Subject: 7 Easy Tips...
Did you know that the Personal Savings Rate in 2009 is at the highest point of the decade?
Clearly, people are more aware of being ready for "a rainy day" than ever. Here are seven easy ways to grow your savings:
1) Establish an emergency savings account. A good rule of thumb is to set aside money equal to two or more month's worth of expenses.
2) Save money for your long-term goals.
3) Make savings automatic.
4) Start small, if necessary. Something IS better than nothing.
5) Comparison shop for the best rate.
6) Turn a payment into savings. If you've recently paid off a credit card or loan, add that payment to a monthly savings account.
7) Save your windfall! Don't spend money you weren't planning (or expecting) on having.
Monday, September 21, 2009
Thursday, September 3, 2009
Tips For A Smooth Loan Approval
Here is a list of helpful tips to ensure an effortless loan process.
These DO’s and DON’Ts will help avoid any delays with your loan approval
- DO continue making your mortgage or rent payments
- DO stay current on all existing accounts
- DO keep working at your current employer
- DO keep your same insurance company
- DO continue living at your current residence
- DO continue to use your credit as normal
- DO call us if you have any questions
- DON’T make a major purchase (car, boat, jewelry, etc.)
- DON’T apply for new credit (even if you seem pre-approved)
- DON’T transfer any balances from one account to another
- DON’T pay off charge offs without a discussion with us first
- DON’T pay off collections without a discussion with us first
- DON’T buy any furniture
- DON’T close any credit card accounts
- DON’T change bank accounts
- DON’T max out or over-charge on your credit card accounts
- DON’T consolidate your debt onto 1 or 2 credit cards
- DON’T take out a new loan
- DON’T start any home improvement projects
- DON’T finance any elective medical procedure
- DON’T open a new cellular phone account
- DON’T join a new fitness club
- DON’T pay off any loans or credit cards without a discussion with a good lender
These DO’s and DON’Ts will help avoid any delays with your loan approval
- DO continue making your mortgage or rent payments
- DO stay current on all existing accounts
- DO keep working at your current employer
- DO keep your same insurance company
- DO continue living at your current residence
- DO continue to use your credit as normal
- DO call us if you have any questions
- DON’T make a major purchase (car, boat, jewelry, etc.)
- DON’T apply for new credit (even if you seem pre-approved)
- DON’T transfer any balances from one account to another
- DON’T pay off charge offs without a discussion with us first
- DON’T pay off collections without a discussion with us first
- DON’T buy any furniture
- DON’T close any credit card accounts
- DON’T change bank accounts
- DON’T max out or over-charge on your credit card accounts
- DON’T consolidate your debt onto 1 or 2 credit cards
- DON’T take out a new loan
- DON’T start any home improvement projects
- DON’T finance any elective medical procedure
- DON’T open a new cellular phone account
- DON’T join a new fitness club
- DON’T pay off any loans or credit cards without a discussion with a good lender
Thursday, July 2, 2009
Purchase Assistance Money To Buy A Home
Limited amount of funds available!!
The Arizona Department of Housing (ADOH) will offer 22 percent in purchase assistance to qualified home buyers purchasing an eligible foreclosed home in the State. ADOH provides help in the form of a deferred second mortgage loan for purchase assistance. All loans are zero percent interest with no monthly payment.
QUALIFICATIONS
Eligibility for the purchase assistance is based on a variety of factors
1.) The household must have a gross income (the total income before taxes, health care costs, social security, etc.) of no greater than 120 percent of the average median income for the county they want to purchase a foreclosed house in.
2.) If you own a residence, you must be leasing your primary residence at least 12 months before applying for the program.
3.) Attend and complete an eight-hour Home buyer Education Class.
4.) MUST be your primary residence.
5.) Maximum debt-to-ratio is 31/43.
6.) Foreclosed properties only. One unit detached single family homes, condos and town homes.
7.) Minimum of 3% down payment, 1% must come from borrower's own funds.
HOW DO I START?
Once you have determined you may be eligible for the ADOH program, contact me at 480-813-0970.
The Arizona Department of Housing (ADOH) will offer 22 percent in purchase assistance to qualified home buyers purchasing an eligible foreclosed home in the State. ADOH provides help in the form of a deferred second mortgage loan for purchase assistance. All loans are zero percent interest with no monthly payment.
QUALIFICATIONS
Eligibility for the purchase assistance is based on a variety of factors
1.) The household must have a gross income (the total income before taxes, health care costs, social security, etc.) of no greater than 120 percent of the average median income for the county they want to purchase a foreclosed house in.
2.) If you own a residence, you must be leasing your primary residence at least 12 months before applying for the program.
3.) Attend and complete an eight-hour Home buyer Education Class.
4.) MUST be your primary residence.
5.) Maximum debt-to-ratio is 31/43.
6.) Foreclosed properties only. One unit detached single family homes, condos and town homes.
7.) Minimum of 3% down payment, 1% must come from borrower's own funds.
HOW DO I START?
Once you have determined you may be eligible for the ADOH program, contact me at 480-813-0970.
Friday, June 26, 2009
Report: Sunbelt States Likely To Lead A Slow Recovery
Phoenix Business Journal
Six Sunbelt states, including Arizona, are poised to recover from the recession faster than other regions of the country, but the pace of recovery will be slow, according to BBVA Compass’ quarterly economic report.
The report says that “the worst is behind us,” but each state’s recovery will hinge on factors including how well it is able to assimilate its portion of the federal stimulus package.
“At the moment, the economy is still contracting, so we expect to see negative GDP growth in the second quarter, but at a slower pace than in (the first quarter),” said Nathaniel Karp, the bank’s U.S. chief economist.
In Arizona, GDP is expected to contract by 2.8 percent this year, more than the Sunbelt average of minus 1 percent and the national average of minus 2 percent. A move back to positive territory is expected for 2010 — a .9 percent gain for Arizona, 1.5 for the region and 1.1 percent for the nation, according to the report.
“Consumption, however, is expected to lead the resurgence in economic activity in the second half of the year, but the high unemployment rate, the greater propensity to save and the high degree of uncertainty regarding the impact of the fiscal stimulus package could present risks to this scenario,” Karp said.
The report points to the Sunbelt’s unemployment rate hovering a percent under national figures and notes that it fell slightly in Arizona, Colorado, Florida and New Mexico during April. Initial unemployment insurance claims have fallen throughout the region, except in Arizona, according to BBVA.
Employment is expected to decline 6.4 percent in Arizona this year, compared to a 3.8 percent drop across the U.S.
Arizona home sales have increased for three consecutive quarters, a trend in states hit hardest by the real estate crash. Prices here, however, are expected to end the year with a 6.2 percent decline, the report says. That compares with BBVA’s predicted drops of 6.3 percent for Sunbelt states and 4.3 percent nationally. In 2010, the bank is looking for a 1.3 percent gain in Arizona, compared with 0.1 percent in the region and 1.7 percent nationally.
The report also notes that Arizona led the pack among the small number of states seeing a rise in building permits during April.
The study covered economic activity in Texas, Arizona, Colorado, Florida, Alabama and New Mexico, the six states in which BBVA Compass operates.
Six Sunbelt states, including Arizona, are poised to recover from the recession faster than other regions of the country, but the pace of recovery will be slow, according to BBVA Compass’ quarterly economic report.
The report says that “the worst is behind us,” but each state’s recovery will hinge on factors including how well it is able to assimilate its portion of the federal stimulus package.
“At the moment, the economy is still contracting, so we expect to see negative GDP growth in the second quarter, but at a slower pace than in (the first quarter),” said Nathaniel Karp, the bank’s U.S. chief economist.
In Arizona, GDP is expected to contract by 2.8 percent this year, more than the Sunbelt average of minus 1 percent and the national average of minus 2 percent. A move back to positive territory is expected for 2010 — a .9 percent gain for Arizona, 1.5 for the region and 1.1 percent for the nation, according to the report.
“Consumption, however, is expected to lead the resurgence in economic activity in the second half of the year, but the high unemployment rate, the greater propensity to save and the high degree of uncertainty regarding the impact of the fiscal stimulus package could present risks to this scenario,” Karp said.
The report points to the Sunbelt’s unemployment rate hovering a percent under national figures and notes that it fell slightly in Arizona, Colorado, Florida and New Mexico during April. Initial unemployment insurance claims have fallen throughout the region, except in Arizona, according to BBVA.
Employment is expected to decline 6.4 percent in Arizona this year, compared to a 3.8 percent drop across the U.S.
Arizona home sales have increased for three consecutive quarters, a trend in states hit hardest by the real estate crash. Prices here, however, are expected to end the year with a 6.2 percent decline, the report says. That compares with BBVA’s predicted drops of 6.3 percent for Sunbelt states and 4.3 percent nationally. In 2010, the bank is looking for a 1.3 percent gain in Arizona, compared with 0.1 percent in the region and 1.7 percent nationally.
The report also notes that Arizona led the pack among the small number of states seeing a rise in building permits during April.
The study covered economic activity in Texas, Arizona, Colorado, Florida, Alabama and New Mexico, the six states in which BBVA Compass operates.
Friday, May 29, 2009
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
News Release
HUD No. 09-072
Lemar Wooley
(202) 708-0685
www.hud.gov/news/index.cfm For Release
Friday
May 29, 2009
----------
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
HUD No. 09-072
Lemar Wooley
(202) 708-0685
www.hud.gov/news/index.cfm For Release
Friday
May 29, 2009
----------
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
Tuesday, May 19, 2009
Home Price Declines May Be Slowing
Monday, May 18, 2009, 11:43am MST
Phoenix Business Journal - by Matt Culbertson
The decline in Phoenix-area home prices is slowing down, following a record annual drop in values in February, according to a new study by Arizona State University.
The ASU-Repeat Sales Index, which measures changes in year-to-year average home prices, shows a record drop of 37 percent in the index from February 2008 to February 2009.
But the declining values appear to be slowing, with a March-to-March drop of 36 percent and a predicted 34 fall for April 2008 to April 2009.
