Home Values Rose For the 4th Straight Month

Published on October 5, 2011 by

First lets make sure that we say the data driving the title of this blog entry is coming from the Federal Home Finance Agency's Home Price Index. With that being said many in the know will realize that the information is old and outdated and not the most accurate.Home Price Index from April 2007 peak

According to the latest data it shows home prices have increased in the month of July by .8%. This makes it four months in a row that the report has shown an increase in home prices when most places that we experience and visit likely don't reflect an increase in home values.

The graph to the right is reflecting that a floor has been identified and that the housing recovery is in progress. The problem with the data is that it's extremely flawed and doesn't account for 1/3 of the homes sold due to mortgage guidelines being so strict and so many properties being purchased with cash which are very likely at very significant discounts. The data is flawed due to the following reasons below:

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  1. Only homes backed by Fannie Mae or Freddie Mac are included in the index. In today's market, because of the FHA's popularity, that leaves 1 of 3 homes “uncounted”.
  2. Only existing home sales are counted, new home sales are not counted.
  3. The data comes with a 60-day delay. The October market is different from July's.

Ultimately we all can recognize that home values have dropped about 17% from their previous highs. The best way to make all of the information relevant to your specific situation is to simply contact a realtor and loan officer in your area and find out what values are doing and what opportunities may be available to you. If you have questions and would like a free obligation simply call (866) 825-6261.


Low Interest Rates Don't Increase Home Sales

Published on September 30, 2011 by

Pending Home Sales graph

The Feds continue to lower interest rates and keep interest rates in hopes that it will stimulate the economy and hopefully improve the housing market. When it comes to home sales this past month proved not to be effective.

While interest rates likely need to remain low to really spur economic recovery there must be something more to the solution to increase home sales going forward. In addition to extremely low interest rates perhaps there needs to be some kind of incentive to purchase homes at this time.

We all know that the banks are making it very difficult to refinance and to purchase or in other words for them to lend their money. Finding a way to reward those buyers out there that don't fall in the category of the rich and international.

The home sales are being split into two different categories even more often as the economy and housing market continues to struggle. The rich and international are having a buying frenzy that will likely result in additional revenue and wealth on their part and the rest of us are struggling to make ends meet and not catching any breaks.

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If you have any ideas on how we could improve the outlook for those on “main street” then please share your ideas. Perhaps if you buy a home in the next year and you don't make more then $250,000 a year you could get a tax credit for 10% of the purchase price? That is one suggestion that may benefit “main street”.


Latest Data Supports Some Housing Value Improvements

Published on September 29, 2011 by

Case-Shiller monthly change (June - July 2011)

The latest data from Case-Shiller Index was released and it reflects that majority of the cities measured are reflecting and improvement in the value of homes. The index showed a .9% increase in values and only a couple of the 20 cities measured were lower in Las Vegas and Phoenix, with Denver remaining flat.

Does this mean that home values nationwide have hit a floor? Well as much as many of us would like to think so it may not be the case. Foreclosures started to pick up again and the lack of jobs and improvements in the economy simply are not supporting the idea of a recovery right now.

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The index is not always the most detailed or accurate data as well as many find multiple faults with the data. Regardless of whether or not you think the data is valuable one can start to recognize that we are seeing signs of improvement and hopefully for all of us it will continue to improve.

If you have any questions about any opportunities that may be available to you with the low home values and low interest rates then simply contact a loan officer today by calling toll free (866) 825-6261. You may be able to save thousands of dollars with a VA Streamline refinance or increase your purchase power on a VA Home Loan by working with the Best VA Loan Specialist's in the country.


New Home Sales Continue to Slide

Published on September 28, 2011 by

New Home Sales August 2010 - August 2011

The number of new homes continues to slide in sales. The sales continue to slow and there were under 300 thousand new homes sold. The housing market is in trouble and will likely continue to be for the near term as well.

The new home sales are falling and the inventory is not being replaced. Builders are not building much during this time when so many homes are distressed and providing huge savings to the buyers and making up almost one third of the housing sales.

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The current inventory will take a bit more then 6 months to sell out with the current demand and sales. That is a very short amount of inventory but with the distressed homes providing such discounts it makes it very difficult for builders to want to take the risks right now.

If you are looking to take advantage of the buyers market know that interest rates are providing an improvement in your purchase power. If you have any questions call toll free for your free consultation (866) 825-6261.

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Realtor Reports Higher Sales and Lower Supply

Published on September 27, 2011 by

Existing Home Sales Aug 2010 - Aug 2011

According to the latest data shown above the supply of homes for sale is continuing to drop and get to a more reasonable and normal level. Realtors are trying to communicate to everyone that the housing market is rebounding and that sales are increasing and supplies are dropping. While it may be true that sales increased there is still very little sales activity and while the supply is dropping there is still plenty of homes available for sale.

Distressed homes continue to be a major part of the housing market and sales. Almost one third of homes sold currently are distressed. Home sales continue to put along at a slow pace and the builders are not anxious to bring new supply to market.

So while things are improving they are far from good. There is also some increase in foreclosures recently with the current activity of accountability for the housing mess.

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Other noteworthy facts from the August Existing Home Sales report :

  • There are currently 3.58 million existing homes for sale nationwide
  • 29 percent of home buyers paid cash in August
  • Real estate investors bought 22% of homes in August, up from 18% in July

In addition to distressed homes being a major part of the purchase market it is also helpful to know that almost 30 percent of buyers are cash. This definitely supports the idea that its a great market for the rich and international buyers. If you are not rich and are looking to purchase a home know that the low interest rates have increased your purchase power significantly. Rates are so low that you should also consider refinancing any existing mortgages you may have outstanding.


