Michael Minkoff, Author at Shoreline Mortgage

About Michael Minkoff

This author has not yet filled in any details.
So far Michael Minkoff has created 502 blog entries.

20 11, 2012

Homebuilder Confidence Spikes To 6-Year High

NAHB Housing Market Index The National Association of Home Builders (NAHB) released its Housing Market Index (HMI) Tuesday, which showed sharp, 5-point increase to 46 for November 2012, marking the seventh consecutive monthly gain for the HMI, and lifting the index to its highest point since May 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal “good” conditions.

The Housing Market Index is a measure of builder confidence, published monthly, based on a survey sent to NAHB members which asks them to rate housing market conditions.

In November, home builders reported gains in two of the three areas surveyed:

Current Single-Family Sales: 49 (+8 from October 2012)
Projected Single-Family Sales: 53 (+2 from October 2012)
Buyer Foot Traffic: 35 (unchanged from October 2012)

Builders report growing demand for new homes as inventories for alternative properties — distressed and foreclosed homes, for example — shrink nationwide.

Even Hurricane Sandy did little to suppress builder confidence.

The NAHB survey was conducted in the two weeks immediately following Hurricane Sandy so the Housing Market Index does reflect builder sentiment during that period. All regions of the country posted confidence gains in November.

The South Region showed a 4-point gain to 43; the West Region showed a 3-point gain to 47; the Midwest Region showed a 3-point gain to 45; and the Northeast Region showed a 2-point gain to 31.

Despite the gains, builders nationwide still report challenges with home appraisals and tight credit conditions. In addition, a shortage of buildable lots in some areas is limiting the ability for home builders to put more single-family homes on the market.

As builder confidence grows, today’s buyers should prepare for the possibility of higher home prices. Confident sellers are less likely to make price concessions or to offer free upgrades.

If you are in the market for a new home, therefore, the time between now and the New Year may be the best opportunity to make a bid on a home. Starting next year, low prices may be gone.

19 11, 2012

Federal Reserve : New Economic Stimulus May Be Warranted

Is more Fed stimulus in store for 2013? The Federal Reserve released its October Federal Open Market Committee (FOMC) meeting minutes last week, revealing a Fed in disagreement about the future of the U.S. economy and about what, if any, stimulus may be warranted in the next 12 months.

The “Fed Minutes” recaps the conversations and debates that transpire during an FOMC meeting, and is published 3 weeks after the meeting adjourns.

According to the October minutes, FOMC members “generally agreed” that a housing recovery is under way nationwide, citing increased housing prices, higher sales volume, and rising construction in many parts of the country.

FOMC members made no major policy changes at their last meeting, but agreed that a continuation of additional asset purchases would likely be necessary in 2013, in order to achieve a substantial improvement in the labor market.

Other notes from within the Fed Minutes included:

On housing: Signs of improvement are “encouraging”, and mortgage rates are at historic lows
On inflation: Essentially “unchanged”, notwithstanding recent increases in energy prices
On Europe: Production indicators signal contraction in business activity and expansion
On employment: Employment is rising, and unemployment remains high

The economic forecast prepared by the FOMC staff shows an uptick in consumer spending, residential construction, and labor market conditions which more than offset recent downgrades in the business fixed investment and the industrial production outlooks.

Through 2013, economic activity is projected to accelerate gradually, supported by a lessening in fiscal policy restraints. The Fed also anticipates that home buyers will benefit from looser credit standards.

Low mortgage rates are helping home buyers, too.

According to Freddie Mac, the average 30-year fixed rate mortgage rate was 3.34% last week, down from 3.55% in September. This has given a boost to buyer purchasing power nationwide and the year-end housing market may reflect it. Demand for homes remains strong.

The next FOMC meeting is scheduled for December 11-12, 2012.

16 11, 2012

Bank Repossessions Slip For 24th Consecutive Month

Foreclosures per household October 2012

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings increased 3 percent in October as compared to September 2012, climbing to 186,455 U.S. properties.

RealtyTrac defines a “foreclosure filing” as any foreclosure-related action including a Notice of Default, a Scheduled Auction, or a Bank Repossession. On average, 1 in every 706 U.S. homes had a foreclosure filing during the month of October.