Karl Guntermann, Fred E. Taylor professor of real estate at ASU W. P. Carey School of Business, said in a news release that the figures suggest a slower rate of decline than previous months.
“In this market, this would be considered good news,” he said. “Before this reversal, we were seeing the index drop another 1 or 2 percent every month.”
According to the ASU-RSI report, declining prices from February 2008 to February 2009 were ranged from 40 percent in Glendale to 16 percent in Tempe.
The index shows declines in home prices for every month in the last two years, eclipsing the previous record set in the early 1990s of 17 months. Guntermann’s initial estimate for median Phoenix-area home prices in April is $117,500, which would be equivalent to November 1998 levels.
The ASU-RSI is based on repeat sales — comparing prices of a single house against itself at different times — which according to the report is the most reliable way to gauge price fluctuations in the housing market.
Phoenix Business Journal - by Matt Culbertson
The decline in Phoenix-area home prices is slowing down, following a record annual drop in values in February, according to a new study by Arizona State University.
The ASU-Repeat Sales Index, which measures changes in year-to-year average home prices, shows a record drop of 37 percent in the index from February 2008 to February 2009.
But the declining values appear to be slowing, with a March-to-March drop of 36 percent and a predicted 34 fall for April 2008 to April 2009.
Karl Guntermann, Fred E. Taylor professor of real estate at ASU W. P. Carey School of Business, said in a news release that the figures suggest a slower rate of decline than previous months.
“In this market, this would be considered good news,” he said. “Before this reversal, we were seeing the index drop another 1 or 2 percent every month.”
According to the ASU-RSI report, declining prices from February 2008 to February 2009 were ranged from 40 percent in Glendale to 16 percent in Tempe.
The index shows declines in home prices for every month in the last two years, eclipsing the previous record set in the early 1990s of 17 months. Guntermann’s initial estimate for median Phoenix-area home prices in April is $117,500, which would be equivalent to November 1998 levels.
The ASU-RSI is based on repeat sales — comparing prices of a single house against itself at different times — which according to the report is the most reliable way to gauge price fluctuations in the housing market.
Wednesday, May 13, 2009
HUD Announces Plan To Offer Bridge Loans For $8000 First Time Homebuyer Tax Credit
by Ben Martin, blogmaster emeritus on May 12, 2009
Today at NAR’s Midyear Legislative meetings, HUD Secretary Donovan announced that the housing agency is planning to offer bridge loans to allow first time homebuyers to use the $8000 tax credit towards their down payment. As an aside, we have also heard — unconfirmed rumor at this point — that VHDA is planning a similar program. We’ll announce details as they become available.
NAR’s Speaking of Real Estate blog says details will be announced during Secretary Donovan’s keynote address.
UPDATE: Here is the text of Secretary Donovan’s prepared remarks, given during his keynote address this afternoon:
We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.
Today at NAR’s Midyear Legislative meetings, HUD Secretary Donovan announced that the housing agency is planning to offer bridge loans to allow first time homebuyers to use the $8000 tax credit towards their down payment. As an aside, we have also heard — unconfirmed rumor at this point — that VHDA is planning a similar program. We’ll announce details as they become available.
NAR’s Speaking of Real Estate blog says details will be announced during Secretary Donovan’s keynote address.
UPDATE: Here is the text of Secretary Donovan’s prepared remarks, given during his keynote address this afternoon:
We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.
Thursday, May 7, 2009
8 Signs of Hope for the Economy
by Beth Kowitt
Tuesday, May 5, 2009
Are we on the brink of a rebound, or is it a false Spring? Fortune looks at the evidence for an imminent recovery.
Is the economy looking up, or at least bottoming out? Lately there has been much talk about "glimmers of hope," in President Obama's words, and "green shoots," a phrase du jour used by the likes of Fed Chairman Ben Bernanke.
Meanwhile, many economists have warned about a false spring, pointing to numbers that are still getting worse, like the unemployment rate. Fortune takes a closer look at the upbeat news to assess whether how strong a case they make for an imminent recovery.
1. Housing Starts
The government reported that the overall number of housing starts fell in March, but those for single-family homes during the month came in unchanged from the February figure of 358,000.
IHS Global Insight noted that this suggests single-family home construction may be stabilizing and is "testing the bottom."
2. The Stock Market
The S&P 500 was up 9.4% in April, its biggest monthly rally since March 2000. The Wilshire 5000 Total Market Index ended the month at 8,962.96, up 849.85, or 10.48%. This is the best monthly return since December 1991, when the index was up 10.72%.
"The initiatives of the federal government and some of the improvements in the credit markets are making investors more confident," said Thomas Cowhey, chief investment strategist at Hirtle Callaghan.
3. Consumer Confidence
Preliminary figures for the Conference Board's Consumer Confidence Index showed a jump of more than 12 points during April, to 39.2. The reading, which measures consumer views on the economy, beat analyst expectations and was the highest so far in 2009.
Lynn Franco, director of the organization's research center, attributed the rise in confidence to "significant improvement in the short-term outlook."
4. Single-Family Home Prices
The S&P/Case-Shiller Home Price Indices showed that while 20-city and 10-city Composite Home Price figures declined through February 2009 (down 18.6% and 18.8%, respectively, from a year ago), for the first time in 16 months the annual decline did not set a new record.
While it signals that the market may be showing some stabilization, or at least what Chairman of the Index Committee David Blitzer called "deceleration in the rate of decline," Blitzer warned that we "need a few more months of data before we can determine if home prices are finally turning around."
Meanwhile, the Pending Home Sales Index rose for the second straight month in March and was up more than 1% over the year-ago figure. The index from the National Association of Realtors (NAR) increased 3.2% during the month, to 84.6%.
"This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit," wrote Lawrence Yun, the NAR chief economist.
5. Earnings
The collapse in profits may be nearly played out. As of the last day in April, the 341 S&P 500 companies that had reported earnings for the first quarter were on average about 2% below estimates, according to Howard Silverblatt, senior index analyst at Standard & Poor's. Silverblatt says the results are overall "not good but definitely not bad" and show that "deterioration has slowed down."
Financial companies reported surprisingly strong numbers. But we can't count on an earnings turnaround for many months, says Silverblatt, who won't consider the numbers to show definitive proof of improvement until fourth-quarter results are in.
6. Jobless Benefit Claims
While unemployment figures are expected to rise still further, there was a signs of hope in the Unemployment Insurance Weekly Claims Report for the week ending April 25. The Department of Labor reported that seasonally adjusted initial claims for unemployment aid fell by 14,000 to 631,000.
"The past few weeks' claims data are beginning to look increasingly like a peak," wrote Ian Shepherdson of High Frequency Economics.
7. New Orders and Exports
Orders are starting to pick up. While reports from the Institute for Supply Management showed that the manufacturing sector failed to grow for the 15th straight month in April, its New Orders Index increased six percentage points to 47.2%, the highest level since August. The New Exports Orders Index increased 5 percentage points, to 44%.
"While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again," said Norbert Ore, chair of the institute's survey committee, in a statement. "This is definitely a good start for the second quarter."
8. Credit Markets
Banks are starting to trust one another again. In May, the three-month London interbank offered rate (Libor), a benchmark for interbank loans, fell below 1% for the first time on record. That was down from 1.16% a month ago and 2.51% six months prior.
John Ewan, director of the British Bankers' Association, which sets the rate, told Fortune in an email that "the continued easing of the rates demonstrates that liquidity and confidence are returning to the wholesale markets."
Copyrighted, CNNMoney. All Rights Reserved
Tuesday, May 5, 2009
Are we on the brink of a rebound, or is it a false Spring? Fortune looks at the evidence for an imminent recovery.
Is the economy looking up, or at least bottoming out? Lately there has been much talk about "glimmers of hope," in President Obama's words, and "green shoots," a phrase du jour used by the likes of Fed Chairman Ben Bernanke.
Meanwhile, many economists have warned about a false spring, pointing to numbers that are still getting worse, like the unemployment rate. Fortune takes a closer look at the upbeat news to assess whether how strong a case they make for an imminent recovery.
1. Housing Starts
The government reported that the overall number of housing starts fell in March, but those for single-family homes during the month came in unchanged from the February figure of 358,000.
IHS Global Insight noted that this suggests single-family home construction may be stabilizing and is "testing the bottom."
2. The Stock Market
The S&P 500 was up 9.4% in April, its biggest monthly rally since March 2000. The Wilshire 5000 Total Market Index ended the month at 8,962.96, up 849.85, or 10.48%. This is the best monthly return since December 1991, when the index was up 10.72%.
"The initiatives of the federal government and some of the improvements in the credit markets are making investors more confident," said Thomas Cowhey, chief investment strategist at Hirtle Callaghan.
3. Consumer Confidence
Preliminary figures for the Conference Board's Consumer Confidence Index showed a jump of more than 12 points during April, to 39.2. The reading, which measures consumer views on the economy, beat analyst expectations and was the highest so far in 2009.
Lynn Franco, director of the organization's research center, attributed the rise in confidence to "significant improvement in the short-term outlook."
4. Single-Family Home Prices
The S&P/Case-Shiller Home Price Indices showed that while 20-city and 10-city Composite Home Price figures declined through February 2009 (down 18.6% and 18.8%, respectively, from a year ago), for the first time in 16 months the annual decline did not set a new record.
While it signals that the market may be showing some stabilization, or at least what Chairman of the Index Committee David Blitzer called "deceleration in the rate of decline," Blitzer warned that we "need a few more months of data before we can determine if home prices are finally turning around."
Meanwhile, the Pending Home Sales Index rose for the second straight month in March and was up more than 1% over the year-ago figure. The index from the National Association of Realtors (NAR) increased 3.2% during the month, to 84.6%.
"This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit," wrote Lawrence Yun, the NAR chief economist.
5. Earnings
The collapse in profits may be nearly played out. As of the last day in April, the 341 S&P 500 companies that had reported earnings for the first quarter were on average about 2% below estimates, according to Howard Silverblatt, senior index analyst at Standard & Poor's. Silverblatt says the results are overall "not good but definitely not bad" and show that "deterioration has slowed down."
