The Warren Report

Survey Reveals How Americans View Homeownership as a Way to Build Wealth

RISMEDIA, June 29, 2009-(MCT)-Nearly half of American adults who participated in a recent survey said they no longer believe that homeownership is a realistic way to build wealth, the National Foundation for Credit Counseling reported this week.

The findings, from a recent survey of about 1,000 people, run counter to the long-held perception that a home should be part of a person’s financial strategy, the NFCC said.

“It had been considered the cornerstone of wealth building,” said Gail Cunningham, spokeswoman for the NFCC. Homeownership had been a significant tool that most people felt was necessary to prepare for retirement, she said in a phone interview.

The survey was conducted because the organization was curious about future implications of living through the mortgage meltdown, she said. Whether consumers reflect on their own experience or are just “observing the guy in the cubicle next door,” conditions have caused many people to change their attitudes about housing, she said.

For now, anyway. According to an annual survey from the NFCC released earlier this year, 57% of adults reported that they were spending less than they were a year ago, Cunningham said. But 45% of those who were spending less said that if their financial situation improved, they would resume their spending habits.

The results released on Monday found that nearly one-third of those polled don’t think they will ever be able to afford to buy a home. Forty-two percent of people who have purchased a home - but no longer own it - don’t think they’ll ever be able to afford to buy another. And 31% of those who still own a home don’t think they’ll ever be able to buy another - whether it’s to upgrade their existing home or buy a vacation home.

According to the survey, 74% of those who have never purchased a home said they could benefit from first-time home buyer education.

“The good news from the survey is that people now seem to grasp that buying a home is a complicated process and admit that they would benefit from education in advance of signing on the dotted line,” Cunningham said in a news release.

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

Mortgage Window Shopping - 5 Tips for Prospective Home Buyers

RISMEDIA, June 26, 2009-(MCT)-After a recent spike seen in mortgage rates, some consumers are wondering whether they’ve missed

 their chance to refinance into an ultra-low rate.

Fear not: While the conforming 30-year fixed-rate mortgage hit a daily average of 5.81% last Thursday, it averaged 5.53% on Tuesday, said Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan information. And it’s possible that rates could continue to fall.

“Predicting interest rates is like predicting who is going to win the World Series in January,” said Guy Cecala, publisher of Inside Mortgage Finance. That said, he calls the recent spike “somewhat of an aberration,” and expects rates will continue to drift down.

Why the recent run-up in rates? Over the past month or two, “the economic skies have brightened somewhat,” Gumbinger said in an e-mail, and the threat of “trillion-dollar budget deficits for the foreseeable future, the potential for significant inflation, and few clues as to how the government might extricate itself from intrusions into markets” created a landscape that was not appealing to investors.

But now, rates are retreating partly because inflation doesn’t seem as immediate a threat as investors feared, Cecala said. In his opinion, nothing fundamentally has changed in the economy over recent weeks to warrant the rate rise, yet he expects volatility through the remainder of the year as investors debate the economy’s health.

“Realistically, I think that the rates will drift under 5% again. It may take a month, may take two months,” he said.

It’s also important, however, to realize that extremely low rates likely won’t be around forever, said Bob Walters, chief economist of Quicken Loans, in a statement.

“Luckily, we have seen rates drop some this week, which should help many consumers breathe a little easier,” Walters said. “But the fact remains, the government’s plan of purchasing mortgage-backed securities cannot go on indefinitely, and when it ends, we will most certainly see a spike in rates. The hope is that the Fed can keep rates low long enough to kick-start a housing recovery. Whether that will work remains to be seen.”

“Volatility is the key word in the mortgage industry these days when it comes to rates,” said Kyle Kerwin, senior vice president of mortgage lending for Signature Bank of Arkansas.

Here are five tips for those shopping for a mortgage today, particularly those who need to refinance an existing loan:

1. Get started on paperwork. Once you’ve found the mortgage professional you’d like to work with, get started on the necessary paperwork, said Dan Green, loan officer with Waterstone Mortgage in Cincinnati and author of TheMortgageReports.com. Rates move regularly, and if paperwork has been started your file can be processed more quickly when rates hit a low. When you start the application process, your credit score will be pulled and you’ll need to submit support documentation including W-2 forms and pay stubs. You might be asked for updated documents nearer to closing.

2. Make sure your credit is in good shape. Check credit reports and fix problems as soon as possible, said Mary Curran, president of Highland Financial Mortgage Corp. in Northbrook, Ill. Even seemingly small charges can haunt a borrower: A forgotten, unpaid parking ticket, for example, can noticeably affect a credit score, she said.

3. Decide at what rate it makes sense to pull the trigger. If you have a 6% rate now, rates would have to hit 5% or lower for it to make financial sense to refinance, Cecala said. Talk with your mortgage professional about what’s best for your particular situation.

