Pending Home Sales Rise For 3rd Straight Month

July 29, 2011 by · Leave a Comment
Filed under: Housing Analysis 

Pending Home Sales 2009-2011Buyers are writing contracts at a furious pace nationwide.

On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month to reach its highest level since March.

A “pending home sale” is a home under contract to sell, but not yet closed. 

The forward-looking Pending Home Sales Index is up 11 percent from its low of the year, according to the National Association of REALTORS®, and well ahead of its rolling 6-month average.

Unfortunately, national data isn’t always helpful for buyers and sellers in Madeira and nationwide. To help make data more relevant, therefore, the official Pending Home Sales Index report includes a region-by-region breakdown

Between May and June 2011, results were mixed:

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

However, even the value of regional data may be dubious.

The West Region, for example, which showed big gains in June, is comprised of multiple states containing thousands of cities and towns. Some of those areas outperformed the region, and some of them underperformed. The Pending Home Sales Index doesn’t show which towns did which. It can’t.

For everyday buyers and sellers in Mt Lookout , it’s the local data that matters.

The Pending Home Sales Index shows that more contracts were written in June than in April or May — a good sign for housing overall. And because 80% of all contracts close within 60 days, we can expect the summer’s home resale activity to be high.

This leads home prices higher.

With mortgage rates low and home sales spiking, now may be the best time to buy a home in 2011. Home prices appear to be rising and mortgage rates should, too.

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16 of 20 Case-Shiller Cities Show Improvement In May

July 28, 2011 by · Leave a Comment
Filed under: Housing Analysis 

Case-Shiller Index May 2011

Standard & Poors released its May 2011 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in select U.S. cities.

May’s Case-Shiller Index showed a 1 percent increase from April 2011. Home values rose in 16 of the Case-Shiller Index’s 20 tracked markets. Only Detroit, Las Vegas and Tampa fell. Phoenix was flat.

Don’t look too far into the findings, though. Like the FHFA’s Home Price Index, the Case-Shiller Index is rife with flaws.

The first flaw of the Case-Shiller Index is its limited geography. Despite being positioned as a national housing index, Case-Schiller Index is sourced from just 20 cities nationwide. There are more than 3,100 municipalities nationwide.

The Case Shiller Index’s second flaw is that it ignores all home types excepts for single-family, detached homes in its findings. Condominiums, multi-family homes, and new construction are not included in the Case-Shiller Index.

In some markets, these excluded home types outnumber the included ones.

Furthermore, the Case-Shiller Index is flawed in that it takes 60 days to release.

The Case-Schiller Index reports on a housing market from 2 months ago — hardly helpful for today’s buyers and sellers in Madeira , trying to make sense of today’s real estate market data. 

When you want real-time housing market data, therefore, for Mt Lookout or anywhere else, look past the Case-Shiller Index and talk to a real estate professional instead. It’s where you’ll get your best, most relevant information.

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New Home Supplies Keep Shrinking; Prices Pressured Higher

July 27, 2011 by · Leave a Comment
Filed under: Housing Analysis 

New Home Supply 2010-2011Home builders are slowly reducing inventory.

According to Census Bureau data, the number of new homes slid 1 percent from May. On a seasonally-adjusted, annualized basis, home buyers bought 312,000 newly-built homes last month.

It’s the third straight month of falling sales and the headline data casts the Mason housing market in a negative light.

Upon closer inspection, however, the numbers appear quite strong. 

First, sales are down marginally. Total units sold have dropped just 2 percent from the highs of the year. And, second, the number of newly-built homes for sale is down markedly from last year

There are 22% fewer new homes for sale today as compared to June 2010

At today’s sales pace, the complete new home inventory would be sold in 6.3 months — the quickest sell-out window since the expiration of the 2010 federal home buyer tax credit.

Builders are feeling better about their business, too.

After falling to a 9-month low, homebuilder confidence rebounded this month, boosted by expectations for a strong fall season. For buyers across Kentucky , this could be seen as a market-shifting signal.

When builder confidence rises, negotiating for upgrades and price reductions can be tougher; “good deals” get scarce.

If you’re a home buyer and are considering new construction, don’t let the headlines fool you. Sales figures are slipping, but that’s because there are fewer homes are for sale nationwide. The inventory is shrinking and that can push home prices higher.

With mortgage rates still low, today’s market may be your best value of the year.

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Is An FHA Mortgage Better Than A Conforming One?

July 26, 2011 by · Leave a Comment
Filed under: Mortgage Guidelines 

FHA vs Conforming Mortgage Rates 2005-2011

The FHA is insuring a greater percentage of loans than during any time in recent history. In 2006, it insured roughly 5 percent of the purchase mortgage market. Today, it insures one-quarter. “Going FHA” is more common than ever before — but is it better?

The answer — like most things in mortgage — depends on your circumstance.

Like its conforming counterpart, an FHA-insured mortgage is available as a fixed-rate loan and as an adjustable-rate one. Payments are made monthly and come without prepayment penalties.

