Archive for November, 2009
US Home Sales Bump up in October
Related Posts: Real Estate News, Real Estate Sales
hiSales of new U.S. homes rose more than expected last month to the highest level in more than a year as the housing market shows stability after its historic collapse.
The Commerce Department says sales rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Economists surveyed by Thomson Reuters had expected a pace of 410,000.
Home shoppers in October were acting before lawmakers decided to extend a tax credit for first-time buyers and expand it to existing homeowners. Nevertheless, sales were up 5.1 percent from a year ago, the first yearly increase since November 2005.
The median sales price of $212,200 was off 0.5 percent from $213,200 a year earlier, but up 0.7 percent from September’s level of $210,700.
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FHA reserves fall…………
Related Posts: Credit & Finance, Government, Real Estate News
hiThe Federal Housing Administration’s financial cushion has fallen to a dangerously low level, but government officials maintain the agency should avoid a taxpayer bailout under “most economic scenarios.”
The agency, a major source of funds for first-time homebuyers, faces mounting concerns that it will eventually need an infusion of cash. FHA losses have increased with the unemployment rate as more homeowners default on their loans. About 17 percent of FHA borrowers are at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.
Agency officials, however, said Thursday the agency won’t need a rescue unless the economy slips back into a severe recession. In that worst-case scenario, home prices in 10 large cities would fall another 28 percent and unemployment would soar to 12.5 percent from the current level of 10.2 percent.
Already, FHA’s reserves have fallen to $3.6 billion, compared with $685 billion in outstanding insured loans for the fiscal year ended Sept. 30. That’s a ratio of 0.53 percent and far below the 2 percent threshold required by Congress.
Also Thursday, RealtyTrac Inc., a foreclosure listing firm, reported that the number of households that received a foreclosure-related notice fell in October, the third straight monthly decline.
The FHA does not make loans, but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require downpayments of 3.5 percent of the purchase price.
The agency is considering raising its insurance premiums for borrowers as well as the 3.5 percent downpayment requirement. Legislation would hike the downpayment to 5 percent.
While agency officials say they are making more loans to far more creditworthy borrowers than in the past, critics say FHA borrowers are still vulnerable to default, particularly if job losses keep climbing and the recent increase in home prices reverses course.
If FHA decides to require higher down payments or insurance fees it would likely raise the hackles of real estate agents and mortgage lenders because fewer people would be able to get loans.
Since the collapse of the subprime lending market, the government has taken up the slack. The FHA has insured about one in five new loans made this year, and about half of all loans to first-time homebuyers. The FHA now insures about 5.5 million mortgages, up from about 4 million three years ago.
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Foreclosures decline in October 2009
Related Posts: Real Estate News
hiThe number of homeowners on the brink of losing their homes dipped in October, the third straight monthly decline, as foreclosure prevention programs helped more borrowers.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee’s sale. That’s down 3 percent from September. And Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration’s loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers – or anyone who hasn’t owned a home in the last three years – would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
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30 Year loans dip under 5% !
Related Posts: Credit & Finance, Government, Real Estate News
hiWASHINGTON – Nov. 6, 2009 – Rates for 30-year home loans dipped below 5 percent this week after rising for three straight weeks.
The average rate fell to 4.98 percent from 5.03 percent a week earlier, mortgage company Freddie Mac said Thursday.
Rates had hovered below 5 percent for nearly a month until inching upward two weeks ago. They hit a record low of 4.78 percent in the spring, but are still attractive for people looking to buy a home or refinance.
The Federal Reserve has pumped $1.25 trillion into mortgage-backed securities in an effort to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
That, plus a federal tax credit of up to $8,000 for first-time homebuyers, has helped boost the ailing housing market.
The number of signed contracts to buy previously occupied homes rose for the eighth month in a row in September, while residential construction spending jumped by 3.9 percent, the largest gain in more than six years, data this week showed.
Still, lenders are cautious and standards remain tight, so the best rates are available only to borrowers with solid credit and a 20 percent downpayment.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, frequently in line with long-term Treasury bonds.
The average rate on a 15-year fixed-rate mortgage declined to 4.40 percent from 4.46 percent recorded last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.35 percent, down from last week’s 4.42 percent. Rates on one-year, adjustable-rate mortgages decreased to 4.47 percent from 4.57 percent.
The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 points for 30-year loans. The fee averaged 0.6 points for 15-year, five-year and one-year loans.
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Tax Credit Extended !!!!!!
Related Posts: Credit & Finance, Government, Real Estate News
hiThe Senate voted yesterday to pass an extension of the first-time homebuyer tax credit until April 2010. 98 Senators voted in favor of H.R. 3548, with zero votes against (two Senators did not vote). H.R. 3548 is a bill is primarily concerned with extending unemployment benefits. The bill is currently amended to include the extension of an $8,000 tax credit for those buying their first homes as well as an $6,500 tax credit for some borrowers buying a home for a second time. “This critical program has already enabled hundreds of thousands of Americans to become first-time homebuyers,” said Business Roundtable, an association of CEOs of leading U.S. companies. the tax credit can still be removed from the final wording of the bill, if placed under further review. However given recent lobbying efforts in the industry and a feeling of presidential support, this remains unlikely.
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