NAR Says Economic Stimulus Legislation Will Help Jumpstart Sluggish Housing Market
WASHINGTON, January 29, 2008 -
The National Association of Realtors congratulated the U.S. House of Representatives and President Bush for their bipartisan actions to help families in need, the housing market, and the U.S. economy.
“We believe the economic stimulus bill approved by the House today is a good legislation in that it can quickly be signed into law, quickly be implemented, and therefore, would quickly have an impact on families and the nation’s economy. We are pleased that both the Federal Housing Administration (FHA) and the Fannie Mae and Freddie Mac (GSE) loan limits have been increased, even if only temporarily,” said Richard Gaylord, NAR president.
NAR has been actively engaged in promoting an increase to the loan limits for FHA and the GSEs for many months. “Our research highlights that increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home,” Gaylord said. “In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market. While such an increase will not solve the full range of housing challenges, it will play an important role in improving the nation’s economy,” said Gaylord
An economic impact study conducted by NAR earlier this month estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated. “These are real results and can have an immediate and sustainable impact for families across our country,” said Gaylord.
“We are also pleased that the House made the GSE limits retroactive to July 1, 2007. This too will provide greater liquidity to the market by allowing Fannie Mae and Freddie Mac to purchase more mortgages,” Gaylord said.
Additionally, NAR recognized the favorable tax treatment in the bill for certain commercial building improvements and noted the immediate positive impact this could have on cash flow.
While pleased with the quick action to pass the economic stimulus package, NAR urged Congress to complete broader FHA reform legislation. These reforms, including reducing down payment requirements and streamlining certain FHA processes, would make FHA more accessible to many more American families and further jumpstart the housing market. “We would also like to see the increase to the loan limits made permanent and we will continue to work with Congress and the administration to pass legislation that modernizes the FHA making it a more viable alternative, and permanently increases the loan limits for both FHA and the GSEs,” Gaylord said.
The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of residential and commercial real estate industries. NAR is the leading advocate for homeownership, affordable housing and private property rights.
Sunday, February 3, 2008
Sunday, January 13, 2008
Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.
The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.
Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.
There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.
“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.
NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.
The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.
After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.
WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.
The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.
Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.
There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.
“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.
NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.
The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.
After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.
Friday, January 4, 2008
Existing Homes Sales Rise in November - Market Likely Stabilizing!
Existing-Home Sales Rise in November, Market Likely Stabilizing
WASHINGTON, December 31, 2007 -
Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # # 1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4 Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
WASHINGTON, December 31, 2007 -
Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # # 1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4 Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
Tuesday, December 11, 2007
Interest Rates Drop Below 6% !!
Concerns that a severe housing downturn and prolonged credit crisis could rattle consumer confidence and hurt the broader economy contributed to a sharp drop in mortgage rates last week, according to Freddie Mac.
Interest on 30-year fixed loans sank to 5.96 percent from 6.10 percent last week, landing at the lowest point seen since September 2005. Borrowing costs on 15-year fixed products fell to 5.65 percent from 5.73 percent over the week and five-year adjustable-rate mortgages were down to 5.75 percent from 5.86 percent, but one-year ARMs bucked the southward trend by bumping up to 5.46 percent from 5.43 percent.
"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," said Freddie Mac chief economist Frank Nothaft.
[SOURCES: Freddie Mac; Information, Inc.]
Interest on 30-year fixed loans sank to 5.96 percent from 6.10 percent last week, landing at the lowest point seen since September 2005. Borrowing costs on 15-year fixed products fell to 5.65 percent from 5.73 percent over the week and five-year adjustable-rate mortgages were down to 5.75 percent from 5.86 percent, but one-year ARMs bucked the southward trend by bumping up to 5.46 percent from 5.43 percent.
"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," said Freddie Mac chief economist Frank Nothaft.
[SOURCES: Freddie Mac; Information, Inc.]
