Buyer Preparation

Buyer Preparation

Every buyer's needs are different.   Age, family size, savings, income, school needs and a variety of similar factors that are different for every individual will make the home desired different from one person to another.

Yet, the preparation required to successfully move from a rental to a first time purchase or from one home to another is the same for every buyer.   Though the steps be the same, the time require to go from thinking of buying to closing on a new home can vary widely.

Financial factors or present housing factors are most common elements to extend the time frame to purchasing a home. Regardless, of such factors, these are the key steps for every buyer to prep for a new home:

        1. Identify characteristics of home desired.  Be specific

            on beds and baths needed, size range and areas

            of town desired. 

        2. Evaluate finaces: What is the maximum housing 

            cost that fits your budget?  What funds for

            down payment are available?  For repairs, if

            home needs repairs?

        3. Evaluate areas for home purchase by accessing 

            School websites, Crime Stats websites, City

            Websites....as you know the web can provide lots

             of good data.  Be wary though and read with a 

             critical eye.

        4.  Evaluate your personal interest and capability to  do

             home improvements as well as having the time to 

             complete any repairs to make a select house a home.

        5.  Contact a Realtor to learn about the home buying process

             in your area.  Discuss home desired and data collected

             to verify accuracy of perceptions.

        6.  Seek a Realtor that will provide immediate information on

             presently available homes and on homes yet to be listed.

             (Note: Truila, Zillow and like websites are great to begin

                 your search but a Realtor can provide the immediacy

                 of home availability that websites can not.)

        7.  Meet with a Mortgage Office and attain pre-approval letter

             for value of home you wish to purchase. 

             Note:  Essential to provide all financial data in timely 

                       Manner

             Hint:  Realtor should be able to refer you to Mortgage

                      Officer that will be helpful whether able to buy

                       now or needs to work with you over time to

                       be ready to be financially ready.

        8.  Drive by homes immediately upon receiving homes from

              your Realtor that have caught your interest.  Evaluate

              neighborhood, distance to work and other factors 

              important to you.   Always provide feedback to Realtor.

        9.    Evaluate times of day to search for homes and determine

               flexibility to alter work/personal schedule during home

               search process 

Now you are ready to begin your home search in earnest!  All is needed then is the right home at the right price in the right location

to come on the market and for you to buy!!!

Market Update---Growing Stronger

Another perspective on the home financing market and home sales.  Jeff
notes all the very positive trends in home sales, stock market, employment numbers, etc.


As you can tell, the improvement is very broad across the economy.  Sequestration may eventually impact the Hampton Roads market.  Yet thus far, both in what Jeff is sharing and in what I am seeing, the strength of the housing market and the general economy may be a force too great.

Only time will tell.

