Published: May 27, 2009

WASHINGTON — A real estate group says sales of previously occupied homes rose modestly from March to April as buyers swooped in to take advantage of prices that were 15.4 percent below year-ago levels.

The National Association of Realtors said today that home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March.

The results slightly beat economists’ forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters.

The median sales price plunged to $172,000, down from $201,300 in the same month last year. That was the second-largest drop on record after January, when prices fell 17.5 percent.

via April existing home sales rise 2.9 percent | Richmond Times-Dispatch.

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Single-family home construction posted a modest rebound in April, raising hopes that the three-year slide in housing is leveling off. But a bulging supply of unsold homes, record levels of foreclosures and still-falling home prices suggest that a sustained recovery isn’t likely until next spring at the earliest.

The Commerce Department said yesterday that construction of homes and apartments fell 12.8 percent last month to a seasonally adjusted annual rate of 458,000 units. That’s the lowest pace on records going back a half-century.

Applications for new building permits dropped 3.3 percent to an annual rate of 494,000, also a record low.

All of last month’s weakness came in the volatile multifamily part of construction. By contrast, single-family construction and permits both rose, which economists took as a hopeful sign that this bigger sector of home construction is stabilizing.

. . .  . .

The government report yesterday showed that multifamily construction plunged 46.1 percent to an annual rate of 90,000 units after a 23 percent fall in March. Permits for multifamily construction dropped 19.9 percent to 121,000 units.

Analysts said apartment construction is being hurt by a glut of condominiums on the market and by tightening credit conditions for commercial real estate.

Construction of single-family homes rose 2.8 percent in April to an annual rate of 368,000. That followed a 0.3 percent gain in March and no change in February.

Building permits for single-family homes rose 3.6 percent to a rate of 373,000 last month.

via Housing slump could be near bottom | Richmond Times-Dispatch.

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Published: May 4, 2009

WASHINGTON — The National Association of Realtors says pending U.S. home sales rose from February to March as buyers took advantage of deeply discounted prices and low interest rates.

The real estate group today said its seasonally adjusted index of pending sales for previously occupied homes rose 3.2 percent to 84.6 in March. The index was 1.1 percent above last year’s levels and has risen for two straight months after hitting a record low in January.

The index, which started in 2001, tracks signed contracts to purchase existing homes. Typically there is a oneto two-month lag between a contract and a done deal, so the index is a barometer for future home sales.

via Pending home sales up 3.2 percent in March | Richmond Times-Dispatch.

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A. A short sale, in which you negotiate with the bank to sell your home for less than you owe on your mortgage, will have a dramatically negative affect on your credit.

A consumer who has been through a short sale could see a drop in her credit score of up to 200 points, essentially the same decrease as if the homeowner had gone into foreclosure, says John Ulzheimer, president of consumer education for Credit.com.

And like a foreclosure, the negative mark will pull down the score for seven years.

That said, if you’re underwater on your mortgage and you need to move, a short sale is a better option than foreclosure.

Going through foreclosure will make it very difficult for you to get a loan for at least three to five years; if you’ve done a short sale, you may be able to qualify for a new mortgage within two years.

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The trade group said first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the median, the Realtors said.

The median price for the latest quarter is down 26% from a peak of $227,600 in the third quarter of 2005. The latest median price was down from a year earlier in 134 of the 152 metro areas included in the survey.

Source: U.S. Median House Price Declines 14% – WSJ.com.

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The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to data released Wednesday.

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the Irvine, Calif.-based foreclosure listing firm began its report in January 2005.

About 63,900 homes were repossessed in April, down 11 percent from about 71,700 in March, RealtyTrac said. But the mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac, together with many other lenders.

On a state-by-state basis, Nevada had one in every 68 households receive a foreclosure filing, down 18 percent from March but still the nation’s highest rate. In Florida, one in every 135 households received a filing in April. For California, the rate was one in every 138 households.

Rounding out the top 10 were Arizona, Idaho, Utah, Georgia, Illinois, Colorado and Ohio.

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Published: May 11, 2009

We might be looking at a lost generation for U.S. home values.

Far too many analysts are calling a bottom to the housing market after home prices in 20 metropolitan areas declined at a slower pace in February, according to the Standard & Poor’s/Case-Shiller Index.

Don’t be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story.

You won’t see a widespread housing rebound in an economy in which 600,000 jobs a month are lost and foreclosures ravage the most overleveraged areas. These are just the visible barriers to a recovery.

Mortgage lending also has been an unusually tightfisted process of late. Lenders are demanding a 20 percent deposit for home purchases and want impeccable credit ratings. About 45 percent of U.S. banks surveyed by the Federal Reserve said they had “tightened their lending standards on prime mortgages.” I suspect that number is much higher.

Then there’s the reality that the market is glutted. A record 19 million homes stood empty at the end of 2008.

via Market realities mean rebound is years away | Richmond Times-Dispatch.

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The sale of previously-owned homes in Virginia fell 4.7 percent in the first quarter from the same period a year ago, according to a report released this morning from the Virginia Association of Realtors.

The median sales price, with half the houses selling for more and half for less, was $223,221, down 14.1 percent from the year-earlier period.

But the price was up 7.8 percent from the last quarter of 2008, indicating that prices may have reached bottom and are rising.

The number of unsold homes on the market at the end of March nationally fell 1.6 percent from a month earlier to 3.7 million. But due to the slumping sales pace, it would still take almost 10 months to rid the market of all of those properties.

via Reports cite Va., U.S. home sales declines | Richmond Times-Dispatch.

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And finally [week of February 8, 2009] The PMI Group of San Francisco announce it won’t insure mortgages originated by mortgage brokers!

If that’s not punative…I don’t know what is. This could be the last straw for mortgage brokers. How is a mortgage broker supposed to make a living only doing loans that don’t require mortgage insurance?

via Mortgage Brokers Get The Final Dagger In The Heart.

There are several other good articles here about the fact that mortgage brokers as an industry are getting cut out

• Mortgage Brokers Getting All Time Low Of Origination Market Share
• Are Mortgage Brokers An Endangered Species?

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Sure, they changed the rules to back to investors being able to get 10 loans, but the qualifications are ridiculously strict.

What do you think are the implications for your retail buyers?

Under Fannie’s (Federal National Mortgage Association) and Freddie’s (Federal Home Loan Mortgage Corp.) new guidelines, even applicants who assumed their FICO credit scores would get them favorable rates will be charged more unless they come up with down payments of 30 percent or more.

For example, a buyer with a 699 FICO score who can bring a sizable down payment of about 25 percent to the table will now get hit with a 1.5 percent “delivery” fee at closing under the new guidelines.

A buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO — once considered a platinum guarantee of the best rates available — will get dinged with a quarter-point add-on.

via Fannie Mae, Freddie Mac to hike fees | Richmond Times-Dispatch.

The rules go on to share that condos will require 25% or receive a .75% penalty fee, no matter how high their score is.  Duplexes that are owner occupied on one side, and rented on the other, will get a 1% point charged.

Cash out refis will be charged up to 3 points (3%).

Of course, realtors are mad.

Real estate investors who are remaking homes available to first time home buyers are finding that it’s not the availability of buyers that is the problem.  It’s Fannie and Freddie making it darn near impossible to get a qualified buyer.

So what?

This suggests that a flood of lease options might be your exit strategy — buyers who cannot get funded now, but when the credit markets stablize, they might.

What do you think?

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