Existing Home Sales Move Higher In October

November 21, 2012 by

Existing Home Sales October 2012After a small decline in September, Existing Home Sales rebounded in October, increasing a modest 2.1%.

The housing market’s slow, steady recovery continues as sales volume in all four regions expanded last month with the exception of the Hurricane Sandy-affected Northeast.

The National Association of REALTORS® monthly Existing Home Sales Report comprises completed sales of single-family homes, townhomes, condominiums, and co-ops. The Existing Home Sales report is compiled on a seasonally-adjusted, annualized basis. It shows a 10.9 percent sales increase as compared last year.

Sales volume might otherwise be higher, however, if not for a lack of homes for sale.

Total housing inventory fell 1.4 percent to 2.14 million homes last month which, at the current sales pace, represents a 5.4-month national supply — the lowest in more than 6 years.

The lack of supply amid burgeoning demand has led home prices higher nationwide. October’s median existing home sale price was $178,600 — an 11.1% increase from October 2011 and the eighth consecutive month during which the median sales price rose.

The last time that occurred was during the eight months ending May 2006.

In addition, the Existing Home Sales report showed that the median time on market in October rose to 71 days, up 1 day from September 2012. As compared to October 2011, however, median time on market is down 26% from 96 days.

Other noteworthy statistics from the October Existing Home Sales report include : 

  • Foreclosures and short sales accounted for 24% of sales
  • Foreclosures sold for an average discount of 20% to market
  • Short sales sold for an average discount of 14% to market

Furthermore, thirty-two percent of homes sold in October were on the market for less than one month. 20% were on the market for six months or longer.

Record-low mortgage interest rates continue to spur housing, as do low prices. Neither will last indefinitely. If you plan to purchase a home in 2013, therefore, consider moving up your time frame. Home ownership will likely increase in cost as the year moves on.

Filed Under: Housing Analysis Tagged With: , ,

Homebuilder Confidence Spikes To 6-Year High

November 20, 2012 by

NAHB Housing Market IndexThe National Association of Home Builders (NAHB) released its Housing Market Index (HMI) Tuesday, which showed sharp, 5-point increase to 46 for November 2012, marking the seventh consecutive monthly gain for the HMI, and lifting the index to its highest point since May 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal “good” conditions. 

The Housing Market Index is a measure of builder confidence, published monthly, based on a survey sent to NAHB members which asks them to rate housing market conditions.

In November, home builders reported gains in two of the three areas surveyed:

  • Current Single-Family Sales: 49 (+8 from October 2012)
  • Projected Single-Family Sales: 53 (+2 from October 2012)
  • Buyer Foot Traffic: 35 (unchanged from October 2012)

Builders report growing demand for new homes as inventories for alternative properties — distressed and foreclosed homes, for example — shrink nationwide.

Even Hurricane Sandy did little to suppress builder confidence.

The NAHB survey was conducted in the two weeks immediately following Hurricane Sandy so the Housing Market Index does reflect builder sentiment during that period. All regions of the country posted confidence gains in November.

The South Region showed a 4-point gain to 43; the West Region showed a 3-point gain to 47; the Midwest Region showed a 3-point gain to 45; and the Northeast Region showed a 2-point gain to 31.  

Despite the gains, builders nationwide still report challenges with home appraisals and tight credit conditions. In addition, a shortage of buildable lots in some areas is limiting the ability for home builders to put more single-family homes on the market.

As builder confidence grows, today’s buyers should prepare for the possibility of higher home prices. Confident sellers are less likely to make price concessions or to offer free upgrades.

If you are in the market for a new home, therefore, the time between now and the New Year may be the best opportunity to make a bid on a home. Starting next year, low prices may be gone.

Filed Under: Housing Analysis Tagged With: , ,

Federal Reserve : New Economic Stimulus May Be Warranted

November 19, 2012 by

Is more Fed stimulus in store for 2013?The Federal Reserve released its October Federal Open Market Committee (FOMC) meeting minutes last week, revealing a Fed in disagreement about the future of the U.S. economy and about what, if any, stimulus may be warranted in the next 12 months.

