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 With that being said many in the know will realize that the information is old and outdated and not the most accurate.Home Price Index from April 2007 peak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.


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.


Pending Home Sales Slip Slipping Away

Published on August 30, 2011 by

Pending Home Sales Jan 2010 - Jul 2011

Pending home sales have continued to struggle ever since the federal tax credit expired last year. There was a small segment where the tax credit was extended for one year specific to VA Loans and had very specific requirements to be extended.

For the past 6 months the National Association of Realtors has been trying to spin all the information and data into something positive when the whole housing market has been horrible. So, yes small improvements are good but it’s not the breaking news and market shaping news that the Realtors have been trying to convince us of.

It is very normal for pending home sales to slow down at the end of Summer. This year the sales have slowed much more then normal and that is during an already very slow and disappointing season.  This year there is many contract cancellations and much more then is typical that has caused the pending home sales to slip even further.

The contract cancellations have been about four times higher than they were in month. 16% of contracts are currently cancelling according to the reports. Contracts are cancelled for many reasons but there are not any new reasons in the past couple of months that didn’t previously exist. There are many  opportunities available for those that are looking to purchase or refinance at this time in the housing market.

New Home Supply Remains Consistently Low

Published on August 24, 2011 by

New Home Supply 2008-2011

New home sales are lower in July then they were in June. This report is the lowest since February earlier this year. The supply has remained flat as builders are hesitant to build too much during a very poor economic time and especially as distressed homes continue to be a big part of the purchases and offering such deep discounts.

New home sales varied around the country as well. The Northeast Region showed a strong increase in the number of sales and without that the numbers would have been much worse. Below you can see how New Home Sales changed since last month by region:

  • Northeast Region : +100.0% from June 2011
  • Midwest Region : +2.4% from June 2011
  • South Region : -7.4% from June 2011
  • West Region : -5.9% from June 2011

Now we must also keep in mind that the data is not the most accurate. Why it’s not accurate when it’s old information is the frustrating part. The margin of error for this report is ±12.9%. With mortgage interest rates at record breaking lows there is a great opportunity to purchase a new or existing home. If you are already a homeowner then simply take advantage of the low rates and refinance your mortgage today.

VA home loans don’t require many of the typical requirements for lowering your interest rate. If you have a VA Home Loan and you have not streamlined your loan in the last month or two then contact a VA Loan Specialist now by calling toll free (866) 825-6261 for a free no obligation consultation.

Pending Home Sales Still Low But On The Rise

Published on July 29, 2011 by

Pending Home Sales 2009-2011

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Buyers are starting to get in the game, perhaps the buyers that were sitting on the fence are now starting to realize what a huge opportunity they have available to them. The home affordability continues to rise beyond all-time highs.

Although Pending Home Sales are on the rise keep in mind that it is still lower then previously prior to the federal tax credit offered for purchasing a home. As much as the media would like you to think the housing market is still in the dumps.

Here is a list broken down by region showing the differences between May and June 2011, results were mixed:

  • Northeast Region: -0.4%
  • Midwest Region : -3.7%
  • South Region : +4.4%
  • West Region : +6.4%

The increase in Pending Home Sales is nice to see that things may have hit their worst and perhaps a recovery is on the way. There is still plenty of concern and talk about another even greater recession still to come later this year. If that is the case then anyone who is still qualified to purchase or refinance a home will be in great shape and have tremendous opportunities. Contact a loan officer if you have any questions.


New Home Inventory Shrinks, Overall Inventory Still Rising

Published on July 27, 2011 by

New Home Supply 2010-2011

Home builders have been awfully slow to build up any inventory they have been selling during this slow market. The new home inventory continues to go lower and lower as they find it difficult to compete with distressed homes and other existing homes that are available.

This is the third month in a row where home sales have hit the media and showcased a continuing negative market. The home inventory is rising as we continue to see more and more foreclosed homes although this time around they are more strategic defaults.

The graph on the right provides you with a downward trend of new home inventory but also keep in mind that compared to this time last year there are almost a quarter percent less of new homes for sale.

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Although inventory is down the home builder confidence report recently showcased higher expectations for this Fall indicating that they may start to see a recovery in new homes coming. With current new home sales volume there is a little bit more then 6 months of inventory which is the lowest it's been since the expiration of the federal tax credit last year.

Mortgage interest rates continue to stay low and with all the talks of the U.S. National Debt Ceiling we may see interest rates go even lower and possibly to all-time lows providing a huge opportunity for those looking to purchase a home as well as those looking to refinance and capitalize on the struggling economy. If you have any questions simply contact a loan officer and find out what opportunities are available to you today.


Home Sales Are Extremely Low and Inventory Builds

Published on July 21, 2011 by

Existing Home Supply June 2010-June 2011

Home sales continue to slow down and this is in the middle of the buying season. Foreclosures are continuing to keep on coming as we see more and more strategic defaults and the slow process of banks to market and sell their homes. The image above shows how inventory is continuing to build up. This news comes out during the same week where home builders showed they were planning to build more homes and sell more through the end of the year.