Financial companies reported surprisingly strong numbers. But we can't count on an earnings turnaround for many months, says Silverblatt, who won't consider the numbers to show definitive proof of improvement until fourth-quarter results are in.
6. Jobless Benefit Claims
While unemployment figures are expected to rise still further, there was a signs of hope in the Unemployment Insurance Weekly Claims Report for the week ending April 25. The Department of Labor reported that seasonally adjusted initial claims for unemployment aid fell by 14,000 to 631,000.
"The past few weeks' claims data are beginning to look increasingly like a peak," wrote Ian Shepherdson of High Frequency Economics.
7. New Orders and Exports
Orders are starting to pick up. While reports from the Institute for Supply Management showed that the manufacturing sector failed to grow for the 15th straight month in April, its New Orders Index increased six percentage points to 47.2%, the highest level since August. The New Exports Orders Index increased 5 percentage points, to 44%.
"While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again," said Norbert Ore, chair of the institute's survey committee, in a statement. "This is definitely a good start for the second quarter."
8. Credit Markets
Banks are starting to trust one another again. In May, the three-month London interbank offered rate (Libor), a benchmark for interbank loans, fell below 1% for the first time on record. That was down from 1.16% a month ago and 2.51% six months prior.
John Ewan, director of the British Bankers' Association, which sets the rate, told Fortune in an email that "the continued easing of the rates demonstrates that liquidity and confidence are returning to the wholesale markets."
Copyrighted, CNNMoney. All Rights Reserved
Friday, April 24, 2009
Mortgage applications up 5.3% last week: MBA
CHICAGO (MarketWatch) -- Mortgage applications rose a seasonally adjusted 5.3% last week, compared with the week before, due to an uptick in refinance applications, the Mortgage Bankers Association reported on Wednesday.
Applications were up 76.9% for the week ended April 17, compared with the same week in 2008, the MBA said. The weekly MBA survey covers about half of all U.S. retail residential mortgage applications.
Refinance applications were up an unadjusted 7.7% last week, compared with the week before. Applications for mortgages to purchase a home were down a seasonally adjusted 4.2%, compared with the week before.
The four-week moving average for all mortgages was up 0.3%.
The share of applications for refinance mortgages was 79.7% of total applications, up from 77.8% the previous week. The share of adjustable-rate mortgages was 1.4% of all applications last week, down slightly from 1.5% the previous week.
Thirty-year fixed-rate mortgages averaged 4.73% last week, up from 4.70% the week before.
Fifteen-year fixed-rate mortgages averaged 4.46%, unchanged from the previous week. And one-year ARMs averaged 6.19%, down from 6.21%. End of Story
Amy Hoak is a MarketWatch reporter based in Chicago.
Applications were up 76.9% for the week ended April 17, compared with the same week in 2008, the MBA said. The weekly MBA survey covers about half of all U.S. retail residential mortgage applications.
Refinance applications were up an unadjusted 7.7% last week, compared with the week before. Applications for mortgages to purchase a home were down a seasonally adjusted 4.2%, compared with the week before.
The four-week moving average for all mortgages was up 0.3%.
The share of applications for refinance mortgages was 79.7% of total applications, up from 77.8% the previous week. The share of adjustable-rate mortgages was 1.4% of all applications last week, down slightly from 1.5% the previous week.
Thirty-year fixed-rate mortgages averaged 4.73% last week, up from 4.70% the week before.
Fifteen-year fixed-rate mortgages averaged 4.46%, unchanged from the previous week. And one-year ARMs averaged 6.19%, down from 6.21%. End of Story
Amy Hoak is a MarketWatch reporter based in Chicago.
Tuesday, April 14, 2009
Bernanke: 'Fundamentally Optimistic' About Economy
By BRIAN BLACKSTONE
WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Tuesday offered some hope that the 16-month-old recession may be losing some of its severity and he is "fundamentally optimistic" about the economy's longer term prospects.
"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Mr. Bernanke said in remarks prepared for delivery later Tuesday in Atlanta.
He specifically cited recent figures on housing, consumer spending, and new vehicle sales as some of those signs that the recession is slowing.
"A leveling out of economic activity is the first step toward recovery," Mr. Bernanke said.
"Today's economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence, "he said. (See the full text of Bernanke's prepared remarks.)
Excerpts of Mr. Bernanke's speech to students at Morehouse College were released in USA Today.
Mr. Bernanke also stressed that despite the extraordinary efforts the Fed is taking to support financial markets and the economy, it hasn't taken its eye off of inflation. The Fed "treats its obligation to ensure price stability extremely seriously," Mr. Bernanke said.
Price stability doesn't necessarily mean that inflation is zero, and Mr. Bernanke noted that most Fed officials would like to see annual inflation of around 2% over the long term. "Right now, because of the weakness in economic conditions here and around the world, inflation has been running less than that, and our best forecast is that inflation will remain quite low for some time."
Still he warned that as the economy strengthens, financial markets heal and the demand for goods and services rebounds, liquidity the Fed has pumped into the system could pose an inflationary threat unless key interest rates rise and some liquidity is drawn back out of the system.
Mr. Bernanke signaled that officials are mindful of the need for an exit strategy once the economy improves. Fed officials, he said, "are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy and we are confident in our ability to do so."
Mr. Bernanke expressed confidence in the Fed's ability to promote economic stability through a variety of efforts including credit programs and open market securities purchases, saying "the Fed's toolkit remains potent, even though the federal funds rate is close to zero and thus cannot be reduced further."
He again defended the federal government's decision to rescue American International Group Inc., saying "preventing the failure of AIG was the best of the very bad options available." He acknowledged that many Americans see the AIG rescue as unfair because other companies, including nonfinancial and smaller financial firms, haven't been treated in the same manner. "Allowing AIG to at least partly avoid the discipline of the marketplace also sets a bad precedent," he said.
WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Tuesday offered some hope that the 16-month-old recession may be losing some of its severity and he is "fundamentally optimistic" about the economy's longer term prospects.
"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Mr. Bernanke said in remarks prepared for delivery later Tuesday in Atlanta.
He specifically cited recent figures on housing, consumer spending, and new vehicle sales as some of those signs that the recession is slowing.
"A leveling out of economic activity is the first step toward recovery," Mr. Bernanke said.
"Today's economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence, "he said. (See the full text of Bernanke's prepared remarks.)
Excerpts of Mr. Bernanke's speech to students at Morehouse College were released in USA Today.
Mr. Bernanke also stressed that despite the extraordinary efforts the Fed is taking to support financial markets and the economy, it hasn't taken its eye off of inflation. The Fed "treats its obligation to ensure price stability extremely seriously," Mr. Bernanke said.
Price stability doesn't necessarily mean that inflation is zero, and Mr. Bernanke noted that most Fed officials would like to see annual inflation of around 2% over the long term. "Right now, because of the weakness in economic conditions here and around the world, inflation has been running less than that, and our best forecast is that inflation will remain quite low for some time."
Still he warned that as the economy strengthens, financial markets heal and the demand for goods and services rebounds, liquidity the Fed has pumped into the system could pose an inflationary threat unless key interest rates rise and some liquidity is drawn back out of the system.
Mr. Bernanke signaled that officials are mindful of the need for an exit strategy once the economy improves. Fed officials, he said, "are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy and we are confident in our ability to do so."
Mr. Bernanke expressed confidence in the Fed's ability to promote economic stability through a variety of efforts including credit programs and open market securities purchases, saying "the Fed's toolkit remains potent, even though the federal funds rate is close to zero and thus cannot be reduced further."
He again defended the federal government's decision to rescue American International Group Inc., saying "preventing the failure of AIG was the best of the very bad options available." He acknowledged that many Americans see the AIG rescue as unfair because other companies, including nonfinancial and smaller financial firms, haven't been treated in the same manner. "Allowing AIG to at least partly avoid the discipline of the marketplace also sets a bad precedent," he said.
Wednesday, March 25, 2009
Betting On A Housing Recovery
Hopes are rising that the housing market has finally hit bottom. In addition to better-than-expected home sales reports, many homebuilder stocks are surging.
NEW YORK (CNNMoney.com) -- Has the housing market finally hit bottom? It's probably too soon to say -- but Wall Street sure seems to think so.
The Commerce Department reported Wednesday that new-home sales rose almost 5% last month after hitting their lowest point ever in January. Economists were expecting a decline of about 3%
This comes on the heels of two reports showing a better-than-expected gain in existing-home sales and the first increase in construction of new homes since June.
Investors have taken notice. The SPDR S&P Homebuilders (XHB) exchange-traded fund spiked about 8% higher Wednesday morning. The ETF includes several leading homebuilders, as well as companies with strong ties to the housing market like Home Depot (HD, Fortune 500) and Lowe's (LOW, Fortune 500) and paint maker Sherwin Williams (SHW, Fortune 500).
Talkback: Do you think housing has finally hit bottom?
Over the past two and a half weeks, a period when the entire market has surged, the homebuilders ETF has been one of the big leaders -- it is up more than 40% compared to about 20% for the S&P 500.
In fact, even though the broader stock market is still down sharply this year, several homebuilding stocks are actually in the black, including D.R. Horton (DHI, Fortune 500), Lennar (LEN, Fortune 500) and Pulte Homes (PHM, Fortune 500).
Now what does all this mean? Are savvy investors declaring that the worst is over for housing and that it's time to start plowing back into homebuilders? Perhaps. Still, it's hard to get overly excited about the recent housing data.
Investors have to be cautious.
Even though some of the February numbers suggest that the that the credit markets may be finally thawing after the Lehman Brothers collapse-induced freeze, many experts warn that isn't the same thing as a healthy housing market -- especially since home prices continue to fall.
In addition, the unemployment rate has risen sharply in the past few months and many economists expect that trend to continue.