The “Fed Minutes” recaps the conversations and debates that transpire during an FOMC meeting, and is published 3 weeks after the meeting adjourns. 

According to the October minutes, FOMC members “generally agreed” that a housing recovery is under way nationwide, citing increased housing prices, higher sales volume, and rising construction in many parts of the country.

FOMC members made no major policy changes at their last meeting, but agreed that a continuation of additional asset purchases would likely be necessary in 2013, in order to achieve a substantial improvement in the labor market.

Other notes from within the Fed Minutes included:

  • On housing: Signs of improvement are “encouraging”, and mortgage rates are at historic lows
  • On inflation: Essentially “unchanged”, notwithstanding recent increases in energy prices
  • On Europe: Production indicators signal contraction in business activity and expansion
  • On employment: Employment is rising, and unemployment remains high

The economic forecast prepared by the FOMC staff shows an uptick in consumer spending, residential construction, and labor market conditions which more than offset recent downgrades in the business fixed investment and the industrial production outlooks.

Through 2013, economic activity is projected to accelerate gradually, supported by a lessening in fiscal policy restraints. The Fed also anticipates that home buyers will benefit from looser credit standards.

Low mortgage rates are helping home buyers, too.

According to Freddie Mac, the average 30-year fixed rate mortgage rate was 3.34% last week, down from 3.55% in September. This has given a boost to buyer purchasing power nationwide and the year-end housing market may reflect it. Demand for homes remains strong.

The next FOMC meeting is scheduled for December 11-12, 2012.

Filed Under: Federal Reserve Tagged With: , ,

Bank Repossessions Slip For 24th Consecutive Month

November 16, 2012 by

Foreclosures per household October 2012

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings increased 3 percent in October as compared to September 2012, climbing to 186,455 U.S. properties.

RealtyTrac defines a “foreclosure filing” as any foreclosure-related action including a Notice of Default, a Scheduled Auction, or a Bank Repossession. On average, 1 in every 706 U.S. homes had a foreclosure filing during the month of October.

For the 24th consecutive month, the number of bank repossessions fell, down less than 1% from the previous month and down 21% from October 2011. Bank repossessions dropped in 37 states, plus the District of Columbia, indicating that banks are seeking alternatives to foreclosure.

Distressed home sales, which include foreclosures and short sales, represented 23% of sales in the second quarter of 2012, down from 30% a year ago, according to the National Association of REALTORS®.

Florida again posted the top foreclosure rate nationwide.

One in every 312 Florida housing units had some sort of foreclosure filing in October as foreclosure starts moved to a 12-month high. Monthly filings increased 2% from last month.

In Nevada, the monthly increase was larger, rising 41% month-over-month, lifting it from the fifth-highest rate in September 2012, to the second-highest in October 2012.

Third-ranked Illinois saw a 6% increase in foreclosure filings over September 2012. California and Arizona rounded out the top five.

Hurricane Sandy made an impact on the foreclosure market, too, with a foreclosure moratorium being put into effect in the states most affected such as New Jersey, New York, and Connecticut.

For home buyers planning to venture into the home foreclosure market, there are well-priced homes for sale. However, understand that a foreclosure property is often sold “as is,” and that you may not be allowed into the property prior to the sale to inspect for damage. Home may have termites, been gutted by previous tenants or owners, or be filled with lead paint or asbestos.

For this reason, it’s a good idea to engage an experienced real estate professional when buying foreclosure properties. Real estate agents can guide you through the foreclosure process and give advice regarding contracts and home inspections.

Filed Under: Housing Analysis Tagged With: , ,

Your November Gardening Task List

November 15, 2012 by

November gardening listFor homeowners who keep a garden, with the change of seasons comes a task list.

There are basic tasks for gardeners — for example, raking the leaves, sharpening your tools. And, there are advanced tasks, too, which includes identifying and removing plants and trees which may be dead, and covering compost to prevent rain storms from leaching nutrients.

For homeowners in frost-free areas, November is a good time to plant roses and azaleas; prune flowering trees; and, start your fall vegetable garden.