Sunday, December 9, 2007
Mortgage 'Freeze" Buys Time for Some
The mortgage freeze unveiled by President Bush may provide only limited relief to thousands of financially strapped homeowners, and may not be enough to cure the foreclosure crisis, advisers who work with troubled borrowers in Middle Tennessee said.The Bush administration's plan, which would freeze the interest rates on many adjustable-rate mortgages at their lower introductory levels, excludes many who need help the most, including those in foreclosure and those already behind on adjustable-rate monthly payments, officials from several Nashville-area housing organizations said.The plan, which has the support of major banks, relies on borrowers and lenders to come together to revise terms of loans before adjustable loans accelerate — sometimes to double-digit rates.
FREEZE FACTS:
• The mortgage industry has agreed to freeze interest rates for many before their loans reset to higher rates.
WHO IT AFFECTS:
• Homeowners must be current on payments and their adjustable rate mortgages must still be under introductory rates to take part.
• The Freeze applies to loans made at the start of 2005 through July 30 of this year and scheduled to rise to higher rates between Jan. 1, 2008, and July 31, 2010.
FREEZE FACTS:
• The mortgage industry has agreed to freeze interest rates for many before their loans reset to higher rates.
WHO IT AFFECTS:
• Homeowners must be current on payments and their adjustable rate mortgages must still be under introductory rates to take part.
• The Freeze applies to loans made at the start of 2005 through July 30 of this year and scheduled to rise to higher rates between Jan. 1, 2008, and July 31, 2010.
Foreclosures Bring Surge in Home-Rescue Scams
The Legal Aid Society of Middle Tennessee used to get 10 to 12 calls a month about such scams, managing attorney David Tarpley said. Now the office gets about five to 10 a week.
Housing advocates fear the number of potential foreclosure rescue victims could be staggering. There's no way to track how many people are scammed because some seek private help or never report it at all. "What we are talking about is literally thousands of people who may be receiving and responding to these offers every day," said Tracey McCartney, executive director of the Tennessee Fair Housing Council. "And people will do things when they are desperate that are not in their best interest.
You just aren't thinking that clearly, and you're being circled by vultures."McCartney said foreclosure rescuers comb newspaper listings of homes due to be sold at auction, looking for victims.
Tennessee law requires such legal notices. Legal Aid has fought only a few home foreclosure rescue cases, Tarpley said. "They require a lot and can get into some very big, very deep issues," he said. "No one is going to admit that they have scammed your client. They are all going to say that this is a matter of free enterprise, your client was free to do what he or she did and there's nothing wrong with making a profit.
"Some of the “rescuers” offer lease-purchase agreements with terms the original homeowner can't meet, some foreclosure rescuers promise to make calls or take other actions that can "delay" a foreclosure, advocates say. They may call the mortgage company and say the homeowner is going to file for bankruptcy, which can delay the foreclosure 30 to 60 days. It's a call the homeowner could make himself, and sometimes the rescuer never makes the call at all.
The money paid the rescuer could have been used toward back payments. Others use bait-and-switch operations in which homeowners are not told that they are surrendering ownership by taking the rescue loan.
"There are a range of 'rescue' products out there that are not in and of themselves illegal, just deeply deceptive and only make a bad financial situation worse," McCartney said. "Given what so many Americans are facing, people need to be aware, be very aware.
"The FBI has identified foreclosure rescue offers and deals as an emerging type of fraud. Here are tips for those facing foreclosure:
• If you are not behind on payments but anticipate you will soon be, sell the house on the open market, not to a quick sale for cash company.
• If you are behind, call your lender and ask for time or a new payment plan.
• If considering a deal, request completed copies of any foreclosure rescue-related agreements to read and review days before they are due to be signed. At minimum, demand the time to read them at your own pace before signing.
• Make sure that you understand all the terms of any agreement, know what you must pay each month and over the life of the deal and what you stand to lose if you do not.
• Do not sign incomplete documents.
• If you receive a foreclosure notice, do not ignore it. Seek advice from a nonprofit agency or organization that does not stand to profit directly from your decisions.
