3 More Signs Of A Strengthening Housing Market

3 More Signs Of A Strengthening Housing Market

Existing Home Sales and Median Sales Price May 2009 The housing market got another dose of good news yesterday.

According to the National Association of REALTORS, the number of homes sold in May increased for the third straight month and the national housing supply fell by 5 months.

Furthermore, first-time home buyers are accounting for nearly one-third of the market activity.

But, before we declare a bottom in housing, it's important that we remember the First Rule of Real Estate:

All Real Estate Is Local

National housing statistics like Existing Home Sales are painted with a very broad brush. They lump disparate locales such as San Francisco and Seattle into one sample set and don't account for regional differences, let alone neighborhood ones.

Furthermore, getting down to a city-by-city, or even street-by-street basis, we can always find homes that are selling quickly and home that are languishing. Real estate is highly local and subject to countless influences.

That said, the national data isn't completely useless. From the patterns, we can infer that low mortgage rates, ample home supply and available tax credits are providing a quantifiable boost to the broader real estate market.

And based on recent pending sales data, we can expect June and July's Existing Home Sales figures to be similarly strong to May.

Therefore, if you're in the market for a new home right now -- or plan to be soon -- be conscious of home inventory levels in your target neighborhoods. Fewer homes on the market usually means less ability for buyers to negotiate and that leads to higher sales prices.

Plus, the NAR is reporting buyer activity up 10 percent from last year.

The housing market may not be fully recovered in every housing market just yet, but in studying the data, a lot of the pieces appear to be falling into place.


Mortgage Rates This Week Will Drop?

What's Ahead For Mortgage Rates This Week : June 22, 2009

Mortgage rates are riding a roller coasterMortgage markets finished out the week unchanged last week but that's not to say that mortgage rates stayed flat.

From day-to-day, mortgage rate shoppers were on a veritable roller coaster.

* Monday and Tuesday, rates dipped
* Wednesday and Thursday, rates surged
* Friday, rates retreated

Overall, conforming mortgage rates carved out a half-percent range this week. This caused fit for home buyers in need of a rate lock, and homeowners interested in refinancing.

Rates changed quite a bit from day-to-day, and even from hour-to-hour at times.

This is the same brand of mortgage rate volatility we've seen all year and it's expected to continue through at least this week, too. There are a number of market-moving events set to hit.

The event with the largest potential impact is the Federal Open Market Committee's two-day meeting.

Scheduled for Tuesday and Wednesday, the Bernanke-led Fed is not expected to raise the Fed Funds Rate upon its adjournment but the markets are more interested in what the Fed says than what it actually does.

If the Federal Reserve says that long-term inflation is a concern, mortgage rates should rise because inflation often leads rates higher. Similarly, if the Fed says the economy is recovering quicker than expected, mortgage rates should rise on that story.

The Fed adjourns at 2:15 PM Wednesday so watch for big market swings around that time.

In addition, there's some big data points due out this week including the Existing Home Sales and New Home Sales reports, plus the Personal Spending and Consumer Sentiment survey.

Each of these reveals the psychology of the U.S. consumer and consumers with dollars to spend move the economy forward. If the reports are overwhelmingly positive, mortgage rates should rise as a result. On the other hand, if the data is weak or non-convincing, mortgage rates should ease.


Cost of Living

Adjusting For Cost Of Living Differences After A Non-Local Move

Every town in America has its own Cost of Living

Moving to a new metropolitan area requires adjustments. There's new streets to learn, new weather patterns to get used to, and new social cultures to assimilate.

There's also new costs.

Just like home values vary by area, so does the Cost of Living. To visit a doctor in Chicago, as an example, costs a person more than to visit a similar-type doctor in Des Moines.

Cost of Living adjustments can't be ignored between two cities because it changes a household's budget.

And while it's a challenge to know exactly how far your dollar can stretch in a new town, Bankrate.com hosts a helpful Cost of Living Comparison Calculator to make the math a little easier. With categories such as dry cleaning, groceries and beauty salon, the calculator goes extra deep into the typical costs to a household, and can help families to make more realistic budgets.

The calculator also shows the equivalent household income between any two metropolitan areas.


Using First-Time Homebuyer Tax Credits

Using First-Time Homebuyer Tax Credits

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides for as much as an $8000 tax credit to qualified first-time homebuyers. FHA supports this important initiative to promote homeownership…

To read this mortgagee letter & any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2009 letters & click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.
Those interested in FHA should also listen in to a FHA Industry Conference Call:

on Thursday, 06/04/09 at 3:00 pm eastern time for a brief overview of recently published FHA policy guidance, including the recent tax credit & manufactured housing Mortgagee Letters. The call-in number is: (866) 207-0413 & the conference ID # is:13015879.

All FHA Mortgagee Letters can be viewed online at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

Mortgage Rates Tack On One-Half-Percent For The Second Time In A Week

Mortgage Rates Tack On One-Half-Percent For The Second Time In A Week

University of Michigan Consumer Sentiment Survey May 2009Mortgage rates soared again Monday, tacking on a half-percent in a day for the second time in under a week.

Each half-percent adds $62 to a $200,000 home loan's monthly payment, or $744 per year.

For home buyers recently under contract, it's a gut-wrenching time to be shopping for a home loan. Morning mortgage rates have been typically gone by early-afternoon and -- in some cases -- lenders have changed rates five times in one-day span.

The reasons for surge in rates are varied, but each is related to the idea that the economic recession may be nearing its end.

* Consumer optimism is as high as it's been all year
* Consumer spending is falling at a slower pace than in months prior
* China's factories reported an expansion in business

Each of these points bodes well for the economy and pushes Wall Street investors towards more risky investments. As a result, "safe" investments get sold -- including mortgage-backed bonds, the basis for conforming mortgage rates.

For as long as the future of the economy remains in question, expect mortgage rates to remain volatile. We won't get half-point rate swings or five pricings in a day every day, but both are becoming more common.

Be careful when shopping for a mortgage -- the rate you're quoted may not last long.