The number of people who signed contracts to buy homes rose in August for the second straight month. The National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3.

These positive figures help alleviate many industry onlookers’ post-Tax Credit concerns.

Congress Extends Higher Loan Limits:
Congress has extended a policy that was due to expire that allows for higher loan limits.  The maximum size of loans guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration will now run through the end of 2011.

The higher loan limits of nearly $730,000 are designed to continue to drive growth in the more expensive, or higher cost areas like New York and San Francisco.  The vast majority of homes do not fall into one of the designated “high cost” areas, loan limits for those homes will remain at $417,000.

What Happened to Rates Last Week:

Mortgage backed securities (MBS) gained +6 basis points last week causing 30 year fixed rates to decrease from the previous week.  We had a very volatile week with price swings of 53 basis points on some days. In the end, we closed out the week very close to where we started.  The MBS market reacted favorably to some U.S. Treasury auctions which enjoyed some very strong demand.  The market also moved upward on weaker than expected ISM Manufacturing data.

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 the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, “Prompt Decision for Qualification of Short Sale Act of 2010,” is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.

The National Association of REALTORS are a strong supporter of the bill. Their President, Vicki Cox Golder, said, “The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth. While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times.”

And in a sticky financial situation such as a short sale, where time really counts, this bill comes as welcome news to many homeowners and buyers.

This legislation aims to “require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.” (Library of Congress)

In this bill, the terms “short sale” means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:

• will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
• requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.

Ms. Golder continued, “Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives.”

Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.

Published: September 28, 2010

http://realtytimes.com/rtpages/20100928_shortsale.htm

Enough with the doom and gloom about homeownership.

Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough. This is what “capitulation” looks like. Everyone has given up.

After all, at the peak of the bubble five years ago, Time had a different take. “Home Sweet Home,” declared its cover then, as it celebrated the boom and asked: “Will your house make you rich?”

But it’s not enough just to be contrarian. So here are 10 reasons why it’s good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer’s market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We’re four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor’s Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it’s mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You’ll never catch the bottom. It doesn’t really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

Brett Arends discusses why he thinks now is a particularly good time to buy a home.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What’s not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won’t see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You’ll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you’ll get a tax break on capital gains–if any–when you sell. Sure, you’ll need to do your math. You’ll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

The June 13, 2005 cover of Time.

4. It’ll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You’ll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. “You can tell the ones that have been bought,” said my local guide. “They’ve painted the front door. It’s the first thing people do when they buy.” It was a small sign that said something big.

5. You’ll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you’re better off buying.

6. It offers some inflation protection. No, it’s not perfect. But studies by Professor Karl “Chip” Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That’s valuable inflation insurance, especially if you’re young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

View Full Image

Associated PressA house for sale in Shelby, Ohio.

7. It’s risk capital. No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It’s forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won’t. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn’t a cost. You’re just paying yourself by building equity. As a forced monthly saving, it’s a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That’s below last year’s peak, but well above typical levels, and enough for about a year’s worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the “glut” simply won’t matter: It’s concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won’t have any long-term impact on housing supply in your town.

http://online.wsj.com/article/SB10001424052748703376504575492023471133674.html?mod=WSJ_RealEstate_

Your servicer should be able to tell you if your mortgage is owned by Freddie Mac. If you wish, you may conduct a search using the secured look-up tool below. Please enter your information carefully — a spelling error or other small mistake could cause an uncertain result. Abbreviations, typos, or including the “Street Type” in the “Street Name” field can lead to incorrect results.

https://ww3.freddiemac.com/corporate/

Is it welcome news to the many slowly recovering housing markets? Real estate is waiting on a marked recovery from the recession, and some of the latest regional housing start figures seem to show it could be happening.

“Today’s data show that new housing activity appears to be stabilizing in the wake of the expiration of the home buyer tax credit,” Commerce Secretary Gary Locke said. “However, a healthy economy requires not only a robust housing sector but strong employment and incomes, and President Obama remains committed to developing policies that encourage job creation and broad economic growth.”

“Builders are very reluctant to build more homes in view of the current state of the economy and weak buyer demand,” noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

What does a recovering housing start market, in general, mean for homeowners? As your own local market begins to sprout up new homes, this in turn can increase jobs for the area. It also could indicate builders are confident enough in the local market to even start building. And if builders are confident, then you, as a homeowner could start to see your home value increase, as well as renewed buyers interest.

“Right now the housing market is essentially in a holding pattern,” acknowledged NAHB Chief Economist David Crowe. “As our latest member surveys have indicated, builders are seeing greater hesitancy among potential home buyers who are uncertain about what’s in store for the economy and jobs going forward. That said, favorable home buying conditions including historically low mortgage rates and low house prices should help spur additional demand as the job market gradually improves later this year.”