For the 24th consecutive month, the number of bank repossessions fell, down less than 1% from the previous month and down 21% from October 2011. Bank repossessions dropped in 37 states, plus the District of Columbia, indicating that banks are seeking alternatives to foreclosure.

Distressed home sales, which include foreclosures and short sales, represented 23% of sales in the second quarter of 2012, down from 30% a year ago, according to the National Association of REALTORS®.

Florida again posted the top foreclosure rate nationwide.

One in every 312 Florida housing units had some sort of foreclosure filing in October as foreclosure starts moved to a 12-month high. Monthly filings increased 2% from last month.

In Nevada, the monthly increase was larger, rising 41% month-over-month, lifting it from the fifth-highest rate in September 2012, to the second-highest in October 2012.

Third-ranked Illinois saw a 6% increase in foreclosure filings over September 2012. California and Arizona rounded out the top five.

Hurricane Sandy made an impact on the foreclosure market, too, with a foreclosure moratorium being put into effect in the states most affected such as New Jersey, New York, and Connecticut.

For home buyers planning to venture into the home foreclosure market, there are well-priced homes for sale. However, understand that a foreclosure property is often sold “as is,” and that you may not be allowed into the property prior to the sale to inspect for damage. Home may have termites, been gutted by previous tenants or owners, or be filled with lead paint or asbestos.

For this reason, it’s a good idea to engage an experienced real estate professional when buying foreclosure properties. Real estate agents can guide you through the foreclosure process and give advice regarding contracts and home inspections.

15 11, 2012

Your November Gardening Task List

November gardening list For homeowners who keep a garden, with the change of seasons comes a task list.

There are basic tasks for gardeners — for example, raking the leaves, sharpening your tools. And, there are advanced tasks, too, which includes identifying and removing plants and trees which may be dead, and covering compost to prevent rain storms from leaching nutrients.

For homeowners in frost-free areas, November is a good time to plant roses and azaleas; prune flowering trees; and, start your fall vegetable garden.

The cooler fall and winter months are terrific for leafy greens such as spinach and kale; and carrots. Protect plants with row covers, when necessary.

For homeowners in colder parts of the county, November is when you should circle evergreens with burlap and wrap the bottoms of young trees with mesh wire to protect from wildlife; and empty and roll up garden hoses for storage.

It’s also when bulbs should be planted. Tulips, crocuses and hyacinths are easy to plant and will welcome you come springtime.

For all homeowners, consider this list :

Aerate lawns to improve root development and drainage
Check and clean gutters from fallen leaves, needles, and twigs
Perform a round of weeding

And then, to discourage weed growth throughout the winter, place down a pre-emergent, and mulch around bedding plants, shrubs, and trees.

If your temperatures in your area tend to go below freezing, be aware of your plants which are sensitive to de-icing salts. Consider buying sand or sawdust for traction purposes near these plantings instead.

Lastly, remember that the fall months are a terrific time to take note of what worked in your garden during the summer, and what didn’t. Use a notebook and put your findings to paper. Attention paid now will pay dividends next spring.

14 11, 2012

Mortgage Approvals : Documents You’ll Need For Your Lender

Bank guidelines loosen According to the Federal Reserve’s quarterly Senior Loan Officer Survey, it’s getting easier to get approved for a home loan.

Between July – September 2012, fewer than 6% of banks tightened mortgage guidelines — the fourth straight quarter that’s happened– and roughly 10% of banks actually loosened them.

For today’s buyers and refinancing homeowners in , softening guidelines hint at a quicker, simpler mortgage approval process; one which gives more U.S. homeowners better access to today’s ultra-low mortgage rates.

However, although banks are easing guidelines, it doesn’t mean that we’re returned to the days of no-verification home loans. Today’s mortgage applicants should still expect to provide lenders with documentation to support a proper loan approval.

Some of the more commonly requested documents include :

Tax returns, W-2s, and pay stubs : In order to prove income, lenders will want to see up to two years of income documentation. Self-employed applicants may be asked for additional business information. Borrowers earning income via Social Security, Disability Income, Pension or other means should expect to provide documentation.
Bank and asset statements : To verify “reserves”, banks will often require up to 60 days of printed bank statements, or the most recently quarterly reports. Be prepared to explain deposits which are not payroll-related — banks adhere to federal anti-money laundering laws.
Personal identification documents : To verify your identity, banks often require photocopies of both sides of your drivers license and/or U.S. passport, and may also ask for copies of your social security card.