The cooler fall and winter months are terrific for leafy greens such as spinach and kale; and carrots. Protect plants with row covers, when necessary.

For homeowners in colder parts of the county, November is when you should circle evergreens with burlap and wrap the bottoms of young trees with mesh wire to protect from wildlife; and empty and roll up garden hoses for storage.

It’s also when bulbs should be planted. Tulips, crocuses and hyacinths are easy to plant and will welcome you come springtime.

For all homeowners, consider this list : 

  • Aerate lawns to improve root development and drainage
  • Check and clean gutters from fallen leaves, needles, and twigs
  • Perform a round of weeding

And then, to discourage weed growth throughout the winter, place down a pre-emergent, and mulch around bedding plants, shrubs, and trees.

If your temperatures in your area tend to go below freezing, be aware of your plants which are sensitive to de-icing salts. Consider buying sand or sawdust for traction purposes near these plantings instead.

Lastly, remember that the fall months are a terrific time to take note of what worked in your garden during the summer, and what didn’t. Use a notebook and put your findings to paper. Attention paid now will pay dividends next spring.

Filed Under: Around The Home Tagged With: , ,

Mortgage Approvals : Documents You’ll Need For Your Lender

November 14, 2012 by

Bank guidelines loosenAccording to the Federal Reserve’s quarterly Senior Loan Officer Survey, it’s getting easier to get approved for a home loan.

Between July – September 2012, fewer than 6% of banks tightened mortgage guidelines — the fourth straight quarter that’s happened– and roughly 10% of banks actually loosened them.

For today’s buyers and refinancing homeowners in , softening guidelines hint at a quicker, simpler mortgage approval process; one which gives more U.S. homeowners better access to today’s ultra-low mortgage rates. 

However, although banks are easing guidelines, it doesn’t mean that we’re returned to the days of no-verification home loans. Today’s mortgage applicants should still expect to provide lenders with documentation to support a proper loan approval.

Some of the more commonly requested documents include :

  • Tax returns, W-2s, and pay stubs : In order to prove income, lenders will want to see up to two years of income documentation. Self-employed applicants may be asked for additional business information. Borrowers earning income via Social Security, Disability Income, Pension or other means should expect to provide documentation.
  • Bank and asset statements : To verify “reserves”, banks will often require up to 60 days of printed bank statements, or the most recently quarterly reports. Be prepared to explain deposits which are not payroll-related — banks adhere to federal anti-money laundering laws.
  • Personal identification documents : To verify your identity, banks often require photocopies of both sides of your drivers license and/or U.S. passport, and may also ask for copies of your social security card.

In addition, if your credit report lists collection items, judgments, or federal tax liens, be prepared to discuss these items with your lender. Sometimes, a derogatory credit event can be eliminated or ignored during underwriting. Other times, it cannot.

The more information that you share with your lender, the smoother your mortgage approval process can be.

As the housing market improves and lender confidence increases, mortgage guidelines are expected to loosen more. 2013 may open lending to even more mortgage applicants.

Filed Under: Mortgage Guidelines Tagged With: , ,

When It Pays To Refinance Your Mortgage — Literally

November 13, 2012 by

Why Refinance

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing. Be sure to ask about it.

Filed Under: Personal Finance Tagged With: , ,

For November : Home Maintenance To-Do List

November 9, 2012 by

Seasonal Home MaintenanceThe calendar has turned to November; the month during which we transition from fall into winter.

With less sunlight, colder temperatures, and shorter days ahead , it’s an opportune time to cross those last-minute maintenance items off your homeowner to-do list.

Practicing preventive care — both inside and outside your home — can save thousands of dollars in repairs come later this winter. What follows is a brief checklist to get you started.

For outside the home :

  • Inspect exterior lights and outlets. Be sure that none of the outlets are cracked or broken, or have exposed wires.
  • Clean gutters and clear all blockages. If leaves are falling, redo after leaves are off all trees.
  • Inspect and test outdoor railings and stairs.
  • Have problem trees trimmed, including those that may damage your home in a storm.
  • Protect outdoor water faucets from freezing. Consider using foam cups, sold at hardware stores.