The two regions with improving housing starts were the Northeast and Midwest, each posting dramatic gains. The Northeast saw an incredible 30.5 percent increase in July, while the Midwest saw an equally impressive 10.7 percent rise.

The Western region of the U.S. saw no change in housing starts, while the South, noted by the NAHB as “the country’s largest housing market,” posted a 6.3 percent decline in July.

But these figures may be deceiving, as the NAHB reports that in reality, “single-family housing production declined 4.2 percent to a seasonally adjusted annual rate of 432,000 units, its lowest mark since May of 2009.” Why are the figures indicating a rise then? This rise in housing production could easily be due to a rise on the multi-family side of housing.

Either way, a rise is a rise, and that is a welcome sign in an ailing economy.

Published: August 20, 2010

http://realtytimes.com/rtpages/20100820_housingstarts.htm

Today our country faces economic challenges not seen since the Great Depression. Questionable lending practices and excessive risk-taking in the mortgage-backed securities market certainly played a significant role, and subsequent declines in home prices and increases in foreclosure rates have led some to question the very value of homeownership itself.

There’s no doubt we need to restructure entities such as Fannie Mae and Freddie Mac, and improve government regulation of the mortgage lending industry. However, owning a home has government support in this country because homeownership benefits individuals and families, strengthens our communities and is integral to our nation’s economy.

The Federal Housing Administration, Federal Home Loan Banks, and Fannie Mae were all created during the Great Depression, the worst economic crisis our country ever faced. Lawmakers back then understood the value of homeownership in fostering communities, creating social stability and building wealth over the long term.

Academic studies have shown the positive social benefits of homeownership, including lower juvenile delinquency rates, lower teen pregnancy rates, and higher student achievement among children of homeowners versus that of non-owners of similar socioeconomic background.

And although some homeowners now owe more on their mortgages than they could sell them for in today’s market, people who bought within their means with the intent to stay in their homes for more than a few years have the opportunity to build financial stability into the future. A fixed-rate mortgage might last 15 to 30 years; renting is forever.

FHA, the mortgage interest deduction, and Fannie’s and Freddie’s role in making long-term, fixed-rate mortgages available make homeownership more attainable for more Americans. Homeownership isn’t for everyone. But anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream, as people in this country have been doing for over 200 years.

Vicki Cox Golder is president of the National Association of Realtors.

http://www.usatoday.com/news/opinion/editorials/2010-06-22-editorial22_ST1_N.htm?csp=obnetwork

ForSaleByOwner.com presents five overlooked reasons why now is a great time to buy a house.

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.

2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back, kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.

3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system—and this is just the opportunity that owners of many desirable properties have been waiting for.

4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market. This ensures that today’s deals will make it over the finish line.

5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by “workforce housing” programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.

For more information, visit www.ForSaleByOwner.com.

http://rismedia.com/2010-08-01/5-smart-reasons-to-buy-a-home-now/#more-48313

Before you even put your home on the market, make sure that all basic repairs are completed. Nothing can turn off a prospective buyer quicker than loose railings, torn screens or missing hardware on cupboard doors. These easy repairs do not cost a lot of money. If a homebuyer sees that the little things are not attended to, they are likely to believe that the larger things are neglected too. Let buyers know that you have pride in your home by making sure that all of the small repairs are taken care of.

Keep your home clean throughout the time it is on the market. In a slow real estate market, it is important to have your home available to show at a moment’s notice. The more often your home is shown, the likelier it is that your home will sell. Keep your home available to your realtor and they will be able to show your home quickly to any buyer that shows interest.

Have your home staged by a professional. Home staging has become a booming business and a professional home stager will help you remove clutter and depersonalize your space. Prospective homebuyers want to picture their family in the home, not yours and a home full of personal clutter will not show off the potential of your home.

Keep pets contained during a real estate showing and make sure that your cat litter box is always clean. Pet owners tend to get used to the odors caused by litter boxes and it is important that you remember to clean it every day. Nothing will turn off a prospective home buyer like a home that smells. Many people are fearful of dogs, especially ones that they do not know. Make sure that you either take your dog with you for a showing or put them on a leash outside.

Be realistic in your expectations of the price you will be able to sell your home. Forget about what could have been if you had sold it last year and focus on what your home is worth now. In a buyer’s market, buyers don’t have to negotiate much. Buyers know that you want to sell your home and a home that is priced too high is likely to be looked over. Ask a fair price for your home to avoid the need for too much negotiation.

In a slow market, hiring a real estate agent is crucial to get your home sold in a reasonable amount of time. Yes, there are ways you can list your home for sale by owner using the internet, but nothing beats the experience that comes fro a real estate agent who is able to take care of everything in order to sell your home.

Selling your home can be a stressful time, but you can be successful in selling your home if you remain patient, reasonable and flexible. There are buyers out there and the key is to find them and get them to fall in love with your home.

http://www.realestateabc.com/insights/sell-your-home.htm