Having trouble viewing this email? Click here to view web version visit my website    email me now Jeff Hurd Loan Officer780 Lynnhaven Parkway #420 Virginia Beach, VA 23452 Mobile: 757-329-1115 Fax: 866-396-6422 For the week of May 13, 2013 – Vol. 11, Issue 19 >> Market Update  QUOTE OF THE WEEK... "Saints are sinners who kept on going" --Robert Louis Stevenson, Scottish novelist, poet, and essayist INFO THAT HITS US WHERE WE LIVE... Home prices also keep on going, and in a decidedly upward direction. The National Association of Realtors (NAR) reported that for Q1 of this year, the median existing home price jumped 11.3% over last year, the largest annual gain since Q4 of 2005. But Q1 inventory was down 16.8%. The NAR's chief economist expounded: "Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation."  A leading research analytics firm reported that home prices in March jumped 10.5% year over year, posting their biggest annual gain in seven years. Plus, the 1.9% price increase over February was the 13th monthly gain in a row. These analysts expect April to register a 12% annual and a 2.7% monthly price hike, if you exclude distressed sales. Finally, Fannie Mae reported a milestone in consumer optimism about home prices: the majority of Americans they surveyed now expect home prices to increase over the next year. BUSINESS TIP OF THE WEEK... From Warren Buffett: "...the biggest thing that kills [businesses] is complacency. You want a restlessness, a feeling that somebody's always after you, but you're going to stay ahead." >> Review of Last Week BREAKING RECORDS AGAIN... Investor enthusiasm pushed U.S. stocks to their third week of record-setting gains. Friday the Dow ended solidly above 15,000, at its highest close ever. Not to be outdone, the S&P 500 also hit an all-time high, well north of 1600. There wasn't much economic data or financial news to distract investors and quite a few Q1 corporate earnings reports continued to surprise to the upside. Other points to ponder included a steep decline in commodity prices and the dollar's surge in value over the Japanese yen. Weekly Initial Unemployment Claims came in at 323,000, a five-year low. Continuing Unemployment Claims were barely above 3 million. The final source of good feelings came Friday, when the Treasury reported its monthly budget statement. In April, the U.S. registered the largest budget surplus in five years: $113 billion. Of course, income tax payments usually make April a surplus month. But, hey, through the first seven months of the government's 2013 fiscal year, the deficit is down to $488 billion, 32% lower than the same period last year. The week ended with the Dow up 1.0%, to 15118; the S&P 500 up 1.2%, to 1634; and the Nasdaq up 1.7%, to 3437.  With stocks soaring and the week bereft of worrisome news or disappointing data, bond prices suffered. The FNMA 3.5% bond we watch ended the week down .86, at $105.18.After five weeks of declines, national average mortgage rates rose in Freddie Mac's weekly Primary Mortgage Market Survey, but remain near historical lows. The Mortgage Bankers Association (MBA) reported purchase loan applications were up 2% for the week and UP 12% compared to a year ago. DID YOU KNOW?... The NAR reports: "Most Americans believe a housing recovery is truly occurring throughout the country. The share of Americans who think it is a good time to sell has doubled during the last year." >> This Week’s Forecast RETAIL DOWN, MANUFACTURING UP, INFLATION SIMMERS, BUILDERS COOL... This week is packed with economic data, starting with Monday's Retail Sales for April, expected down for another month. Nonetheless, factories are humming, according to bothNY Empire Manufacturing and Philadelphia Fed forecasts. Staying on simmer, inflation did not heat up in April, with wholesale PPI and consumerCPI numbers predicted slightly down overall and up only a tick in Core readings that exclude food and energy. Although the housing market is recovering, builder enthusiasm cooled off in April, with Housing Starts expected to dip below the 1 million annual rate. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.  Economic Calendar for the Week of May 13 – May 17  Date Time (ET) Release For Consensus Prior Impact M May 13 08:30 Retail Sales Apr –0.3% –0.4% HIGH M May 13 10:00 Business Inventories Mar 0.3% 0.1% Moderate W May 15 08:30 Producer Price Index (PPI) Apr –0.5% –0.6% Moderate W May 15 08:30 Core PPI Apr 0.1% 0.2% Moderate W May 15 08:30 NY Empire Manufacturing Index May 3.5 3.1 Moderate W May 15 09:15 Industrial Production Apr –0.2% 0.4% Moderate W May 15 09:15 Capacity Utilization Apr 78.3% 78.5% Moderate W May 15 10:30 Crude Inventories 5/11 NA 0.230M Moderate Th May 16 08:30 Initial Unemployment Claims 5/11 330K 323K Moderate Th May 16 08:30 Continuing Unemployment Claims 5/4 3.005M 3.005M Moderate Th May 16 08:30 Consumer Price Index (CPI) Apr –0.2% –0.2% HIGH Th May 16 08:30 Core CPI Apr 0.2% 0.1% HIGH Th May 16 08:30 Housing Starts Apr 970K 1.036M Moderate Th May 16 08:30 Building Permits Apr 950K 902K Moderate Th May 16 10:00 Philadelphia Fed Index May 2.5 1.3 HIGH F May 17 09:55 Univ. of Michigan Consumer Sentiment May 78.5 76.4 Moderate F May 17 10:00 Leading Economic Indicators (LEI) Apr 0.3% –0.1% Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... Economists expect the Fed to keep the Funds Rate at the present exceptionally low level at least through Q3 of this year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Jun 19 0%–0.25% Jul 31 0%–0.25% Sep 18 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Jun 19      <1 span=""> Jul 31      <1 span=""> Sep 18      <1 span=""> UIE