4. Stick to your guns. Once you determine the rate you’d need to get, it’s probably wise to stick to that decision. Consumers sometimes gamble that rates will go lower, and the plan can backfire if rates reverse course, Kerwin said. A couple of weeks ago, rates were close to 4.5% in his market, “and people wanted to hold out for an extra eighth of a percent.”

5. Remember, rates are still good. Yes, rates could fall and create another record low as a result of a swoon in the stock market, a collapse of a major bank or a deepening of a recession, Gumbinger said. But it isn’t likely that many consumers would crave those economic shocks. “Why would anyone wish for those things again to simply get a rock-bottom, ultra low mortgage rate? If it means saving $250 per month on your mortgage but it costs you $50,000 in your 401(k), how could this be seen as any kind of benefit?” he said.

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

Mortgage Applications Increase in Latest MBA Weekly Survey

 RISMEDIA, June 25, 2009-The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending June 19, 2009.

  The Market Composite Index, a measure of mortgage loan application volume, was 548.2, an increase of 6.6% on a seasonally adjusted basis from 514.4 one week earlier. On an unadjusted basis, the Index increased 6.0% compared with the previous week and increased 17.2% compared with the same week one year earlier.

The Refinance Index increased 5.9% to 2116.3 from 1998.1 the previous week and the seasonally adjusted Purchase Index increased 7.3% to 280.3 from 261.2 one week earlier.

The four week moving average for the seasonally adjusted Market Index is down 9.3%. The four week moving average is up 2.2% for the seasonally adjusted Purchase Index, while this average is down 15.5% for the Refinance Index.

The refinance share of mortgage activity decreased to 54.0% of total applications from 54.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.1% from 4.3% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.44% from 5.50%, with points increasing to 0.99 from 0.89 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.93% from 4.99%, with points decreasing to 0.92 from 0.99 (including the origination fee) for 80% LTV loans.

The average contract interest rate for one-year ARMs remained unchanged at 6.54%, with points increasing to 0.11 from 0.09 (including the origination fee) for 80% LTV loans.

The survey covers over 50% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

For more information, visit www.mortgagebankers.org .

Have We Reached Bottom? 10 Factors to Consider

 RISMEDIA, June 24, 2009-Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws

 of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:

1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.

2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.

3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.

4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.

5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.

6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.

7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.

8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.

9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.

10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.

For more information, visit www.appraisalinstitute.org .

May Existing-Home Sales Continue Rising Trend

RISMEDIA, June 24, 2009-Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005.

Existing-home sales-including single-family, townhomes, condominiums and co-ops-rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Lawrence Yun, NAR chief economist, expected an improvement. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” he said. “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 appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86% in May from a record low 4.81% in April; the rate was 6.04% in May 2008. Last week, Freddie Mac reported the 30-year fixed at 5.38%; data collection began in 1971.

Total housing inventory at the end of May fell 3.5% to 3.80 million existing homes available for sale, which represents a 9.6-month supply2 at the current sales pace, down from a 10.1-month supply in April.

Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

An NAR practitioner survey in May showed first-time buyers accounted for 29% of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago. “This is the time of year when we see large increases in the number of repeat buyers, who are benefitting from sales to entry-level buyers,” Yun said. “Investors appear less active, but are more prevalent in areas with large price corrections.”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said appraisals and the tax credit are key issues. “To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist,” he said. “In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August.

“Freeing a pent-up demand in housing will absorb inventory at a faster pace, strengthen communities and stabilize home prices earlier,” McMillan said.

The national median existing-home price3 for all housing types was $173,000 in May, down 16.8% from a year earlier. Distressed properties, which declined to 33% of all sales in May from 45% in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

“The decline in the distressed sales share likely results from an increase of repeat buyers in May,” Yun said. “First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales.”

Single-family home sales rose 1.9% to a seasonally adjusted annual rate of 4.25 million in May from a pace of 4.17 million in April, but are 3.0% below the 4.38 million-unit level in May 2008. The median existing single-family home price was $172,900 in May, down 16.1% from a year ago.

Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000 units in May from 490,000 in April, but are 8.9% below the 571,000-unit level in May 2008. The median existing condo price4 was $173,800 in May, down 21.9% from a year earlier.

Regionally, existing-home sales in the Northeast rose 3.9% to an annual level of 800,000 in May, but are 10.1% below a year ago. The median price in the Northeast was $243,600, which is 12.5% below May 2008.

Existing-home sales in the Midwest jumped 9.0% in May to a pace of 1.09 million but are 4.4% below May 2008. The median price in the Midwest was $145,800, which is 10.4% lower than a year ago.

In the South, existing-home sales were unchanged at an annual pace of 1.74 million in May but are 8.9% below a year ago. The median price in the South was $157,400, down 9.9% from May 2008.

