More Positive Data From The Housing Sector: Existing Home Sales AND New Home Sales Rise

May 29, 2009 by · Leave a Comment
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Existing Home Sales April 2009As this week’s signal that homebuyers are returning to the market, both Existing Home Sales and New Homes Sales posted improvement versus month-prior figures this April.

According to the National Association of REALTORS, the number of Existing Home Sales rose by 130,000 units in April.

New Home Sales rose by a modest 1,000 units in April.

As a twist in the story, however, although sales activity is rising, the available housing inventory is rising faster.

Versus March 2009, there were 300,000 more homes for sale in April — an increase of 9 percent. In addition, the “housing supply” rose to 10.2 months, its highest level since October.

This is good news for home buyers, of course, because home prices are a product of Supply and Demand. Depending on local conditions, buyers may find themselves in a position to demand lower sale prices or additional seller concessions.

The housing market has not fully rebounded but it continues to show signs of strength. With a few more months like March and April, it’s reasonable to assume that homebuyers will lose some of their leverage for contract negotiation.

When that happens, expect home prices to rise.

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Mortgage Rates Rose By More Than 1/2 Percent In 1 Day Wednesday

May 28, 2009 by · Leave a Comment
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Mortgage rates made a historic change May 28 2009Conforming mortgage rates rose by 0.625 percent Wednesday. Yes, you read it right. Zero-point-six-two-five percent.

The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market’s closing. It was the sharpest one-day surge in mortgage rates in recent history. Perhaps ever.

For mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.

That’s a significant shift.

For as rare as Wednesday’s events were, though, middle-of-the-day, 0.625 percent rate changes don’t just happen. Yesterday, the action was the result of a confluence of factors, including:

In addition, momentum trading played a role.

As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.

Mortgage markets are notoriously fickle and yesterday’s events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe. The faster you finish, the lower the risk of losing low interest rates to new market conditions.

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On A Monthly Basis, Home Values Look Better Than Press-Reported Annual Figures

May 27, 2009 by · Leave a Comment
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The March 2009 Case-Shiller 20 City Index

Each month, researchers measure home values in 20 large U.S. cities, then compile their findings in a report called the Case-Shiller Index. It’s a popular measurement of housing health across the country, but it’s far from perfect.

As 3 examples:

  1. It gives more weight to expensive homes than inexpensive ones
  2. Its sample set includes just 37 states of 50 states
  3. Real estate isn’t a “national” market — it’s local

All that said, however, the data is still important. The Case-Shiller Index helps identify broader trends in housing and it’s widely believed that the economy won’t recover until the sector starts to stabilize.

We may be at that recovery point now.

Despite newspaper headlines blaring about 19 percent drops from March 2008, the month-to-month values appear to be stabilizing and the latter is the more important development. 15 of the 20 markets covered by Case-Shiller either improved, stayed flat, or declined by 0.2 percent or less.

Versus 2008, the rate of speed at which home values are falling is slowing.

Furthermore, because the Case-Shiller Index is on a 2-month delay, it doesn’t account for all of this year’s Spring Buyers, or first-timers taking the $8,000 first-time homebuyer tax credit.

Two months don’t make a trend, but if Case-Shiller Index continues to report similar data for April and May, it could be the signal that housing finally bottomed.

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VIDEO : How To Clean A Faucet Aerator

May 26, 2009 by · Leave a Comment
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When sinks deliver low water pressure or “spray”, homeowners like to blame faulty plumbing. A more likely culprit, however, is a neglected faucet aerator. Built-up dirt and sediment eventually slow down water delivery on most faucet types.

In this 1-minute-40-second video, DIY expert Ron Hazelton demonstrates how to properly clean an aerated faucet, restoring pressure and water flow to the sinks in your home.

The steps are basic:

  • Close the drain so you don’t lose parts down the pipes
  • Unscrew the aerator with your hands
  • Disassemble and clean the parts
  • Reassemble the parts
  • Screw the aerator back on the faucet

Sometimes, weak water pressure isn’t a plumbing issue, but a cleanliness one instead. Clean your aerators as part of your annual Spring Cleaning rites.

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Over 24 Hours, Mortgage Rates Shoot Higher

May 22, 2009 by · Leave a Comment
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Iniital Jobless Claims May 21 2009Rates go up, rates go down. Catch them while you can.

After Wednesday’s mortgage market rally drove rates down by a bunch, Thursday’s sell-off pushed them right back up.

This has been a common pattern in the skittish world of mortgage rates this year.

With the U.S. economy still teetering between recession and growth, markets are looking for signals anywhere it can find them. Thursday’s clue came from a government report showing that more Americans are collecting unemployment benefits than at any point in history.

Strangely, mortgage rates rose on the news.

We call it “strange” because weak economic data has tended to draw mortgage rates lower lately to the benefit of prospective home buyers and would-be refinancers. Lower rates make homes more affordable.

Thursday, though, the pattern broke.

The main reason why mortgage rates rose Thursday isn’t because of the employment report or any other piece of data. Rates rose Thursday for the same reason that they had dropped the day prior — the Federal Reserve.

On Wednesday, the released minutes from the Fed’s last meeting suggested that the group might make a larger mortgage market intervention. On Thursday, in the face of worsening jobs data, markets bet the Fed wouldn’t.