For inside the home :

  • Change batteries in all smoke detectors and carbon monoxide alarms, whether they’re “dead” or not. 
  • Vacuum refrigerator condenser coils, plus the front bottom grill. Empty and clean the drip pan.
  • Inspect wood stoves and fireplace inserts. Hire a certified chimney sweeper to clean the chimney, if needed.
  • Insulate bare water pipes running through your home to prevent freezing and to limit condensation on cold-water lines.
  • Inspect automatic garage door opener. Lubricate chains according to manufacturer’s instructions. Make sure bolts and screws are properly tightened and secured.

As a constant series of chores, home maintenance is a four-season job and one which should not be taken lightly. The tasks of each season are unique and November’s jobs are mostly preparatory in advance of colder weather.

If your routine maintenance uncovers larger issues including a faulty HVAC unit, or a leaking faucet, for example, seek professional help to make the repair. 

Filed Under: Around The Home Tagged With: , ,

Questions First-Time Home Buyers Should Ask

November 8, 2012 by

First-time home buyer questionsNationwide, mortgage rates are low and home prices remain relatively low, too. This combination, plus rising rents, is pushing renters in some cities toward first-time homeownership.

Buying your first home can be exciting, but you should also do your research to make sure that you ask the proper questions of the process, and make the best choices for yourself and your household.

For example, recommended questions for first-time buyers to ask home sellers include :

What major repairs have been made to your home?

Although standard disclosure forms are supposed to provide information regarding past damage and renovation to the property, there are occasionally repairs that are omitted or otherwise forgotten.  Be proactive and ask pointed questions about the roof, the foundation, and the electrical system. Some home issue have a way of resurfacing many years later and it’s best to know in advance. •

To which school district does the home belong?

As a first-time homebuyer, you may or may not have school-aged children. However, in many areas, public school rankings positively (or negatively) affect home values. Ask your real estate agent for school district data. Consider asking the seller for feedback, too.

Is this a “distressed” property, and what does that mean to me?

For many home buyers, the allure of a foreclosed home or a home in short sale can be large. Prices are discounted as compared to comparable real estate — sometimes by as much as 20%. However, many distressed properties are sold as-is,” with little room for negotiation. This means that homes may be defective or, worse, uninhabitable. Ask your real estate agent for help with distressed homes and their suitability to your home buying needs.

After asking the above questions, and other questions, too, it’s important to remember that buying a home can be an emotional decision; and one that requires using your “brain” as much as your “heart”. Try to keep emotions in check so that you don’t overpay for a home that’s unsuitable, for example.

Filed Under: Personal Finance Tagged With: , ,

Improving Market Index Swells To 125 In November

November 7, 2012 by

Improving Market Index 125 MarketsThe U.S. economy continues to improve.

The National Association of Homebuilders released its Improving Markets Index Tuesday. The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating “measurable and sustained growth”.

125 U.S. markets are qualified as “improving” this month, a 22-market jump from the month prior and and all-time high for the index which launched late last year.

Compared to November 2011, this month’s IMI has climbed more than four-fold, rising from last year’s reading of 30. This jump suggests that housing recovery is firmly taking root, helping to generate needed jobs and economic growth across much of the country.

So what qualifies a market as “improving”? The NAHB uses strict criteria.

First, the group gathers data from the three separate, independent sources :

  1. Employment growth from the Bureau of Labor Statistics
  2. Housing price appreciation from Freddie Mac
  3. Single-family housing permits growth from the U.S. Census Bureau. 

Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.

And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for the most recent “bottom” is at least six months in the past.

In this way, the Improving Market Index doesn’t just measure housing market strength — it measures general economic strength. 

Of the 22 markets added to the Improving Market Index in November, the following cities were included : San Diego, California; Gainesville, Florida; Omaha, Nebraska; Louisville, Kentucky; and Charlotte, North Carolina.

Several markets dropped off the list, too, including Hanford, California; Orlando, Florida; Terre Haute, Indiana; and Greenville, North Carolina.

The complete list of 125 metropolitan areas on November’s IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.

Filed Under: Housing Analysis Tagged With: , ,