Consumer Finance Protection Board

CONSUMER WATCH: THE CFPB'S "GOT YOUR BACK" ON FINANCIAL COMPLAINTS!

Topic Summary: In the last two years, the Consumer Finance Protection Board has been rattling cages across the financial services spectrum, empowering consumers with education, warnings and redress when problems arise. The CFPB just announced  open access to the complaints database for issues that consumers have raised about their mortgage company.  The database is HERE. To lodge a complaint against a financial service company, get all the info HERE. Recently the Board started to oversee (monitor) the activities of the Credit Reporting industry. If you feel that your credit report has legitimate or otherwise factual errors, you now have a friend in Washington that will guide you through the complaint process. Furthermore, the CFPB can issue fines against companies that have systemic consumer complaints or that were found guilty of illegal practices. Just in the last 6 months months, the CFPB has won refunds and restitution for customers worth $425 million. The civil fines were even greater: Capital One  $210 Million Discover Card $214 Million American Express $112.5 Million To lodge a complaint against a financial service company, get all the info HERE. If you have some time, look at their first annual report on complaints and resolution on behalf of consumers HERE. Courtesy of Al Clark Your Home Actions Newsletter

The Fed Hold Off Again

Bernanke to the Rescue


In his presentation to Congress, Bernanke once again re-iterated the Fed's willlingness to continue to Bond purchases.  The stock market responded with over 150 point gain on Wednesday.

The Market was bouyed by the thought of continued low interest rates.  If you run a business, low interest rates mean cheaper equipment purchases, low rates on building expansions and purchases as well as lines of credit at banks for every day expenses and corporate bonds for financing big ticket purchases.

So do you know that you run a "business" everyday also?  Its called 'Corporation "Me"'.    The life and vitality of "Me" depends on funds to provide a roof over "Me"'s head, food in the belly, and clothing at a minimum.  Most business owners of "Me" can conjure up other needs for funds.

Thus, if your "Me" corporation(which may have a few subsidaries running about the house) needs more space or must downsize(due to casting off a few subsidaries in the past few years), Bernanke's speach should have you dancing in the streets also!!!

Though bond rates and mortgage rates don't track perfectly(but what in the financial market ever tracks with anything else!), these two rates do respond to one another in general ways.  If bond rates are going down(reduced yields is market term), mortgage rates tend to stay lower with less pressure to rise.

Why?   Great question....could be that both are traded on public market.  Though the investor wants the highest return, safety is important.  So if government bonds and corporate bonds are bought with a given rate of return, mortgage bonds/securities must compete to garner investments.

Do you need to worry about the intricacies of this dynamic?  Only if you plan to invest directly in these securities. 

You only really need to know that Bernanke's pronouncement means rates will remain constrained.   Thus, "Me" Corporations can still get insanely low rates to purchase a home.   Yet for how long is not known.

But don't miss that it is great news for the "Me" corps that need to unload property.  If you were a top 100 corporation in the U.S., you would realize low rates means that you can sell off a subsidary with good value at a good price because the buyer will have reduce long term cost due to low interest rates.  Likewise, any buyer for a "Me" corp. looking to change locations will also save lots of money over 30 years with a 3.5% mortgage rate versus historical over 7% average mortgage rate.

SO DON'T MISS OUT!!!   

Real Estate Market Rolls

Impressive...that is all I can say.