So even though mortgage rates have been falling and banks may be more willing to lend now that the Treasury Department has a plan to help them unload some of their most troubled assets, that may not be enough to counter the growing ranks of unemployed who can't buy under any circumstances.
0:00 /0:53Mortgage affordability
Nonetheless, one fund manager who owns several homebuilder stocks said that even though it's premature to predict a housing recovery, the group has been beaten down so far that it won't take a significant real estate upturn for more share-price gains.
"One month does not a trend make. We're hopefully bouncing along the bottom but happy days are not here again," said John Buckingham, manager of the Al Frank fund. "Still, many of the stocks have been priced for the Great Depression 2. Lots of homebuilders have been generating cash during the downturn and their balance sheets, believe it or not, are in good shape."
Buckingham said he's a little concerned by the sharp recent run-up in the stocks. But he said he still likes shares of several of the larger builders, including MDC Holdings (MDC), Ryland (RYL), D.R. Horton and KB Home (KBH, Fortune 500), for the long-term.
At the end of the day, stabilization in the market is what is needed before a recovery. It's the classic case of learning to crawl before you can walk, let alone run.
Buckingham said that as long as the housing numbers are "getting less worse" that should be treated as encouraging news by investors. He added that even though some may dismiss February's surprising sales strength as a byproduct of more demand for foreclosed homes, any boost to sales is a good sign.
"Clearly there is interest in homes. Whether it's in foreclosure or not, there's still a buyer. That helps put in a floor on prices and could boost confidence," he said.
Another investor in several housing-related stocks agreed that the housing picture looks less bleak. But he added that investors will need to be patient. Just as the housing market didn't collapse overnight, a rebound won't take place quickly either.
"It's exciting that the numbers are perking up and the government's efforts to bring mortgage rates down are helping," said Doug Ober, chairman and CEO of Adams Express (ADX), a closed-end fund that invests mainly in U.S. stocks and owns Ryland, Lowe's and cabinet and plumbing fixtures maker Masco (MAS, Fortune 500). "But I think that probably the market is a little early on this. This is going to be a recovery that will take several years."
Shameless plug alert: Before I started writing The Buzz, I covered the media business for several years at CNNMoney.com. Some of this reporting is the basis of a book I've written about News Corp. CEO Rupert Murdoch called Inside Rupert's Brain, which was published on March 19 by Portfolio, an imprint of Penguin Group (USA).
NEW YORK (CNNMoney.com) -- Has the housing market finally hit bottom? It's probably too soon to say -- but Wall Street sure seems to think so.
The Commerce Department reported Wednesday that new-home sales rose almost 5% last month after hitting their lowest point ever in January. Economists were expecting a decline of about 3%
This comes on the heels of two reports showing a better-than-expected gain in existing-home sales and the first increase in construction of new homes since June.
Investors have taken notice. The SPDR S&P Homebuilders (XHB) exchange-traded fund spiked about 8% higher Wednesday morning. The ETF includes several leading homebuilders, as well as companies with strong ties to the housing market like Home Depot (HD, Fortune 500) and Lowe's (LOW, Fortune 500) and paint maker Sherwin Williams (SHW, Fortune 500).
Talkback: Do you think housing has finally hit bottom?
Over the past two and a half weeks, a period when the entire market has surged, the homebuilders ETF has been one of the big leaders -- it is up more than 40% compared to about 20% for the S&P 500.
In fact, even though the broader stock market is still down sharply this year, several homebuilding stocks are actually in the black, including D.R. Horton (DHI, Fortune 500), Lennar (LEN, Fortune 500) and Pulte Homes (PHM, Fortune 500).
Now what does all this mean? Are savvy investors declaring that the worst is over for housing and that it's time to start plowing back into homebuilders? Perhaps. Still, it's hard to get overly excited about the recent housing data.
Investors have to be cautious.
Even though some of the February numbers suggest that the that the credit markets may be finally thawing after the Lehman Brothers collapse-induced freeze, many experts warn that isn't the same thing as a healthy housing market -- especially since home prices continue to fall.
In addition, the unemployment rate has risen sharply in the past few months and many economists expect that trend to continue.
So even though mortgage rates have been falling and banks may be more willing to lend now that the Treasury Department has a plan to help them unload some of their most troubled assets, that may not be enough to counter the growing ranks of unemployed who can't buy under any circumstances.
0:00 /0:53Mortgage affordability
Nonetheless, one fund manager who owns several homebuilder stocks said that even though it's premature to predict a housing recovery, the group has been beaten down so far that it won't take a significant real estate upturn for more share-price gains.
"One month does not a trend make. We're hopefully bouncing along the bottom but happy days are not here again," said John Buckingham, manager of the Al Frank fund. "Still, many of the stocks have been priced for the Great Depression 2. Lots of homebuilders have been generating cash during the downturn and their balance sheets, believe it or not, are in good shape."
Buckingham said he's a little concerned by the sharp recent run-up in the stocks. But he said he still likes shares of several of the larger builders, including MDC Holdings (MDC), Ryland (RYL), D.R. Horton and KB Home (KBH, Fortune 500), for the long-term.
At the end of the day, stabilization in the market is what is needed before a recovery. It's the classic case of learning to crawl before you can walk, let alone run.
Buckingham said that as long as the housing numbers are "getting less worse" that should be treated as encouraging news by investors. He added that even though some may dismiss February's surprising sales strength as a byproduct of more demand for foreclosed homes, any boost to sales is a good sign.
"Clearly there is interest in homes. Whether it's in foreclosure or not, there's still a buyer. That helps put in a floor on prices and could boost confidence," he said.
Another investor in several housing-related stocks agreed that the housing picture looks less bleak. But he added that investors will need to be patient. Just as the housing market didn't collapse overnight, a rebound won't take place quickly either.
"It's exciting that the numbers are perking up and the government's efforts to bring mortgage rates down are helping," said Doug Ober, chairman and CEO of Adams Express (ADX), a closed-end fund that invests mainly in U.S. stocks and owns Ryland, Lowe's and cabinet and plumbing fixtures maker Masco (MAS, Fortune 500). "But I think that probably the market is a little early on this. This is going to be a recovery that will take several years."
Shameless plug alert: Before I started writing The Buzz, I covered the media business for several years at CNNMoney.com. Some of this reporting is the basis of a book I've written about News Corp. CEO Rupert Murdoch called Inside Rupert's Brain, which was published on March 19 by Portfolio, an imprint of Penguin Group (USA).
Friday, March 20, 2009
Richard Russell: Bernanke Wants Mortgage Rates at 3-4%; "Massive Assault"
Friday, March 20, 2009
From Dow Theory Letters:
Russell Comment -- They're calling it "The Rambo Fed." Bernanke is not fooling around any longer. He's playing all his cards. He's going to put a floor under housing and boost asset prices in an all-out attack on the bear market. Bernanke wants to drive mortgage rates down and refinance housing at 3-4%. On the news, the dollar swooned, the Euro surged, the long T-bond exploded higher by six points, and the yield on the ten-year Treasury bond sank to 1.51%. Whew, what a day and what an announcement.
The Bernanke plan -- smother deflation with money and put a floor under housing. Bernanke will in no way accept deflation. The Fed will go all-out in printing Federal Reserve Notes in its massive assault on deflation. Bernanke will accept a collapsing dollar rather than a repeat of the Great Depression. Actually, the Fed would like a lower (not a crashing) dollar. A lower dollar would be inflationary, which is what the Fed wants.
From Dow Theory Letters:
Russell Comment -- They're calling it "The Rambo Fed." Bernanke is not fooling around any longer. He's playing all his cards. He's going to put a floor under housing and boost asset prices in an all-out attack on the bear market. Bernanke wants to drive mortgage rates down and refinance housing at 3-4%. On the news, the dollar swooned, the Euro surged, the long T-bond exploded higher by six points, and the yield on the ten-year Treasury bond sank to 1.51%. Whew, what a day and what an announcement.
The Bernanke plan -- smother deflation with money and put a floor under housing. Bernanke will in no way accept deflation. The Fed will go all-out in printing Federal Reserve Notes in its massive assault on deflation. Bernanke will accept a collapsing dollar rather than a repeat of the Great Depression. Actually, the Fed would like a lower (not a crashing) dollar. A lower dollar would be inflationary, which is what the Fed wants.
Monday, March 16, 2009
Good News On Credit Scores for People Involved in Foreclosure!
Good news!!! Looks like FICO has figured out that they may need to adjust their scoring guidelines. Could 650 be the new 850? Don't give up on those that have a foreclosure during 2008-2009, the government must figure out a way to get these hundreds of thousands of people back into the market, our economy depends on it.....
Source: The New York Times, Ron Lieber (03/14/2009)
How Will Foreclosure Effect Credit Scores?
The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.
FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.
BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”
Source: The New York Times, Ron Lieber (03/14/2009)
How Will Foreclosure Effect Credit Scores?
The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.
FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.
BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”
Wednesday, March 11, 2009
Foreclosure Tally: Good News, Bad News
Phoenix Business Journal
The number of foreclosure filings in February jumped 83 percent from last year’s total, but has abated from the peak six months ago, according to Default Research.
The Pennsylvania provider of foreclosure lists reported 5,624 filings of Notice of Trustee Sales in Maricopa County in February. That’s up sharply from February 2008’s 3,066, but well below the August 2008 tally of 8,685 filings.
Default Research founder Serdar Bankaci had some encouraging words: “After a steep increase in foreclosures in 2007 and 2008, market indicators in the Phoenix area show that median home values have remained relatively constant for the past 90 days. We expect to see much of the same for the next six months, but the market should begin to recover by the end of this year.”
On the flip side, the company reports that the number of nonresidential foreclosures is on the rise, representing 3.6 percent of all properties entering the process in February.
“It is no surprise that the commercial and retail businesses have suffered with the decline in consumer spending,” said Bankaci. “To further complicate the foreclosure situation, many commercial properties are now unable to refinance their loans due the credit crunch.”
The number of foreclosure filings in February jumped 83 percent from last year’s total, but has abated from the peak six months ago, according to Default Research.
