experienced the most significant price movements in the latest quarter. Prices fell 1.4% in the Mountain Division, while prices increased 1.9% in the Pacific Division.

-Seasonally adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 19 states and Washington, D.C. Prices rose over the latest four quarters in only seven states.

-The purchase-only index for California rose 2.1% between the second and third quarters of this year.

-Of the purchase-only indexes for the 25 most-populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area. In that area, prices declined 22.0% between the third quarters of 2008 and 2009. Prices held up best in the Denver-Aurora-Broomfield, CO Metropolitan Area, where prices rose 3.3% over that period.

For more information, visit www.fhfa.gov .

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5 Tips to Buying a Home on Deadline and How the Tax Credit Extension Can Help

 RISMEDIA, November 24, 2009—(MCT)—House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather. This winter, however, might be different, thanks to the extended—and expanded—first-time home-buyer tax credit.

“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she said.

The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now 10% of the home price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers. All buyers must have a binding contract on a house in place on or before April 30, 2010. The sale must close on or before June 30. 2010.

To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased. The credit is only for principal residences.

Income limits have risen as well. According to the IRS, the home buyer tax credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.

The inclusion of move-up buyers might inspire homeowners to take action and list their house if they’ve been putting it off, said Carolyn Warren, a Seattle, Wash.-based mortgage broker and banker and author of the book Homebuyers Beware. “If somebody loves their home, it’s not going to entice them to sell. If they’ve had it on the back of their minds and really would like to move up, it might push them into doing it sooner than later,” Warren said.

The credit isn’t expected to have as large of an effect on move-up buyers as it has on first-time buyers, according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The maximum tax credit is about 4% of the average purchase price for first-time buyers, but about 2% of the average purchase price for move-up buyers.

“We estimate that the first-time home buyer tax credit will result in a 10% increase in home sales from March through November of 2009,” said Thomas Popik, research director for Campbell Surveys, in a news release. “We’d expect the effect of the proposed tax credit for current homeowners to be about half as large—from December until the tax credit expiration in the spring of next year, it might be 5% of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time home buyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension.”

Tips for buyers
Interested in buying a home and claiming the home-buyer tax credit? Below are five tips:

1. Don’t procrastinate. Start searching for a home now. Getting an early start will give you a better chance of finding the right house before the credit deadline. Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker, and do a realistic assessment of what you can afford. Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible.

2. Don’t count on another extension. The credit won’t be available forever, Fadel said. If you want to take advantage, be sure to make that spring deadline.

“This is a medication for the housing crisis. Once the patient—which is the housing market—cures, there will be no medication needed,” he said.

3. Mind the interest rates. Mortgage interest rates are low right now, but will likely rise next year. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying. Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise.

4. Communicate with your lender. Throughout the process, make sure you’re communicating with your lender regularly; if there’s a piece of documentation you’re asked for, get it turned in as soon as possible, said Doug Heddings, a New York-based real estate agent with Charles Rutenberg Realty. Good communication is important in making sure the loan closes on time. And think twice before pursuing a short sale if you want to make the credit deadline. That’s where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner’s lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property.

5. Don’t take shortcuts. Don’t forgo any of the steps you would normally take just to make the tax credit deadline. Make sure the house is a good fit for your needs and get a home inspection. Skipping steps could cost you in the long run.

(c) 2009, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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U.S. existing home sales seen at highest since July 2007

By Julie Haviv 

New York (Reuters) – Sales of existing U.S. homes likely rose for a second consecutive month in October, reaching their highest since July 2007, according to a Reuters poll, as buyers scrambled to take advantage of greater affordability and a first-time home buyer tax credit.

The survey of 29 economists predicted sales of previously owned homes climbed to a seasonally adjusted annual rate of 5.70 million, the fastest pace since 5.73 million units were sold in July 2007 and up from 5.57 million units in September.

Forecasts ranged from as low as a seasonally adjusted annual rate of 5.26 million to as high as 6.00 million units.

Existing home sales tally the number of previously constructed homes for which a sale closed during the month.

The National Association of Realtors will release U.S. existing home sales data on Monday at 10 a.m. EST.

(Additional reporting by Lucia Mutikani; Editing by Dan Grebler)

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Housing Affordability Hovers Near Record-High Level for Third Consecutive Quarter

 RISMEDIA, November 23, 2009—Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 70.1% of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3% during the previous quarter and up from 56.1% during the third quarter of 2008.

“At a time when housing is at its most affordable, we applaud the recent actions taken by Congress and President Obama to stimulate housing by extending the federal tax credit beyond its Nov. 30 deadline and expanding it to a wider group of eligible home buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “With interest rates now lower than last quarter, the tax credit will encourage even more home buyers to enter the market and help stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices.”

Read the full article at: http://rismedia.com/2009-11-22/housing-affordability-hovers-near-record-high-level-for-third-consecutive-quarter/

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