Jim Belote recaps information that I, and perhaps you have seen, from various news outlets in the past week or so. 

A quick read to know that Mortgage Deduction is safe as well as the relief given to home owners going through a short sale or foreclosure.  As Jim notes, this will keep the market improving by removing a costly tax burden to people in these tough situations.

You have to like the news on Phoenix and Las Vegas as well as national 5%+ home value increase.  Yet, note the continued warning on interest rate pressures.  This is bound to be a topic of many reports in the next few months.

Keeping you updated on the market! For the week of  January 7, 2012 MARKET RECAP It appears Congress and the president have finally reached a compromise on the “fiscal cliff” – the agglomeration of tax increases and spending cuts that were set to take effect in January 2013. The good news is the housing and mortgage markets survived unscathed. The Mortgage Forgiveness Debt Relief Act remains in force for another year. This means forgiven mortgage debt will remain untaxed. Without this extension, short sales, foreclosures, and loan modifications would have become encumbered with a tax burden. This would have been a serious blow to the recovery. These basic market-clearing mechanisms were vital to the housing recovery in 2012, and will continue to help the recovery along in 2013. The mortgage interest deduction also remains intact, which means mortgage financing remains a very good low-cost deal. It also means mortgage financing remains a savvy leveraging strategy for purchasing an asset (residential real estate) that is rising in value; thus providing a means to increase returns on invested capital. In other words, the housing recovery is here to stay, and the latest round of price data supports this conclusion. Trulia reports that asking-price gains accelerated throughout the past year. In the first quarter of 2012, national home prices increased 0.8% quarter over quarter; by the fourth quarter, the pace had increased to 2.3%. Year over year, national home prices were up 5.1%. Fueling the home-price acceleration was the former left-for-dead Phoenix market, which staged a remarkable resurrection that continues to this day. Home prices in Phoenix were up 25% for the year. We've frequently written that falling prices will eventually produce more buyer interest, which, in turn, will lead to an eventual recovery. Phoenix is proof this economic maxim works. Las Vegas also proves the maxim. It seems like it has taken an eternity, but the Las Vegas housing market is on the mend. Home prices in Las Vegas were up 10% year over year in December, building on a price-recovery trend that begin in the second half of 2012. We noted early in 2012 that a recovery in the Las Vegas housing market would likely mean the recovery had become a country-wide phenomenon. This appears the case today. Home prices around the country remain on the rise, and it's appearing more likely that mortgage rates will be rising too. Over the past couple weeks, rates have been inching higher. What's more, events in the debt market point to even higher rates. We are speaking specifically of the 10-year U.S. Treasury note – a benchmark for the mortgage-backed security market and the 30-year fixed-rate mortgage. The yield on the 10-year Treasury has moved considerably higher over the past month. In fact, the yield on the 10-year Treasury today is approaching its highest point in nearly four months. The trend in the 10-year Treasury yield is worth following, because if the job market and economy continue to improve (as we expect), then you can be sure that the yield on the 10-year Treasury note will continue to rise. Should this occur, mortgage lending rates are sure to follow.   Economic  Indicator Release  Date and Time Consensus  Estimate Analysis Consumer Credit (November) Tues., Jan. 8, 3:00 pm, ET $15 Billion (Increase) Important. Rising credit use reflects rising consumer confidence. Mortgage Applications Wed., Jan. 9, 7:00 am, ET None Important. Applications are expected to regain pace after the holiday-season lull. International Trade (November) Fri., Jan 11, 8:30 am, ET $40.2 Billion (Deficit) Moderately Important. Lower energy prices are reducing the current account deficit. Import Prices (December) Fri., Jan 11, 8:30 am, ET No Change Important Prices. Import prices continue to help hold inflation in check.   No Such Thing as a Perfect Market   No sooner had news on the “fiscal cliff” reached the market when frets and worries turned to the debt ceiling. The federal government hit its legal borrowing limit of $16.4 trillion this past week. Now pundits and professional worriers are fretting over what implications this impasse will have on financial markets and the economy. No need to fret or worry, because perfection is impossible. Markets will always be encumbered with uncertainty. To wait for perfection is to wait in perpetuity and to never act. In fact, the best time to act is when the outlook appears most dire and sentiment is decidedly negative. That's when the best values appear. We saw that in the residential real estate market in 2011 and early 2012. Many people who bought a home then are already sitting on a tidy gain today. We still see value, just not as much of it. Low mortgage lending rates have been an extenuating factor, but we believe if borrowers (and refinanciers) wait much longer the value of that factor will fall should rates rise. The point we can't emphasis enough is not to wait for perfection, because perfection doesn't (and never will) exist.     If you wish to unsubscribe, click on the link below and send the email. If this message was forwarded to you, please reply to the sender. Click Here To Unsubscribe EQUAL HOUSING LENDER

