Existing Home Sales Report Shows Highest New Home Inventory Since January 2012

The National Association of REALTORS reported that existing home sales for July came in at 5.39 million on a seasonally adjusted annual basis. July's reading exceeded both expectations of 5.21 million existing homes sold and June's reading of 5.06 million homes sold.

This suggests good news for home buyers who've been constrained by limited supplies of homes for sale.

As home prices continue increasing in many areas, more homeowners are likely to list their homes for sale. Existing home sales for July rose by 6.80 percent year-over-year.

The Federal Housing Finance Agency Home Price Index reported a 7.70 percent year overyear increase in prices for homes financed by Fannie Mae or Freddie Mac.

This reading was slightly higher than May's year-over-year reading of a 7.60 percent increase in home prices.

New Home Sale Inventories Also Growing

New home sales for July dropped by 13.40 percent to a seasonally adjusted annual reading of 394,000; this was lower than expectations of 485,000 new homes sold, but this expectation was based on June's original reading of 497,000 new homes sold. June's reading has been adjusted to 455,000 homes sold, which likely would have resulted in a lower expectation.

New home sales were lower in all four U.S. regions:

-16.1 percent in the West

-13.4 percent in the South

-12.9 percent in the Midwest

- 5.7 percent in the Northeast

While this isn't great news for developers and home builders, supplies of new homes for sale jumped from a 4.30 month supply of new homes in June to a 5.20 month inventory of available new homes in July. This was the highest inventory of available new homes since January 2012.

Monthly New Home Sales Continue Upward Trend

Month to-month sales of new homes tend to be volatile, but July's year-over-year home sales were 6.80 percent above new home sales in July 2012.

Higher mortgage rates likely stifled sales, but slower sales would increase inventories of available homes. More homes available would help ease constraints on buyers and level then playing field for home buyers who have been competing for few homes in strong seller's markets.

Rising mortgage rates could continue, especially if the Federal Reserve begins tapering its $85 billion in monthly bond purchases, a program known as quantitative easing. The Fed has announced that it may start reducing the QE program before year-end.

When QE purchases are reduced, securities prices can be expected to fall due to less demand, and mortgage rates can be expected to rise.

How To Choose The Right Neighborhood When Buying A Home

The old real estate cliche' about "location, location, location" is true, as the area of the city where your home is located will have an impact on its future value as well as your lifestyle.

So what factors should you consider when you are choosing which neighborhoods to house hunt within?

Proximity to Your Daily Needs

If you work downtown, living out in the suburbs means that you will be adding time for a commute onto your day.

While this might be worth the cheaper prices for properties out of the town center, it is something to consider when making your decision.

You will also need to consider whether the house is near shopping centers, schools, doctors, dentists and other services that you will need regularly.

Planned Developments

When you are choosing a neighborhood to buy in, do some research into what developments are planned in the future for that part of town.

For example, you might be able to get a cheap price on a home that is out of the way, but a new proposed highway leading straight into the town center that will be built in the next five years could increase property values considerably.

Overall Atmosphere

Take a walk around the neighborhood where you are considering buying and get a sense of the overall atmosphere. Are there a lot of families living there? Are there green places to relax? Are people friendly and saying hello to you?

You want to live in a place where you feel welcome and comfortable.

Property Values

Different neighborhoods will have a range of house prices and you will want to look for something with the right balance of value.

Some areas of town will be very expensive but very nice; other areas will have cheap house prices but might not be as pleasant to live in. Take the time to find the neighborhood that is in the middle, where you will find the right house, and neighborhood, at a good price.

These are just a few of the factors to consider so that you can choose the right neighborhood to buy in.

For more information about buying a Marietta home, feel free to contact your trusted mortgage professional today. 

RealtyTrac Report Shows Home Prices Increasing At Highest Rate Since 1977

U.S. housing markets continue to drive the economic recovery according to data released by RealtyTrac Inc.

National home prices rose by 11.90 percent year-over-year for June.

48 states reported rising home prices with only Delaware and Mississippi reporting lower home prices. Nevada led the states with a 26.50 percent gain over June 2012.

Cities also fared well on housing prices; 99 of the 100 largest U.S. cities reported gains in home prices.

Rising Home Prices And Mortgage Rates, Short Supply Of Homes

According to Mark Fleming, chief economist for CoreLogic, home price trends are rising at their fastest pace since 1977. While good news for sellers, homebuyers may find fewer affordable options over time while also contending with rising mortgage rates.

In spite of rapidly rising home prices, national home prices remain about 19 percent below their peak in April 2006.

Why The Shortage Of Available Homes?

Some homeowners are hoping to recoup losses on their homes before listing them for sale. This could be a risky decision, as many economists have previously characterized the last peak of the housing market to be a "bubble," or an abnormal spike in home values. 

In some markets cash buyers are snapping up homes and making it difficult for mortgage-dependent homebuyers to compete.

