Freddie Mac just announced their“Smartbuy” sales promotion for owner-occupants buying Freddie Mac Homesteps(R) Homes. Under this promotion people buying a Freddie Mac home for their personal residence will receive at no cost:
Up to 3.5% payment by Freddie Mac towards buyers closing costs
Homeprotect(R) Appliance discount (up to 30% savings on name brand appliances)
This program runs through October 30, 2009. For a complete list of HomeSteps homes click here.
Chris Bowden, Vice President of HomeSteps(R) said “this unprecedented offer will enable HomeSteps(R) buyers to protect against unexpected repair costs which could interfere with their ability to meet their mortgage obligation.” He goes on to say, “we expect SmartyBuy’s comprehensive two-year warranty and closing cost offer to help more families buy and own HomeSteps homes, which in turn will help support home values and stabilize communities.”
The survey, which focused on affordability, foreclosures and refinancing showed:
Employment concerns and the ability to make mortgage payments are the greatest barriers to home ownership today. This is particularly true for those people 25-49 years of age.
More than three-fourths (77.4%) of consumers think a median income family can only afford 50% or fewer of the homes for sale in their area. This is in sharp contrast to that fact that a family earning the median income can actually afford nearly 75% of the current homes for sale on Realtor.Com.
Homeowners that have recently refinanced their mortgages are using the monthly savings from lower payments in different ways: 12.2% to pay their monthly expenses and 12.3% to remodel or repair their home
One out of five people (20.1%) who say they or someone they know may be facing foreclosure in the near future have not yet taken steps to resolve their situation. Additionally 22.4% have not taken any steps yet but plan to do so before the Making Home Affordable refinance program expires June 10, 2010.
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in May were at a seasonally adjusted annual rate of 342,000. this represents a 0.6% drop from Aprils rate of 344,000 and is almost 33% down from a year ago.
Three of the four regions in the US actually saw an increase in new home sales for the month. The Northeast region was up 28.6% followed by the Midwest and the the West with increases of 18.6% and 1.3% respectively. The South saw a 8.5% drop in sales for the month.
Median prices for new homes increased to $221,600 from $212,600 in April. Homes in the $200,000 – $299,999 range continue to dominate sales with 28% of the sales, homes in the $150,000 – $199,999 range accounted for 25% of the sales for the month.
The inventory of new homes continued it’s decline down to 292,000 homes in May which represents a 10.2 month supply. A 10.2 month supply is still about twice as high as we would like to see but it is certainly headed the right direction. The Northeast region has the largest inventory of new homes with a 14.66 month supply, followed by the Midwest with a 11.29 month supply, the West at 9.75 months and the South at 9.3 months.
These figures are once again consistent with my earlier comments that I think the market is leveling off and perhaps is close to finding it’s bottom. As new home inventories continue to decline we should see more strength in sales numbers.
Sales for May were at a seasonally-adjusted annual rate of 4,770,000 homes which is a 2.4% increase over Aprils’ rate of 4,660,000. May’s rate is 3.6% below last year which is pretty consistent with Aprils year to year decline of 3.5%.
The Midwest region which has been holding pretty steady had a 9% increase in sales for the month followed by the Northeast with a 3.9% increase and the South with no change from April. The West was the only region reporting a decline in sales albeit a mere 0.9% decline.
Median home prices in the U.S. rose 3.8% from an adjusted median price of $166,600 for April to $173,000 in May which is 16.8% less than a year ago. The West was the only region that saw a decline in price from April to May with prices dropping from 204,200 to 197,700. The West has seen the biggest decline in median prices from a year ago with a decline of 30.6%, followed by the Northeast with a 12.5% decline, the Midwest at 10.4% and the South at 9.9%.
I’m going to repeat my recent mantra….overall I think the numbers show the market is trying to find a bottom and may be leveling off.
Lawrence Yun, the chief economist for the National Association of REALTORS(R) expected an improvement. He said “Historically low mortgage interest rates clearly drew buyers into the market and housing remains very affordable even with a recent uptick in rates. First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisal are stalling transactions.”
According to a report issued by IHS Global Insight, house prices in the first quarter of 2009 declined in 199 of the 330 metro markets they monitor. At just over 60% of the metros this represents a huge decrease from 4th quarter 2008 when 312, or almost 95% of the metros, showed declining prices.
For first quarter 2009 the price decline nationally was 2.2%, annualized, compared with an annualized decline of 12.5% for 4th quarter 2008 which once again represents a significant move in a positive direction for the market.
Another interesting, and encouraging, item in the report is their measurement of valuation and whether real estate is overvalued or undervalued. For the first quarter 2009 the report shows that overall the real estate market is currently undervalued by 10.6% which is a significant change from the peak of the market in 4th quarter 2005 when their reports showed the market as a whole was overvalued by 24.2%. Currently only one market, Atlantic City, New Jersey, is considered to be “extremely overvalued” coming in at 44.1% over valued. This is a sharp contrast to 2005 when IHS Global Insight considered 52 metro areas to be extremely overvalued. Read more…
Lawrence Yun, NAR chief economist, said “buyers are responding to very favorable market conditions. Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market. ”
Pending sales in the US overall were up 6.7% from March and up 3.2% from April of last year. Three of the four regions showed an increase; the Northeast shot up 32.6% from March and is slightly ahead of the same time last year, the Midwest was up 9.8% for the month and up 11.1% from last year, the West rose 1.8% over March but is down 2.9% from a year ago and the South had a minor decrease for the month of 0.2% but is still showing a 3.5% increase over last year.
Yesterday, Bankrate, Inc. issued their weekly mortgage interest rate report showing that mortgage rates jumped this week with 30-year fixed-rate mortgages averaging 5.45%, up from 5.24% last week, with an average of 0.41% in discount and origination fees.
The report shows 15-year fixed-rate mortgages were also higher this week at an average of 4.86%, up from 4.74% last week.
While rates are not at the lowest they have been recently they are still near historic lows. Six months ago the average 30-year fixed-rate mortgage was at 6.39% so even with rates increasing slightly this week they are still significantly lower than the recent past and at near-historic lows.
Sales for April were at a seasonally-adjusted annual rate of 4,680,000 homes which is down 3.5% from last year, which means in year over year numbers things are improving because last months annual rate was down 7.1% from the year before.
The Midwest region which has held steady for the prior two months saw a modest 2% decrease from March and was the only region with decrease this time. The Northeast region had the highest increase in sales over March at 11.6% but is still down 10.5% from a year ago. The West had a 3.5% increase over March and is still the only region showing an increase over the prior year with a 19.4% increase. The South had a 1.8% increase over March and is down 8.9% from a year ago.
Q- Bob, please share with us your background and experience.
A- I moved to Sanibel in 1979 and started a small ad studio/advertising office. My extensive national marketing background has helped me in Real estate promotions and advertising. Read more…
I met the wonderful woman that was to be my wife in 1998 in St. Louis. Prior to moving back to St. Louis she had spent the prior decade living on the gulf coast of Florida and loved it but came back to St. Louis to be closer to family.
We were married in late 1999 in Florida, and afterward took many trips and vacations to various destinations along the gulf coast of Florida. Every trip had one common element, my wife trying to “sell me” on the area she loved. Don’t get me wrong, I don’t have anything against Florida…I was just very partial to southern California as a travel destination at the time. Read more…
