Posted on Tue, Dec 29, 2009
This week's lending rates:
30 YR FIXED 5.25%
15 YR FIXED 4.75%
FHA/VA 5.5%
Rates are on the rise and have been for the last 6 business days! See chart below.
Home Sales Rise Again:
Sales of previously owned homes in Houston (which make up 86% of all home sales) jumped last month to their highest level in nearly three years. This is just the latest sign that points to an economic recovery.
The National Association of Realtors said that existing home sales increased 7.4% to an annual rate of 6.54 million units. This is the fastest pace since February 2007. The housing market, the main trigger of the most painful U.S. recession in 70 years, is stabilizing according to many analysts.
A separate report from the U.S. Federal Housing Finance Agency showed home prices rose 0.6 percent in October from September.
What Happened to Rates Last Week?
We all got a little coal in our stocking for Christmas as agency (Fannie Mae and Freddie Mac) mortgage backed securities lost 138 basis points last week. This is important because conventional 30 year fixed rates are based upon the sale of these agency's mortgage backed securities. This caused 30 year fixed interest rates to rise dramatically last week.
What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Contact the Home Coach Team Houston when you need help buying, selling, or financing a home.
Posted on Sun, Dec 27, 2009
Reported today from the LA Times:
Home buyers hoping to take advantage of a new or extended tax credit should not procrastinate: This third bite at the apple will be the last.
Proponents of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. And a lobbyist for the National Assn. of Realtors confirmed that at the group's annual convention last month.
Lawmakers "made us promise practically in blood that we would not come back" for another extension, Linda Goold, the Realtor group's director of tax policy, told her members.
During the debate, Sen. Johnny Isakson (R-Ga.), a former real estate broker and a longtime proponent of the tax credit, promised his colleagues, "This is the last extension."
And Senate Finance Committee Chairman Max Baucus (D-Mont.) said, "It is important that this tax credit does not become a permanent fixture of the tax code."
As it stands now, buyers who meet the income eligibility requirements have until midnight April 30, 2010, to ink a deal and must close by midnight June 30 to qualify.
Congress enacted the original $7,500 first-time buyer credit as part of the Housing and Economic Recovery Act of 2008. But because the credit had to be paid back it was more like a no-interest loan than a true credit and there were relatively few takers.
So in the American Recovery and Reinvestment Act of 2009, lawmakers upped the ante to a maximum of $8,000 for new buyers who closed before Dec. 1. They also said the new credit need not be paid back unless the taxpayer moves out within the three-year period following the purchase.
This second attempt at stimulating sales worked so well that the housing lobby implored Congress to help keep the momentum going. So lawmakers extended the deadline for first-timers and added a "long-term resident" tax credit for repeat buyers who owned their current home for at least five consecutive years out of the last eight.
Incidentally, the credit is not a flat $8,000 for new buyers and $6,500 for repeat buyers. It is 10% of the purchase price up to those ceilings. There is no credit if the price of the house is above $800,000.
Read more at the LA Times article.
Posted on Tue, Dec 08, 2009
Historically the Houston housing market responds to a major market correction with subsequent shortage of inventory and an increase in pricing. Examination of the current indicators would suggest 2010 fitting that model. Consider that major builders are publically traded companies. The executives of those comapnies must turn end of the year profits for bonuses. Liquidating inventory helps generate revenue. Even selling below costs may help get dead inventory off the books in 2009 and help 2010 be a profitable year. I have talked with few builders that plan on building any spec homes for the spring. They and their lenders are being very cautious. Banks are not loaning on speculative building. Henceforth the majority of homes available in the spring and summer will be contract to build homes that were negotiated 120 days before. Builders do not negotiate prices on contract to build homes. It is the base price plus upgrades and premiums. So it stands to reason that New Construction homes will be going up in price. The best deals are to be struck now before the end of the year and certainly before the weather changes and we have more daylight. Less inventory and higher prices on new homes will have a positive impact on the resale market, lowering days on the market and increasing prices.
Add the extension and expansion of the $8K and $6K tax credit through Spring and ending in the summer and it appears that the market will be shifting from a buyers market to a sellers.
Agents that are asleep at the wheel over The Holidays and not sharing the future in an informative educational way with their clients are neglecting their fidicuary responsibilities. Buyers deserve to know in advance of media reports (which are always 6 months late) that now is the time to act if they expect to get the best deals.
Posted on Thu, Dec 03, 2009
Our monthly housing trends update includes national and regional real estate trends.
We're seeing all-time low interest rates, and many people are sitting on the sidelines. How much house can you afford? Well, at 5% interest, for every $100,000 you borrow, you need about $33,000 in pre-tax annual income. The Home Coach Team is happy to be a trusted resource for you. Please let us know if we can help.
National Housing Indicators
Existing Home Sales (October 2009):
6.10 millions units*
Existing Home Median Price (October 2009):
$173,100
Housing Starts (October 2009):
529,000 units*
New Home Sales (October 2009):
430,000 units*
*seasonally adjusted annual rate
Source: NATIONAL ASSOCIATION OF REALTORS®.