Another common scenario that presents challenges to home buyers in areas where homes are in high demand occurs when there are multiple purchase offers for one home.

Buyers who rely on mortgage loans for financing their home purchase can improve their chances by being pre-approved for a mortgage before shopping for a home.

Fewer Foreclosed Homes Contribute To Rising Home Prices

RealtyTrac estimates that 500,000 home mortgages will be foreclosed this year. This is approximately 25 percent lower than the number of 2012 residential foreclosures.

Bank-owned homes are typically offered at lower prices and with incentives such as direct financing, but most are sold as-is with no warranties or guarantees as to their condition.  Multiple foreclosed homes within a community can drag down home prices, so fewer foreclosed homes is positive for homeowners and communities alike.

Want To Buy A Home? Don't Give Up

Rising mortgage rates and home prices can present challenges, but working with your trusted mortgage professional can help with finding an affordable home. Programs are available for assisting eligible first-time buyers with their down payment and closing costs.

Adjustable-rate mortgage loans that provide a low fixed rate for a specified introductory period provide an alternative to higher payments required of a fixed-rate mortgage. An adjustable-rate mortgage may be a good option for first-time buyers who plan to "move up" within a few years. 

For assistance in finding an affordable home please feel free to reach out to your trusted mortgage professional today.

Case Shiller Home Price Index Shows Rising Prices For May 2013

The S&P/Case-Shiller Home Price Index (HPI) released Tuesday presented solid evidence that the housing recovery continued during the month of May.

The Case-Shiller 20-City Index showed increasing home prices for all 20 cities.

Highest Year-Over-Year Gains Included Theses Cities:

• San Francisco, CA 24.50 percent
• Las Vegas, NV 23.30 percent
• Phoenix, AZ 20.60 percent
• Atlanta, GA 20.10 percent
• Los Angeles, CA 19.20 percent

In surprising news, Dallas, TX and Denver, CO posted record year-over-year price gains that surpassed their pre-crisis peaks.

Year-over-year home prices in Dallas increased by 7.60 percent and Denver home prices increased by 9.70 percent year-over-year in May.

Home prices grew by 12.20 percent on a year-over year basis in May; this reading fell short of expectations of 12.40 percent, but moved slightly ahead of April's reading of a 12.10 percent year-over year increase.

The Case-Shiller HPI is based on a three-month rolling year-over-year average of home prices in the cities surveyed.

Cities Post Month-To- Month Price Gains 

On a seasonally-adjusted month-to-month basis, home prices rose by 1.00 percent in May as compared to April. Expectations were for a 1.40 percent increase over April's reading, which came in at 1.70 percent.

Top Gains From April To May Were Posted By These Cities:

• San Francisco, CA 4.30 percent
• Chicago, IL 3.70 percent
• Atlanta, GA 3.40 percent
• San Diego, CA 3.10 percent
• Seattle, WA 3.10 percent

Analysts noted that home prices for two metro areas in Florida surpassed year-over-year gains in Washington, D.C.; this illustrates home values shifting geographically.

Miami home prices posted a month-to gain of 2.00 percent and a year-over-year gain of 14.20 percent.

Tampa, FL home prices posted a month-to-month gain of 1.80 percent on a year-over-year gain of 10.90 percent.

Washington, D.C. home prices gained 2.00 percent month-to-month in May, but only gained 6.50 percent year-over-year.

Rising Mortgage Rates Could Slow Price Momentum

It's important to understand that the data in the Case-Shiller HPI lags a couple of months behind current market conditions; the latest numbers were compiled prior to mortgage rates spiking. Economists expect that the impact of higher mortgage rates won't be seen in home prices until fall.

Higher mortgage rates are expected to slow home sales. If the demand for homes falls due to higher mortgage rates, inventories of available homes would expand, which would create competition among home sellers and potentially lead to lower home prices.

For any questions regarding your mortgage rate and buying a home feel free to contact your trusted mortgage professional today.

Existing Home Sales: Second Highest Level Since 2009

According to the National Association of REALTORS®, national sales of existing homes in June came in at 5.08 million.

June's reading was reported to be the second highest since November of 2009; this should calm concerns about a lapsing recovery in housing markets.

Summer typically produces the highest prices for existing homes sold, as families seeking larger homes frequently move during summer months.

The June inventory of existing homes improved by 1.90 percent to 2.19 million homes or a 5.20 month supply. June's number of available homes was 7.60 percent lower than in June 2012.

The shortage of available homes has been causing buyers to turn from existing homes to new homes in areas where both available homes and/or land for new construction are in short supply.

Average Home Prices Continue Their Climb Nationally

So the news of more existing homes for sale is good news for home buyers and housing markets that have been held back by an excess of buyers seeking a short supply of available homes.

NAR chief economist Lawrence Yun noted that inventories of existing homes are expected to "broadly favor sellers and contribute to above-normal price growth."

This trend was supported by June's national average price for existing homes at $214,200, which represented a year-over-year increase of 13.5 percent. Rising home prices and mortgage rates continue creating financial challenges for first-time buyers and others seeking affordable home prices and mortgage loans.