In addition, if your credit report lists collection items, judgments, or federal tax liens, be prepared to discuss these items with your lender. Sometimes, a derogatory credit event can be eliminated or ignored during underwriting. Other times, it cannot.

The more information that you share with your lender, the smoother your mortgage approval process can be.

As the housing market improves and lender confidence increases, mortgage guidelines are expected to loosen more. 2013 may open lending to even more mortgage applicants.

13 11, 2012

When It Pays To Refinance Your Mortgage — Literally

Why Refinance

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing. Be sure to ask about it.

9 11, 2012

For November : Home Maintenance To-Do List

Seasonal Home Maintenance The calendar has turned to November; the month during which we transition from fall into winter.

With less sunlight, colder temperatures, and shorter days ahead , it’s an opportune time to cross those last-minute maintenance items off your homeowner to-do list.

Practicing preventive care — both inside and outside your home — can save thousands of dollars in repairs come later this winter. What follows is a brief checklist to get you started.

For outside the home :

Inspect exterior lights and outlets. Be sure that none of the outlets are cracked or broken, or have exposed wires.
Clean gutters and clear all blockages. If leaves are falling, redo after leaves are off all trees.
Inspect and test outdoor railings and stairs.
Have problem trees trimmed, including those that may damage your home in a storm.
Protect outdoor water faucets from freezing. Consider using foam cups, sold at hardware stores.

For inside the home :

Change batteries in all smoke detectors and carbon monoxide alarms, whether they’re “dead” or not.
Vacuum refrigerator condenser coils, plus the front bottom grill. Empty and clean the drip pan.
Inspect wood stoves and fireplace inserts. Hire a certified chimney sweeper to clean the chimney, if needed.
Insulate bare water pipes running through your home to prevent freezing and to limit condensation on cold-water lines.
Inspect automatic garage door opener. Lubricate chains according to manufacturer’s instructions. Make sure bolts and screws are properly tightened and secured.

As a constant series of chores, home maintenance is a four-season job and one which should not be taken lightly. The tasks of each season are unique and November’s jobs are mostly preparatory in advance of colder weather.

If your routine maintenance uncovers larger issues including a faulty HVAC unit, or a leaking faucet, for example, seek professional help to make the repair.

8 11, 2012

Questions First-Time Home Buyers Should Ask

First-time home buyer questions Nationwide, mortgage rates are low and home prices remain relatively low, too. This combination, plus rising rents, is pushing renters in some cities toward first-time homeownership.

Buying your first home can be exciting, but you should also do your research to make sure that you ask the proper questions of the process, and make the best choices for yourself and your household.

For example, recommended questions for first-time buyers to ask home sellers include :

What major repairs have been made to your home?

Although standard disclosure forms are supposed to provide information regarding past damage and renovation to the property, there are occasionally repairs that are omitted or otherwise forgotten. Be proactive and ask pointed questions about the roof, the foundation, and the electrical system. Some home issue have a way of resurfacing many years later and it’s best to know in advance. •

To which school district does the home belong?

As a first-time homebuyer, you may or may not have school-aged children. However, in many areas, public school rankings positively (or negatively) affect home values. Ask your real estate agent for school district data. Consider asking the seller for feedback, too.

Is this a “distressed” property, and what does that mean to me?

For many home buyers, the allure of a foreclosed home or a home in short sale can be large. Prices are discounted as compared to comparable real estate — sometimes by as much as 20%. However, many distressed properties are sold as-is,” with little room for negotiation. This means that homes may be defective or, worse, uninhabitable. Ask your real estate agent for help with distressed homes and their suitability to your home buying needs.

After asking the above questions, and other questions, too, it’s important to remember that buying a home can be an emotional decision; and one that requires using your “brain” as much as your “heart”. Try to keep emotions in check so that you don’t overpay for a home that’s unsuitable, for example.

7 11, 2012

Improving Market Index Swells To 125 In November

Improving Market Index 125 Markets The U.S. economy continues to improve.

