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From being your own landlord to proximity to good schools, benefits of owning a home often have nothing to do with fiscal investment gains. Read more >
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How low can they go? Mortgage rates hit a new record low for the 10th time in 11 weeks, according to Freddie Mac. Read more >
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Findings from a survey show that fixed-rate mortgages are gaining in popularity. Read more >
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After the government extended the home buyer tax credit, housing professionals now say it's time to see the true demand of the market without any stimulus. Read more >
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Following the 25.5 percent year-over-year drop in existing home sales last month, the federal government is looking to stabilize the housing market. But another home buyer tax credit is up in the air. Read more >
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Federal Reserve officials said at a conference this week that more assistance for the housing sector is needed. Read more >
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July Existing-Home Sales Fall, But Prices Rise Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of REALTORS®.Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009. Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun added.Mortgage Rates DipAccording to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.The national median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.“Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”Inventory RisesTotal housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.NAR President Vicki Cox Golder said there are great opportunities now for buyers who weren’t able to take advantage of the tax credit. “Mortgage interest rates are at record lows, home prices have firmed and there is good selection of property in most areas, so buyers with good jobs and favorable credit ratings find themselves in a fortunate position,” she said. A parallel NAR practitioner survey shows first-time buyers purchased 38 percent of homes in July, down from 43 percent in June. Investors accounted for 19 percent of sales in July, up from 13 percent in June; the balance were to repeat buyers. All-cash sales rose to 30 percent in July from 24 percent in June. Breakdown of the Numbers• Single-family home sales dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 percent below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. • The median existing single-family home price was $183,400 in July, which is 0.9 percent above a year ago.• Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago.• Existing condominium and co-op sales fell 28.1 percent to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 percent below the 605,000-unit level in July 2009. The median existing condo price was $176,800 in July, down 1.7 percent from a year ago.By Region• Existing-home sales in the Northeast dropped 29.5 percent to an annual pace of 620,000 in July and are 30.3 percent lower than a year ago. The median price in the Northeast was $263,800, up 4.8 percent from July 2009.• Existing-home sales in the Midwest fell 35.0 percent in July to a level of 800,000 and are 33.3 percent below July 2009. The median price in the Midwest was $151,600, down 2.8 percent from a year ago. • In the South, existing-home sales dropped 22.6 percent to an annual pace of 1.54 million in July and are 19.8 percent below a year ago. The median price in the South was $156,300, down 3.3 percent from July 2009. • Existing-home sales in the West fell 25.0 percent to an annual level of 870,000 in July and are 23.0 percent below a year ago. The median price in the West was $224,800, up 3.3 percent from July 2009. Source: NAR
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Monday's announcement that Lincoln Park 2520 had secured construction financing and that its development would proceed is a welcome piece of news for the local new-construction condo market. Chicago Spire and Waterview Tower are gathering cobwebs, and the lone new project that's really gotten off the ground is the ultra-high-end Ritz-Carlton Residences, an 86-unit development that will be the only building to deliver units to the market in 2011. That's not necessarily a bad thing, because the initial exuberance for downtown condos earlier this year, brought about by aggressive marketing campaigns and federal homebuyer tax credits, seems to have foundered in the second quarter. On the same day that Ricker-Murphy Development LLC and GE Pension Trust affiliate Lake Tower Development LLC announced plans to move forward with Lincoln Park 2520, Appraisal Research Counselors painted a picture of a downtown residential sales environment that is more sluggish than it was during the second quarter of 2009. And it's not like sales were setting the world on fire a year ago either. "There's just not a lot pushing people to buy right now," said Gail Lissner, an Appraisal Research vice president. "The surge was last quarter. I think the developers were really sitting back (in the second) quarter and seeing how it played out." And how did it play out? Well, according to the firm's report on the second quarter, there were 150 condos, town houses and condo conversion units under contract or sold during the second three months of the year, compared with 256 units in the first quarter and 313 in 2009's second quarter. However, there is some upside in the report. If you add up the year-to-date totals — 406 contracts and sales in the first six months — and compare them against last year, downtown sales of new units have a good shot of performing better in 2010 than in 2009. Last year's total was 572, so we're about 10 percent ahead. Not everyone is benefiting from the activity, and contract fallout continues to stymie developers. The firm's report found that one-quarter of all downtown projects lost sales in the April-June period and another 21 percent had no net increase in sales contracts. Meanwhile, the total number of unsold new units in the market is at the same level it was at in 2000. The difference is that a decade ago, those were units not spoken for and hadn't been built. Flash forward to now and it's more than 2,200 already built units still waiting for an owner. Another approximately 550 units are unsold and under construction. Will this mean another round of developers trying to one-up each other on the discounting this fall, like they did in the early part of the year? It depends entirely on the relationships between developers and the money behind the projects. Lincoln Park 2520 is outside the "downtown" boundaries of the report, but it's still notable because it's been long-watched to see if the developer could secure construction financing. It will be the first new large-scale condo building in Lincoln Park since 2120 North Lincoln Park West was completed in 2001. This week, there were sales contracts on 68 of the 228 condos planned for the building; sales contract fallout has happened there too. More mortgage aid outreach: Chicago will conduct its next Fix Your Mortgage event from 9:30 a.m. to 2 p.m. Saturday at Northside College Prep High School, 5501 N. Kedzie Ave. During last month's event at Little Village High School, 230 families got free help applying to their lender for mortgage loan modifications. Preregistration for the event is encouraged. For more information, call Neighborhood Housing Services of Chicago at 773-329-4185 or 773-329-4181 (Spanish). Separately, the Cook County Circuit Court's Mortgage Foreclosure Mediation Program has stepped up efforts to reach homeowners who have been served with foreclosure filings. Cook County homeowners in foreclosure who have a valid e-mail address and want to seek mediation on their case can fill out an online form at cookcountyforeclosurehelp.org and will receive confirmation within 48 hours of an appointment time with a housing counselor. Homeowners also can call the toll-free help line at 877-895-2444 or 312-836-5222 (TDD).