National Economic Indicators
Homeownership Rate
| 3rd Qtr 09 | 3rd Qtr 08 |
| | |
| 67.6% | 67.9% |
Thehomeownership rate (67.6 percent) for the current quarter was notstatistically different from the third quarter 2008 rate (67.9 percent)or from last quarter's rate (67.4 percent).
New Home Sales
| Oct 09 | Sept 09 |
| | |
| | |
| +6.2% | -2.4% |
Salesof new one-family houses in October 2009 were at a seasonally adjustedannual rate of 430,000. This is 6.2% above the revised September 2009estimate of 405,000.
National Home Sales
National Sales Price of Homes
| | Homes
$173,100 | Single Family
$173,100 | Condo/Co-op
$172,900 |
| vs. last year: |  -7.1% | -6.8% | -10.4% |
Regional Home Sales
| | U.S.
6,100,000 | Northeast
1,060,000 | Midwest
1,430,000 | South
2,300,000 | West
1,310,000 |
| vs. last month: |  10.1% | 11.6% | 14.4% | 12.7% | 1.6% |
| vs. last year: | 23.5% | 27.7% | 28.8% | 25.7% | 12.0% |
Regional Sales Price of Homes
| | U.S.
$173,100 | Northeast
$235,400 | Midwest
$146,600 | South
$151,100 | West
$220,200 |
| vs. last year: | -7.1% | -2.6% | 1.1% | -6.3% | -14.7% |
| Click Here to view details |
Regional Single Family Home Sales
| | U.S.
5,330,000 | Northeast
770,000 | Midwest
1,290,000 | South
2,080,000 | West
1,190,000 |
| vs. last month: | 9.7% | 10.0% | 13.2% | 13.0% | 0.8% |
| vs. last year: | 21.4% | 24.2% | 27.7% | 23.1% | 11.2% |
|
Regional Sales Price of Single Family Homes
| | U.S.
$173,100 | Northeast
$239,500 | Midwest
$145,900 | South
$153,000 | West
$225,700 |
| vs. last year: | -6.8% | -1.2% | 3.1% | -5.2% | -15.0% |
Regional Condo/Co-Op Sales
| | U.S.
770,000 | Northeast
290,000 | Midwest
140,000 | South
220,000 | West
120,000 |
| vs. last month: | 13.2% | 16.0% | 27.3% | 10.0% | 9.1% |
| vs. last year: | 40.8% | 38.1% | 42.9% | 52.8% | 26.3% |
Regional Sales Price of Condo/Co-Ops
| | U.S.
$172,900 | Northeast
$224,400 | Midwest
$153,200 | South
$133,300 | West
$165,400 |
| vs. last year: | -10.4% | -6.3% | -16.7% | -13.3% | -11.5% |
Posted on Thu, Dec 03, 2009
Do you qualify?
You qualify for the Extended Homebuyer Tax Credit if:
You meet IRS income and homeownership rules.
You sign a binding contract by April 30, 2010.
You close on a home purchase by June 30, 2010.
The home of your dreams may come with a bonus: a tax credit.
There's happy news for current homeowners: If you intend to sell your home and buy another in 2009 or 2010, you may be eligible for a federal tax credit of up to $6,500. The Extended Homebuyer Tax Credit legislation, passed in November 2009, also shares the wealth with first-time homebuyers-up to $8,000.
Are you eligible?
You're considered a current homeowner under IRS rules if you've used the home being sold or vacated as a principal residence for five consecutive years within the last eight. You're a first-time homebuyer if you or your spouse haven't owned a home for the three years before your purchase.
In both cases, keep in mind that the credit amount you're eligible for begins to decrease for joint filers if your modified adjusted gross income is $225,000 ($125,000 for individuals); it disappears at $245,000 ($145,000 for individuals).
The ultimate amount of your credit depends on the price of the home and your income.
To claim your benefit:
Close on a new principal residence between Nov. 7, 2009, and April 30, 2010. You can settle as late as June 30, 2010, as long as you have a binding contract by April 30.
Don't spend more than $800,000 on your new home.
When you submit your tax return, attach a copy of the settlement statement you received at closing. Check with the IRS or your tax adviser to confirm what additional documentation may be needed.
Decide whether to:
- Apply the credit to your 2009 tax return, filed on or before April 15, 2010,
- File an amended 2009 return; or
- Apply the credit on your 2010 return, filed on or before April 15, 2011.
First-timers who purchased a home between Jan. 1, 2009, and Nov. 6, 2009, may also be eligible for the $8,000. Keep in mind that the income limits in this case are tighter than for those who purchased after Nov. 7.
Apply the credit to your 2009 taxes
To claim the credit on your 2009 tax return:
- Complete IRS Form 5405 to determine the amount of your available credit.
- Apply the credit when you file your 2009 tax return or file an amended return.
- Attach documentation of purchase to your return or amended return.
Which properties are eligible?
You can apply the credit to primary residences, including single-family homes, condos, townhomes, and co-ops.
Do I need to repay the tax credit?
No, not if you occupy the purchased home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale.
This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.
Resource: NATIONAL ASSOCIATION OF REALTORS®
HouseLogic.com