New Home sales up?
The Commerce Department's report on November's new home sales -- due out today -- is forecast to show a 2.3 percent increase to a seasonally adjusted annual rate of 440,000, from 430,000 in October, according to economists polled by Thomson Reuters. First-time buyers will still be able to save up to $8,000, and now homeowners who have lived in their current properties for at least five years can claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must ink a deal by the end of April. Still, some analysts don't think the new deadline will have an immediate impact on sales, because many buyers won't act until the 11th hour approaches. "Buyer traffic is likely to be flat until spring," said Mark Vitner, senior economist with Wells Fargo Securities. On top of that, the National Association of Home Builders said last week its index of industry confidence fell to the lowest level since June, reflecting concern that job losses and a slow economic recovery will
continue to stifle demand. Home resales, meanwhile, are at the highest level in nearly three years. As we reported earlier, the National Association of Realtors said Monday that sales rose 7 percent from October to a seasonally adjusted annual rate of 6.54 million in November.
MBA -- Mortgage applications down
The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 18, 2009 found that mortgage loan application volume decreased 10.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10.9 percent compared with the previous week. The Refinance Index decreased 10.1 percent from the previous week and the seasonally adjusted Purchase Index decreased 11.6 percent from one week earlier. The unadjusted Purchase Index decreased 13.4 percent compared with the previous week and was 32.7 percent lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is down 0.2 percent. The four week moving average is down 1.0 percent for the seasonally adjusted Purchase Index, while this average is up 0.6 percent for the Refinance Index. The refinance share of mortgage activity increased to 75.9 percent of total applications from 75.2 percent the p revious week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.8 percent from 4.1 percent of total applications the previous week. The average contract interest rate for 30-year fixed-rate mortgages remained flat at 4.92 percent, with points increasing to 1.23 from 1.08 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
Income and spending a little higher
The Commerce Department said spending increased 0.5 percent after rising by a slightly downwardly revised 0.6 percent in October. Consumer spending in October was previously reported to have increased 0.7 percent. Analysts polled by Reuters had expected consumer spending, which normally accounts for over two-thirds of U.S. economic activity, to rise 0.6 percent last month. Today's report showed that spending adjusted for inflation rose 0.2 percent in November, adding to the prior month's 0.4 percent gain. Personal income increased 0.4 percent last month, the largest increase since May, after rising 0.3 percent in October. That was a bit below market expectations of a 0.5 percent increase. Real disposable income climbed 0.2 percent in November after rising by the same margin in October. The rise in income saw savings increasing to an annual rate of $525.1 billion, but the savings rate was unchanged at 4.7 percent from the prior month. The personal consumption expenditures price index, excluding food and energy, rose 1.4 percent from a year ago in November. The index, a key inflation gauge monitored by the U.S. Federal Reserve, increased 1.4 percent in October.
Existing home sales up as expected
The National Association of Realtors (NAR) confirmed yesterday that, as expected, existing-home sales rose in November as first-time buyers rushed to close sales before the original November 30 deadline for the recently extended and expanded tax credit. Existing-home sales, including single-family, townhomes, condominiums and co-ops, rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said conditions are optimal for buyers in the current market. “Inventories have steadily declined and are closer to balanced levels, which indicate home prices in many areas are either stabilizing or could soon stabilize and return to normal appreciation patterns,” she said. “This means buyers still have good choices but are purchasing near the bottom of the price cycle with historically low mortgage interest rates. Throw a tax credit on top and it really doesn’t get any better for buyers with secure jobs and long-term ownership plans.” Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply3 at the current sales pace, down from an 7.0-month supply in October.
DS.com -- Undervalued Foreclosures Create Opportunities
As the government looks to further stimulate the housing market in the face of a steadily rising national inventory of HUD foreclosures, huge savings are being realized on these properties, according to Annapolis, Maryland-based Heavy Hammer, Inc. The online networking and consulting company cited a recent study showing government foreclosures are routinely underpriced by 8 to 10 percent and said incentivizing aggressive valuations on these properties by third parties is creating opportunities of a lifetime for savvy first-time homebuyers. In addition, Michael Urbanski, Heavy Hammer CEO, said there are little-known gaps in the rules governing the appraisal process for foreclosure properties. He said only a single appraisal for government foreclosures is required, and acceptance of bids up to 11 percent below asking price is mandatory. “This chronic undervaluing of real estate held by the federal government is good news,” Urbanski said. “This sort of government practi ce assistance opens up incredible opportunities to buyers who have a basic understanding of the process. Most importantly, it could go a long way in getting the market back on the right track.”
www.MauiRealEstateBuyer.com
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