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Daily Real Estate News | August 3, 2010 |
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Pending home sales edged down with near-term sales expected to be notably lower in contrast to the spring surge when buyers rushed to take advantage of the home buyer tax credit, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”
Yun expects mortgage interest rates to remain historically low for the balance of the year, with very modest growth in employment. “We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he added.
By Region
- The Pending Home Sales Index in the Northeast dropped 12.2 percent to 58.8 in June and is 25.4 percent lower than June 2009.
- In the Midwest the index fell 9.5 percent to 64.1 and is 27.8 percent lower than a year ago.
- Pending home sales in the South rose 3.7 percent to an index of 85.8, but are 13.3 percent below June 2009.
- In the West the index slipped 0.2 percent to 85.1 but is 14.2 percent below a year ago.
Source: NAR
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Daily Real Estate News | August 3, 2010 |
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Spending on single-family residential structures declined 0.7 percent in June, the first time that number has gone down in a year.
Funding for public construction increased 1.5 percent in June, with most of the money spent on power, sewage, and waste disposal plants. Federal building rose 4.6 percent to $31.7 billion, the highest spending on record.
“Support to construction spending via new homes should continue to remain dampened in the coming months,” Maxwell Clarke, chief U.S. economist at IDEAglobal Inc. in New York, said in a note to clients before the report from Commerce. “Ongoing difficulty of accessing capital for speculative commercial real estate ventures will continue to act as a deadweight in the overall construction measure.”
Source: Bloomberg, Courtney Schlisserman (08/02/2010)
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Daily Real Estate News | August 2, 2010 |
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Home owners who choose to default on their mortgage even though they can afford the monthly payments can expect to take a significant hit to their creditworthiness, some credit rating firms say.
A record of the default — initially as much as 200 points — stays on a credit report for seven years. This will have an impact on the defaulter’s ability to get credit of all kinds and potentially his or her ability to buy insurance and even get a job.
The debt that foreclosure erases may be considered income, and Uncle Sam may want to collect taxes.
"It's by no means a move to be undertaken lightly," says Maxine Sweet, vice president of public education for Experian.
Source: ARA Content (07/30/2010)
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Daily Real Estate News | August 5, 2010 |
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A Housing Predictor forecast based on three months of research says properties in Alabama and Florida on the Gulf Coast likely will see home price declines of 10 percent related to the BP oil spill, which would be significantly less than expected by many economists.
Florida and Alabama have started aggressive TV advertising campaigns to counter
the negative media coverage over the crisis at the height of the tourism season
Given that home and condo buyers are expected to avoid the area due to concerns about the environmental impact of the oil spill, experts believe the losses will last for a couple of years.
Although most beaches on the Florida Panhandle have not been affected by the oil, which -- except for globs of oil and tar balls -- has been kept offshore, buyers have been scared away. The oil spill came at a time when the Sunshine State already was suffering from high unemployment and foreclosure rates.
To help struggling borrowers in the Gulf Coast region, Freddie Mac, Bank of America, and Wells Fargo are offering relief, with Freddie Mac permitting servicers to suspend mortgage payments for certain borrowers for up to a year.
Source: HousingPredictor, Mike Colpitts (07/27/10)
© Copyright 2010 Information Inc.
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Daily Real Estate News | August 6, 2010 |
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Freddie Mac reports that long-term mortgage rates moved south again this week.
Interest on 30-year fixed loans hit a new low of 4.49 percent, compared to 4.54 percent last week and 5.22 percent a year ago; and the 15-year mortgage landed at 3.95 percent, down from 4 percent last week and 4.63 percent a year ago.
Five-year adjustable-rate mortgages reached a new low of 3.63 percent, down from 3.76 percent last week and 4.73 percent a year ago; while one-year ARMs fell to 3.55 percent from 3.64 percent last week and 4.78 percent a year ago.
Source: The Wall Street Journal, Amy Hoak and Nick Timiraos (08/06/10)
© Copyright 2010 Information Inc.
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Daily Real Estate News | August 5, 2010 |
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A real estate technology company surveyed its clients and found their confidence in the market is dropping.
Point2 Technologies' National Real Estate Confidence Index, based on 1,255 clients surveyed in July, declined almost 9 percent to 5.24 on a 10-point scale with 10 reflecting optimism.
The pessimism is the result of "unabated pricing pressure caused by foreclosure and pre-foreclosure properties; a general sense that shadow foreclosure inventory is significant and could materially prolong current market conditions; a persistent, tough job market keeping more potential buyers on the sidelines; and the expired federal tax credit program that many respondents felt was a key catalyst to market activity,” Point2 said in a statement.
[Editor's note: The findings line up with the REALTORS® Confidence Index, which NAR updates monthly based on member surveys.]
Source: Point2 Technologies (08/04/2010)
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Daily Real Estate News | August 4, 2010 |
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Applications to purchase homes rose 1.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
The unadjusted purchase index also rose 1.5 percent, and it was up 7.1 percent compared to four weeks ago. Compared to the same week a year ago, it was down 33.7 percent. For the third straight week, government-backed loans, especially Federal Housing Administration loans, drove the increase, with government loan volume rising 3.4 percent compared to last week.
Source: Mortgage Bankers Association (08/04/2010)
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