Home sales have not been this low since November of last year. The rising inventory of homes available in combination with the additional foreclosures should continue to push the value of homes lower. Many American homeowners are already in serious denial about the value of their homes and this should make that a bit more difficult to stomach. If you have questions about your options with low prices and low interest rates you should contact a loan officer. You can get a free consultation with no obligation that may be very valuable to you as you consider purchasing a home or refinancing your existing mortgage.

Nationwide the activity and values of home can vary greatly. Here is a snapshot of home sales by region, home resale activity varied:

  • Northeast : -5.2% from May
  • South :+0.5% from May
  • Midwest : +1.0% from May
  • West : -1.7% from May
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This snapshot is very general and if you are interested in what opportunities are available to you, you should look much more specifically at the neighborhood, city, state you are considering. Home affordability continues to be at all-time highs and present great opportunities whether you're looking for an existing home or a new home. Regardless of which you choose you are sure to get great value for your money.


Looking at Mortgage Rates This Week : July 18, 2011

Published on July 18, 2011 by

Greece roiling mortgage markets

The mortgage markets are very sensitive currently with the growing concerns of Greece and the concerns of how to deal with their default as opposed to whether or not they will default on their debts. Growing concerns with other countries including Italy and the debt ceiling in the U.S. have continued to push interest rates lower.

The primary concerns that came up last week included the growing concerns of debt crisis into other countries beyond Greece. Some of the countries that were mentioned for concern include:

  • Italy
  • Portugal
  • Ireland
  • Spain

The debts with those countries were down graded and the concerns continue for all of those countries.

The debt ceiling for the U.S. is coming closer and closer to the deadline of August 2 and this topic should impact the interest rates greatly and make them quite volatile. This week we will also get data specific to the housing industry including the Existing Home Sales report, Housing Starts, Builder Confidence and Jobless Claims.

If you have any questions about your opportunities to refinance or purchase a home during this time simply contact a loan officer where it will take just a few minutes and there is no cost or obligation. The home affordability continues to climb higher and higher even though we’ve been at a previous all-time high.

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Foreclosures Continue to Slow – Strategic Default

Published on July 14, 2011 by

Foreclosure changes 2010-2011

It's been many months in a row where we continue to see foreclosure activity slowing. Perhaps a bigger or growing concern is the reason why there are still so many foreclosures happening. Earlier there was so many homeowners that lost their jobs or couldn't keep up with their mortgage payments and had no choice but to face foreclosure. Now the growing concern as home values continue to dwindle is how many people will choose to strategically default.

It's been nearly a year where foreclosures continue to decrease but the reasons for defaulting now is quite different. Below you will find a list of states that are showing less foreclosures this year.

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The other 3 states performed similarly well in June:

  • California : -22% on an annual basis
  • Arizona : -7% on an annual basis
  • Michigan : -25% on an annual basis

Many of these distressed homes are ending up on the market for quite some time which keeps inventory quite high. The time and frustration it takes to purchase a bank owned home is increasing as more and more buyers look for the best value available. Often times you are seeing discounts on distressed homes at about 20% and that savings is likely going to continue as home prices continue to drop and inventory continues to rise.

If you are considering purchasing a distressed property  make sure you have your finances in order so you may respond in a timely manner as the landscape continues to get more and more competitive. Contact a  loan officer and get prepared with no cost or obligation, simply call now toll free (866) 825-6261.


Housing Starts Increase Slightly But Remain Extremely Low

Published on June 17, 2011 by

Housing Starts (2009-2011)

The housing market has been in the dumps for years now and we are all hoping and looking for signs of hope. Well, here is a small glimmer that things may be improving and not continuing to get worse. I mean nobody knows if we have hit the floor yet.

The housing starts increased this month unexpectedly and although it was slight it was still an improvement. Yes, overall things are still very low but maybe this is the start of movement in a positive direction and hopefully not just an unexpected bump.

The slight improvement is 4 percent to a seasonally-adjusted, annualized rate of 419,000 units and just a little bit better then the 6 month average although the 6 month average is a very low target to surpass.

The reason why this may be a sign of a positive direction and hopefully some recovery in the housing market is that the Building Permits were also up so that is an indication that we could see more improvements in the future.

This report was a surprise to many since it was recently reported that home builder confidence is at its lowest reading since September 2010. Additionally, home sales are slow and many are going to investors who are simply picking up discounted and distressed homes. It doesn’t make a lot of sense for new homes to compete with much of the existing inventory.

If you are looking to capitalize on the low prices and low interest rates contact a loan officer right away and be prepared to move quickly and effectively regardless if you look to purchase a new home or an existing home. Once you are prepared financially you can move forward confidently.