Building Permits Extremely Weak, Continue to Fall

Published on September 23, 2011 by

Housing Starts 2009-2011

Home builders and housing permits are not looking very encouraging. Latest reports show that home builders are not very positive on the outlook for the housing economy now or in the near future.

It should come as no surprise that the lack of confidence by the home builders has resulted in less and less housing permits being requested and granted. Home sales have slowed down so much currently and there is very little incentive for builders to be taking risks with the current housing crisis.

With the foreclosures and the deep discounts on distressed properties there are very few that are willing to compete with a new home. Until we see an improvement in the housing market and clear recovery you likely won't see new homes springing up.

Now if you are custom building and hiring out a builder then you are likely going to get a great deal and the builders don't take as many risks with a custom build job. Don't count on seeing too many new homes that are built on speculation in hopes that the perfect buyer will come by and purchase the home that is available.

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If you have any questions about the current status of the housing market and how you may be able to benefit from the buyers market then simply call toll free (866) 825-6261. There is a great opportunity for purchasing and refinancing with the record breaking low interest rates of today.


Home Builder Confidence, Does It Get Any Lower

Published on September 20, 2011 by

Home builder confidence 2000-2011

Home builders are less and less confident in the market as time goes on. For all of those talking about a floor or a recovery you may be mistaken. The interest rates continue to go lower and provide all the opportunity in the world for a recovery yet the distressed homes continues to linger and keep the market down.

The risk that builders would have to take on right now simply don't justify the reward. Credit is tight and competition from deeply discounted distressed homes have builders sitting on the sidelines willing to wait for better opportunities in the future. The home builder confidence report is made of 3 different surveys that include the following:

  1. How are market conditions for the sale of new homes today?
  2. How are market conditions for the sale of new homes in 6 months?
  3. How is prospective buyer foot traffic?

The home builder confidence has been extremely low for years now and it looks like it may remain that way for years to come. The last time the confidence number was above 50 was April 2006. If you are shopping for a new home then look for some serious discount and deals because there are so many opportunities available to buyers today.


Foreclosures Slow While Default Notices Increase Sharply

Published on September 15, 2011 by

Foreclosure Change August 2010-2011

The foreclosures are slowing down nationwide and it's definitely reflected in the top ten states in the country responsible for foreclosures. The graph above shows you how the activity is slowing down which many are trying to spin into a positive sign for a housing recovery.

The bigger news is likely the sharp increase in default notices which definitely indicates that there is not a strong recovery if any in the works. The states below are the current numbers from the states with the most foreclosure activity:

  • California : 18 percent of bank repossessions
  • Florida : 8 percent of bank repossessions
  • Georgia : 7 percent of bank repossessions
  • Michigan : 6 percent of bank repossessions
  • Texas : 6 percent of bank repossessions
  • Arizona : 6 percent of bank repossessions

The good news is if you're a buyer you have many option available to you and an extremely strong buyers market with historically low interest rates maximizing your purchase power. The option to purchase one of many foreclosed or distressed homes is providing huge savings. The average savings on a distressed home is about 20 percent currently and could go higher if more foreclosure activity continues.

If you have any question as a buyer or homeowner looking to refinance then simply contact a loan officer now and get a free consultation, call now toll free (866) 825-6261.


Home Affordability Still Near All-Time Highs

Published on September 9, 2011 by

Home Opportunity inde 2005-2011

If you are in a position to purchase a home currently then you are in great shape. Home Affordability continues to be extremely high with low sale prices and very little competition in addition to low interest rates.

The National Association of Home Builders is reporting that over 70% of the homes purchased in Q2 were affordable considering the national median income of $64,200. That makes it 10 straight quarters where the mark passed 70% which historically never happens.

Home affordability will vary depending on where you live in the country. The most affordable region is the Midwest and the least affordable was New York and Southern California.

The top 5 most affordable cities in Q2 2011 were:

  1. Kokomo, IN (95.8%)
  2. Wheeling, WV (94.7%)
  3. Lansing, MI; East Lansing, MI (94.4%)
  4. Bay City, MI (94.3%)
  5. Youngstown, OH; Warren, OH; Boardman, OH (93.7%)

The rankings for all 225 metro areas are available for download on the NAHB website.

If you are interested in a no obligation free consultation regarding your possible mortgage opportunities contact a loan officer at (866) 825-6261.


Home Values Rising, Not In My Neighborhood

Published on September 2, 2011 by

Case-Shiller Changes May to June 2011

Reports are out and some areas of the country are showing a rise in prices. This doesn’t mean that we have hit a floor when you consider many are preparing and anticipating another recession. The media is out hyping that prices are increasing but we know that there is much fewer applications and purchases happening.

The data coming form the recent Case-Shiller Index is old data and nothing new that hasn’t been talked about previously.

For example, the June 2011 Case-Shiller Index shows the following :

  • Denver, Dallas, Washington D.C., and the “California Cities” bottomed in 2009. Each has shown steady improvement since.
  • None of the Case-Shiller cities showed negative growth between May and June 2011.
  • 12 of Case-Shiller’s tracked cities have improved over 3 consecutive months.

All of those points are very encouraging but know that the index is 2 months old and you will get a much better feeling for the values in your area by visiting with a few realtors in your area. So, although the index may be representing a recovery it is old and flawed and not that credible.