Home Improvement Trends for 2010

If you do plan to update your home or garden, here are some trends to keep in mind.

Home decor.
The sleek, sophisticated but comfortable style known as “soft contemporary” will be a key look for the New Year, said Kris Kolar, vice president of interior design at Robb & Stucky Interiors. Instead of the eclectic clutter that has been popular for a while, there will be a move toward using just one or two eye-catching accents. These “punctuation-mark pieces,” featuring hand-worked techniques that give a custom look, may include special materials such as mother-of-pearl, flame mahogany and stainless steel.

Furniture.
The environmental movement is getting stronger, said Jackie Hirschhaut, spokeswoman for the American Home Furnishings Alliance. Increasingly, furniture is being built using natural-fiber fabrics, recycled metals and sustainable woods. Red will be the trendiest accent color for furniture, she predicted. And home offices will continue to boom as growing numbers of Americans work from their residences.

Color.
Classic neutrals and pops of exotic brights are the key shades at Pittsburgh Paints, which recently announced four color palettes for 2010.
The “Canvas” palette includes deep gray-browns and gray-blues, muted beige and chalky white. “Pink City” offers vibrant pinks, spicy oranges, grays and chocolate-brown. “Grace” includes elegant hues such as pale butter, bronze-gold and sea foam. And “Zest” reinvents the style of Palm Springs circa 1950, mixing high-energy yellows with gray, white and black.

Landscaping.
Organic vegetable gardens, like the one installed at the White House are likely to be a huge trend in 2010, said Orlando, Fla., horticulture expert Tom MacCubbin. Community gardens are a growing trend, especially those that involve children. Of all vegetables, he predicts tomatoes will be especially popular. In the landscape, perennial plants that last longer than annuals and need less care are a strong trend, he added. Trendy plants include gold mound duranta, a shrub with acid-green foliage, and perennial bulbine, which sports spikes of yellow blooms.

New-home construction.
The era of the extravagant McMansion is over, said Nathan Cross of NWC Construction in Orlando. When building new homes, people are increasingly budget-conscious. “It’s back to basics. Even the pool is a no-frills deal,” he said. About the only area where homeowners may be prepared to splurge a little is the master suite. Energy-efficiency will be important. So will going green: “So long as it’s a green trend that doesn’t cost too much.” Outdoors, some homeowners will be installing fireplaces, fire pits and summer kitchens.

Remodeling.
The trend toward making minor improvements to home exteriors is likely to extend into next year—for good reason. It gives homeowners the biggest bang for their bucks when it comes to selling their homes. In terms of costs recouped, eight out of the top 10 home-improvement projects this year were exterior upgrades that cost less than $14,000, according to Realtors Report’s annual Remodeling Cost vs. Value Report. A steel entry-door replacement topped the list, recouping 128.9% of costs, followed by upscale fiber-cement siding replacements (83.6%), wood deck additions (80.6%), and several types of window replacements (more than 70%). The two interior projects that landed on the top-10 list were attic-bedroom additions (83.1% recouped) and minor kitchen remodels (78.3%). The least profitable remodeling projects in terms of resale, and therefore not likely to be popular in 2010, were home-office remodels and sunroom additions.

Senate Health Care Bill Threatens Home Building Industry

December 21, 2009 - In a rush to pass a massive health care overhaul before Christmas, Senate Democrats have included a last-minute provision targeting the construction industry that is certain to derail the fragile housing recovery and threaten the solvency of countless small home building firms.
In order to find the 60 votes needed to pass health care reform, a provision was slipped into the health care bill that unfairly targets small construction industry firms by mandating that they provide health insurance if they employ more than five workers. That is the same mandate required for big businesses. Meanwhile, all other small businesses – with the exception of the construction industry -- would be exempt from providing mandatory health coverage if they employ 50 workers or less.
“This narrow provision is an unprecedented assault on the construction industry and unjustly targets an industry trying to keep its doors open during the worst housing downturn since the Great Depression,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “If this provision were to be enacted into law, it would prove to be catastrophic for the home building industry. In short, this is a true jobs killer. Thousands of small builder firms struggling to stay afloat could go under. We strongly urge the Senate to reconsider and pull this onerous provision that threatens the viability of small home builders across the nation.”

Existing Home Sales Jump To Highest Level in Three Years

Sales of previously owned homes in the United States surged last month as prices continued to fall and buyers rushed to take advantage of a popular tax credit, the National Association of Realtors (NAR) said on Tuesday.
The National Association of Realtors said that sales rose 7.4 percent to an annual rate of 6.54 million units, the fastest pace since February 2007, and higher than the 6.25 million unit pace expected.
October sales were revised lower to a 6.09 million pace from 6.10 million units.
Compared to November last year, sales of existing homes were up 44.1 percent, the largest yearly gain on records dating to 1999.
The median sales price was $172,600, down 4.3 percent from a year earlier, and up 0.2 percent from October.

New Home Energy-Efficiency Incentives Could Boost Recovery

The National Association of Home Builders (NAHB) recently commended President Barack Obama as he proposed a new initiative to create jobs and make today’s homes more energy efficient.
In a recent speech that took place at a Home Depot in the suburban Washington, D.C. area, the president called on Congress to extend energy-efficiency tax credits for home owners as part of an $8 billion effort to reduce energy use.
“This is the kind of thinking that is going to get America back to work–and make a big difference in many home owners’ monthly utility bills,” said NAHB Chairman Joe Robson, a builder and developer in Tulsa, Okla.
NAHB estimates that 11,000 jobs, $527 million in wages and salaries, and $300 million in business income are generated by every $1 billion in new remodeling and home improvement activity. “That’s a huge impact just in the short run. And in the long run, the energy savings for participating home owners can be quite significant,” Robson said. “This also bolsters a very important message and something we have been saying for years: If we really want to make an impact on the nation’s energy use, we need to take significant steps to make the existing housing stock more efficient,” Robson said.
He pointed out that state and local home builder associations affiliated with NAHB can be instrumental in the effort to weatherize older homes and make them more energy efficient.
For example, the Builders Association of Minnesota served as the conduit for federal stimulus program funds provided to the state for its energy-efficiency programs. The association trained nearly 1,000 remodelers and other residential contractors and funneled the money to 1,300 Minnesota home owners to help them make needed improvements. Minnesota home owners got extra incentives for choosing projects like attic insulation, which some consumers don’t do because it’s something that’s not immediately visible, but when combined with incentives can bring a payback on utility bills within a year or two, depending on the climate.
“President Obama is right that saving money is very attractive, and so is providing jobs,” Robson said. “These are efforts that the Administration should consider on a much larger scale,” he continued. “They provide employment, stimulate the economy and help us reduce our dependence on fossil fuels–that’s three great outcomes. NAHB can help make this happen all over the country.”
Last month, the White House Council on Environmental Quality invited NAHB to explain how home builders, product manufacturers and remodelers can be part of the Administration’s “Recovery Through Retrofit” solution with programs like Minnesota’s. “We’re anxious to help with these efforts,” Robson said. “It’s what our members do, and do well–and they all want to get back to work

Housing Starts Rise Less Than Expected

New U.S. housing starts rose but were lower than expected in November as construction activity for single family dwellings increased only marginally, a government report showed on Wednesday.
AP
The Commerce Department said housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units.
Analysts polled by Reuters had expected housing starts to rise to 580,000 units. However, the percentage increase last month was the largest since May, indicating housing remained on a steady recovery path
October's housing starts were revised downwards to 527,000
units from the previously reported 529,000 units. Compared to the same period a year-ago, housing starts were down 12.4 percent, but way off the 54.9 percent decline seen in January.
Groundbreaking for single-family homes rose 2.1 percent last month to an annual rate of 482,000 units, after falling sharply in October. Starts for the volatile multifamily segment surged 67.3 percent to a 92,000 annual pace, reversing the previous month's plunge.
The housing sector, the main catalyst of the most painful U.S. recession since the 1930s, has been slowly improving after three straight years of decline. New home construction contributed to economic growth in the third quarter for the first time since 2005.
New building permits, which give a sense of future home construction, rose 6 percent to 584,000 units last month, the highest since November 2008. That compared to analysts' forecasts for 570,000 units. Compared to the same period a year-ago, building permits fell 7.3 percent.

