Mar 22, 2012 | Housing Analysis
The market for home resales stays strong.
Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that cannot be classified as new construction.
Last month’s sales data represents a 9 percent improvement from the year prior.
There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.
Some analysts believe that a 6-month home supply indicates a housing market in balance.
The real estate trade group’s report contained other noteworthy statistics, too :
- 32 percent of home sales were made to first-time buyers
- 33 percent of home sales were made with cash (i.e. no mortgage)
- 34 percent of home sales were of foreclosed homes or homes in short sale
In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.
Even accounting for last month’s high contract failure rate, (more…)
Mar 21, 2012 | Housing Analysis
Home builder confidence in the newly-built, single-family housing market remains high.
In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.
When home builder confidence reads 50 or better, it reflects favorable builder conditions in the single-family, new home market. Readings below 50 suggest unfavorable builder conditions.
The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.
Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.
In March, home builders provided mixed replies to the survey questions :
- Current Single-Family Sales : 29 (-1 from February)
- Projected Single-Family Sales : 36 (+2 from February)
- Buyer Foot Traffic : 22 (Unchanged from February)
It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. The reasons for this are several and should be of interest to today’s home buyers.
First, the jobs market is heating up. The U.S. economy has (more…)
Mar 20, 2012 | Mortgage Guidelines
The new, revamped HARP program is now available in Worcester County area and nationwide. It was officially released Saturday, March 17, 2012 by Fannie Mae and Freddie Mac.
HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the conforming mortgage loan product meant for “underwater homeowners”. Under the HARP program, homeowners in Massachusetts can get access to today’s low mortgage rates despite having little or no equity whatsoever.
HARP is expected to reach up to 6 million U.S. homeowners who would otherwise be unable to refinance.
HARP is not a new program. It was originally launched in 2009. However, the program’s first iteration reached fewer than 1 million U.S. households because loan risks were high for banks, and loan costs were high for consumers.
With HARP’s re-release — dubbed HARP 2.0 — the government removed many of HARP’s hurdles.
In order to qualify for HARP, homeowners must first meet 3 qualifying criteria.
First, their current mortgage must be backed either Fannie Mae or Freddie Mac. Loans backed by the FHA or VA are ineligible, as are loans backed by private entities. This means jumbo loans and most loans from community banks cannot be refinanced via HARP.
- To check if your loan is Fannie Mae-backed, click here.
- To check if your loan is Freddie Mac-backed, click here.
The second qualification standard for HARP is that all loans to be refinanced must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Mortgages securitized on, or after, June 1, 2009 are HARP-ineligible.
There are no exceptions to this rule. (more…)
Mar 16, 2012 | Housing Analysis
After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac.
In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.
A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.
Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.
This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the (more…)
Mar 15, 2012 | The Economy
The U.S. economy is expanding, fueled by a renewed consumer optimism and increased consumer spending.
As reported by the Census Bureau, Retail Sales in February, excluding cars and auto parts, rose 1 percent to $335 billion as 11 of 13 retail sectors showed improvement last month.
February markets the 19th time in twenty months that U.S. Retail Sales increased on a month-over-month basis.
Unfortunately, what’s good for the economy may be bad for Worcester County area home buyers and mortgage rate shoppers. Home affordability is expected to worsen as the U.S. economy improves.
The connection between Retail Sales and home affordability is indirect, but noteworthy — especially given today’s broader market conditions.
First, let’s talk about affordability.
Last week, the National Association of REALTORS® released its monthly Housing Affordability Index, showing that homes are more affordable to everyday home buyers than at any time in recorded history. For buyers with median earnings buying median-priced homes, monthly payments (more…)