The National Association of Homebuilders released its Improving Markets Index Tuesday. The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating “measurable and sustained growth”.

125 U.S. markets are qualified as “improving” this month, a 22-market jump from the month prior and and all-time high for the index which launched late last year.

Compared to November 2011, this month’s IMI has climbed more than four-fold, rising from last year’s reading of 30. This jump suggests that housing recovery is firmly taking root, helping to generate needed jobs and economic growth across much of the country.

So what qualifies a market as “improving”? The NAHB uses strict criteria.

First, the group gathers data from the three separate, independent sources :

Employment growth from the Bureau of Labor Statistics
Housing price appreciation from Freddie Mac
Single-family housing permits growth from the U.S. Census Bureau.

Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.

And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for the most recent “bottom” is at least six months in the past.

In this way, the Improving Market Index doesn’t just measure housing market strength — it measures general economic strength.

Of the 22 markets added to the Improving Market Index in November, the following cities were included : San Diego, California; Gainesville, Florida; Omaha, Nebraska; Louisville, Kentucky; and Charlotte, North Carolina.

Several markets dropped off the list, too, including Hanford, California; Orlando, Florida; Terre Haute, Indiana; and Greenville, North Carolina.

The complete list of 125 metropolitan areas on November’s IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.

6 11, 2012

October Jobs Report Blows Away Estimates; Mortgage Rates Falling

U.S. Non-Farm Payrolls 2010-2012

Another month, another good showing for the U.S. economy.

Mortgage rates are performing surprisingly well after Friday’s release of the October 2012 Non-Farm Payrolls report. The Bureau of Labor Statistics’ monthly report beat Wall Street expectations, while also showing a giant revision to the previously-released job tallies of August and September.

171,000 net new jobs were created last month against calls for 125,000 and revisions for the two months prior totalled 84,000.

October also marked the 25th consecutive month of U.S. job growth — a period during which 3.8 million jobs have been reclaimed. This sum represents more than half of the 7.3 million jobs lost between 2008-2009.

Nationally, the Unemployment Rate rose by one-tenth of one percent last month to 7.9%. It may seem counter-intuitive to see unemployment rates rise even as job growth soars. However, it’s a sign of economic strength.

October’s rising Unemployment Rate is the result of more workers entering the U.S. workforce and actively looking for jobs, a manifestation of rising consumer confidence levels and optimism for the future.

Typically, mortgage rates would worsen on a strong jobs report like this. This month, however, rates are improving. This is mostly the result of Hurricane Sandy, which is expected to create a drag on the U.S. economy with its $50 billion damage tag.

The storm has Wall Street looking past the strong jobs report, positioning itself for the next few months. Investors are moving into less risky assets until the uncertainty surrounding the storm’s effects subside. Mortgage-backed bonds are considered “safe” and are benefiting from this safe haven buying pattern.

For home owners and buyers nationwide, the shift is yielding an opportunity to lock mortgage rates at artifically-low levels. 30-year fixed rate mortgages remain well below 3.50% for borrowers willing to pay discount points, and home affordability is approaching an all-time high.

Home values are expected to rise through 2013 so consider this week’s low rates a gift. If you’re in a position to go to contract and/or lock a mortgage rate, you may want to take that step today.

5 11, 2012

HOA : The Role Of Homeowners Associations In Housing Communities

Homeowners associations (HOA) are legal corporations formed by a real estate developer to market, to manage, and to sell homes and lots in a residential subdivision.

They’re most commonly formed for condominiums and planned urban developments (PUDs), a category which includes suburban communities.

HOA Articles of Incorporation typically grant developers privileged voting rights in governing the association during its infancy, while providing the means for the developer to exit financial and legal responsibility for the organization, transferring ownership to the homeowners of the association.

This transfer typically occurs after a predetermined number of units have been sold — often two-thirds of the available lots and/or units.

Each homeowners association enforces its own governing documents in the form of restrictive covenants, by-laws, architectural guidelines and regulations. Together, the “rules” of an HOA are meant to define the community standards for the purpose of protecting property values.

Restrictive covenants vary widely from homeowners association to homeowners association. Covenants may include guidelines on issues as varied as where parking is permissible; planned architectural improvements; and, landscaping.