30-Year Mortgage Rate Climbs From Record Lows

U.S. fixed home loan rates edged above record lows in the past week, tracking bond yields higher following surprise improvement in November employment, home funding company Freddie Mac said on Thursday.
Thirty-year mortgages averaged 4.81 percent, up 0.10 percentage point from the the previous week, when it hit the lowest level since Freddie Mac started tracking it in 1971.
Historically low mortgage rates, largely a response to government interventions such as the purchase of more than $1.4 trillion in mortgage-related debt, are helping restore stability in hard-hit U.S. housing after a three-year dive.
High unemployment and fear of job loss has curbed homebuyer appetite despite enticing borrowing costs and discounted house prices, The Labor Department reported last Friday that the unemployment rate dropped to 10 percent in November from a 26-1/2-year high of 10.2 percent in October.
"Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed" in the week ended Dec. 10, Freddie Mac chief economist Frank Nothaft said in a statement.
Despite the rise, "rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year, (which) translates into an $81 lower monthly payment on a $200,000 conventional mortgage," Nothaft said.
The average 15-year mortgage rate climbed to 4.32 percent in the past week from 4.27 percent, which was a record low dating back to when Freddie started tracking this rate weekly in 1991.
A year ago, 15-year home loans averaged 5.20 percent.
Lenders charged an average of 0.7 points in fees on the 30-year loan and 0.6 points on the 15-year mortgage, unchanged in the week.

Nine Consecutive Gains for Pending Home Sales

Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
The PHSI in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago. In the Midwest the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008. Pending home sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago. In the West the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.
“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.

Home Improvements to Promote Healthy Living In Your Home

Consumers are more conscientious about healthy living than ever before and this awareness is making its way to the homebuilding industry, particularly in the custom home market, says Michael Lenahen who owns Ponte Vedra, Fla.-based Aurora Custom Homes.
“As more consumers begin to realize how much their home affects every aspect of their health, they are beginning to see the importance of improving its environmental quality with products to benefit their health and that of their family,” Lenahen said. “The new emphasis toward healthy living focuses around four main categories – air, water, odor/fumes and lighting.”
According to the U.S. Green Building Council, pollutants are often two to five times higher indoors than outdoors and this can significantly affect air in the home causing breathing problems and respiratory diseases. When it comes to the quality of the air, Lenahen said several products are available on the market that homeowners should incorporate into their home such as:
-Advanced allergy filters to control dust particles and pollutants-Dehumidification devices to manage the humidity in the home-Variable speed air handlers to maintain the circulation of air throughout the home and ventilation fans to introduce fresh air into the home while removing stale, humid air
Improving the water quality in a home is just as important as the air quality, Lenahen said. Several products are available to improve the quality and efficiency of a home’s water flow and usage, including:
-Carbon filter and reverse osmosis units to purify drinking water by removing particulate matter and harmful minerals-Whole-house water softeners to remove calcium and other harmful minerals while providing added benefit to the home’s appliances and pluming fixtures. Water softeners also improve skin tone and texture by removing calcium, magnesium and iron from the water.-Underground cisterns to collect rainwater from the gutter and downspouts to use for irrigating the lawn and landscapeHealthy home living is also improved by the use of low Volatile Organic Compound (VOC) materials, which emit lower levels of gasses into the home from everyday materials such as paints, sealants, cabinets and flooring materials. Lenahen said homeowners should use the lowest emitting VOC products for custom homebuilding and remodeling projects, thereby reducing the negative health impact the products may have on the occupants. Low VOC products will have labeling to help homeowners find the healthiest option.
Better lighting solutions can also foster healthier living. Traditional light fixtures typically include high wattage bulbs, which waste electricity while adding excessive heat into the home. Suggested improvements include:
-Decorative light fixtures with less wattage requirements and soft-light emitting globes-Compact florescent light (CFL) bulbs or L.E.D. fixtures and bulbs for longer life usage-Next generation skylights, such as Velux Sun Tunnel or Solatube, that bring natural light into the home, reducing the need for artificial light and energy consumption
“These are just some of the many changes that can be made to current homes or built into new homes that will greatly improve the quality of life and health of its occupants,” Lenahen said. “The more consumers become aware of the positive affects of healthy living within the home, the more products will enter the mainstream of standard building practices.”

Existing-Home Sales Record Another Big Gain, Inventories Continue To Shrink

Driven by the first-time buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, while inventories continue to decline, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate1 of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”
Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through – there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.
Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said strong demand by first-time buyers is creating some unusual conditions. “In parts of the country, especially in Southwestern states but also in Florida and suburban Washington, D.C., we’ve been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly,” she said.
“In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive. In this kind of environment it’s important to work with a Realtor® who can walk you through the process and help you negotiate a satisfactory deal,” Golder said.
Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply2 at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.
“The supply of homes on the market is now at the lowest level in over two-and-a half years – we’re getting closer to a general balance between buyers and sellers,” Yun said. The last time the relative housing inventory was this low was in February 2007 when it also was at a 7.0-month supply.
The national median existing-home price3 for all housing types was $173,100 in October, down 7.1 percent from October 2008. Distressed properties, which accounted for 30 percent of sales in October, continue to downwardly distort the median price because they usually sell at a discount relative to traditional homes in the same area.
“In the second half of 2010, if home values show consistent stabilization or even a modest increase, then home sales could remain at normal healthy levels because consumers would no longer be worried about a price overcorrection,” Yun said.
He added that low home prices also are contributing to extremely favorable affordability conditions. “With the abnormal drop in home prices over the past few years, the price-to-income ratio has fallen below the historic trend line,” Yun said. “This is adding to the buying power of the typical family, with affordability conditions this year at the highest on record dating back to 1970, but prices are beginning to flatten and are poised to rise next year.”
Single-family home sales rose 9.7 percent to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4 percent above the 4.39 million-unit pace in October 2008. The median existing single-family home price was $173,100 in October, down 6.8 percent from a year ago.
Existing condominium and co-op sales surged 13.2 percent to a seasonally adjusted annual rate of 770,000 units in October from 680,000 in September, and are 40.8 percent above the 547,000-unit level a year ago. The median existing condo price4 was $172,900 in October, which is 10.4 percent below October 2008.
Regionally, existing-home sales in the Northeast rose 11.6 percent to an annual level of 1.06 million in October, and are 27.7 percent higher than October 2008. The median price in the Northeast was $235,400, down 2.6 percent from a year ago.
Existing-home sales in the Midwest surged 14.4 percent in October to a pace of 1.43 million and are 28.8 percent above a year ago. The median price in the Midwest was $146,600, a gain of 1.1 percent from October 2008.
In the South, existing-home sales rose 12.7 percent to an annual level of 2.30 million in October and are 25.7 percent higher than October 2008. The median price in the South was $151,100, down 6.3 percent from a year ago.
Existing-home sales in the West increased 1.6 percent to an annual rate of 1.31 million in October and are 12.0 percent above a year ago. The median price in the West was $220,200, which is 14.7 percent below October 2008.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Mortgage Rates Fall, With 30-Year Fixed at 4.83%