Could the News be Any Better??

Hallelujah!!!   The Congress got together for at least a partial deal!!  You would think it was time to celebrate but there is more to do on the debt side.   Call your Congressman and Senator!!!

And the Real Estate News??  It only keeps coming!!!   As reported previously and echoed again in Jim Belote's Mortgage Matters, the Housing Market is coming back!!  More good news.

With the sense of calm that will occur in the market due to the recent compromise in Congress, sellers should feel very confident that the market improvements will continue.  And buyers, you best run!!  The prices will only continue to firm and, as noted in the Mortgage Matters, interest rates are projected to rise over time.  No one can tell you the exact time when the rates could move up.

Yet do you want to wait to get the double whammy of higher prices and higher rates???

Keeping you updated on the market! For the week of  December 31, 2012 MARKET RECAP Last week, we sang hosannas for home builders and new-home sales. This week, existing home-sales get their turn. We praise existing homes because sales have taken a significant turn for the better. Late last week, existing-home sales posted at an annualized rate of 5.04 million units for November – a 5.9% increase over October. The pace of existing-home sales has risen to the point they are on par with the federal-tax-credit days in the spring of 2010. The good news is the market is much healthier today compared to 2010. Back then, we were skeptical that tax credits would sustain existing home sales. Our view was that the credits were simply pulling sales in from future demand, while aggregate demand remained low. This time is different. We expect sales to continue to trend higher. The housing market is more robust today than it was in 2010. For one, distress properties are becoming less of a factor. For November, distressed properties accounted for 22% of existing-home sales, down from 24% in October. What's more, that percentage has been trending down for much of 2012. Supply has been an issue, and a mixed blessing. Current inventory of existing homes is at a multi-year low of 4.8 months. The number of existing homes on the market, 2.03 million, is retarding sales-volume growth. On the other hand, low supply is helping prices. The national medium price of an existing home is up to $180,600, a 10.1% increase over the median price this time last year. All in all, the latest data show that housing – new and existing – is increasingly taking leadership for economic growth. In other words, the world is finely returning to some sense of normalcy. Normalcy might not be the word we'd use to describe mortgage lending. Yes, rates continue to skim along multi-decade lows; that is, when they are not setting new multi-decade lows. But this is an unusual lending market. Rates are low, but risk aversion remains high (particularly among regulators). The Federal Reserve is doing everything within its power – by purchasing mortgage-backed securities and long-term Treasury notes – to hold interest rates low. This is an unprecedented move by the Fed.  To be sure, the Fed's efforts have worked, but it's worth keeping in mind that the events of today are an aberration. A more normal lending environment would consist of higher-rate 30-year mortgages. From an investor's standpoint, the rate today barely compensates for inflation and doesn't compensate for risk and the time value of money. The point we want to emphasis is that the housing market has returned to normal; we think that it's a matter of time (which isn't too far into the future) when mortgage lending returns to normal too.   Economic  Indicator Release  Date and Time Consensus  Estimate Analysis Mortgage Applications Wed., Jan. 2, 7:00 am, ET None Important. Markets expect the rising trend in purchase applications to continue into 2013. Construction Spending (November) Wed., Jan. 2, 10:00 am, ET 0.1% (Increase) Important. The residential sector is fueling gains in overall construction spending. Federal Reserve FOMC Minutes Wed., Jan. 2, 2:00 pm, ET None Moderately Important. The Fed minutes will likely report moderate, but sustained, economic growth. Employment Situation (December) Fri., Jan 4, 8:30 am, ET Unemployment Rate: 7.8% Payrolls: 140,000 (Increase) Very Important. Accelerating job growth will make it more difficult for the Fed to maintain its low-interest-rate policies.   A Look Back and a Look Ahead   It appears we were fairly accurate in our predictions for 2012. This time last year we predicted that home sales volumes would continue to improve. We said the same for pricing. We even expected prices in the sand & shore states to lead the rebound. That's been the case (even Las Vegas is rebounding). One reason we thought 2012 would be a strong year for housing is shadow inventory would be less of an issue than many pundits were ominously projecting. Our rationale was simple: What's known doesn't roil markets; it's the unknown that roils markets. The problems associated with shadow inventory are well-known and well-vetted. Markets are masters at dealing with what's known. Now, we said “fairly” accurate, not completely accurate. Our prediction on mortgage rates was wrong. We expected higher lending rates in December 2012 compared to December 2011. That wasn't the case. In our defense, we didn't expect the Federal Reserve to intervene in the mortgage market to the extent it has. For 2013, we are doubling down: Existing-home and new-home sales will continue to improve, as will overall pricing. Home starts will also pick up pace throughout the year. As for shadow inventory, it will become even less of an issue than it is today. We're also doubling down on mortgage rates. We see higher rates this time next year. We say that because the Federal Reserve's interventionist policies are becoming less effective. After the Fed announced it would double its purchases of longer-term notes and bonds, the yield on the 10-year Treasury actually increased 20 basis points. This suggests to us markets are becoming more concerned with inflation. So that's our call for 2013. Have a safe and happy New Year.