HOAs often enforce these common restrictive covenants, among others :

Boats, utility trailers, RVs, and commercial vehicles may not be parked in driveways and streets
Homes may not be painted in “loud” colors
Yard signage may not be political in nature, nor defamatory
Lawn care must be performed routinely to prevent overgrowth
For condos with balconies, towels and clothing may not be draped on railing

For homes governed by an HOA, membership in the homeowners association is a condition of purchase; buyer are not permitted to opt-out.

Homeowners associations make their by-laws available upon request to existing, governed homeowners and will often make by-laws available to prospective home buyers as well. Review community guidelines before buying into a building or neighborhood, and before beginning a home improvement project. It’s important to know what actions are permissible and what actions are not.

In addition, most mortgage lenders require HOA by-laws as part of the mortgage approval process.

2 11, 2012

How Choosing Kitchen Colors Can Affect Your Eating Habits

Kitchen colors influence eating habits Have you ever walked into your kitchen and instantly felt hungry?

Rarely do people think about the colors that they choose to paint their kitchens. They are often too busy worrying about whether the kitchen will match the rest of the home, or whether the colors will be satisfactory to the rest of the household.

However, when painting and decorating your kitchen, you may want to think about the process in a way many people do not — how the colors you choose will affect the way in which you eat. As behavioral psychologists have documented, the presence of specific colors your the kitchen can change your eating habits and your cravings for food.

Here are some examples :

The color red increases your appetite. This is why so many restaurants paint their walls red. Although associated with romance and passion, red is also a color which promotes hunger. Furthermore, it has been noted that the color red in your kitchen can influence high blood pressure.
The color blue is calming, which can slow your eating speed, and prevent you from over-eating. When decorating your kitchen and dining room, therefore, using blue wallpaper or blue paint; and blue placemats, for example, can result in “slower” eating and fewer feelings of fullness.
The color orange is a “stimulating” color; increasing oxygen supply to the brain and providing a mental boost. An orange-themed kitchen may stimulate your appetite, therefore, and make over-eating more likely.

Then, there is gray. Gray can be an ideal appetite-suppressing color for your kitchen. This is because, psychologically, gray is calming and relaxing, and it neutralizes anxiety. Gray can arrest binge eating and impulsive snacking. It’s also a color which home stagers recommend for its neutrality.

Whether you’re a home buyer , a home seller, or just getting ready to remodel, consider the influence of colors in your home. They do more than just “match the next room” — they affect your food and drink cravings as well.

1 11, 2012

Find A Mortgage Rate Strategy Ahead Of Friday’s Job Report

Unemployment Rate Friday morning, the government’s Bureau of Labor Statistics will release its Non-Farm Payrolls report, more commonly called the “jobs report”.

Depending on how the jobs data reads, FHA and conforming mortgage rates may rise, or fall. This is because today’s mortgage market is closely tied to the U.S. economy, and the U.S. economy is closely tied to job growth.

Economists expect that employers have added 125,000 net new jobs to their payrolls in October 2012, up from September’s tally of 114,000 net new jobs. Jobs have been added to the economy over 24 consecutive months leading into Friday’s release, and approximately 4.7 million jobs have been created in the private sector since early-2010.

So, what does this mean for home buyers and refinancing households ? It means that mortgage rates may get volatile beginning tomorrow morning.

Improving jobs numbers tend to push mortgage rates up, as it signals to investors that the U.S. economy is strengthening. If the actual jobs reports shows more than 125,000 net new jobs created, therefore, look for mortgage rates to rise.

Conversely, a weaker-than-expected report injects fear into the market, causing investors to purchase safer assets including U.S. Treasury bonds and mortgage-backed bonds. This moves mortgage rates lower.

Markets will also watch for the monthly Unemployment Rate. After falling to a 4-year low of 7.8 percent in September, economists anticipate that October’s unemployment rate will rise 0.1 percentage point to 7.9%.

The good news for rate shoppers is that mortgage rates remain low. Freddie Mac’s weekly mortgage rate survey puts the 30-year fixed rate mortgage below 3.50% nationwide for borrowers willing to pay 0.7 discount points. Furthermore, a forecast from the Mortgage Bankers Association predicts that the 30-year fixed rate will remain below 4% for at least the next 8 months and low mortgage rates help to keep home payments low.