Mortgage rate shoppers, unfortunately, got caught in the crosshairs.

Rates can — and do — change quickly, without warning. And, thus far this year, the changes have been extra sudden. This is one reason why it’s often prudent to lock a mortgage rate as soon as you find one that’s agreeable. Wait too long, and it could be gone.

Expect more volatility today with traders leaving early for Memorial Day Weekend. Less volume means more chances for rates to change.

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How The “Fed Minutes” Can Change Mortgage Rates And Home Affordability

May 21, 2009 by · Leave a Comment
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FOMC Minutes can move mortgage ratesMortgage rates fell after the Federal Reserve released its April 28-29, 2009 meeting’s internal notes Wednesday.

Officially known as “Fed Minutes”, the report is an in-depth account Federal Reserve’s last get-together, detailing the discussions and decisions that create our country’s monetary policy.

It’s the lengthy companion to the Federal Reserve’s brief, post-meeting press release.

For comparison’s sake, the Federal Reserve’s April 29 announcement contained 383 words. The minutes of that same meeting held 5,754 words. The extra words offer extra details about what the next monetary steps might be for the nation’s policymakers.

This is a big deal to markets because investors are always looking for clues about what’s next — especially considering how the April Fed Minutes showed that group discussed increasing its $1.25 trillion mortgage market commitment to something bigger.

Remember that the Fed’s mortgage-buying program is largely credited with keeping mortgage rates low this year. If there’s more buying ahead, that should help rates stay similarly low. Mortgage rates fell Wednesday in anticipation of a move like that. For now, though, the Fed Minutes are just talk.

As economic conditions change later this year, so might the Federal Reserve’s stance.

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Housing Starts Are No Longer Falling, Another Positive Signal In Housing

May 20, 2009 by · Leave a Comment
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Single-Family Housing Starts April 2009A “housing start” is a new home on which construction has started and, for the fourth straight month, single-family home construction remained flat in April.

For the battered housing market, this is the latest in a series of signals that a long-awaited turnaround is coming.

The current plateau in Housing Starts may indicate that builders are more confident in the economy, and that Americans are, too. Especially in light of the freefall over the past few years.

Single-Family Housing Starts have hugged the 360,000 mark since January 2009.

However, there is a footnote to the story.

As noted by the Commerce Department in its official report, the April Housing Starts conclusion is suspect because of the data’s large Margin of Error. Had the government’s sample set included a different series of data, in other words, it may have concluded that housing starts had fallen instead of staying flat. Or risen.

We won’t know the final results of the report until 3 months from now but if the initial figures hold, it will fortify the argument that the housing market has, indeed, found its bottom.

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Effective Strategies For Selling A Timeshare In A Recession

May 19, 2009 by · Leave a Comment
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According to the American Resort Development Association, there are more than 4 million timeshare owners across the United States. There are ample buying opportunities, but what if you want to sell your timeshare?

In this 4-minute piece with NBC’s The Today Show, Barbara Corcoran talks about the difficulties today’s timeshare sellers face with respect to a down economy, revealing sales strategies in the meanwhile.

Among the advice:

  • Know what your share’s worth, then lower it by 20%
  • Don’t overlook obvious marketing techniques
  • Consider auction sites to sell a timeshare
  • Donating to charity open up tax breaks

Selling timeshares is always more difficult than selling a “regular” home; and today’s recessionary economy doesn’t make it any easier. Watch the complete clip for more tips on selling timeshares at MSNBC.com.

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Building Homes From Shipping Containers

May 18, 2009 by · Leave a Comment
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Shipping containers can be used to make homesMore than 18 million freight containers make 200 million trips per year, moving the world’s goods from port-to-port. It’s system that’s been in place for 50 years.

But ever since a California architect used the containers to build the world’s first Uniform Building Code-compliant 2-story home, the boxes have been on the fringe of the Green Home Movement.

Look at these few examples container-based housing from around the world:

Shipping containers are popular among architects because they’re cheap, plentiful, and easily shaped into designs. They’re popular among consumers for their small eco-footprint.

They’ll likely never replace traditional building materials, but shipping container homes should become more commonplace over the next decade.

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Mortgage Guidelines Show Signals Of A Thaw

May 15, 2009 by · Leave a Comment
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The Federal Reserve Senior Loan Officer Opinion Survey April 2009Getting approved for a home loan isn’t getting easier, but it doesn’t appear to be getting much more difficult, either.

In its quarterly survey to member banks, the Federal Reserve asked senior bank loan officers whether “prime” residential mortgage guidelines had tightened in the last 3 months.

Nearly 50 percent of banks said guidelines tightened last quarter, a much lower figure than during all of 2008 and a signal that mortgage lending may be turning a corner.

Guidelines remain restrictive, however.

Versus 18 months ago, lenders subject would-be borrowers to all of the following:

  • Higher minimum credit score thresholds
  • Larger minimum downpayments
  • Lower debt-to-income requirements
  • Mandatory fees based on certain loan traits

In addition, the availability of subordinate financing has all but disappeared when a home’s loan-to-value exceeds 80 percent.

Combined, these changes preclude a lot of Americans from getting access to today’s low rates but that could change in the coming months if the Fed’s reported trend continues.

Some experts believe that credit tightening started the recession. Credit loosening, therefore, could help lead us out.

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