Posts Tagged ‘ tumwater real estate lender ’

New Home Supplies Plummet, Pressuring Home Prices Higher

December 1, 2009
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New Home Supply October 2009

The supply of newly-built homes fell to its lowest levels since 2006, offering additional proof of a housing market in recovery.

Home supply is defined as the amount of time it would take to sell the current inventory of homes at the current pace of sales.

In October, for the 8th consecutive month, home supplies fell. Since peaking in January 2009, it’s now down by almost half.

Lower supply leads to higher prices. This is Economics 101.

Furthermore, supply is expected fall into 2010. According to the government, builders are breaking ground on new homes at a declining pace, even as sales ramp up.

Builders are cheering the October New Home Sales report, but its the everyday sellers of “existing homes” that have real reason to celebrate.

See, as builders clear out their respective inventories and turn profitable, there’s less reason for them to offer the types of over-the-top purchase incentives that characterized the last 12 months of selling.

With fewer builder incentives, the playing field levels between large corporations and individual home sellers.

And while this is happening, buyers are eagerly taking advantage of low mortgage rates and federal tax credits for buying homes. It’s pressuring home prices higher overall.

Since January 2009, the average sale price of a newly-built home is up 6 percent.

What's Ahead For Mortgage Rates This Week : November 23, 2009

November 23, 2009
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What drives mortgage rates this weekMortgage markets worsened last week on a mixed bag of economic data. Inflation data came in soft, but so did the start of the holiday shopping season.

For the first time in a month, mortgage rates worsened last week, adding roughly 0.125 percent on conforming fixed-rate products, and a little bit more on ARMs.

Despite rates worsening, there was still some good news for home buyers and would-be refinancers. Mortgage rate volatility was markedly lower than in recent weeks. You could shop for mortgage rate last week and actually take your time about it.

This is in stark contrast to the last month or so over which mortgage rates changed every few hours, on average.

This week, though, because a heavy data calendar is combining with a holiday-shortened trading week, rates aren’t likely to stay as tame.

  • Monday: Existing Home Sales
  • Tuesday: Consumer Confidence, Home Price Index, Fed Minutes
  • Wednesday: New Home Sales, Personal Income and Outlays

Each of these data points are market-movers by themselves. In tandem, however, they could really shake things up. Then, at the tail end of the week, markets will react to Black Friday.

If stores look full Friday and initial receipts appear high, stock markets should rise at the expense of bonds, leading mortgage rates higher.

Additionally, expect that mortgage rate changes will be amplified because of low trading volume. This could work in your favor, or out of your favor — depending on the market direction.

With mortgage rates at such low levels and unlikely to fall much further, locking a rate is advisable. If you choose to float, though, keep your loan officer on speed dial because when rates do rise, they’re going to rise quickly.

Home Prices Still On The Rise

September 23, 2009
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Home Price Index from peak of housing in April 2007 to July 2009As reported by the government, home prices are rising nationwide, up 0.3 percent in July.

Furthermore, versus November 2008, the Home Price Index has clawed back to unchanged.

The housing market appears to be holding its own.

However, we have to be careful about putting our full faith in the Federal Housing Finance Agency’s data. It’s somewhat flawed.

  1. The Home Price Index is a national statistic and all real estate is local
  2. The Home Price Index’s methodology specifically excludes key housing demographics

As an obvious example, HPI only accounts for homes with Fannie Mae- or Freddie Mac-backed mortgage. Lately, the percentage of homes meeting that description is shrinking.

As FHA financing rises in popularity, Fannie and Freddie back far fewer loans than in the past. Furthermore, the HPI sample set also excludes newly-built homes and multi-unit properties.

Because of these exclusions, some analysts call the HPI incomplete. The same could be said of all home price metrics, however — including the venerable Case-Shiller Index.

Therefore, what should be of interest to today’s buyers and sellers is that all of “popular” home valuation models seem to be telling the same story — home prices have stopped falling and look like they’re beginning to rebound.

For a region-by-region breakdown of the Home Price Index, visit the FHFA website.

Housing Starts Slip, But Don't Think The Recovery's Been Halted

September 18, 2009
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Housing Starts August 2009Housing Starts on single-family homes took a step backwards last month, falling month-over-month for the first time since January.

A “housing start” is new home on which construction has started.

Don’t let the slowdown fool you, however — the housing market’s recovery is still very much underway.

Builders were bound to take a construction breather sometime — especially with the looming expiration of the First Time Home Buyer Tax Credit. The last thing they want is to be saddled with excess supply.

Some of the news coverage categorized August’s Housing Starts as troubling. That’s likely overstating it. One down month after 8 consecutive increases is not only acceptable, but it’s expected, too.

Single-family starts are up 34 percent on the year. The housing market is recovering just fine.

The Housing Market Index Reaches A 16-Month High

September 17, 2009
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NAHB Housing Market Index September 2009According to home builders around the country, the housing market is looking good.

Each month, the National Association of Home Builders releases its Housing Market Index report, a survey meant to “take the pulse of the single-family housing market”.

Respondents report on three facets of their business, each series weighted and averaged:

  1. How are market conditions today?
  2. How do market conditions look 6 months from now?
  3. How is the traffic of prospective buyers of new homes?

For the 3rd straight month, the Housing Market Index improved. It’s now at its highest level since May 2008.

The housing market has shown signs of life since March. Both Existing Home Sales and New Homes Sales have soared and home values are up in a lot of towns. Builders showing confidence is another positive signal.

Fed Chairman Ben Bernanke said that the recession is “very likely over” and strong housing data corroborates that statement.

As the economy strengthens and housing does, too, home sellers will start to regain the upper-hand in contract negotiations. If you’re an active home buyer, therefore, and looking for “a deal”, be aware that time is close to running out.