Credit Card Antivirus

Prepping to buy a home??  Having your finances under control is always very important.  Here is a Consumer Watch article provided by Al Clark.  It is a pretty timely note as many of us use our credit cards for Christmas gift purchases. Watch the video!  Check out the Billguard website: www.billguard.com CONSUMER WATCH: ANTIVIRUS FOR OUR CREDIT CARDS

Bill Guard is a free consumer service that aggregates experiences of its online users and those who post online complaints. So in essence users of the service share their stories of overcharges, hidden fees and outright fraud. Many fraudulent operators try to slide small charges on our bills and Credit cards thinking that we will not haggle or research the charges. When this happens the Bill Guard service will alert you of scams they have seen and the members have seen. Bill Guard alerts you whenever a charge on your bill is flagged by anyone else, that had a unwanted charge on theirs. Click on the video that explains the entire process in under two minutes The process works once you register your credit or debit cards into the service. Today. debit card use is growing and we use our debit cards for small purchases on a regular basis. Its easy to have 50 or 60 debit cards transactions every month and making sure they are all valid is a tough job. Bill Guard scans your card activity daily for hidden charges, billing errors, forgotten subscriptions, scams and fraud, The system alerts you via email when your attention is required. So if a consumer in California got a mysterious charge for a magazine subscription, that ripoff is then submitted to the system and all Bill Guard users benefit from this "shared experience". Each new transaction is analyzed by over 100 automated tests. Bill Guard also scours the web for complaints posted by others about similar charges and merchants that may appear on your bills. The service has garnered a lot of venture capital and has won several awards A scan report is emailed monthly, providing a quick overview of Bill Guard's findings and an indication of how clean your cards are. Alerts are emailed immediately giving you an early warning sign of potential fraud. Bill Guard was designed by financial security experts. They are very proactive about their data security and their Privacy Policy To learn more, visit www.billguard.com

Another Voice-CNN Update on Housing

Home prices: Biggest rise in more than 2 years

By Chris Isidore @CNNMoney November 27, 2012: 10:07 AM ET

Home prices are up for the 2nd straight quarter, the biggest year-over-year increase in more than two years.