Rates on 30-year fixed-rate mortgages dropped to their lowest levels since May, Freddie Mac reported on Thursday.
The 30-year fixed-rate mortgage averaged 4.83% for the week ending Nov. 19, down from last week's 4.91% average, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 6.04% a year ago.
Fifteen-year fixed-rate mortgages also dropped, averaging 4.32% this week, down from 4.36% last week and 5.73% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.25% this week, down from 4.29% last week and 5.87% a year ago. And one-year Treasury-indexed ARMs averaged 4.35%, down from 4.46% last week and 5.29% a year ago.
To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 point, while the 15-year fixed-rate mortgage as well as the ARMs required payment of an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.
"Interest rates on 30-year fixed-rate mortgage loans fell for the third consecutive week to the lowest since the week ending May 21, while 15-year fixed rates were the lowest since our records began in 1991," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release.
"Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan. Moreover, for the fourth consecutive quarter, more than 95% of prime borrowers who originally had an ARM selected a conventional fixed-rate mortgage in the third quarter of this year," he said.

Tips For Improving Your Credit Score

Although interest rates are at historic lows, you need to have excellent credit to secure the best possible rate. Whether you’re looking to boost an already good score, or if you have a foreclosure or short sale on your record, it’s never a bad time to improve your credit score.

Top Tips to Improve your Credit

1. Review your current credit report for accuracy. Everyone is entitled to one free credit report per year from each of the three credit bureaus—Experian, Equifax, and TransUnion. Get a copy of your credit report and look at it for accuracy. First, make sure that the information in your file is about you and only you, not someone who has a similar name or a similar Social Security number. It is very common for your credit reports to have mistakes or incorrect information. At a minimum, make sure that the information you are being evaluated on is current and correct.
2. Repair credit report mistakes. If you find something on your credit report that is incorrect or missing, you should dispute the mistake by contacting the credit bureaus directly. All credit bureaus have their dispute procedures on their website. They are also required by law to investigate any disputed items and these investigations will usually be done within 30 days of your request.
3. Pay your bills on time. Sounds like a no-brainer, right? Payment history accounts for roughly 35% of your credit score. Paying bills on time is the most important thing to do. If you’re struggling to catch up, contact your creditors to work out a payment schedule.
4. Increase the length of your credit history. This accounts for about 15% of your score. Don’t cancel your old card or get a lot of new ones in a short time span because this can hurt your score.
5. Keep credit card balances low. It’s a good idea to keep the balances below 25% of your available credit. Even if you pay off your credit cards every month, a high average balance will impact your score. This accounts for about 30% of your credit score.
6. Keep new credit requests to a minimum. This accounts for 10% of your score. Every time a lender runs your credit, an inquiry is recorded. If you are trying to get a loan, don’t apply for new credit cards first.
7. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
8. Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
9. Beware credit-repair scams. By all means, don’t pay someone to wipe away the negative items in your file. If they don’t follow through, the damaging items will reappear in two or three months.

For more information on how your credit score will impact your loan and interest rate, please contact your mortgage lender.

Home Sellers: Top Five Home Improvement Projects Based on Cost and Return on Investment

HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey.
HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes.
According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:
1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI)
Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.
“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”
Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.
The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase).
“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999.
For more information, visit http://www.homegain.com/.

President Obama Signs Homebuyer Tax Credit Extension

President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010. The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. The following details apply to the homebuyer tax credit expansion: Who is Eligible -First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit. -Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit. -All U.S. citizens who file taxes are eligible to participate in the program. Income Limits Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000. -For married couples filing a joint return, the combined income limit is $225,000. -Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit. -The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. Effective Dates -The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. Types of Homes that Qualify -All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify. Tax Credit is Refundable -A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference. -For example: -A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit). -A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit). -All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return. Payback Provisions The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

5 Spaces to Consider When Creating a Flexible Home

The definition of family has expanded far beyond the traditional image of a married couple and 2.2 children, and daily lives are busier than ever. Understanding a family’s unique needs and lifestyle is important in helping them find a house that really feels like home.
Flexibility may be the buzzword of the millennia. Flexible schedules, flexible work hours, flexible space—Americans are regaining control by rearranging the flow of their day-to-day lives. Very few of us lead cookie-cutter lives, so cookie-cutter home solutions don’t always work. If every family has a unique configuration and life pattern—consider single moms, empty nesters with visiting kids and grandkids, families with young children, multigenerational families—shouldn’t the architecture that surrounds them be flexible enough to accommodate their needs? The opportunity is to identify houses that offer “adaptable possibilities” and develop talking points aligned with your client’s situational needs.
Buying a home today is an emotional, economic and deeply considered purchase. That home will be a base station for family, friends, neighbors, school, work and play and its layout and traffic pattern will need to accommodate the “busy-ness” of life. As buyers imagine themselves in a potential home, adaptable space may be a selling point over and above simple staging. Here are a few spaces to consider:
-Kitchen: We cook, we do homework, we entertain, we do crafts there. Open or co-located areas for simultaneous activities and multiple people usually top the wish list. If space is limited, suggest a corner of the kitchen or an adjoining dining room as a homework/conversation area.
-Open, accessible plans: If your client is single, an open plan delivers a great space for entertaining. An older or multi-generational family may view it in terms of accessibility. Either will have visiting family members, so having a “visitable” home offers the opportunity to welcome anyone regardless of age or ability. One zero-threshold entry, wide doorways and a main floor bathroom offer ease of use and accessibility whether you’re unloading groceries or have a temporary or permanent physical impairment.
-Home office/library/reading space: Part of a dining room, den, extra bedroom or even an extra closet can be furnished to create a small space for quiet activities. Bookcases lining a wall speak volumes regarding functionality far beyond the original intention of the room.
-Basement: This extra square footage offers many options so even if the space is un- or partially-finished, paint the vision for tomorrow’s media room, game room, exercise or craft area.
-Outdoor living spaces: Whether it’s a tiny lot or large open space, suggesting ideas that go “beyond the deck” with landscaping, pathways and sitting areas brings even the mundane to life.
Seeing a home through a different lens may help your clients imagine the space as they would actually use it and gain a new perspective on possibilities. Going beyond the basics of BR/BA-speak to engage your clients in lifestyle discussions will not only help you find solutions that are right for each family; it will help them find the perfect fit for the architecture of their lives.
Melissa Birdsong is vice president for Trend, Design & Brand, Lowe’s Companies, Inc.
For more information, visit www.lowes.com.