The Pennsylvania provider of foreclosure lists reported 5,624 filings of Notice of Trustee Sales in Maricopa County in February. That’s up sharply from February 2008’s 3,066, but well below the August 2008 tally of 8,685 filings.
Default Research founder Serdar Bankaci had some encouraging words: “After a steep increase in foreclosures in 2007 and 2008, market indicators in the Phoenix area show that median home values have remained relatively constant for the past 90 days. We expect to see much of the same for the next six months, but the market should begin to recover by the end of this year.”
On the flip side, the company reports that the number of nonresidential foreclosures is on the rise, representing 3.6 percent of all properties entering the process in February.
“It is no surprise that the commercial and retail businesses have suffered with the decline in consumer spending,” said Bankaci. “To further complicate the foreclosure situation, many commercial properties are now unable to refinance their loans due the credit crunch.”
Saturday, February 21, 2009
Regardless Of How Religious You Are (Or Are Not), The Following Is Inspiring...
Here's a great interview with Rick Warren. He wrote the Purpose Driven Life, A highly recommended book. (and by the way, it is the book that the woman who was kidnapped by an escaped killer/prisoner used to convince her captor to turn himself in a couple of years ago.)
You will enjoy the new insights that Rick Warren has, with his wife now having cancer and him having 'wealth' from the book sales. This is an absolutely incredible short interview with Rick Warren,
'Purpose Driven Life ' author and pastor of Saddleback Church in California
In the interview by Paul Bradshaw with Rick Warren, Rick said:
People ask me, What is the purpose of life?
And I respond: In a nutshell, life is preparation for eternity. We were not made to last forever, and God wants us to be with Him in Heaven.
One day my heart is going to stop, and that will be the end of my body-- but not the end of me.
I may live 60 to 100 years on earth, but I am going to spend trillions of years in eternity. This is the warm-up act - the dress rehearsal. God wants us to practice on earth what we will do forever in eternity.
We were made by God and for God, and until you figure that out, life isn't going to make sense.
Life is a series of problems: Either you are in one now, you're just coming out of one, or you're getting ready to go into another one.
The reason for this is that God is more interested in your character than your comfort; God is more interested in making your life holy than He is in making your life happy.
We can be reasonably happy here on earth, but that's not the goal of life. The goal is to grow in character, in Christ likeness.
This past year has been the greatest year of my life but also the toughest, with my wife, Kay, getting cancer.
I used to think that life was hills and valleys - you go through a dark time, then you go to the mountaintop, back and forth. I don't believe that anymore.
Rather than life being hills and valleys, I believe that it's kind of like two rails on a railroad track, and at all times you have something good and something bad in your life.
No matter how good things are in your life, there is always something bad that needs to be worked on.
And no matter how bad things are in your life, there is always something good you can thank God for..
You can focus on your purposes, or you can focus on your problems:
If you focus on your problems, you're going into self-centeredness, which is my problem, my issues, my pain.' But one of the easiest ways to get rid of pain is to get your focus off yourself and onto God and others.
We discovered quickly that in spite of the prayers of hundreds of thousands of people, God was not going to heal Kay or make it easy for her- It has been very difficult for her, and yet God has strengthened her character, given her a ministry of helping other people, given her a testimony, drawn her closer to Him and to people.
You have to learn to deal with both the good and the bad of life.
Actually, sometimes learning to deal with the good is harder. For instance, this past year, all of a sudden, when the book sold 15 million copies, it made me instantly very wealthy.
It also brought a lot of notoriety that I had never had to deal with before. I don't think God gives you money or notoriety for your own ego or for you to live a life of ease..
So I began to ask God what He wanted me to do with this money, notoriety and influence. He gave me two different passages that helped me decide what to do, II Corinthians 9 and Psalm 72.
First, in spite of all the money coming in, we would not change our lifestyle one bit.. We made no major purchases.
Second, about midway through last year, I stopped taking a salary from the church.
Third, we set up foundations to fund an initiative we call The Peace Plan to plant churches, equip leaders, assist the poor, care for the sick, and educate the next generation.
Fourth, I added up all that the church had paid me in the 24 years since I started the church, and I gave it all back. It was liberating to be able to serve God for free.
We need to ask ourselves: Am I going to live for possessions? Popularity?
Am I going to be driven by pressures? Guilt? Bitterness? Materialism? Or am I going to be driven by God's purposes (for my life)?
When I get up in the morning, I sit on the side of my bed and say, God, if I don't get anything else done today, I want to know You more and love You better. God didn't put me on earth just to fulfill a to-do list. He's more interested in what I am than what I do.
That's why we're called human beings, not human doings.
Happy moments, PRAISE GOD.
Difficult moments, SEEK GOD.
Quiet moments, WORSHIP GOD.
Painful moments, TRUST GOD.
Every moment, THANK GOD.
If you do not pass it on, nothing will happen. But it will just be nice to pass it on to a friend....just like I have done.
God's Blessings…
Thursday, February 19, 2009
Mortgage help: Do you qualify?
President Obama's new real estate rescue plan offers two key possible benefits: More refinancing opportunities and greater chance for a loan modification.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 18, 2009: 7:11 PM ET
NEW YORK (CNNMoney.com) -- The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help - are you one of them?
The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:
First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates.
Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.
Official guidelines won't be unveiled until March 4, but here's how to know whether you'll likely be able to take advantage of either of these options.
Help for those seeking refinancing
This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.
Right now, if you're underwater on your mortgage, owing more than the home's market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must.
The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties.
The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.
Who's not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.
Those with "jumbo" mortgages also don't qualify - only those with "conforming' mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them.
All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn't yet clear.
Mortgage modification help for at-risk borrowers
Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.
Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification.
Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they'll be required to accept debt counseling in a HUD-certified program.
If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income.
The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.
The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option.
Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time.
President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.
Who's not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help -- all homes must be owner/occupied.
The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.
And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%.
That will disqualify many borrowers who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss.
"[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford," said Obama. "In short, this plan will not save every home."
No mortgages for amounts above comforming loan limits would be eligible. To top of page
First Published: February 18, 2009: 6:57 PM ET
By Les Christie, CNNMoney.com staff writer
Last Updated: February 18, 2009: 7:11 PM ET
NEW YORK (CNNMoney.com) -- The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help - are you one of them?
The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:
First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates.
Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.
Official guidelines won't be unveiled until March 4, but here's how to know whether you'll likely be able to take advantage of either of these options.
Help for those seeking refinancing
This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.
Right now, if you're underwater on your mortgage, owing more than the home's market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must.
The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties.
The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.
Who's not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.
Those with "jumbo" mortgages also don't qualify - only those with "conforming' mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them.
All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn't yet clear.
Mortgage modification help for at-risk borrowers
Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.
Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification.
Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they'll be required to accept debt counseling in a HUD-certified program.
If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income.
The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.
The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option.
Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time.
President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.
Who's not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help -- all homes must be owner/occupied.
The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.
And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%.
That will disqualify many borrowers who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss.
"[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford," said Obama. "In short, this plan will not save every home."
No mortgages for amounts above comforming loan limits would be eligible. To top of page
First Published: February 18, 2009: 6:57 PM ET
Wednesday, February 18, 2009
Obama Announces $75 Billion Foreclosure Prevention Plan
The plan to stem the housing crisis, which President Obama released Wednesday, is more ambitious than initially expected -- and more expensive.
FOXNews.com
Wednesday, February 18, 2009
President Obama, calling the housing meltdown a "crisis unlike we've ever known," rolled out a $75 billion plan Wednesday that his administration hopes will keep as many as 9 million families in their homes.
The announcement in Phoenix comes a day after he signed a $787 billion economic rescue package that combines spending and tax cuts aimed at saving and creating millions of jobs.
The foreclosure prevention plan is more ambitious than initially expected -- and more expensive. It aims to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.
Obama said the plan is a critical component in his administration's efforts to pull the nation out of recession.
"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling homeownership, the middle class, and the American dream itself," Obama said. "But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit."
The plan would draw $50 billion from existing financial bailout money, as well as $25 billion from government-backed entities like Fannie Mae and Freddie Mac.
Part of the program would instruct Fannie and Freddie to automatically approve refinancing at current rates. That change is expected to give 4-5 million people an immediate reduction in their mortgage payments, according to a senior administration official.
Another component would provide government incentives to modify at-risk mortgages to drive down payments. Lenders would be asked to reduce monthly payments to 38 percent of the borrower's income, and then the government would split the cost of reducing that to 31 percent.
Obama said the funding would not reward "unscrupulous or irresponsible" speculators.
"This plan will not save every home," he said. "But it will give millions of families resigned to financial ruin a chance to rebuild."
Obama said the goal is to target families who are "underwater or close to it" and help those who "played by the rules and acted responsibly."
The goal of the overall plan is to save 7 to 9 million mortgages.
Announcing his plan in a state hard hit by the housing crunch, Obama said that stemming the tide of foreclosures is key to turning around the recession-bound economy.
FOX News' Wendell Goler and The Associated Press contributed to this report.
FOXNews.com
Wednesday, February 18, 2009
President Obama, calling the housing meltdown a "crisis unlike we've ever known," rolled out a $75 billion plan Wednesday that his administration hopes will keep as many as 9 million families in their homes.
The announcement in Phoenix comes a day after he signed a $787 billion economic rescue package that combines spending and tax cuts aimed at saving and creating millions of jobs.
The foreclosure prevention plan is more ambitious than initially expected -- and more expensive. It aims to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.
Obama said the plan is a critical component in his administration's efforts to pull the nation out of recession.
"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling homeownership, the middle class, and the American dream itself," Obama said. "But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit."
The plan would draw $50 billion from existing financial bailout money, as well as $25 billion from government-backed entities like Fannie Mae and Freddie Mac.
Part of the program would instruct Fannie and Freddie to automatically approve refinancing at current rates. That change is expected to give 4-5 million people an immediate reduction in their mortgage payments, according to a senior administration official.