NEW YORK (CNNMoney) -- In another sign of a housing market rebound, home prices posted the biggest percentage gain in more than two years in the third quarter, according to the closely followed S&P/Case-Shiller index.

The 3.6% increase from a year earlier is more than three times the rise in the previous quarter and was the biggest jump in prices since the second quarter of 2010. But that 2010 rise was much more of a temporary blip caused by a homebuyer's tax credit of up to $8,000 on homes purchased in late 2009 and early 2010.

This latest rise comes as the housing market has shown numerous other signs of recovery in recent months. The rebound is spurred by a combination of record low mortgage rates, an improving jobs market and a drop in foreclosures to a five-year low, reducing the supply of distressed homes available. There is also a tighter supply of both new and previously owned homes on the market.

The improvement in housing market fundamentals have helped to lift the pace of both home sales and home building.

Dean Baker, the co-director of the Center for Economic and Policy Research who was one of the earliest economists to warn about the housing bubble and the trouble that lay ahead, said this recovery in the housing market should lead to some sustained housing price increases in the coming years.

"I've been an optimist as of late," he said. "Some think it'll get back to bubble prices and that's crazy. But we'll probably do better than inflation for the next few years, and people who have been underwater on their mortgage will get out from that, and build some equity."

The latest rise in the Case-Shiller index was the second straight quarter of year-over-year improvement, while the monthly annual reading has climbed for four months in a row, with six straight month-over-month increases.

"With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

The increases are widespread, with only two of the 20 cities tracked by index -- Chicago and New York -- showing modest price declines from a year earlier. The biggest rise was in Phoenix, one of the cities hardest hit when the housing bubble burst. Prices there in September were 20.4% higher than a year ago.

"Home price gains are becoming more widespread across cities, and some of the largest rebounds have been in areas that were most heavily affected during the initial housing slump," said Cooper Howes, an economist with Barclays Capital. "We expect this trend to persist into next year as part of a broad-based housing recovery that includes starts, sales and prices"

Home prices are now back to where they were in early 2003, before the housing bubble inflated over the next three years before bursting. Even with the recent gain, the national index is down 28.6% from the peak level reached the first quarter of 2006.

 

Will FED QE3 push Mortgage Rates?

Hampton Roads has seen month over month improvement since June 2011 in both sales and prices in the lower price strata. No doubt the sliding from an inventory of 14,000 homes to approx. 10,000 homes has pressured home prices as more buyers come out to get the low 3.5% rates.

As you can see below, this trend is being experience broadly across the country and is evident in the numbers and the optimism in home builders.

A comment that must grab your attention is the commentary below on the Fed's $40 billion infusion into the equity markets via mortgage bond purchases.   Influx of funds may actually undergird the current mortgage rates, preventing them from falling farther.

Translated:  Rates are as low as they are going to be!!

So the time to act is NOW!