Congress Passes Homebuyer Tax Credit and Expansion

After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow. The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less. The legislation takes effect December 1 and is not retroactive. Both credits are available only for primary residences, not second homes or investment properties. In the House debate, Speaker Nancy Pelosi (D-Calif.) took the floor to say the homebuyer tax credit was helping a new generation of Americans live out their dream of homeownership and financial independence. Debate on the homebuyer credit was overwhelmingly positive and the legislation passed 403 to 12. However, several leading economists have voiced concern about the $16.7 billion cost of the credit and the wisdom of spending up to $400,000 per homebuyer to stimulate real estate sales and White House support for extending the credit has been lukewarm at best. However, it is virtually certain that the President will sign the legislative package, which contains an expansion of unemployment benefits as well as the tax changes. In the Senate, the homebuyer tax credit was amended to a bill expanding unemployment benefits by 20 weeks for those who have exhausted their benefit. The latest unemployment numbers are due out tomorrow and Congressional leaders are rushing the unemployment bill to the White House so that the President can show compassion by signing on the same day more job losses are announced. The legislation included provisions added to address complaints of fraud. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit. The legislation also contains a provision supported by the National Association of Home Builders which will help larger companies strapped for cash with net operating losses (NOL). Ordinarily these companies can carry back these losses for only two years to qualify for a tax refund. The provision would make this process extend the carry-back to five years for either 2008 or 2009. The tax break will now apply to losses in either 2008 or 2009, and the income cap will come off.

Big Rebound in Existing-Home Sales Shows First Time Buyer Momentum

RISMEDIA, October 26, 2009—Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®. Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”
Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.
Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.

Wall St vs. Main St: Courts Beginning To Side In Favor Of Foreclosed Property Owners

RISMEDIA, October 27, 2009—Agents involved in foreclosures and short sales may need to begin to disclose the possibility of serious property transfer defects associated with these types of lender controlled sales.
If recent court decisions are any indication, we could be headed for an explosion of litigation in this area.
And now, Massachusetts Courts have revealed the possibility that unlawful foreclosures, dating back to 1989, might be invalidated and that buyers of foreclosed properties and short sales may have clouded titles.
The implications are enormous for title companies, bankruptcy attorneys, real estate agents, those facing foreclosure, and those who have lost their homes.
The problem stems from the collision of two worlds. It illustrates what can happen when the new world fails to acknowledge or understand the old. It is change that takes place without the cooperation of all affected parties.
Real property law has an ancient tradition. But, its laws and their purpose are not always apparent to those who want to change those traditions to benefit themselves.
In the case of maintaining a public chain of title to real property, it was thought to be essential and generally required by the law.
For hundreds of years, no one ever thought of any reason to change it. It was thought to be part of the public good.
That is, until Wall Street saw the money making potential in credit derivatives.
Credit derivatives are packages of debts such as car loans, student loans, credit card debts, and mortgage loans to name a few. These are collected, rated according to their risk, and sold to investors around the world.
One small problem; if you are going to bundle mortgages from every county in the country, you would have to physically send someone to every county recorder’s office on multiple occasions and pay multiple recording fees. It was costly and cumbersome to those responsible for affecting the recordings.
Their solution? Stop recording the assignments in public and track them instead in an electronic data base that the major lenders would operate through a cooperative entity. That entity is known as Mortgage Electronic Registration Systems (MERS). In my opinion, not only did it save them a fortune in county fees and manpower, it turned out to be a cash cow.
Well, good for them, right? They figured out how to bring technology to the process and were handsomely rewarded. Never mind that the cost of maintaining a county recording system is paid, in part, by the recording revenue. They still have to maintain the apparatus, but now they aren’t receiving the revenue intended to maintain the system. Of course, this comes at a time when many counties are struggling to provide necessary services to their residents.
But, as with many new ideas, there are unintended consequences that are now coming to light as state after state are enforcing basic property rights.

"Listen To What The Man Said"

And those aren't just the words from Paul McCartney's hit song of the same title...they're also words of advice for anyone who's considering buying a home or refinancing. Last week, Federal Reserve Chairman Ben Bernanke said that as the economy heals, the Fed will be very vigilant to protect against inflation. While inflation is not a problem at present...it will most certainly become a problem down the road. So why does this matter if you are considering purchasing or refinancing? Because inflation is the arch-enemy of Bondsand home loan rates, and just the knowledge of it coming has been causing both Bonds and home loan rates to worsen in recent days. Along with the fear of inflation, the Fed's purchasing program of Mortgage Backed Securities is already slowing down, with the end of their buying in sight - and the reduced demand for these Bonds is also driving homeloan rates higher. Bottom line: home loan rates are already on the rise, and we won't likely see these low historic levels again. Interest rates are still very near historic lows - George Washington couldn't have gotten a better interest rate - and the opportunity these low rates present is huge for homebuyers or people looking to refinance.

MORTGAGE RATES: As Good As It Gets

Though the federal government's extraordinary steps to make interest rates low enough to pull reluctant homebuyers have been largely successful, some are now wondering whether it's become too much of a good thing.
"With the government now subsidizing risk by buying mortgage-backed securities and keeping rates low, buyers are almost demanding the lower rates," says Jesse Keenan, adjunct professor of housing law at the University of Miami.
But some analysts says a rise in rates could force some would-be home buyers off the fence—as has happened in the past.
"Higher rates will force people to buy," says David Dessner, director of sales at Guardhill Financial, a mortgage broker firm in Manhattan. "People will see current rates as historically low and see rising rates as a time to buy, thinking that rates will keep rising once they start up."
With rates so low in a battered economy, the only way for them to go may be up. A look at rates show how historically low they are. The average for a 30-year fixed is 5.18 percent, while the 15-year fixed 's is 4.63 percent. The 5/1 ARM is 4.21 percent.
"It's hard to imagine them going any lower," says Greg McBride, chief economist at Bankrate.
"I think people need to be worried about them going up," adds Mark Goldman, professor of real estate at San Diego State University.
In the past, the prospect of higher rates has typically led to a burst of mortgage activity, but in the current environment, particularly after the extenuating circumstances of the past two years, it's hard to say if that dynamic will play out again.
Higher rates (triggered by an apparent rebound in the economy) might drive some home buyers to sign on the dotted line, but they could also produce a marked slowdown in today's fragile housing market, say analysts.
"Higher rates put a damper on things," says Chuck Whitehead, a real estate broker with Coldwell Banker Associated Brokers in Temecula, California. "That works even for the seller. If rates go up then someone who qualifies for a loan now might not be able to with higher rates."
Current DateTime: 11:53:09 08 Oct 2009LinksList Documentid: 33117527
"Once you start increasing rates to that 6-percent mark, you take a big dent out of the market," adds Frank Nitschke, a principle at Maximus Advisors, a research group for CW Capital, a commercial real estate finance and investment management firm.
The traditional interest-rate dynamic may be different for other reasons as well this time. First- time buyers and foreclosure sales are accounting for an unusually high percentage of sales.
"They see very low prices and with the $8,000 tax credit for them about to expire (end of November) we've seen a 10 percent increase in unit sales the last six months," says David O'Neil, a broker, owner of Century 21 Spindler and O'Neil Associates in North Reading, Massachusetts.
There's been little move-up or trade-up business is many markets, especially the more expensive ones, partly because the credit applies to only first-time buyers.
"Low rates are not enough to keep the market going," says Cindy McClellan, a real estate broker in the Denver, Colorado area. "If the tax credit goes away and more jobs as well, low interest rates won't do much to help."
(The credit is set to expire Dec. 1, but there's growing speculation it will be extended or even expanded.)
"I think the market might soften," says Johnny Martinelli, broker/owner of LevyMart Real Estate Sales and Investments in Norman, Oklahoma. "The residential real estate market is starting to level out."
The slowdown may already be underway. Mortgage applications for purchases and refinancing fell on a week-to week basis in the period ending Sept. 25, despite the lowest lending rates in four months—4.81 percent for a 30 year—according to a Mortgage Bankers Association survey.. (Compared to a year ago—when the 30-year averaged 6.33 percent—applications were up some 44-percent.
Whether rates stay where they are now or move up, what happens to the housing market may turn out to be a case of psychology, says J. Andrew Hansz, director of the Gazarian Real Estate Center and professor at the Craig School of Business at Cal State University Fresno.
"Inflation and higher interest rates should encourage people to buy real estate sooner than later," says Hansz. "But real estate ownership is relatively out of favor now. In the bubble days, housing was an investment. But the sentiment has changed. Now it's a place to live. With jobs being cut, credit tight or tougher to get, consumers are not rushing into the market."