Source: Legal Aid Society of Middle Tennessee, Tennessee Fair Housing Council, National Association of Attorneys General
Housing advocates fear the number of potential foreclosure rescue victims could be staggering. There's no way to track how many people are scammed because some seek private help or never report it at all. "What we are talking about is literally thousands of people who may be receiving and responding to these offers every day," said Tracey McCartney, executive director of the Tennessee Fair Housing Council. "And people will do things when they are desperate that are not in their best interest.
You just aren't thinking that clearly, and you're being circled by vultures."McCartney said foreclosure rescuers comb newspaper listings of homes due to be sold at auction, looking for victims.
Tennessee law requires such legal notices. Legal Aid has fought only a few home foreclosure rescue cases, Tarpley said. "They require a lot and can get into some very big, very deep issues," he said. "No one is going to admit that they have scammed your client. They are all going to say that this is a matter of free enterprise, your client was free to do what he or she did and there's nothing wrong with making a profit.
"Some of the “rescuers” offer lease-purchase agreements with terms the original homeowner can't meet, some foreclosure rescuers promise to make calls or take other actions that can "delay" a foreclosure, advocates say. They may call the mortgage company and say the homeowner is going to file for bankruptcy, which can delay the foreclosure 30 to 60 days. It's a call the homeowner could make himself, and sometimes the rescuer never makes the call at all.
The money paid the rescuer could have been used toward back payments. Others use bait-and-switch operations in which homeowners are not told that they are surrendering ownership by taking the rescue loan.
"There are a range of 'rescue' products out there that are not in and of themselves illegal, just deeply deceptive and only make a bad financial situation worse," McCartney said. "Given what so many Americans are facing, people need to be aware, be very aware.
"The FBI has identified foreclosure rescue offers and deals as an emerging type of fraud. Here are tips for those facing foreclosure:
• If you are not behind on payments but anticipate you will soon be, sell the house on the open market, not to a quick sale for cash company.
• If you are behind, call your lender and ask for time or a new payment plan.
• If considering a deal, request completed copies of any foreclosure rescue-related agreements to read and review days before they are due to be signed. At minimum, demand the time to read them at your own pace before signing.
• Make sure that you understand all the terms of any agreement, know what you must pay each month and over the life of the deal and what you stand to lose if you do not.
• Do not sign incomplete documents.
• If you receive a foreclosure notice, do not ignore it. Seek advice from a nonprofit agency or organization that does not stand to profit directly from your decisions.
Source: Legal Aid Society of Middle Tennessee, Tennessee Fair Housing Council, National Association of Attorneys General
Tuesday, December 4, 2007
It's YOUR Real Estate Career...
Are you going to ride, drive, follow or sleep??
Let's travel down a little path together...
I've been asked many, many times by Agents "Are you looking for new agents with your firm?" Hey, my answer to that is always "OF COURSE!"... However, I do follow a question like that with a simple "perhaps we can discuss your motivation for wanting to change companies or start your Real Estate Career." "Why not give me a call and we can set up a time to discuss your career direction and needs."
Well, it seems that most will not call me. Some do, but most do not! While they want a change in their career, maybe, just maybe, there is not enough self-motivation, intestinal fortitude or commitment on their part to actually make that change.
At times we all need to "shake up" our careers. Sometimes that may mean making a change to another company or team but at other times it may mean just grabbing ourselves by the socks and reaching down for our own motivation to make something happen. You veterans of the industry know exactly what I'm talking about.
Every veteran Realtor knows that there are going to be up times and down times... the key is to manage those down times and turn them into successful times... Easier said than done!!! But, the difference in a successful Realtor and a mediocre real estate agent is that the successful Realtor "drives" their career and refuses to let their career "drive" them!
Are you at the point that you feel it is time for a change to re-kindle the passion for the career you have chosen? Does your performance indicate that you've reached an impasse and cannot seem to find a way to punch through to the next level? Do you even care?
Well, perhaps you can answer your own question about whether you need a change or if you need to just pull yourself up by your bootstraps and get moving again!