Another component would provide government incentives to modify at-risk mortgages to drive down payments. Lenders would be asked to reduce monthly payments to 38 percent of the borrower's income, and then the government would split the cost of reducing that to 31 percent.
Obama said the funding would not reward "unscrupulous or irresponsible" speculators.
"This plan will not save every home," he said. "But it will give millions of families resigned to financial ruin a chance to rebuild."
Obama said the goal is to target families who are "underwater or close to it" and help those who "played by the rules and acted responsibly."
The goal of the overall plan is to save 7 to 9 million mortgages.
Announcing his plan in a state hard hit by the housing crunch, Obama said that stemming the tide of foreclosures is key to turning around the recession-bound economy.
FOX News' Wendell Goler and The Associated Press contributed to this report.
Tuesday, February 17, 2009
Economic Stimulus Plan Benefits the Housing and Mortgage Industries
Economic Stimulus Plan Benefits the Housing and Mortgage Industries
Revised February 17, 2009
Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
The following discussions are intended for you to use directly with your client either in writing or verbally.
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
Revised February 17, 2009
Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
The following discussions are intended for you to use directly with your client either in writing or verbally.
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
Fannie Mae and Freddie Mac Follow Banks with Foreclosure Moratorium!
Phoenix Business Journal
Fannie Mae and Freddie Mac said they will suspend foreclosure sales involving occupied single-family and two- to four-unit residential properties through March 6.
The announcement from McLean, Va.-based Freddie (NYSE:FRE) and Washington D.C.-based Fannie (NYSE:FNM), which own or guarantee almost half of the nation’s mortgages, comes after some of the largest U.S. banks with Arizona operations last week agreed to a similar measures while the government works out a plan to stabilize the banking industry.
Moratoriums from JPMorgan Chase, Wells Fargo, Bank of America Corp. and Citigroup Inc. also will remain in effect until March 6.
Fannie Mae and Freddie Mac said the temporary suspension should give give loan servicers more time to help troubled borrowers find an alternative to foreclosure. The latest suspension does not apply to vacant properties in foreclosure.
In addition, the moratorium gives lenders servicing Freddie Mac mortgages broad authority to provide forbearance to borrowers who are not yet delinquent, the lender said. Lenders also can provide permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are delinquent.
Fannie Mae and Freddie Mac said they will suspend foreclosure sales involving occupied single-family and two- to four-unit residential properties through March 6.
The announcement from McLean, Va.-based Freddie (NYSE:FRE) and Washington D.C.-based Fannie (NYSE:FNM), which own or guarantee almost half of the nation’s mortgages, comes after some of the largest U.S. banks with Arizona operations last week agreed to a similar measures while the government works out a plan to stabilize the banking industry.
Moratoriums from JPMorgan Chase, Wells Fargo, Bank of America Corp. and Citigroup Inc. also will remain in effect until March 6.
Fannie Mae and Freddie Mac said the temporary suspension should give give loan servicers more time to help troubled borrowers find an alternative to foreclosure. The latest suspension does not apply to vacant properties in foreclosure.
In addition, the moratorium gives lenders servicing Freddie Mac mortgages broad authority to provide forbearance to borrowers who are not yet delinquent, the lender said. Lenders also can provide permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are delinquent.
Stimulus Plan Benefits Home Sellers and Buyers in 3 Ways
The Recovery Bill was passed today which includes provisions to benefit home owners and home buyers.
First Time Homebuyer Tax Credit has been amended. The Tax Credit has been increased to $8,000 for homes purchased between 1/1/09 and 12/1/09. Additionally, the credit will not be required to be paid back if the home is purchased between 1/1/09 and 12/1/09 and the buyers remain in the home without selling it for at least 3 years. The credit can be claimed on 2008 taxes with an amended return or on 2009 tax returns. It should be noted that if the home was purchased in 2008 the credit remains $7,500 and it still needs to be paid back over a 15-year time frame beginning in 2011.
FHA Loan Limits will temporarily be reverted back to the 2008 loan limits.
This would mean that the current FHA loan limits for Maricopa county of $271,050 would increase back to $346,250. Effective date for these loan limits is not yet known as Fannie Mae, Freddie Mac and FHA must determine pricing, policy and delivery requirements. We are anticipating a March 1st effective date, but will let you know as more details become available.
Home Improvement Tax Credit has been expanded.
Tax credit for making energy efficient home improvements is now 30% of the cost of the improvements, or a maximum amount of $1,500. Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters.
First Time Homebuyer Tax Credit has been amended. The Tax Credit has been increased to $8,000 for homes purchased between 1/1/09 and 12/1/09. Additionally, the credit will not be required to be paid back if the home is purchased between 1/1/09 and 12/1/09 and the buyers remain in the home without selling it for at least 3 years. The credit can be claimed on 2008 taxes with an amended return or on 2009 tax returns. It should be noted that if the home was purchased in 2008 the credit remains $7,500 and it still needs to be paid back over a 15-year time frame beginning in 2011.
FHA Loan Limits will temporarily be reverted back to the 2008 loan limits.
This would mean that the current FHA loan limits for Maricopa county of $271,050 would increase back to $346,250. Effective date for these loan limits is not yet known as Fannie Mae, Freddie Mac and FHA must determine pricing, policy and delivery requirements. We are anticipating a March 1st effective date, but will let you know as more details become available.
Home Improvement Tax Credit has been expanded.
Tax credit for making energy efficient home improvements is now 30% of the cost of the improvements, or a maximum amount of $1,500. Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters.
Monday, February 16, 2009
6 Ingredients of Strong Housing Markets
Luke Mullins wrote a great article below about buying in the "right" neighborhoods but I would like to add that buying in Arizona is an obvious plus because of our attractive Winter weather. Why not get the best of both worlds?
By Luke Mullins, US News
Feb 2009
Community elements essential to supporting favorable home prices over the long haul
With lower home prices and attractive mortgage rates, 2009 will present plenty of bargains for real estate shoppers. But as the historic bust continues, Americans everywhere are learning a painful lesson about home buying: property values don't always increase. As such, anyone looking to purchase a home this year should make sure they're buying into a community that can support long-term value. With the help of housing experts, U.S. News compiled a list of the top 6 ingredients of strong housing markets:
Please note that although the following factors will help support a home's value over the long term, they can't prevent short-term declines in a given market—especially in light of the ongoing real estate crash. "These would be forces that are going to impact [your home] over the next five to ten years, as opposed to next year," says Mike Larson of Weiss Research.
1. A well-groomed neighborhood: Well-maintained homes and landscaping have a positive effect on property values in that community, says Joshua Dorkin, founder and CEO of BiggerPockets.com, a real estate networking and information site. By caring for the appearance of their homes, residents help to create a more aesthetically-pleasing environment that future real-estate hunters will want to buy into. So when you're eyeing a home, make sure to take a drive through the entire neighborhood. Take note of how the neighbors care for their homes, lawns and gardens. "Run-down houses and abandoned cars are big red flags," Dorkin says.
2. Good schools: Given the importance of education, communities located within strong school districts tend to support higher home prices. Parents, after all, will want to move into the communities with the best educational opportunities. "The school district is important in terms of increasing demand for that particular area," says Richard Moody, chief economist at Mission Residential. Would-be home buyers can determine the strength of a local school system by accessing online information from local governments or community websites, Moody says.
3. Low Crime: Low crime rates also support strong home values. Since nobody wants to live in a neighborhood where they feel unsafe, crime limits housing demand in a given community. As a result, it's important to obtain crime statistics for the neighborhood you're considering moving into. The best way to do that, says Steve Dexter, a foreclosure expert and author of the book Beat the Banks, is to contact the local police department. "The police department is a public utility," Dexter says. "Most medium- to large-sized [communities] have a public information [officer] that is dedicated to interacting with the public." By contacting this office, home shoppers can get their hands on all the information they'll need to determine a community's level of safety.
4. Close to public transportation: Proximity to public transportation or commuter rails can also help boost home values, says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. He argues that Americans are increasingly willing to pay a premium for properties that allow them to be less dependent on cars. "Access to bus lines and commuter rail lines is of huge value," Phipps says. "The price of fuel is going to go up again and a lot of my clients are saying, 'O.K., how do we position ourselves to minimize that impact?'" Phipps says.
5. Favorable population trends: It's also important to look at the population trends in the city you're considering moving to, Moody says. "You want to see a track record of steady population growth, which supports growing demand for housing, which will in turn support rising home values," Moody says. Such data can be found online at the U.S. Census Bureau, or though local county or township web sites, he says.
6. Healthy employment landscape: Employment plays a key role in population trends, as workers migrate to locations where they can find jobs. Thus, a healthy employment outlook is a key component of a strong housing market. "If you are in one of these upper Midwest cities and you've got layoffs, especially in a sector like automotives where the jobs are disappearing and they are not coming back, that is a huge problem," Larson says. Home shoppers can obtain economic data from the local government or chamber of commerce, Larson says. Pay special attention to the unemployment trends and find out if any new companies are slated to move into—or out of—the area. "A lot of communities have been trying to attract the sort of economically insensitive industries like biotech and [pharmaceutical companies]," Larson says. "If you've got an area where that kind of business is being brought in—through tax incentives or other efforts—that would be a positive for your local area."
By Luke Mullins, US News
Feb 2009
Community elements essential to supporting favorable home prices over the long haul
With lower home prices and attractive mortgage rates, 2009 will present plenty of bargains for real estate shoppers. But as the historic bust continues, Americans everywhere are learning a painful lesson about home buying: property values don't always increase. As such, anyone looking to purchase a home this year should make sure they're buying into a community that can support long-term value. With the help of housing experts, U.S. News compiled a list of the top 6 ingredients of strong housing markets:
Please note that although the following factors will help support a home's value over the long term, they can't prevent short-term declines in a given market—especially in light of the ongoing real estate crash. "These would be forces that are going to impact [your home] over the next five to ten years, as opposed to next year," says Mike Larson of Weiss Research.