Racing For The Homebuyer's Tax Credit? Here's Some Tips

Awareness for the First-Time Home Buyers Credit is high, but some perspective buyers are nevertheless confused as to whether they can qualify.
“Any time you talk about taxes it’s confusing,” Bob Meighan, vice president of TurboTax. “All these specific detailed rules can drive anyone crazy.”
The tax credit—which was designed to help stabilize the housing market—has first-time home buyers rushing to close on homes before the Dec. 1, 2009 deadline.
The tax credit, however, has generated sales. So much so that the real estate and housing industries are pushing for an extension of the program as well as an expansion that would not only increase the value of the credit to $15,000 credit but have it apply to all primary-residence buyers.
“Upwards of 50 percent of our sales are because of the tax credit,” says Diann Patton, sales manager and broker at Coldwell Banker Grass Roots Realty in Northern California.
The Internal Revenue Service announced this month that 1.4 million taxpayers have taken advantage of the program so far, and more are expected. The National Association of Realtors estimates that the credit will generate an extra 350,000 sales that would have otherwise not taken place. Overall, the organization expects that 1.8 to 2.0 million taxpayers will take advantage of the credit.
And, according to a survey by real estate Web site Zillow.com, nearly 18 percent of prospective first-time home buyers said extending the tax credit would be the primary factor in their decision to buy a home before the end of 2010.
But don't hold your breath. Experts say if you are planning to buy a home, waiting to see if the program is extended will backfire if it doesn't pass. Then, you're left with nothing.
If you’re considering buying a home, here’s a few tips from experts on common questions:
It doesn’t necessarily have to be your first house: "The First-Time Home Buyer’s Credit is a bit of a misnomer,” said Meighan.
You can have owned a primary home in the past, but just not within the past three years.
If you own either a vacation home or rental property and do not live in it, you still qualify too.
Income limitations: If you’re single, the amount of the tax credit you get begins to phase out by 5 percent for every $1,000 of income you earn over $75,000. For example, lets say you are eligible for an $8,000 credit and you earn $76,000 a year, $400 is shaved off the credit. Some one who makes $77,000 gets $800 taken off that credit, and so on. Any single person earning over $95,000 doesn’t qualify for the credit.
Married couples see the amount of their tax credit begin to phase out in the same way after they both earn over $150,000. The cutoff is $170,000 per couple.
Another tip: if you made too much money this year to qualify, but made below the cutoff limit last year, you can amend last year’s taxes, says CPA Fran Coet of Coet & Coet.
She offered the example of two married clients who graduated from college last year but made over $170,000 in 2009. They amended their taxes from last year because they worked only worked six months in 2008, allowing them to receive the credit.
Married couples cancel themselves out: If one person in a marriage qualifies, and the other doesn't, they both won't get the tax credit.
iStockphoto
However, if an unmarried couple buys a house together and one of them doesn't qualify, the qualifying person gets the full credit amount.
Unmarried and married couples who both qualify will share the credit and will not exceed $8,000 for the both of them.
Not always $8,000: It’s commonly referred to as the $8,000 tax credit, but the actual credit allotted is 10 percent of the home value or $8,000, whichever is less. So homes under $80,000 will get back a 10 percent tax credit.
Not just for homes: “There’s a lot of focus on the home…but an RV or motor home qualifies as well,” said Meighan, who is also a certified public accountant. Besides RVs and motor homes, he says that you can qualify even if you buy a houseboat, as long as they are used as primary residences.
Paying it back: If you move out of the home within three years of buying it, you have to pay back the credit you received.
Slow down: Real estate agents and sellers might put pressure on you to make a buy before the deadline, but Coet warns, “Don’t go and make a bad decision.”
The tax credit may be tempting, but making a purchase without doing enough research can cost you more.

Builder Confidence Edges Up Again in September

September 16, 2009 - Builder confidence in the market for newly built, single-family homes edged higher for a third consecutive month in September, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI rose one point to 19 this month, its highest level since May of 2008.

“Builders are seeing some improvement in buyer demand as a result of the first-time home buyer tax credit, and low mortgage rates and strong housing affordability have also helped to revive some optimism,” noted Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “However, the window is now basically closed for being able to start a new home that can be completed in time for buyers to take advantage of the tax credit before it expires at the end of November, and builders are concerned about what will keep the market moving once the credit is gone. Congress needs to act now to keep the credit from expiring just as its intended effect on buyer demand is starting to materialize.”

“Today’s report indicates that builders are starting to see some glimmers of light at the end of the tunnel in terms of improving sales activity,” said NAHB Chief Economist David Crowe. “However, the fact that the HMI component gauging sales expectations for the next six months slipped backward this month is a sign of their awareness that this is a very fragile recovery period and several major hurdles remain that could stifle the positive momentum. Those hurdles include the impending expiration of the $8,000 tax credit as well as the critical lack of credit for housing production loans and continuing problems with low appraisals that are sinking one quarter of all new-home sales. These concerns need to be addressed if we are to embark on a sustained housing recovery that will help bolster economic growth.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three of the HMI’s component indexes recorded gains in September. The index gauging current sales conditions rose two points to 18, while the index gauging traffic of prospective buyers rose one point, to 17. Meanwhile, the index gauging sales expectations for the next six months declined one point, to 29.

All four regions posted gains in their HMI readings for September. The biggest improvement was registered in the Midwest, where a three-point gain brought its HMI to 19, the highest level since July of 2007. The Northeast posted a two-point gain to 24, the South posted a two-point gain to 19, and the West posted a one-point gain to 18, respectively.