Some Brokers are simply seeking "warm bodies" to fill positions and feel that if a person produces a little, well, that's all well and good... I certainly do not agree with, or practice, that philosophy but if that is what the Broker is seeking, that's exactly what he or she will find.
On the other hand, as a Managing Broker of an office, I seek someone entirely different. I seek an Agent with passion. Someone who is "hungry" enough to make something happen. Someone "committed" enough to carve out their own career instead of riding the coat tails of someone before them. Sure, I like Agents with experience... especially when that Agent can adjust to a new environment and capitalize on the change in a positive way. But, I also like a new Agent who sincerely wants to learn and put what they learn into action!
That is what makes all the difference in the world... putting what you've learned into action. Pick a mentor, follow their lead, take your training seriously and develop a plan of action from training to productive activity... drive it to the next step!
I spent over 22 years in the military. We called that "Training our own relief"... That is to say, pick someone with passion, take them under your wing, show them all the ropes and let them run with it while monitoring them closely to insure they're following all the right protocol. Not worrying that the person may well turn what you teach them into a situation where they take your job. That is what training is all about... making the person successful enough to "take your job!" It does my heart good to see a person grow from virtually nothing to a success! And, who defines success? Each of us define it every day for what we determine is successful... it's different for every person!
Of course many Managing Brokers simply get someone in their office and say "Go, Run, Make Something Happen!"... WOW... that's easy to say to someone who is not sure how to walk yet much less "RUN!" and, inevitably, they fall on their face and don't know how to pick themselves back up... the Agent's fault? Well, yes... the Broker's fault? ABSOLUTELY!
It takes time to nurture a relationship between a Broker and an Agent. The Broker needs to be attentive enough, and provide the appropriate level of training for the individual to be able to make decisions... then, by the same token, the Agent must be aggressive enough and to have enough self-confidence to take the bull by the horns and "drive" it. Sure, some things will fall into your lap... the new Agent then must determine how best to deal with that windfall and turn it into a career-building experience. Not to just sit back and wait for the next windfall... it may not happen again, especially if you are sitting and waiting on it to happen.
That is like obtaining a property listing, putting it on the Multiple Listing Service then sitting back in your chair and waiting until someone sells it! Hey, that works about as good as taking a shower with no soap... some of the dirt will naturally fall off but the built-up grime just continues to stick! And, that's not the service your client has hired you to do... you owe your Principal a Fiduciary Duty! You were "hired" to do a job and sitting there waiting for someone else to do a part of your job is not your best option, I'll guarantee that!
So, where am I going with all of this?... just down a path.
Are you seeking a new experience in your Real Estate career? Are you seeking a new level of production? and, do you have the "intestinal fortitude" to "drive" your career to the next level?
Perhaps we can discuss your motivation... Give me a call... who knows what you can accomplish with guidance, training, support, tools. a grain of self-motivation and a pinch of confidence!?!
If you're just looking to glide along without direction, practicing the "status quo" philosophy of life and not concerned about your success... I'm not the person to call. Perhaps one of the "warm body" Brokers will allow you to hang your license on their wall...
However, if you want to move ahead, I challenge you to locate my contact information and give me a call! The market is here, the opportunity is now and the ball is in your court now... is it time to score, or quit the game? You decide!
Now, you know the rest of the story... Good day...
Let's travel down a little path together...
I've been asked many, many times by Agents "Are you looking for new agents with your firm?" Hey, my answer to that is always "OF COURSE!"... However, I do follow a question like that with a simple "perhaps we can discuss your motivation for wanting to change companies or start your Real Estate Career." "Why not give me a call and we can set up a time to discuss your career direction and needs."
Well, it seems that most will not call me. Some do, but most do not! While they want a change in their career, maybe, just maybe, there is not enough self-motivation, intestinal fortitude or commitment on their part to actually make that change.
At times we all need to "shake up" our careers. Sometimes that may mean making a change to another company or team but at other times it may mean just grabbing ourselves by the socks and reaching down for our own motivation to make something happen. You veterans of the industry know exactly what I'm talking about.