1. A well-groomed neighborhood: Well-maintained homes and landscaping have a positive effect on property values in that community, says Joshua Dorkin, founder and CEO of BiggerPockets.com, a real estate networking and information site. By caring for the appearance of their homes, residents help to create a more aesthetically-pleasing environment that future real-estate hunters will want to buy into. So when you're eyeing a home, make sure to take a drive through the entire neighborhood. Take note of how the neighbors care for their homes, lawns and gardens. "Run-down houses and abandoned cars are big red flags," Dorkin says.
2. Good schools: Given the importance of education, communities located within strong school districts tend to support higher home prices. Parents, after all, will want to move into the communities with the best educational opportunities. "The school district is important in terms of increasing demand for that particular area," says Richard Moody, chief economist at Mission Residential. Would-be home buyers can determine the strength of a local school system by accessing online information from local governments or community websites, Moody says.
3. Low Crime: Low crime rates also support strong home values. Since nobody wants to live in a neighborhood where they feel unsafe, crime limits housing demand in a given community. As a result, it's important to obtain crime statistics for the neighborhood you're considering moving into. The best way to do that, says Steve Dexter, a foreclosure expert and author of the book Beat the Banks, is to contact the local police department. "The police department is a public utility," Dexter says. "Most medium- to large-sized [communities] have a public information [officer] that is dedicated to interacting with the public." By contacting this office, home shoppers can get their hands on all the information they'll need to determine a community's level of safety.
4. Close to public transportation: Proximity to public transportation or commuter rails can also help boost home values, says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. He argues that Americans are increasingly willing to pay a premium for properties that allow them to be less dependent on cars. "Access to bus lines and commuter rail lines is of huge value," Phipps says. "The price of fuel is going to go up again and a lot of my clients are saying, 'O.K., how do we position ourselves to minimize that impact?'" Phipps says.
5. Favorable population trends: It's also important to look at the population trends in the city you're considering moving to, Moody says. "You want to see a track record of steady population growth, which supports growing demand for housing, which will in turn support rising home values," Moody says. Such data can be found online at the U.S. Census Bureau, or though local county or township web sites, he says.
6. Healthy employment landscape: Employment plays a key role in population trends, as workers migrate to locations where they can find jobs. Thus, a healthy employment outlook is a key component of a strong housing market. "If you are in one of these upper Midwest cities and you've got layoffs, especially in a sector like automotives where the jobs are disappearing and they are not coming back, that is a huge problem," Larson says. Home shoppers can obtain economic data from the local government or chamber of commerce, Larson says. Pay special attention to the unemployment trends and find out if any new companies are slated to move into—or out of—the area. "A lot of communities have been trying to attract the sort of economically insensitive industries like biotech and [pharmaceutical companies]," Larson says. "If you've got an area where that kind of business is being brought in—through tax incentives or other efforts—that would be a positive for your local area."
Saturday, February 14, 2009
Selling A Home Is Like Selling A Stock
In today's market, if you sell your home, you will sell at tens of thousands below what you would have sold for 2 years ago. Yet many homeowners who bought during those years of price appreciation have earned positive equity in their home. Some homeowners who did not need to sell at the market peak, but need to sell now are remembering those peak prices and feeling that they are losing money by selling at today’s market-influenced prices.
One way to look at this is to compare a similar situation with another commodity. What if someone bought stock in a company at $70 per share and then watched it rise to $130 per share and then fall to $100 at the time they needed to sell it. Did that person lose $30 per share or gain $30? If they focus on the peak price, they lost an imaginary $30. However, since they paid only $70 and sold it at $100, they actually gained $30 per share, an excellent return. Today’s sellers need to see their situation in a similar light.
What about those sellers with negative equity – owing more than their property is worth? There are many reasons – refinancing or taking out a home equity loan on equity valued during the peak, or buying at the peak. If they don’t need to sell for a while, they know that commodities that go down will come up as real estate always has. If they do need to sell now, there are multiple ways to get to the settlement table with a buyer depending on the situation.
The ideal scenerio for a seller would be to rent out their current home if they can get a positive cash flow and purchase a foreclosure or pre-foreclosure. Buyer's are getting homes at fire sale prices and will profit nicely once the market turns around. Frank and I specialize in helping buyers find incredible deals in this volatile market. Please contact us an we can send you the latest foreclosure lists.
One way to look at this is to compare a similar situation with another commodity. What if someone bought stock in a company at $70 per share and then watched it rise to $130 per share and then fall to $100 at the time they needed to sell it. Did that person lose $30 per share or gain $30? If they focus on the peak price, they lost an imaginary $30. However, since they paid only $70 and sold it at $100, they actually gained $30 per share, an excellent return. Today’s sellers need to see their situation in a similar light.
What about those sellers with negative equity – owing more than their property is worth? There are many reasons – refinancing or taking out a home equity loan on equity valued during the peak, or buying at the peak. If they don’t need to sell for a while, they know that commodities that go down will come up as real estate always has. If they do need to sell now, there are multiple ways to get to the settlement table with a buyer depending on the situation.
The ideal scenerio for a seller would be to rent out their current home if they can get a positive cash flow and purchase a foreclosure or pre-foreclosure. Buyer's are getting homes at fire sale prices and will profit nicely once the market turns around. Frank and I specialize in helping buyers find incredible deals in this volatile market. Please contact us an we can send you the latest foreclosure lists.
Thursday, February 12, 2009
Arizona Sales Up As U.S. Home Values Fall
Arizona sales up as U.S. home values fall
Thursday, February 12, 2009, 9:41am MST
Phoenix Business Journal - by Adam Kress
The National Association of Realtors reports a record drop in home values around the country, but home sales are up in Arizona.
Nationwide home prices fell 12.4 percent during 2008, according to NAR. That’s the largest yearly decline since the group began tracking the numbers in 1979. The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.
The vast majority of metropolitan areas -- 134 out of 153 -- recorded price declines compared with the last quarter of 2007.
Foreclosures and short sales accounted for 45 percent of all deals. That has driven sales volume up in states like Arizona, Nevada, Florida and California.
The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 134 percent, followed by California at 84.7 percent, Arizona, up 42.6 percent, and Florida with a 12.5 percent increase.
“Once again, we see a pattern of strong sales gains, particularly in lower-price homes, in areas with price declines resulting from foreclosures,” said Lawrence Yun, NAR chief economist, in a statement.
Despite the record drop in home values last year, Yun said there is hope in the form of government help.
“Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said. “If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun said.
Cape Coral-Ft. Myers, Fla., saw home prices fall nearly 51 percent for the year -- the steepest drop in the nation. The Beaumont-Port Arthur area of Texas saw median home prices increase almost 17 percent -- the highest increase in the nation.
Thursday, February 12, 2009, 9:41am MST
Phoenix Business Journal - by Adam Kress
The National Association of Realtors reports a record drop in home values around the country, but home sales are up in Arizona.
Nationwide home prices fell 12.4 percent during 2008, according to NAR. That’s the largest yearly decline since the group began tracking the numbers in 1979. The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.
The vast majority of metropolitan areas -- 134 out of 153 -- recorded price declines compared with the last quarter of 2007.
Foreclosures and short sales accounted for 45 percent of all deals. That has driven sales volume up in states like Arizona, Nevada, Florida and California.
The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 134 percent, followed by California at 84.7 percent, Arizona, up 42.6 percent, and Florida with a 12.5 percent increase.
“Once again, we see a pattern of strong sales gains, particularly in lower-price homes, in areas with price declines resulting from foreclosures,” said Lawrence Yun, NAR chief economist, in a statement.
Despite the record drop in home values last year, Yun said there is hope in the form of government help.
“Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said. “If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun said.
Cape Coral-Ft. Myers, Fla., saw home prices fall nearly 51 percent for the year -- the steepest drop in the nation. The Beaumont-Port Arthur area of Texas saw median home prices increase almost 17 percent -- the highest increase in the nation.
Thursday, February 5, 2009
$15,000 Tax Credit to Homebuyers!
New Law could make it possible for buyers to pocket an additional $15,000 with the Home Buyer Tax Credit. Not only are buyers able to buy real estate at record low prices and get the lowest interest rates since the depression of 1929 but now they can make an additional $15,000 dollars by purchasing a home! Unbelievable!!
Below is a snipit from a Bloomberg article explaining some of the negotiations going on in Washington.
"Feb. 5 (Bloomberg) -- The U.S. Senate voted to cut taxes on homebuyers and weaken “Buy American” provisions in an economic stimulus package that tops $900 billion and could come to a vote as soon as today.
Lawmakers, aiming to boost the ailing housing industry, yesterday unanimously approved a Republican amendment that would temporarily offer home buyers a tax credit worth $15,000 or 10 percent of a home’s purchase price, whichever is less. The plan would cost $18 billion.
Senator Johnny Isakson, a Georgia Republican who sponsored the amendment, said it was critical to pulling the economy out of the worst recession in decades. “If we don’t fix housing first, it doesn’t matter what else we fix,” Isakson said."
While this is clearly GREAT news, my concern is that there are some of you that will wait for the approval of the credit with plans of pairing "savings" with the current low interest rates. I'm concerned because by the time this measure is fully passed and enacted the rate train may have left the station."
For anyone in a position to buy a home- there is no better time than right now!
Below is a snipit from a Bloomberg article explaining some of the negotiations going on in Washington.
"Feb. 5 (Bloomberg) -- The U.S. Senate voted to cut taxes on homebuyers and weaken “Buy American” provisions in an economic stimulus package that tops $900 billion and could come to a vote as soon as today.
Lawmakers, aiming to boost the ailing housing industry, yesterday unanimously approved a Republican amendment that would temporarily offer home buyers a tax credit worth $15,000 or 10 percent of a home’s purchase price, whichever is less. The plan would cost $18 billion.
Senator Johnny Isakson, a Georgia Republican who sponsored the amendment, said it was critical to pulling the economy out of the worst recession in decades. “If we don’t fix housing first, it doesn’t matter what else we fix,” Isakson said."