The Bureau of Labor Statistics releases the jobs report at 8:30 AM ET Friday.

31 10, 2012

19 of 20 Case-Shiller Index Markets Improve In August

Case-Shiller Index : Home Prices Between July and August 2012

Home value rose to close out the summer, according to the S&P/Case-Shiller Index, a national home-valuation tracker.

Nationwide, values rose 0.9% between July and August 2012 with 19 of 20 tracked markets showing improvement. Only one tracked city — Seattle, Washington — showed a decrease, falling just 0.1 percent.

On an annual basis, 17 of the 20 Case-Shiller Index markets improved, led by Phoenix. Home values in the Arizona city are up 18.8 percent from August 2011. The next closest city in terms of home price gains is Detroit, Michigan at 7.6 percent

We should temper our excitement for the August Case-Shiller Index, however. Although it suggests an ongoing U.S. housing recovery, the methodology of the Case-Shiller Index is far-from-perfect. In fact, one could argue that the index is more effective for policy-makers than for actual buyers and sellers of real estate.

There are three reasons for this :

The Case-Shiller Index tracks home prices of single-family homes only. Multi-unit homes are excluded.
The Case-Shiller Index can be distorted by “discounted” home sales (e.g.; foreclosure, short sale).
The Case-Shiller Index publishes on a two-month delay — data is hardly current.

Beyond the above three points, however, the Case-Shiller Index falls short in another area — it ignores the basic tenet of housing that “all real estate is local”. In using 20 cities to represent the entire United States, the Case-Shiller Index reduces more than 3,100 municipalities into a single “market”.

Even within its 20 tracked cities, the Case-Shiller Index fails short as a housing market barometer. This is because — even with cities — home values vary. Some zip codes perform better than others, for example, as do some streets. The Case-Shiller Index can’t capture markets with that level of detail.

National housing data helps in spotting broader trends of growth but provides very little for today’s active buyers and sellers of real estate who need “real-time” data. For that, talk to a local real estate agent.

30 10, 2012

Pending Home Sales Index Suggests Housing Momentum Into 2013

Pending Home Sales Index 09-2012 The home resales is expected to finish the year with strength.

Last month, for the fifth straight month, the Pending Home Sales Index hovered near its benchmark value of 100, registering 99.5 in September.

he Pending Home Sales Index tracks homes under contract to sell, but not yet sold, and is published by the National Association of REALTORS®. The index is a relative one. It compares today’s housing market activity to the housing market activity of 2001 — the index’s first year of existence.

The Pending Home Sales Index has averaged 99.1 this year.

Among housing market indicators, the Pending Home Sales Index is unique. It doesn’t report on prior market activity as the Existing Home Sales and New Home Sales reports do. By contrast, the Pending Home Sales Index is a forward-looking indicator.

The real estate trade association tell us that 80% of U.S. homes under contract go to closing within 60 days, and many of the rest go within Months 3 and 4. In this way, the monthly Pending Home Sales Index can foreshadow to today’s home buyers and sellers what’s next for housing.

Based on September’s Pending Home Sales Index, then, we should expect to see closed home sales stay strong through November and December. That said, home sales are expected to vary by region.

Here is how the Pending Home Sales Index broke down by area last month as compared to one year ago on a seasonally-adjusted, annualized basis :

Northeast Region : +26.1% from September 2011
Midwest Region : +19.3% from September 2011
South Region : +17.6% from September 2011
West Region : +0.8% from September 2011

Often, the last few months of a year are considered to be a “slow” period for the housing market. Based on regional, annual Pending Home Sales Index improvements, though, 2012 may be different. The market looks poised to finish with momentum that may carry home prices higher into 2013.

For today’s home buyers, mortgage rates remain low and home prices have only started to climb.

29 10, 2012

What’s Ahead For Mortgage Rates This Week : October 29, 2012

The jobs report puts the economy is focus Mortgage markets ended the week slightly better last week. Wall Street took its cues from U.S. economic data, from developments in Europe, and from the Federal Reserve, moving mortgage rates lower nationwide.

Pricing for both conforming and FHA mortgage rates improved between Monday and Friday, with the majority of gains occurring late in the week.