Housing Industry Groups Agree On Need To Reform Appraisal Process

September 21, 2009 - The National Association of Home Builders (NAHB) today hosted a Residential Real Estate Appraisal Summit with federal regulatory agencies and the major housing and financial institution stakeholder and appraisal organizations to discuss constructive solutions to appraisal problems.

Among the problems discussed at the summit was the use by some appraisers of foreclosed or other distressed properties as comparables without proper adjustments. Summit participants also addressed unintended consequences from the implementation of the Home Valuation Code of Conduct (HVCC) which are impeding the ability to obtain appraisals of the quality required in today’s distressed markets.

These inappropriate practices, including reports that some appraisers are working in areas where they don’t know the market, are driving down home values and impacting home sales as inaccurate appraisals are coming in below the contract sales price. This is causing unwarranted downward pressure on home prices at a time when housing and the economy are struggling to emerge from the worst downturn in decades.

Following the meeting, the leadership of NAHB, the National Association of REALTORS® and the Mortgage Bankers Association were united in calling for immediate action to address their appraisal-related concerns, including clarifications with regard to the HVCC and the establishment of “best practices” for the appraisal process. The groups also urged the regulators to adopt and enforce clear, concise regulatory guidance on the use of distressed and/or foreclosed properties that will allow appraisers to develop realistic valuations based on sales that are truly comparable.

“Appraisers generally are only required to inspect the exterior of a property that is being used as a comparable because they are normally unable to enter these homes and examine their interiors,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But all too often, properties that have been subject to foreclosure or distress sales have issues related to deferred maintenance or internal damage that an external inspection simply cannot detect. You can’t compare these properties to new homes that are in market-ready condition.

NAHB believes that it’s time for appraisers to have regulatory guidelines that acknowledge such realities.”
“NAR supports the independence of appraisers and the integrity of the appraisal process,” said NAR President Charles McMillan. “An accurate appraisal is an important part of any real estate transaction, and reforming the appraisal process is critical to the nation’s housing recovery.

Quality appraisals are threatened by unintended HVCC consequences and an inconsistency among the various federal regulators. As the leading advocate for housing issues, NAR calls on the federal government to establish consistent appraisal rules for FHA and the GSEs.”

“Ensuring that appraisals are fair and accurate is the lynchpin of our secured lending system,” said Robert E. Story, Jr., CMB, Incoming Chairman of the Mortgage Bankers Association. “As a lender, it is crucial that I can count on the fact that an appraisal is correct and that the appraiser has not been subject to pressure from any interested party to the transaction. We want to work with appraisers and regulators to ensure that every appraisal results in an honest, truthful evaluation of a property’s value.”

FHA Taking Steps to Ensure Taxpayers Money during Housing Crisis

Washington, September 18, 2009
The following is a statement by National Association of Realtors® President Charles McMillan:
“The Federal Housing Administration is playing a crucial role in providing mortgage financing to the housing market, as mortgage and banking systems have faced collapse. While FHA’s capital reserve ratio has declined, that is not surprising for an agency dealing in housing finance in today’s market, and there is no sign that a taxpayer bail-out will be required. FHA stands in contrast to entities in the private sector, including Fannie Mae, Freddie Mac and many large banks that have needed tens of billions of dollars in federal funds.
“Under the leadership of Commissioner Dave Stevens, FHA has announced timely steps to protect taxpayers: implementing credit policy changes to enhance risk management; hiring a chief risk officer for the first time in the agency’s history; shifting responsibility for mortgage brokers away from taxpayers to the lenders who use mortgage brokers; and modifying appraisal requirements including emphasizing appraiser independence and geographic competence.
“Declining home prices have forced many homeowners into underwater positions, regardless of lender or loan product. FHA is still solvent, has significant reserves and remains an essential tool for consumers.”

Credit Crunch Constrains International Home Buyers in U.S. Market

Interest in U.S. real estate by international buyers declined due to the worldwide recession and severe credit crunch, according to the 2009 National Association of Realtors® Profile of International Home Buying Activity.
The share of Realtor® clientele who are foreign buyers is smaller than in previous years, but among those purchasing nearly half paid all cash – bypassing the mortgage process. Twenty-three percent of survey respondents served at least one international client in the 12-month period between the end of May 2008 and the end of May 2009, down from 26 percent in the 2008 study. During this period an estimated 154,000 homes were sold to foreign nationals, which is down from approximately 170,000 international transactions during the previous 12 months.
The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100, higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash for their property, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.
Lawrence Yun, NAR chief economist, said recent improvements in the credit market will help reverse the slide in foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”
U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens.
The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.
Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.
Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13.0 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer relatively mild climate.
California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year. “Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California,” Yun said.
The study shows 69 percent of international purchases were single-family homes, while condos accounted for 18 percent. Townhomes made up 8 percent of transactions, with commercial property at 4 percent. Nearly 46 percent of properties were in suburban areas and 25 percent in urban environments. The rest were evenly split between resorts and small towns or rural areas.
The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.
The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors® and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009.

HOME BUYERS WANT TO SAVE ENERGY - BUT ONLY AT THE RIGHT PRICE, NAHB SURVEY SHOWS

Even though prospective home buyers want the benefits of new, more efficient homes, they are unwilling to pay much more for a “green” home, according to a recent member survey from the National Association of Home Builders (NAHB).

“Although we are seeing significant interest in green building, cost effectiveness is clearly a key concern among home buyers,” said NAHB Chairman Joe Robson, a home builder and developer in Tulsa, Okla. “Builders said that among buyers who are willing to pay more for green features, more than half -- 57 percent -- are unlikely to pay more than an additional two percent.”

The August survey coincides with news that the NAHB National Green Building Program continues to grow. More than 400 homes, developments and remodeling projects have been certified by the NAHB Research Center, which administers the program and trains and accredits local project verifiers. Of those projects, 43 have been certified to the National Green Building Standard, approved earlier this year by the American National Standards Institute.

Preferences for specific green building techniques are decidedly regional, with builders in the West reporting much more interest in water efficiency than builders in other areas. Interest in homes built with recycled materials is particularly high in the Northeast (the region where the fewest new homes are built) and low in the South (the region with the highest number of housing starts).

Only 11 percent of builders nationwide indicated that their customers ask about environmentally friendly features, according to the survey. “Fortunately, our members are increasingly taking the initiative to educate the home-buying public about the benefits of green construction,” Robson said.

Overall, energy efficiency continues to be the primary factor driving the green building movement, squaring with previous NAHB surveys of home builders when asked about buyer preferences. “More and more, our members are able to convince their clients of the benefits of a home built with efficiency and sustainability in mind,” Robson said.

“However, when buyers prepare to sign on the dotted line, cost-effectiveness clearly drives their decisions. We need to make sure that our energy policies reflect that reality so that builders have the flexibility to use lot and site design, high-efficiency heating and cooling equipment and other features to achieve the desired results at the right price,” he continued.

“Whenever Congress considers how to encourage more energy-efficient construction, it must keep affordability in mind – and look for ways to incentivize these changes not only in new homes, but even more importantly in the nation’s much more substantial and inefficient existing housing stock,” Robson said.