That’s where the similarities end, however, and decision-making begins. For homeowners and buyers across Madeira , FHA mortgages carry a different set rules as compared to conforming loans through Fannie Mae or Freddie Mac that can render them more — or less — attractive for financing.

For example:

  • FHA mortgages can be assumed by a subsequent buyer. Conforming loans may not.
  • FHA mortgages require mortgage insurance, regardless of downpayment. Conforming loans do not.
  • FHA mortgages do not have loan-level pricing adjustment. Conforming loans do.

FHA mortgages also require smaller downpayment requirements versus a comparable conforming mortgage. FHA calls for a minimum downpayment of 3.5%. Conforming mortgages often require 5 percent or more.

And, lastly, FHA mortgages are priced differently from conforming ones. Since 2005, the average FHA mortgage rate has been below the average conforming mortgage rate more than 50% of the time, meaning that an FHA mortgage’s principal + interest payment is lower than a comparable Fannie/Freddie loan.

Today, conforming mortgage rates are lower.

So, which is better — FHA loans or conforming ones? Like most things in mortgage, it depends. FHA-insured loans can be big money-savers or money-wasters. To find out which is best for you, ask your loan officer for today’s market interest rates and study the results.

With less than 20% equity, the answer is often clear.

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How To Clean A Smelly Front-Loading Washing Machine

July 25, 2011 by · Leave a Comment
Filed under: Around The Home 

Front-loading washers can collect bacteriaIn today’s Mason homes, front-loading washing machines are a popular choices as compared to traditional, top-loading machines for 3 main reasons:

  1. They wash more clothes per cycle, lowering household energy costs
  2. They’re environmentally-friendly, using less water per cycle
  3. They’re gentler on clothes, preserving colors and fabrics longer

They also require more care in the “cleaning” department.

Because of the way most front-loading washers are built, they tend to pool water in their drums, which can be a breeding ground bacteria and mildew.

Whether your front-loading washer smells “dirty” or not, you’ll want to follow proper procedures to keep it clean.

First, only use High Efficiency detergent. High Efficiency detergent is super-concentrated and creates fewer suds than traditional laundry detergent. Fewer suds means more soap is drained in the rinse cycle, leaving fewer chemicals and fragrances to sit in the drum.

High Efficiency detergent is also sold fragrance-free. This is the preferred variety for a long-term, stink-free washing machine.

Next, at least once weekly, take a dry cloth and wipe the inside rim of your front-loading washer. There, you will find a wide plastic tube in which water settles between loads of laundry. If you find stains or grime, remove it.

If your washer has a drain filter on its front-lower edge, remove the filter and allow the water to drain — preferably onto a towel or into a bucket.

Then, lastly, consider running an empty cycle with just bleach and water. This is optional, but can help remove lingering stench.  

Once your front-loading washing machine is cleaned, going forward, after each load runs, try leaving your washer’s front door open. This will allow fresh air to circulate through the washer and help drum-settled water to evaporate.

With less water and humidity in the drum, bacteria growth is slowed.

 

 

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Existing Home Sales Fall To 8-Month Low

July 21, 2011 by · Leave a Comment
Filed under: Housing Analysis 

Existing Home Supply June 2010-June 2011

Home resales slipped for the 3rd straight month, according to data from the National Association of REALTORS®.

The Existing Home Sales posted a 1 percent drop from May as the number of homes sold fell to a seasonally-adjusted, annualized 4.77 million units. It’s the monthly report’s lowest reading since November 2010.

The report also showed the national supply of homes for sales rising to 9.5 monthsalso its highest reading since November 2010.

Home Supply is the amount of time it would take to exhaust the complete home inventory at the current pace of sales.

June’s Existing Home Sales data would have been stronger if not for a high contract cancellation rate. As compared to May’s 4 percent rate, June’s cancellation rate was 16 percent; an elevated figure that “stands out in contrast” to what’s typical, according to the REALTOR® trade group.

By region, home resale activity varied:

  • Northeast : -5.2% from May 
  • South :+0.5% from May
  • Midwest : +1.0% from May
  • West : -1.7% from May

This disparity from region-to-region highlights an important housing market concept. Namely, that all real estate is local. Because just as the Existing Home Sales varies on a regional level, it varies on a state-wide level, too.

What’s true for California housing is not necessarily what’s true for Florida housing, for example. Each of the 50 states has its own trends, and within those 50 states, there are thousands of cities and neighborhoods, each with their own trends, too.

The “national housing market” doesn’t exist, so national data is rendered somewhat useless.

For data in Madeira or your local market, talk to your real estate agent.

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Housing Starts Surge 9 Percent; Signal A Strong Fall Season

July 20, 2011 by · Leave a Comment
Filed under: Housing Analysis 

Single-family housing starts

Builders are busy once again.

According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June — a 9 percent spike from the month prior and the highest reading in 3 seasons.