The timing of the gains explains why Freddie Mac’s weekly mortgage rate report showed the average 30-year fixed rate mortgage rate rising this week when, in fact, it did not. Because Freddie Mac conducts its mortgage rate survey at the start of the week, its survey respondents had no time to acknowledge late-week improvements.

Freddie Mac said the 30-year fixed rate mortgage rate rose to 3.41% for home buyers and refinancing households willing to pay 0.7 discount points at closing plus a full set of closing costs.

Mortgage applicants choosing zero-point mortgages should expect a higher rate.

The biggest event of last week was the Federal Open Market Committee’s seventh scheduled meeting of the year. The FOMC’s post-meeting press release described the U.S. economy as growing, and inflation as stable. The Fed re-iterated its pledge to QE3, a stimulus program geared at keeping mortgage rates suppressed. The group also said it would hold the Fed Funds Rate low until at least mid-2015.

Lastly, the Fed showed optimism about the broader U.S. housing market — and for good reason. Since October 2011, housing has trended higher and last week saw the release of the September New Homes Sales report and the September Pending Home Sales Index. Both showed strength.

This week, the market’s biggest story is Friday’s release of the October Non-Farm Payrolls report. Jobs are a keystone in the U.S. economic recovery so the monthly jobs report holds sway over mortgage rates. If the number of jobs created exceeds Wall Street expectations, mortgage rates will rise and purchasing power will shrink.

The U.S. economy has added jobs in each of the previous 24 months.

26 10, 2012

New Home Supply Remains Firmly In “Seller’s Market” Territory

New Home Supply chart The U.S. housing market appears headed for a strong close to 2012.

According to the U.S. Census Bureau, the number of new homes sold jumped to 389,000 units in September 2012 on a seasonally-adjusted, annualized basis.

Not since the expiration of the $8,000 federal home buyer tax credit in April 2010 have new homes sold at such volumes.

September’s tally marks a 5.7 percent increase from the month prior, and a 27 percent increase from September 2011. There are now just 145,000 new homes for sale nationwide and, according to the National Association of Homebuilders, buyer demand continues to grow.

At today’s pace of home sales, the entire U.S. inventory of new homes for sale would sell out in 4.5 months. By way of comparison, in January 2009, new home supply was 12.1 months.

When home supplies dip below 6.0 months, analysts say, it signifies a “seller’s market”; one in which sellers tend to benefit from negotiation leverage over buyers. The national New Home Supply has been below 6.0 months since October 2011.

Perhaps that’s one reason why the average new home sale price has climbed 14.5 percent over the past 12 months to $292,400; and why median new home sales prices have made a similar jump.

With builders reporting prospective buyer foot traffic at its highest level since 2006, home supplies are shrinking at a time when buyer demand is rising. Low mortgage rates and affordable housing choices contribute, too.

30-year fixed rate mortgage rates have been under 4 percent for all of 2012, and are now under 3.50% nationwide. Low rates make for low monthly payments but, like home prices, conditions can’t remain buyer-friendly forever.

For today’s home buyers of new construction, the outlook for finding “great deals” in 2013 may be grim. New home prices are expected to rise and supplies will continue to get scarce. The best homes in the new construction market, therefore, may be the ones you buy today.

By early-next year, low home prices may be gone, and low mortgage rates may be, too.

24 10, 2012

Simple Explanation Of The Federal Reserve Statement (October 24 , 2012)

Putting the FOMC statement in plain English The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.

For the ninth consecutive meeting, the vote was nearly unanimous. And, also for the ninth consecutive meeting, Richmond Federal Reserve President Jeffrey Lacker was the lone dissenter in the 9-1 vote.

The Fed Funds Rate has been near zero percent since December 2008.

In its press release, the Federal Reserve noted that, since its last meeting six weeks ago, the U.S. economy has been expanding “at a moderate pace”, led by growth in household spending. However, “strains in global financial markets” continue to remain threat to U.S. economic growth, a comment which references to the Eurozone and its economy.

The Fed’s statement also included the following economic observations :

Growth in employment has been slow; unemployment is elevated
Inflation pressures remains stable, and below 2%
Business spending on equipment and structures has slowed

In addition, the Fed addressed the housing market, stating that there have been “further signs” of improvement, “albeit from a depressed level”.

