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”.

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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.

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What Does The Federal Reserve Statement Mean

Published on September 21, 2011 by

Putting the FOMC statement in plain EnglishThe Federal Reserve agreed with a majority vote to keep the Fed Funds rate unchanged. This means that they are seeing the economy as still sputtering and trying to stimulate the economy with more spending by making interest rates lower or keeping them low.

The economy continues to stay in the dumps and the official language from the Feds statement are detailed below:

  1. Economic growth “remains slow”
  2. Unemployment rates “remain elevated”
  3. The housing sector “remains depressed”

Not all signs indicate that the economy is in poor shape but until you start seeing jobs created and more spending it is very unlikely that you will see too much change in the economy and the housing sector specifically.

If you are not part of “main street” then consider yourself fortunate and start taking advantage of the many opportunities available to you. If you are not considered rich you may want to tighten your belt and prepare for a lengthy rough patch prior to recovery.

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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.

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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.

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Looking at Mortgage Rates This Week : July 25, 2011

Published on July 25, 2011 by

Congress debates the debt ceiling

Mortgage interest rates were worse last week as the Greek financial issues got closer to being resolved. The leaders in Europe are in agreement and hopefully all the concerns of debt issues will calm down.

Last week marked the first week in quite a few where interest rates actually increased slightly, yet the adjustable rates continued to dip and provide even greater savings and value over fixed rate loans. The spread between fixed rates and adjustable rates is approaching all-time highs. If you are interested in learning more about the opportunity to capitalize on the low rates contact a loan officer today.
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This week the big talk and impact on interest rates is simply the U.S. debt ceiling. Although the expectation is to raise the debt ceiling there is no agreed upon plans on how to do so. The talks and resolutions should impact interest rates immediately.

This week we will also receive some updated reports on New Home Sales, Pending Home Sales and Consumer Sentiment. If you have any questions on how this may impact you simply call your loan officer today.

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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.

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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.

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