A “Housing Start” is defined as a home breaking ground on new construction.

June’s reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.

Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a large increase in sales over the next 6 months.

For buyers of new construction, the news is mixed. Rising confidence may mean that builders in Cincinnati are less willing to negotiate on upgrades and/or price, but rising construction levels add inventory to an already fragile market.

Adding to the nation’s home supply without a corresponding increase in buyer demand shifts negotiation leverage away from builders. 

The Census Bureau also reported on Building Permits.

In June, permits for single-family homes rose by 1,000 units nationwide on a seasonally-adjusted, annualized basis. This, too, bodes well for housing because 89 percent of homes with permits start construction within 60 days.

Momentum should carry forward into fall.

If you’re buying new construction in Kentucky , ask your real estate agent about local home supply, and how the market is trending. With mortgage rates low and the fall buying season approaching, you may find some of your best deals in the next few weeks.

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Led By Expectations Of A Strong Fall Season, Homebuilder Confidence Bounces Back

July 19, 2011 by · Leave a Comment
Filed under: Housing Analysis 

Housing Market Index (Homebuilder Confidence)

Homebuilder confidence is bouncing back.

One month after an unceremonious dip highlighted by poor sales figures and dim prospects for the future, the National Association of Homebuilder’s Housing Market Index rebounded two points to 15 in July.

The monthly Housing Market Index is scored on a 1-100 scale. Readings above 50 indicate favorable conditions for homebuilders and the “new home” market. Readings below 50 indicate unfavorable conditions.

The Housing Market Index has not read higher than 50 in more than 5 years.

As a housing metric, the HMI is actually a composite of three separate surveys, self-reported by builders. The surveys ask about current single-family home sales volume; projected single-family home sales volume; and current buyer foot traffic levels.

In July, the responses read as follows : 

  • Current single-family sales : 15 (+2 from June)
  • Projected single-family sales : 22 (+7 from June)
  • Buyer foot traffic : 12 (Unchanged from June)

The most noteworthy reading is the rapid rise in Projected single-family home sales. Although builders aren’t experiencing more foot traffic, they think sales will spike between now and the New Year. 

That could spell bad news for Madeira home buyers.

When builders harbor higher expectations for the future, they’re less willing to make concessions for upgrades and/or price. Your likelihood of getting “a great deal” as a buyer diminishes.

That’s why it’s good that mortgage rates are still so low. Low mortgage rates help with home affordability and can offset slight jumps in sale price.

Mortgage rates remain just above their lowest levels of 2011, and of all-time. 

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There’s 3.7 Million Homes For Sale. Is Yours Standing Out From The Crowd?

July 18, 2011 by · Leave a Comment
Filed under: Around The Home 

According to the National Association of REALTORS®, there are more than 3.7 million homes for sale this month. If your home is among them, are you doing what it takes to stand apart from the crowd?

This 4-minute piece from NBC’s The Today Show pulls no punches. It’s titled “5 Mistakes Sellers Can’t Afford To Make” and it covers falling home prices, buyer mentality, and the need to be smart when faced with that first offer.

Some of the tips include:

  • Why you should list your home at a price within 5 percent of its “true value”
  • How to turn “low-ball” offers into legitimate ones
  • How to interview and select a real estate agent to sell your home

In addition, based on the truth that “people shop with their eyes” and then review home details, the video includes advice on using great photographs and making the most of an online listing.

It can be tough to find buyers in any market. But if you follow the tips outlined above, you can get more showings, and do more with them.

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Retail Sales Rise For 12th Straight Month In June

July 15, 2011 by · Leave a Comment
Filed under: The Economy 

Retail Sales 2010-2011The American Consumer will not be deterred.

Despite worsening jobless figures and an increase in the Cost of Living, Retail Sales are climbing. In June, for the 12th straight month, retail receipts rose, excluding cars and auto parts.

Analysts expected no change from May. Instead, receipts topped $321 billion — an all-time record.

For home buyers and would-be refinancers in Cincinnati , this is a bit of unwelcome news. Mortgage rates are rising in the wake of the Retail Sales data release.

This is because Retail Sales account for roughly half of consumer spending, and nearly one-third of the economy overall. A rise in Retail Sales, therefore, suggests stronger growth ahead.

Here’s how it happens.

As consumers spend more money, businesses sell more product. So, to accommodate burgeoning demand, business hire additional employees, and are forced to make additional capital expenditures as well. 

This rise in spending prompts other businesses to hire and spend; to meet their own respective demand surges. There’s a chain reaction-like effect.

Then, with businesses carrying larger payrolls and bigger staffs, federal, state and local governments realize bigger tax bases and can fund new and existing projects. 

This, too, leads to hiring and the cycle repeats.

A weak economic outlook dragged down mortgage rates last week. This week’s Retail Sales data reversed that flow. Mortgage rates are higher by 1/8 percent — roughly $8 per $100,000 borrowed.

Retail Sales are up 8 percent from a year ago.

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