Every veteran Realtor knows that there are going to be up times and down times... the key is to manage those down times and turn them into successful times... Easier said than done!!! But, the difference in a successful Realtor and a mediocre real estate agent is that the successful Realtor "drives" their career and refuses to let their career "drive" them!
Are you at the point that you feel it is time for a change to re-kindle the passion for the career you have chosen? Does your performance indicate that you've reached an impasse and cannot seem to find a way to punch through to the next level? Do you even care?
Well, perhaps you can answer your own question about whether you need a change or if you need to just pull yourself up by your bootstraps and get moving again!
Some Brokers are simply seeking "warm bodies" to fill positions and feel that if a person produces a little, well, that's all well and good... I certainly do not agree with, or practice, that philosophy but if that is what the Broker is seeking, that's exactly what he or she will find.
On the other hand, as a Managing Broker of an office, I seek someone entirely different. I seek an Agent with passion. Someone who is "hungry" enough to make something happen. Someone "committed" enough to carve out their own career instead of riding the coat tails of someone before them. Sure, I like Agents with experience... especially when that Agent can adjust to a new environment and capitalize on the change in a positive way. But, I also like a new Agent who sincerely wants to learn and put what they learn into action!
That is what makes all the difference in the world... putting what you've learned into action. Pick a mentor, follow their lead, take your training seriously and develop a plan of action from training to productive activity... drive it to the next step!
I spent over 22 years in the military. We called that "Training our own relief"... That is to say, pick someone with passion, take them under your wing, show them all the ropes and let them run with it while monitoring them closely to insure they're following all the right protocol. Not worrying that the person may well turn what you teach them into a situation where they take your job. That is what training is all about... making the person successful enough to "take your job!" It does my heart good to see a person grow from virtually nothing to a success! And, who defines success? Each of us define it every day for what we determine is successful... it's different for every person!
Of course many Managing Brokers simply get someone in their office and say "Go, Run, Make Something Happen!"... WOW... that's easy to say to someone who is not sure how to walk yet much less "RUN!" and, inevitably, they fall on their face and don't know how to pick themselves back up... the Agent's fault? Well, yes... the Broker's fault? ABSOLUTELY!
It takes time to nurture a relationship between a Broker and an Agent. The Broker needs to be attentive enough, and provide the appropriate level of training for the individual to be able to make decisions... then, by the same token, the Agent must be aggressive enough and to have enough self-confidence to take the bull by the horns and "drive" it. Sure, some things will fall into your lap... the new Agent then must determine how best to deal with that windfall and turn it into a career-building experience. Not to just sit back and wait for the next windfall... it may not happen again, especially if you are sitting and waiting on it to happen.
That is like obtaining a property listing, putting it on the Multiple Listing Service then sitting back in your chair and waiting until someone sells it! Hey, that works about as good as taking a shower with no soap... some of the dirt will naturally fall off but the built-up grime just continues to stick! And, that's not the service your client has hired you to do... you owe your Principal a Fiduciary Duty! You were "hired" to do a job and sitting there waiting for someone else to do a part of your job is not your best option, I'll guarantee that!
So, where am I going with all of this?... just down a path.
Are you seeking a new experience in your Real Estate career? Are you seeking a new level of production? and, do you have the "intestinal fortitude" to "drive" your career to the next level?
Perhaps we can discuss your motivation... Give me a call... who knows what you can accomplish with guidance, training, support, tools. a grain of self-motivation and a pinch of confidence!?!
If you're just looking to glide along without direction, practicing the "status quo" philosophy of life and not concerned about your success... I'm not the person to call. Perhaps one of the "warm body" Brokers will allow you to hang your license on their wall...
However, if you want to move ahead, I challenge you to locate my contact information and give me a call! The market is here, the opportunity is now and the ball is in your court now... is it time to score, or quit the game? You decide!
Now, you know the rest of the story... Good day...
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