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.”
Friday, September 11, 2009
Wednesday, September 2, 2009
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.’”
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.’”
Tuesday, September 1, 2009
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.
“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.
Wednesday, August 26, 2009
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.
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.
Friday, August 21, 2009
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.
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.
Tuesday, August 18, 2009
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.”
“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.
“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.
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