August 2009

First-Time Home Buyers – The $1 Million Challenge

Did you know that First-Time Home Buyers make up over half (53.5%) of the home purchase market?

Consequently, the Obama administration enacted a tax credit to stablize the real estate industry and to generate more housing demand. But according to a survey commissioned by Move, Inc. –which operates Realtor.com– nearly half (47%) of ALL Americans don’t even know the $8,000 tax credit exists.

Consumer confidence has tumbled and the fear of the economy has frozen many first-time home buyers in their tracks. The Barath Group is collaborating with Realtors, service professionals and businesses to provide this FREE Educational Seminar to renew confidence back into the value of homeownership.

Not only will the tax credit be explained, but every attendee will receive a Home Buyer Handbook, a Credit Resourse Handbook and alo be eligible for valuable prizes*. Don’t delay. Time is RUNNING OUT.

Join Us as we set out to put $1 MILLION back in the hands of First-Time Home Buyers locally!

*Attendance Required to be Eligible for Prizes, Gift Certificates and FREE Services Courtesy of our Sponsors.

Pending Home Sales Rise Again for 5th Consecutive Month

The number of homes under contract to sell rose in June for the fifth straight month.

It’s the Pending Home Sales Index’s longest winning streak since 2003 and another piece of evidence that the housing market may be rebounding.

* The supply of new homes is falling
* The supply of existing homes is falling
* The Case-Shiller Index showed home value increases in many of its markets

Separately, the data is interesting. All together, it paints the portrait of a recovery.

That said, we can’t forget that the Pending Home Sales Index is somewhat unique versus other real estate reports.  Whereas data on existing and new home sales measures closed transactions, the Pending Home Sales Index only measures intent to buy.

Just because a home goes under contract, in other words, doesn’t mean that it actually will sell. 

Purchase transactions can fall apart for a multitude of reasons including, but not limited to, buyer-seller disputes, failed home inspections, and an inability to secure mortgage financing.  The Pending Home Sales Index doesn’t account for these types of issues.

In general, though, as the number of homes under contract increases, Existing Home Sales increase, too — usually on a 2-month lag.  Home sale data should remain strong through early-Fall, at least.

For active home buyers, be conscious of the fact that that more home sales plus falling home supplies leads to higher home values.  If you’re looking for a bargain, the longer you wait, the less likely you may be to find it.

Where Does The Money Go?

Where does the money go?

If you’re like most U.S. consumers, more than half of it goes to housing and transportation costs.

According to the government’s most recent Consumer Expenditure Survey, spending patterns are little changed from years prior. 

More money is spent on entertainment and less money is spent on dining out.  Beyond that, the figures are somewhat static.

Meanwhile, using on the survey’s industry-by-industry breakdown, we can see how monthly housing payments and daily commuting costs impact a household’s budget.

For the budget-conscious, going out less often and bargain-shopping can help pad the bottom line, but not as much as living in a less expensive home or moving closer to work.

Even a refinance into lower rates can make a difference.

What’s Ahead For Mortgage Rates This Week: August 3rd

Mortgage markets improved last week despite a series of volatile trading sessions. 

A combination of weaker-than-expected economic data and massive-sized Treasury auctions kept investors guessing and mortgage rates moving.

* Weak data nudged rates lower.
* Treasury auctions pushed rates up

By Friday, however, momentum was in favor of lower rates and that’s how the week finished up — slightly more favorable overall.

It’s the second consecutive week in which rates fell.

This week, markets will digest a host of new data.  Rate shoppers can expect the volatility to continue.

Monday afternoon, Auto and Truck Sales data is released.  We normally don’t track this report, but because of the auto industry’s role in the economy right now, strong numbers should lead to a mortgage bond sell-off, pushing mortgage rates higher.

Then, Tuesday, the Personal Income and Personal Spending report is released as well as the Pending Home Sales Index.  Again, strength in the numbers should result in higher mortgage rates.

Thursday, Initial Jobless Claims will get the market’s attention.  The data has been trending lower over the past two months and, last week, the rolling, 4-week average posted its lowest mark since January.  A reversal in the trend would likely boost the mortgage markets, helping rates to fall.

And, Friday, the jobs report is due. 

With unemployment close to 10 percent nationwide and more than 3 million jobs lost this year, investors will respond to “less weak” data with enthusiasm — a bad result for rate shoppers.  No matter what the data says, it’s sure to move markets.

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