While this is clearly GREAT news, my concern is that there are some of you that will wait for the approval of the credit with plans of pairing "savings" with the current low interest rates. I'm concerned because by the time this measure is fully passed and enacted the rate train may have left the station."
For anyone in a position to buy a home- there is no better time than right now!
Tuesday, February 3, 2009
If you'd love to purchase a new house but you're sitting on the fence, what exactly would it take to get you to buy?
Nation's Housing
* What will it to take to get you to buy a house? 02.01.09
* Stimulus package gives credit to new home buyers 01.25.09
* FTC's warning to foreclosure fix-it firms 01.18.09
* New rules making appraisers angry 01.11.09
More Nation's Housing »
Mortgage rates lower than 5 percent? Smaller down payments? Below-market value pricing? Special amenity packages? Or a big tax credit?
What's the magic mix that will get you motivated? Or is it unlikely you'll get off the fence as long as you're worried about the economy and further drops in real estate values?
Questions like these are at the core of the housing industry's dilemma: Builders are stuck with bulging inventories of homes - most of them priced lower than six months or a year ago - that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Association of Home Builders. It was also the key subject of an eye-opening new consumer opinion survey conducted by the association's research subsidiary.
The study, conducted in early January, polled more than 700 self-described "on-the-fence" buyers, segmented to represent consumers in all areas of the country at varying price levels. Asked why they hadn't yet committed to a purchase, 44 percent said they're holding out for lower mortgage rates, 41 percent said they weren't sure they could qualify for financing and 38 percent said they expect to see lower house prices.
Concerns about falling property values were most prevalent among consumers in the Western region, while buyers in the Northeastern and Midwestern states were more likely to be waiting for lower interest rates. Buyers in the South tended to be more concerned about their ability to qualify for a new mortgage.
Researchers asked what individual enticements - financial or otherwise - would motivate them most to get past their worries and buy. Some of the results were surprising to builders at the convention session where the study was introduced. A few of the findings even appeared to conflict with the builders association's policy positions.
For example, although the association is vigorously lobbying the Obama administration and Congress for a 10 percent federal tax credit with a cap of $22,000 in the most expensive markets, the survey results suggested that a tax credit alone is not sufficient to motivate buyers to sign purchase contracts.
The study examined the effectiveness of a credit roughly the size the association is seeking from Congress, but it ranked sixth on a list of 10 features that would pull buyers off the fence - well behind mortgage and price concessions.
The mortgage rate that consumers said would be most effective in persuading them to buy now: a 30-year loan with a fixed 3 percent interest rate. Whether by coincidence or design, one of the country's largest home builders for high-end buyers, Toll Brothers Inc., announced a 3.99 percent 30-year fixed rate on new houses nationwide during the convention, through Jan. 25.
A 30-year fixed-rate loan at 3 percent was ranked twice as effective an enticement as a 3 percent loan fixed for five years, with an adjustment to 5 1/4 percent, fixed for the remainder of the loan term. Not surprisingly, at a time when Fannie Mae and Freddie Mac require substantial down payments for the best interest rates, the study found that a zero-down option would be highly attractive to potential buyers - more than twice as effective as 10 percent down.
Guarantees by builders that loan applications will be accepted if buyers verify their income and have a "fair" credit score ranked high in the survey. Such a guarantee was rated six times more effective than standard application procedures, where applicants can be rejected at the underwriting, appraisal review or other stages.
Price concessions also are compelling to would-be buyers. Most effective of all: a 10 percent discount below true market value - in other words, instant equity for the purchaser up-front.
Among other findings in the study that some builders found sobering: Their traditional approach of offering incentive packages of free upgrades and amenities may not be all that effective. The same may be true for heavily marketed green features - energy efficiency certifications and environmentally sensitive designs. If a new house comes with a green certification but costs $2,000 more than a standard model, this doesn't motivate shoppers to buy, researchers found. Even if the house is green-certified and costs the same as a standard house, that alone won't do the trick.
Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees. They'll still push for tax credits on Capitol Hill, but financing concessions appear to have more clout with their potential customers.
This article appeared on page N - 3 of the San Francisco Chronicle
* What will it to take to get you to buy a house? 02.01.09
* Stimulus package gives credit to new home buyers 01.25.09
* FTC's warning to foreclosure fix-it firms 01.18.09
* New rules making appraisers angry 01.11.09
More Nation's Housing »
Mortgage rates lower than 5 percent? Smaller down payments? Below-market value pricing? Special amenity packages? Or a big tax credit?
What's the magic mix that will get you motivated? Or is it unlikely you'll get off the fence as long as you're worried about the economy and further drops in real estate values?
Questions like these are at the core of the housing industry's dilemma: Builders are stuck with bulging inventories of homes - most of them priced lower than six months or a year ago - that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Association of Home Builders. It was also the key subject of an eye-opening new consumer opinion survey conducted by the association's research subsidiary.
The study, conducted in early January, polled more than 700 self-described "on-the-fence" buyers, segmented to represent consumers in all areas of the country at varying price levels. Asked why they hadn't yet committed to a purchase, 44 percent said they're holding out for lower mortgage rates, 41 percent said they weren't sure they could qualify for financing and 38 percent said they expect to see lower house prices.
Concerns about falling property values were most prevalent among consumers in the Western region, while buyers in the Northeastern and Midwestern states were more likely to be waiting for lower interest rates. Buyers in the South tended to be more concerned about their ability to qualify for a new mortgage.
Researchers asked what individual enticements - financial or otherwise - would motivate them most to get past their worries and buy. Some of the results were surprising to builders at the convention session where the study was introduced. A few of the findings even appeared to conflict with the builders association's policy positions.
For example, although the association is vigorously lobbying the Obama administration and Congress for a 10 percent federal tax credit with a cap of $22,000 in the most expensive markets, the survey results suggested that a tax credit alone is not sufficient to motivate buyers to sign purchase contracts.
The study examined the effectiveness of a credit roughly the size the association is seeking from Congress, but it ranked sixth on a list of 10 features that would pull buyers off the fence - well behind mortgage and price concessions.
The mortgage rate that consumers said would be most effective in persuading them to buy now: a 30-year loan with a fixed 3 percent interest rate. Whether by coincidence or design, one of the country's largest home builders for high-end buyers, Toll Brothers Inc., announced a 3.99 percent 30-year fixed rate on new houses nationwide during the convention, through Jan. 25.
A 30-year fixed-rate loan at 3 percent was ranked twice as effective an enticement as a 3 percent loan fixed for five years, with an adjustment to 5 1/4 percent, fixed for the remainder of the loan term. Not surprisingly, at a time when Fannie Mae and Freddie Mac require substantial down payments for the best interest rates, the study found that a zero-down option would be highly attractive to potential buyers - more than twice as effective as 10 percent down.
Guarantees by builders that loan applications will be accepted if buyers verify their income and have a "fair" credit score ranked high in the survey. Such a guarantee was rated six times more effective than standard application procedures, where applicants can be rejected at the underwriting, appraisal review or other stages.
Price concessions also are compelling to would-be buyers. Most effective of all: a 10 percent discount below true market value - in other words, instant equity for the purchaser up-front.
Among other findings in the study that some builders found sobering: Their traditional approach of offering incentive packages of free upgrades and amenities may not be all that effective. The same may be true for heavily marketed green features - energy efficiency certifications and environmentally sensitive designs. If a new house comes with a green certification but costs $2,000 more than a standard model, this doesn't motivate shoppers to buy, researchers found. Even if the house is green-certified and costs the same as a standard house, that alone won't do the trick.
Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees. They'll still push for tax credits on Capitol Hill, but financing concessions appear to have more clout with their potential customers.
This article appeared on page N - 3 of the San Francisco Chronicle
Wednesday, January 28, 2009
HAS THE HOUSING MARKET REALLY HIT BOTTOM?
We keep hearing how the housing market took the economy down, now we are finally seeing some positive numbers showing that the housing market is improving nationally- but especially in the Western States!!
Finally, Positive News For Arizona Home Sellers!
As you can see from this chart, existing home sales in December shot to the upside. In fact, compared to November, home sales were up 4% in the Midwest, 7.4% in the South and up to 13.6% in the West. Although the Northeast took a bit of a hit, overall home sales in the U.S. rose a full 6.5%!
Great news for sellers because rising home sales mean that buyers are coming back into the market! One of the biggest investments out there for most people is finally showing signs of health. This spurs the banking business, contractor activity and a boost in tons of home-related products and services... and the news gets even better.
The latest report from the National Association of Realtors also shows that the supply of existing homes is falling. With about 3.7 million units on hand, current existing home inventory amounts to 9.3 months of supply. That's the lowest supply level in a year and is significantly off last year's high of 11.2 months booked in April.
Why are we seeing such a big change? Tumbling home prices. In fact, during December the average home in the United States averaged $175,400, down 15% from the year-ago period's $207,000. And while that's painful for home sellers, it's also the sign of a sector beginning to shift in the right direction.
We keep hearing how the housing market took the economy down, now we are finally seeing some positive numbers showing that the housing market is improving nationally- but especially in the Western States!!
Finally, Positive News For Arizona Home Sellers!
As you can see from this chart, existing home sales in December shot to the upside. In fact, compared to November, home sales were up 4% in the Midwest, 7.4% in the South and up to 13.6% in the West. Although the Northeast took a bit of a hit, overall home sales in the U.S. rose a full 6.5%!
Great news for sellers because rising home sales mean that buyers are coming back into the market! One of the biggest investments out there for most people is finally showing signs of health. This spurs the banking business, contractor activity and a boost in tons of home-related products and services... and the news gets even better.
The latest report from the National Association of Realtors also shows that the supply of existing homes is falling. With about 3.7 million units on hand, current existing home inventory amounts to 9.3 months of supply. That's the lowest supply level in a year and is significantly off last year's high of 11.2 months booked in April.
Why are we seeing such a big change? Tumbling home prices. In fact, during December the average home in the United States averaged $175,400, down 15% from the year-ago period's $207,000. And while that's painful for home sellers, it's also the sign of a sector beginning to shift in the right direction.
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