Finally, the Federal Reserve re-affirmed its commitment to its most recent stimulus program, a bond-buying program known as QE3.

Via QE3, the Federal Reserve has been purchasing $40 billion in mortgage-backed bonds monthly, with no defined “end date”. QE3 is meant to suppress U.S. mortgage rates.

Fed Chairman Ben Bernanke has said that QE3 will remain in place until the U.S. economy has recovered in full, at least. It’s a plan that may help home buyers nationwide. Since QE3 launched, mortgage rates have moved to new all-time lows.

The Fed also used its meeting to announce that it intends to hold the Fed Funds Rate near its target range of 0.000-0.250 percent until mid-2015, at least.

The FOMC’s next scheduled meeting is a two-day event and its last of the year, December 11-12, 2012.

24 10, 2012

Home Supplies Drop To Multi-Year Low

Existing Home Supply drops to 5.9 months

As the third quarter closed, home resales showed considerable momentum nationwide.

The National Association of REALTORS® reports Existing Home Sales at 4.75 million units in September 2012 on a seasonally-adjusted, annualized basis, an 11 percent increase from one year ago.

An “existing home” is a home that’s been previously occupied; a resale.

The reading marks the second-highest tally of the year — second only to August 2012 when 4.83 million homes were sold on a seasonally-adjusted, annualized basis. The real estate trade association reports that there are now just 2.32 million previously-occupied homes for sale nationwide.

It’s the thinnest national home supply since March 2005 and, at today’s sales pace, all 2.32 million homes would sell in 5.9 months.

A 6.0-month home supply is thought to represent a market in balance. September’s home supply, therefore, suggests a market which favors sellers. Buyers in many U.S. markets may have noticed this shift. Multiple-offer situations are increasingly common and “right-priced” homes are selling quickly.

The median Time on Market is down 31 percent from last year to 70 days nationwide.

Meanwhile, for purchasers of foreclosures and short sales, September Existing Home Sales report included interesting data on the relative value of buying “distressed” property :

Foreclosures sold at an average discount of 21% to market value last month
Short sales sold at an average discount of 13% to market value last month

And, although distressed homes remain a large part of the U.S. housing market, their relative size is shrinking.

In September, foreclosures and short sales accounted for roughly 1 in 4 home sales. Earlier this year, that figure was 1 in 3.

For today’s home buyer, September’s Existing Home Sales report may be a “buy signal”. With home supplies down and demand for homes rising, home prices are poised to increase through the last three months of 2012 and into the start 2013.

23 10, 2012

The Most Expensive U.S. ZIP Codes (2012 Edition)

Most expensive ZIP codes in the U.S. Since late-2011, home values have climbed in many U.S. markets.

The government’s Home Price index puts the increase at +3.7% an annual basis and the National Association of REALTORS® shows home sale prices up 11% since last year.

The price at which a home sells is determined by the economic force of supply-and-demand but location and amenities matter, too; establishing a baseline from which supply-and-demand can work.

Using data compiled by real estate market data firm Altos Research, Forbes Magazine recently presented America’s 10 most expensive ZIP codes for 2012. California and the New York Metro area dominate the list.

New York, NY (10065) : $6,534,430
Alpine, NJ (07620) : $5,745,038
Atherton, CA (94027) : $4,897,864
Sagaponack, NY (11962) : $4,180,385
Hillsborough, CA (94010) : $4,127,250
New York, NY (10014) : $4,116,506
Los Altos Hills, CA (94022) : $4,016,050
New York, NY (10021) : $3,980,829
Rolling Hills, CA (90274) : $3,972,500
New York, NY (10075) : $3,885,409

As an illustration of how home prices have climbed since Forbes publishes last year’s Most Expensive ZIP code list, this year’s #10 — Upper East Side, New York City, New York — would have ranked third in 2011.

The Forbes list may be interesting but, to home buyers or sellers , it’s far from the final word in home values. Real estate remains a local market which means that — even within a given ZIP code — prices can vary based on street and neighborhood, and home characteristics.

Look past the general data and get to the specifics. Talk to your real estate agent for local market pricing.

Previous 212223 Next

MichaelM

About Michael Minkoff