Lose Your Job, Keep Your Home - Ask for Help Before It's Too Late

MCT)-Few words sting like the ones that inform you that you’re being laid off — especially today, with jobs so hard to come by. If you’re a homeowner, the blow of a job loss can be even worse. In households with more than one wage earner, halving the monthly income can severely stretch a budget. And in households where there’s one breadwinner, having zero income can be devastating. A rainy day fund helps, but it’s important to craft a plan early about how you’re going to get through the rough patch. More people are facing this nightmare today: While the volume of subprime mortgages headed to foreclosure is falling, the volume of prime, fixed-rate mortgages defaulting is on the rise, according to statistics from the Mortgage Bankers Association. The MBA’s chief economist said that’s a result of rising unemployment.
“If you don’t have the prescribed three to six months income in the bank (now eight to 12 months due to how long it takes to replace that job), you’re really in deep trouble with some troubling decisions to make,” said Gail Cunningham, vice president of public relations for the National Foundation for Credit Counseling, in an e-mail. The NFCC is a national, nonprofit credit-counseling network. “We always advise people to pay their living expenses in full (this includes the house payment), followed by any secured debt (usually the car payment), and then the creditors. This will keep a roof over your head, food on the table, utilities paid, medicine in the cabinet, the kids at day care, etc. Once the money runs out, no one beneath that line gets paid. However, this assumes that there’s either some savings to fall back on or another income source,” she said.
Between programs offered by the government and loan servicers, there are additional options available for today’s homeowners before they slip into foreclosure — if they speak up and ask for help. Or maybe the best answer is to start over again by cutting your losses and selling your home or pursuing a short sale if you owe more on your mortgage than your home is worth, those in the industry say.
Whichever road you choose, it’s important to make contact with the lender or servicer as early as you know you could have a problem on your hands — and before you get behind on your payments. The MBA has a listing of contact information for lenders and servicers, including links to Web sites that give consumers a glimpse of some of the help that is offered.
“A lot of customers call us very late in the process, and it becomes extremely difficult for us to explain everything in one shot and to resolve everything to their satisfaction,” said Sanjiv Das, CEO of CitiMortgage.
Early communication is also stressed at Chase, said Christine Holevas, a bank spokeswoman. Remember also to be open and honest about your financial situation. You may think you’re bettering your chances for help by fudging on income information, for example, but it will in fact slow the process down; when income is verified and is found to be false, you’ll have to start over again, she said.
For help, there are counselors who will sit down with you and sort through options and paperwork. Chase, for example, has counselors at 27 homeownership centers throughout the country to assist its borrowers, Holevas said. The U.S. Department of Housing and Urban Development has a list of approved housing counselors, or homeowners can connect with a counselor through the NFCC site.
The solution that has gotten some of the most press this year has been the government’s Home Affordable Modification Program, which lowers monthly payments for borrowers based on debt-to-income ratios. Borrowers have to successfully complete a three-month trial period before the modification is finalized. Some homeowners are still confused about who is eligible, said Greg Hebner, president of MOS Group, a loss-mitigation service provider that works with lenders and servicers. For one, the program “requires a hardship, but does not require you to be delinquent,” Hebner said. “That is an important consumer misconception—if I’m still making my payments there is no help for me.”
But what the government does require is some amount of monthly income within the household, said Drew Kessler, director of sales for Rand Mortgage, in New City, N.Y. In a dual-income household, for example, if one person loses his or her job, a modification is a possibility. With one breadwinner, it probably isn’t. “There has to be some viable source of income,” Kessler said. “If they lost wages, or found a new job, the banks will work with them.” Kessler’s advice: It might be best to accept a job that pays less instead of holding out for one that is best suited to your salary history in order to qualify for the adjustment.
A borrower also has to be in danger of imminent default to be eligible, Holevas said. “They’re going to take a look at what your liquid assets are,” she said. If a borrower has more than seven months worth of payments in savings, he or she is not yet in imminent danger of falling behind and likely won’t be able to modify, she said. If you do qualify, it’s important to submit complete and accurate information in order for the application to move through the process without hiccups, Holevas added. If you don’t, “the back and forth tends to really slow things down,” she said.
Remember, if you don’t qualify for the government’s program, many mortgage servicers have their own modification plans, Holevas said. All options can be examined if you start early enough. “Contact your lender when you think you’re going to have a problem,” she said, even if you’re a couple of months out from not being able to make your payment.
For some homeowners, however, it might make more sense to sell their home and start fresh. Home sales are up recently in many markets, and if you’re living in a home that would be attractive to a first-time buyer eligible for the government’s first-time buyer tax credit, you might be able to take advantage and make a sale before the credit expires at the end of November, Kessler said.
“Maybe sell now and get yourself in a smaller property, a less costly property,” he said.
For homeowners who owe more on their mortgages than their homes are currently worth, short sales can be a viable option. In a short sale, the home is sold for less than the mortgage amount — with approval from the lender — and the difference is forgiven. Short sales usually take longer than a traditional sale, so borrowers might want to seek out a real-estate agent who is a certified default property expert in order to expedite the process, said Rich Rollins, president of National Quick Sale, a firm that works with the mortgage industry to get short-sale offers processed. His firm also helps match up investors with distressed properties, working out deals that allow the homeowners to give up ownership but rent their home, with the potential for them to “rent to re-own,” he said.
He warns, however, to be careful of unsolicited offers of help from people claiming they can save your home, he said.
“Be very wary of people who approach you for a profit or fee upfront,” Rollins said. “You’ve got to be diligent because there are people out there trying to steal your money,” he said. “You’re already in a precarious position. Don’t let people take advantage and take the money that you do have.”

Pending Home Sales on a Roll, Up for Sixth Straight Month

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2% to 97.6 from a reading of 94.6 in June, and is 12.0% higher than July 2008 when it was 87.1.The index is at the highest level since June 2007 when it was 100.7.
Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said. “Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25% of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30, 2009 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible- it is taking approximately two months to complete home sales in the current market.
The Pending Home Sales Index in the Northeast declined 3.0% to 78.8 in July but is 4.7% higher than July 2008. In the Midwest the index slipped 2.0% to 88.1 but is 8.1% above a year ago. In the South, pending home sales activity rose 3.1% to an index of 103.8 in July and is 12.0% above July 2008. In the West the index jumped 12.1% to 112.5 and is 20.0% above a year ago.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said. “To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.
NAR’s Housing Affordability Index (HAI) stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.
Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery.’”

