The Long-Term Trendline For Existing Home Sales Points To A Housing Recovery

The Long-Term Trendline For Existing Home Sales Points To A Housing Recovery

The housing market continues to surprise.  Last week, the latest good news came in the form of the monthly Existing Home Sales report.
An "existing home" is a home sold by an existing owner as opposed to a developer.  It's non-new construction property.
The data on Existing Home Sales was noteworthy for its trends:

1. Sales volume rose over four straight months for the first time in 5 years
2. Sales volume rose year-to-year for the first time in 4 years
3. Median home prices fell for the first time since April

Furthermore, first-time home buyers and buyers of "distressed" homes accounted for nearly one-third of the market activity each.
But, before we declare a bottom in housing, it's important that we remember the First Rule of Real Estate -- All Real Estate Is Local.
The Existing Home Sales report is not neighborhood-specific.  It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real estate, let alone neighborhood ones.
This is the primary reason why on-the-ground real estate agents are better sources for a market pulse versus a report from a national trade group.  The national group can't know the happenings of every street and every home in a market.
That said, however, the national data isn't completely useless. 
Looking at the long-term patterns in the Existing Home Sales report, we can infer that ample supplies, low mortgage rates and tax credits are spurring home sales in a lot of U.S. markets.
Eventually, this will lead home prices higher.

MortgageMonday.com says Loan Modification Might Not Be an Option

A Mortgage Modification Might Not Be an Option

All the news and TV is filled with loan modification offers about President Obama’s Making Home Affordable plan, and in a nation where over 3 million people are past due on their mortgage payments, a solution to their woes is something worth talking about. Loan modification is being pitched as a way to help troubled homeowners reverse their progression toward a short sale or foreclosure.

While loan modification may be a perfect recourse for some, it should be noted that not all homeowners will qualify for a loan modification and even then, some who do would be better served pursuing a different option.

In order to qualify for a loan modification your mortgage must have originated before January 1, 2009, you must live in the home, your monthly mortgage payment must be more than 31% of your pretax income, you must prove financial hardship, and the amount you owe on your home cannot exceed $729,750. If you do qualify for loan modification, your loan servicer will reduce the interest rate on your mortgage until your monthly payments drop below the 31% threshold. This new interest rate can go as low as 2% but if that is not enough to get below 31% they may extend the life of the loan or offer to defer a portion of the amount you owe until the loan matures. Call us we are the experts! MortgageMonday.com

Home Prices Keep Rising, Rising, Rising

Home Prices Keep Rising, Rising, Rising

18 of 20 markets tracked by the Case-Shiller Index showed rising home values in June. It's the 5th consecutive month with strong numbers and the best showing for the benchmark housing index since home values began deflating in 2006.

Some would argue it's a sign that housing has finally bottomed out. Even Case-Shiller representatives acknowledge that home prices are "on an upswing".

Despite the Case-Shiller Index's popularity with economists and the press, though, it's falls short of being a perfect housing indicator. As examples:

1. Its data is reported with a 2-month lag
2. Its sample set includes just 20 U.S. cities
3. Real estate isn't a "national" market -- it's local

Nevertheless, flaws aside, Case-Shiller is still important. It helps identify broader trends in housing and many people believe the housing is the keystone of the economy right now.

This is why June's Case-Shiller Index gives cause for hope. The nascent housing recovery has a long road ahead but June's Case-Shiller data shows that we're heading in the right direction.