Distressed home sales were down from 18 percent in May to 15 percent in June; this is the lowest market share since tracking began in 2008. June sales of distressed homes were significantly lower than in June 2012's reading of 26 percent of existing homes sold.

The National Association of REALTORS® noted that falling levels of distressed sales are contributing to higher prices for existing homes.

FHFA Reports Home Prices Rise In May

The Federal Housing Finance Agency (FHFA) reported Tuesday that prices for homes financed by Fannie Mae and Freddie Mac rose by 0.70 percent in May as compared to April's downwardly revised 0.50 percent increase in home prices.

According to the FHFA Housing Price Index (HMI), home prices were up by 7.30 percent year-over-year in May, and are roughly equal to home prices reported for January 2005. May's home prices remained 11.20 percent below peak prices reported in April 2007.

May's FHFA data demonstrated steady growth of home prices for all nine census divisions on a year-over-year basis with home prices increasing from 2.70 percent to 15.80 percent in May.

Case-Shiller Index Verifies Home Value Gains Through Q3 2012

The housing market continues to expand.

According to the S&P/Case-Shiller Index, which was released earlier this week, U.S. home prices rose in September for the sixth straight month, climbing 0.3% as compared to the month prior.

On an annual basis, values are higher by 3.0%.

The Case-Shiller Index findings are a composite reading of 20 U.S cities, 17 of which showed home price gains in September. Detroit and Washington D.C. showed slight declines, and New York City showed no change.

Leading the recovery, though, appears to be Phoenix, Arizona. The previously hard-hit city has seen home values gain 20.4% over the last 12 months. Also noteworthy is that Atlanta, Georgia reversed 26 consecutive months of home value declines in September, posting a +0.1% annual growth rate.

Average U.S. home prices have climbed back to mid-2003 levels.

On a month-over-month basis, value change by city varied. San Diego, California and Las Vegas, Nevada both posted gains of 1.4 percent from August, leading the Case-Shiller Index's 20 tracked cities. Minneapolis, Minnesota and Phoenix showed gains of 1.1 percent.

Los Angeles, California rounded out the Top Five, posting a 1% gain month-over-month.

Despite the index's strong findings, however, we should remember to temper our expectations. The Case-Shiller Index -- like most home value trackers -- is wildly flawed. Buyers in Marietta should follow its gospel with caution.

Here's why.

First, the Case-Shiller Index tracks values for single-family homes only. As a result, it doesn't account for multi-unit homes or for condos and co-ops. This is a big deal in cities such as Chicago and New York where high-rise units are common.

Another flaw in the Case-Shiller Index is that it's 60 days delayed. It's nearly December yet we're still reviewing data from September. In housing market terms, September was a different market. Real-time data trumps data from last season. 

That said, the long-term trends as shown by the Case-Shiller Index, are overwhelmingly positive. As a Case-Shiller Index spokesperson remarked, "It is safe to say we are now in the midst of a recovery in the housing market."

What's Ahead For Mortgage Rates This Week : July 25, 2011

Mortgage markets worsened last week as the Greek sovereign debt situation came closer to final resolution, and as the U.S. housing market showed signs of life.

After many weeks, European leaders agreed on a financial package for Greece that featured favorable loan terms designed to slow Eurozone contagion, along with a built-in, 37 billion euro "haircut" for private-sector investors.

The accord pleased Wall Street. Equities rallied after the announcement. Mortgage bonds sank.

Bonds also sank after a strong home builder confidence report Monday. 

Last week, conforming and FHA fixed mortgage rates increased in Georgia and for the first time in 3 weeks. Adjustable-rate mortgages slipped slightly.

The interest rate spread between the Freddie Mac 30-year fixed rate and 5-year ARM is back near its all-time high.

This week, mortgage rates will be guided by Congress's on-going U.S. debt ceiling debate. The United States government is expected reach its legal $14.294 trillion debt limit August 2, 2011. Congress must either vote to raise the debt ceiling, or take steps to reduce debt prior to August 2.

The debt ceiling was last raised February 12, 2010.

It's unclear in which direction Congress will vote. Therefore, mortgage rates may be erratic until a deal is reached. If the debt limit is raised, expect mortgage rates to rise. This is because carrying high levels of debt can devalue the U.S. dollar and mortgage bonds are less valuable as the dollar weakens.

On the other hand, if Congress votes to make cuts in the budget, mortgage rates should fall. This is because fewer treasury securities will be issued, creating fewer inflationary pressures on the U.S. economy. Inflation is linked to higher mortgage rates.

Also this week : New Home Sales (Tuesday), Pending Home Sales (Thursday), Consumer Sentiment (Friday), plus Treasury auctions of 2-year, 5-year and 7-year notes. Each event can move mortgage rates so be ready to lock at a moment's notice. 

Mortgage rates remain low. By August 2, they could be much higher.