Keeping you updated on the market! For the week of  September 24, 2012 MARKET RECAP The argument that housing isn't in full-recovery mode continues to weaken. Look no further than the sentiment of those whose living depends on bringing new supply to market – the home builders. Confidence among builders has surged through 2012. A year ago, the builders were deep in the doldrums; their sentiment index was down to a very low 15. Today that index stands at 40. That's a remarkable change in sentiment. Optimism is no longer the exception; it's the rule. The upward trend in housing starts is no doubt a contributing factor to rising optimism. Since August 2011, starts have been on a steady upward trajectory. For August 2012, the trend continued to move higher, with starts advancing 2.3% to 750,000 annualized units. Single-family units paced the gain, improving 4.5%. To be sure, 2.3% advance isn't a spectacular, but slow and steady wins the race. Slow and steady also produces substantial advances over time. A year ago, starts were at 600,000 annualized units. Today, the pace in starts is up 25%. Sales of existing homes are also moving in the right direction, though the pace is a bit more volatile. For August, existing home sales improved 7.8% – posting the largest percentage gain in over a year – to an annual rate of 4.82 million units. The higher sales pace, in turned, tightened inventory to a 6.1-months supply. Existing home sales were helped by a slight drop in prices in some markets, which dropped the national median home sales price 0.2% to $187,400. Looking at the longer-term price trend, the national median home price is still up 9.5% year over year. At this point, the best course of action is to let the market recover on its own. The chart below reveals what can happen when good intentions interfere. The spikes in existing home sales that occurred in November 2009 and May 2010 were a reaction to the impending expiration of the federal home tax credits. After November 2009 and May 2010, sales fell off a cliff. Future demand was simply pulled into the present, thus leaving a future void. Around September 2011, a slow, slightly volatile, uptrend formed. The good news is that the trend that formed in 2011 is genuine and sustainable. The trend in mortgage rates is less genuine, because the Federal Reserve has openly influenced the mortgage lending market. This week, mortgage rates did ease a couple basis points across most product offerings. Such a minor decrease suggests that rates really don't want to go much lower. Activity in the 10-year Treasury note also points to a rate bottom. When the Federal Reserve announced it would continue to buy mortgage-backed securities and Treasury securities last Thursday, the yield on the 10-year Treasury note actually increased (since then it's been moving marginally lower). Given the Fed's strategy to add $40 billion to the base money supply monthly, investor concerns could be shifting toward consumer price inflation and away from slow economic growth. If inflation becomes a front-burner issue, interest rates will be very hard pressed to go lower. Economic Indicator Release Date and Time Consensus Estimate Analysis Mortgage Applications Wed., Sept. 26, 7:00 am, et 380,000 (Annualized) Important. Lower lending rates fail to draw in more purchase activity. New Home Sales (August) Wed., Sept. 26, 10:00 am, et 4.6 Million (Annualized) Important. The upward trend in new home sales and construction are good news for the economic outlook. Gross Domestic Product (2nd Quarter 2012) Thurs., Sept. 27, 8:30 am, et 1.6% (Annualized Growth) Important. The upward revision in growth estimates is primarily due to the housing recovery. Pending Home Sales Index (August) Thurs., Sept. 27, 10:00 am, et 1.0% (Increase) Important. The trend in home sales is expected to improve through the end of the year. We're Only the Messenger Lenders make money lending, not by not lending. This might seem obvious, but lenders are often a lightening rod for frustration. “We can't we get my client qualified?” is a repeated complaint. We all know that we are not returning to the lending environment circa 2005, and that's a good thing. That said, we would like to go to a new lending environment, because the current one is too homogeneous (lacks diversity) and too formulaic. There are simply too many one-size-fits-all rules and regulations in today's lending market. Banks have to adhere to uniform new regulations set forth by the Dodd-Frank Act. They also have to adhere to international rules, known as Basel III, which impart strict capital requirements. More rules and tighter regulations, particularly ones that are uniform across the country, discourage lenders from venturing out past plain vanilla residential mortgages. If any business is forced to address increased regulation, mandated MBS repurchases, and increased litigation, that firm will tend not to venture far out on the risk curve. What we need are rules and regulations that account for risk-based pricing tailored to particular markets. North Dakota and New York are different markets with different borrower profiles. Instead of forcing lenders to adhere to a uniform standard, regulators should permit a variety of standards and pricing policies based on the risk and borrower characteristics of different metropolitan markets. Should that occur, today's clogged lending pipes would certainly flow more freely, allowing more funds to flow to more borrowers.