Home Loan Focus

Archive for the ‘Home Sales Market News’ Category

There was an anemic improvement in the housing market in November.  Home sales increased from 4.98 million to 5 million homes.  This happened at the same time that 30 year mortgage rates dropped from 6.38 to 6.21% in November.

There were other small but positive signs in the housing market as well.  The number of homes available for sale dropped to 4.27 million homes, about a 10.5 monht supply.  This indicates about a 3.6% drop in a bloated housing market that never heard of ephedra diet pills.

There was some bad news, the median home price dropped from $217,300 in November of 2006 to $210,000 in November 2007.

Among other things it should be noted that a pick up occurred in the presence of two historically significant factors, lowering house prices and lowering mortgage rates.

Existing-Home Sales Edged Up In November, but Remain Weak – WSJ.com

I have a suggestion that could provide average Americans with a solution in the face of the Mortgage crisis and a troubled real estate market.  (and it contradicts my last article on incentive arbitrage a bit but not in spirit as taking advantage of the incentives to save real money also takes something back to the major builders that have contributed to the problem.  We’re talking major price concessions in that article as opposed to some trivial gift like a Technomarine watch or a toaster or DVD player.)

Here’s the solution in 2 parts:

1.  Do not buy a new home from a builder.

2.  Only buy a home from an actual home owner that has lived in the home.

Now the point of this illustrative solution is to help increase the number of home sale transactions for existing homes, relieving the burden on existing home owners that live there as opposed to helping out the major builders that are partly responsible for the run up in real estate prices, the over supply of new homes, and the past sales tactics that have under priced new homes to sell as compared to existing homes.

Here’s the latest statistics on home sales

A Commerce Dept. report released on Dec. 28 showed U.S. new-home sales plunged 9%, to a 0.647 million unit annual rate in November, from a downwardly revised 0.711 million in October (from 0.728 million previously). Market forecasters had expected a more modest decline to 0.715 million. Following downwardly revised numbers for August and September, new-home sales are stuck in a steep downtrend.

New-home sales dropped by 19.3% in the Northeast, 27.6% in the Midwest, and 6.4% in the South. However, sales increased by 4% in the West. Over the last 12 months, new-home sales nationwide have tumbled by 34.4%, the biggest annual slide since early 1991, and stark evidence of the painful collapse of the once high-flying housing market.

The supply of homes for sale rose to 9.3 months’ worth from 8.8 (revised from 8.5). Whereas earlier sales and price data had suggested big price cuts by homebuilders were clearing inventory, this pattern has been reversed with the November data and revisions.

New Home Sales: A Stunning Slide

A near-record low for then index that projects near-term home sales suggests borrowers in high-priced areas are struggling to finalize home purchases amid mortgage market troubles.

The National Association of Realtors announced on Wednesday that its seasonally adjusted index of pending sales for existing homes fell 16.1 percent in July from a year ago and 12.2 percent from the prior month. July’s reading of 89.9 was the second-lowest ever for the index and its lowest since September 2001, when the economy was shocked by the terrorist attacks.

The pending home sales index is designed to predict sales levels over the following two months. A reading of 100 is equal to the average  level of pending sales activity in 2001, when the index began.

Stock markets slumped after the real estate data were released.

“Numbers like this should put to rest the belief that we’ve reached the bottom” in the housing market, said Joel Naroff, chief economist for Commerce Bancorp Inc. “There’s still a lot of pain that’s ahead of us.”

On Friday The White House unveiled a new program that enables borrowers who can’t meet rising monthly mortgage payments to refinance into loans guaranteed by the Federal Housing Administration.

The program, called FHA Secure, is limited to people with good credit records except for late payments after their adjustable mortgages switched from low teaser rates to higher permanent rates.  Research shows that only a small fraction of area homeowners facing foreclosure would be able to qualify.

Nationwide, the White House plan was applauded by Republicans and Democrats, mortgage lenders and low-income housing advocates.