Coldwell Banker Gender Survey

Coldwell Banker Real Estate LLC recently surveyed 1,000 individuals to discover how much men and women differ in the home-buying process. Using a third-party research firm, International Communications Research (ICR), they used questions such as “How long did it take for you to know that the last home you purchased was right for you?” and “If you found the home of your dreams but had concerns about its security, would you still be interested?”
“The results were surprising,” said Diann Patton, the Coldwell Banker consumer real estate expert. “Not only did we uncover some of the inherent differences between men and women, but we also pinpointed a number of ways that the two genders are actually the same. For example, both men and women are increasingly concerned with having a space to work in their homes- something we would not have seen 40 years ago.” Patton continued, “We also found that feeling insecure about a home’s safety is a deal-breaker for most people, regardless of gender.”
As reported by RISMedia,
“Below are some key highlights from the Coldwell Banker Real Estate study:
Women may be inclined to make up their mind more quickly than men.-When asked how long it took before they knew their home was “right” for them, almost 70% of women had made up their mind the day they walked into the house, vs. 62% of men. Conversely, significantly more men needed two or more visits: (32% of men vs. 23% of women).
Women would rather live closer to their extended family than to their job.-55 percent of women find it more important to be closer to their extended family (those that do not live in their household) than to their job, compared to only 37% of men.
A home’s security is a deal-breaker for both men and women.-64 percent of women said that if they found the home of their dreams but had concerns about its security, they would no longer be interested. More than half of men agreed (51%).
Couples say that no one “wears the pants in the relationship” in terms of major financial decisions.-When asked who wears the pants in the relationship (when it comes to major financial decisions, such as purchasing a home), almost 70% of respondents living with their significant other said it’s actually mutual.-However, 23% think that they, themselves, wear the pants in the relationship, not their partner. More men than women said this (26% vs. 20%, respectively).
Men and women agree on how they would use a spare room, for the most part.When the respondents were asked how they would use an extra 12 x 12 room if it could be anything they wanted, men and women agreed on the top three most popular, and very practical, responses:
-Bedroom: 25%-Office/Study: 15%-Family Room / Den: 11%
However, men really do want a “Man Cave.”-Interestingly, out of the 8% who indicated they would turn that spare room into an entertainment center, it was a preponderance of men leading the charge. In fact, four times as many men as women said they would use the extra space for recreation / entertainment.”
According to Patton, “These results further validate how critical it is for couples to recognize each other’s differences and work together, from picking a neighborhood to how to use a spare room,” she said. “Online tools and the expertise of a real estate professional can be particularly helpful for couples, especially if they work together step-by-step along the way.”
Contact your local Coldwell Banker agent or office for expert real estate information.

New-Home Sales Surge in July; Inventories Fall to a 16-Year Low

Sales of newly built U.S. single-family homes rose for a fourth straight month in July to set their fastest pace since last September, while the inventory of unsold homes fell to the lowest level in 16 years, a government report showed on Wednesday.
The Commerce Department said sales rose 9.6 percent to a 433,000 annual pace, the highest in ten months, from an upwardly revised 395,000 in June.
That was the biggest monthly percentage gain since a matching increase in February 2005.
Analysts polled by Reuters had forecast a 390,000 rate.
The median home sales price in July fell 11.5 percent to $210,100 from a year earlier, the department said.
Compared to June, the median price slipped 0.1 percent.
The inventory of homes available for sale in July fell 3.2 percent to 271,000 units, the lowest since March 1993, the department said.
July's sales pace left the supply of homes available for sale at 7.5 months' worth, the lowest since April 2007.

Strong Gain in Existing-Home Sales Maintains Uptrend

Washington, August 21, 2009
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June; the rate was 6.43 percent in July 2008.
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.
“Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price4 was $178,800 in July, down 18.9 percent from July 2008.
Regionally, existing-home sales in the Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.
Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.
In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.
Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

FHA Home Loan Modification Program Will Help Thousands of Homeowners

The following is a statement by National Association of Realtors® President Charles McMillan:
“NAR would like to congratulate and thank Department of Housing and Urban Development Secretary Shaun Donovan and Federal Housing Administration Commissioner Dave Stevens for implementing the FHA–Making Home Affordable Loan Modification Program. This newly enhanced program will help struggling homeowners who qualify to significantly reduce their monthly mortgage payments and keep the home they worked so hard to obtain.
“As Secretary Donovan noted, this is another tool the federal government is providing to help homeowners avoid foreclosures by making mortgage payments more affordable. These changes expand the Obama administration’s Making Home Affordable Loan Modification Program to include FHA borrowers, and Realtors® are optimistic that this will have positive implications for thousands of homeowners.
“Until foreclosures have been significantly reduced and housing inventory reaches a more normal level, there can be no true housing recovery. The FHA–HAMP program will go a long way in achieving these important goals by helping FHA servicers bring mortgages current, buy down loans by up to 30 percent of the unpaid principal balance, and defer these amounts until the first mortgage is paid off.
“The actions taken over the past several months are beginning to help stabilize the housing market. Now, helping more families stay current on their mortgage and remain in their homes will reduce the impact of foreclosures on families and communities.
“Moving forward, NAR will continue to call on Congress and the Obama administration to expand the first-time home buyer tax credit to all home buyers and to continue efforts to streamline the short-sale process. Along with the expanded loan modification program, addressing these issues will help reduce foreclosures and housing inventory, and stabilize home values.”

Single-Family Housing Starts and Permits Rise in July

August 18, 2009 - Production and permitting of new single-family homes continued on an upward trajectory in July, according to newly reported numbers from the U.S. Commerce Department today. Meanwhile, substantial declines on the multifamily side dragged down the overall numbers, with combined single- and multifamily starts down 1 percent to a seasonally adjusted annual rate of 581,000 units and combined single- and multifamily permits down 1.8 percent to a 560,000-unit rate.

“With the impending expiration of the first-time home buyer tax credit at the end of November, July was probably the last month in which to get homes permitted and started in time for customers to take advantage of that valuable incentive,” noted Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “Builders were responding to improved demand related to that upcoming deadline and also to the first signs of an economic recovery.

However, it remains to be seen what happens after the tax credit expires, and the severe credit crunch that has curtailed many multifamily projects is looming over single-family builders as well. Congress and the Administration need to take action now in order to maintain the momentum toward a housing and economic recovery.”

“The latest report marks a fifth consecutive month of improvement in single-family housing starts and a fourth consecutive month of improvement in single-family permits,” noted NAHB Chief Economist David Crowe. “This is exactly in keeping with our latest member surveys, which indicate that builders are cautiously optimistic about single-family sales conditions over the next several months. That said, the significant drop-off in multifamily construction and permitting shown in recent months’ reports may be a harbinger of the financing challenges facing all home builders going forward. A severe lack of credit for acquisition, development and construction financing, along with other issues tied to low appraisals and the upcoming expiration of the first-time buyer tax credit, could derail the progress made so far. Government action is required to ensure that housing can help generate jobs and economic growth in the days ahead.”

NAHB is calling on Congress to extend the first-time home buyer tax credit for another year and to offer it to all income-eligible buyers. In addition, NAHB is urging Congress to help eliminate the credit crunch, correct faulty appraisal practices and expand Net Operating Loss tax provisions that can help avoid more layoffs.

Single-family housing starts posted a 1.7 percent gain to a seasonally adjusted annual rate of 490,000 units in July, while single-family permits registered a 5.8 percent gain to 458,000 units. Both of these were the highest levels registered since October of 2008. Meanwhile, multifamily starts tied a record low set in April of this year, falling 13.3 percent to a 91,000-unit rate. Multifamily permits fell 25.5 percent to 102,000 units.

Due largely to declining multifamily production numbers, housing starts fell in three out of four regions in July. The Northeast posted a 16.3 percent decline, while the South and West posted more moderate declines of 1.4 percent and 1.6 percent, respectively. The Midwest was the only region to report a gain, of nearly 13 percent. Meanwhile, housing permits fell 5.2 percent in the Northeast and 9.2 percent in the South, but gained 14.1 percent in the Midwest and 7 percent in the West in July.