Existing-home sales in the West slipped 0.9% to an annual rate of 1.14 million in May, but are 11.8% higher than May 2008. The median price in the West was $197,700, down 30.6% from a year ago.

For more information, visit www.realtor.org .

Sounding an Optimistic Note - 8 Questions for NAR’s Leader

RISMEDIA, June 23, 2009-(MCT)-The dream of homeownership is alive and well in the U.S., the president of the nation’s largest real estate trade association recently told a professional group in Fort Worth.

“That’s pretty remarkable considering what’s happened to home prices and sales this year,” said Charles McMillan, who this year is leading the 1.1 million-member National Association of Realtors.

McMillan got his start in real estate in Fort Worth in 1983. He was the Greater Fort Worth Association of Realtors’ 1992 Realtor of the Year and the 2000 Texas Realtor of the Year.

He’s now director of realty relations and broker of record with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. He returned to his home turf Friday to speak to the Dallas-Fort Worth Chapter of the National Association of Hispanic Real Estate Professionals.

He told the group that consumers want back in the market on two conditions: They can get a home for a good price and financing at an affordable rate.

“With so many distressed properties for sale, it’s not difficult to find a bargain. However, some might say that we communicated our message too well because now we have so many buyers who have unrealistic low-price expectations for all homes. They have the feeling that all sellers are distressed sellers and they’re not.”

Finding affordable financing for potential home buyers also remains a challenge, McMillan said. Last year’s government takeover of Fannie Mae and Freddie Mac should have encouraged financial institutions into pumping more money out to consumers, but that has not been the case, he said.

“I’ve heard many, many stories from Realtors who have seen good-credit clients turned down for loans,” he said. “We’ve got to take a critical look at lending practices and find a way to balance responsible lending with an appropriate pool of capital in the marketplace.”

McMillan spoke with the Star-Telegram following his address:

Star-Telegram: As the housing market was going bad, was there anything that real estate agents could have done back then to help?

McMillan: Neither the real estate industry nor its allied folks and regulators knew the huge tsunami that was about to hit us. One of the things we did, and do, as Realtors, is we would bring to the attention of authorities when we saw abuses going on at the closing table; fraud going on at the closing table. As far as us forecasting and foreseeing the great decline, we did not, nor should we be faulted for it.

Star-Telegram: What is it going to take to stabilize the U.S. housing market?

McMillan: Keep interest rates low and stable. The volatility that’s occurred in the last three weeks has not been helpful. Make financing, mortgage money, available. That’s still a challenge despite the fact that all of the bailout money was given to financial institutions. Stem the tide of foreclosures; shrink the existing foreclosure inventory. Our data shows that is starting to happen.

Star-Telegram: The NAR has called for the expansion of the first-time home-buyer tax credit for all buyers. How will that affect the market?

McMillan: It will impact the market significantly. The current tax credit brought buyers back in unprecedented numbers. Approximately 43% of all sales have been first-time home buyers making use of the first-time tax credit.

Star-Telegram: What glimmers are you seeing in the housing market right now?

McMillan: Existing home sales are increasing. They’re increasing more dramatically in areas that had more severe downturns, like California, Nevada, Arizona and Florida. That says a lot about the ability to decrease the excess inventory on the market. Unfortunately, most of the sales that are a part of this dramatic increase are distressed sales.

Star-Telegram: What other issues will be facing your organization this year?

McMillan: There are two issues: reform with respect to appraisal issues and appraisal management companies and healthcare. Almost 50% of real estate practitioners operating as independent contractors don’t have healthcare.

Star-Telegram: You took over this organization at one of the most critical times in the housing market. How are you handling the pressures?

McMillan: I think I’ve been handling it very well. Hours after I took over, I was scheduled to go to Tokyo and no sooner I got home, with a 48-hour turnaround, I flew back to Washington to testify before the House Financial Service Committee about reform. While the job has been difficult, it’s required a whole lot of time. It’s a commitment I made going into this role.

Star-Telegram: What has been your biggest accomplishment?

McMillan: Having Freddie Mac and Fannie Mae eliminate their “declining markets” policy, which was adding tremendously to the decline of neighborhoods by stigmatizing those areas. That was a huge coup. We met with them intensely and hours later they rescinded that policy. [Under the policy, loan underwriters were requiring larger down payments in areas where home prices were falling or were hard to determine. The NAR argued that the policy disproportionately affected minorities and lower-income families.]

Star-Telegram: Is real estate still a good career choice?

McMillan: Absolutely it is. One of the things we’re seeing now, more people are coming into this who have chosen real estate as a career from high school.

Copyright ©2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.

Are Tighter Appraisals Hurting Home Sales?

RISMEDIA, June 22, 2009-(MCT)-Less than a week after putting his newly renovated house in Idylwood, Texas, on the market, Derrick DeCristofaro accepted a full-price offer of $242,900 on the 1940 bungalow.

But the appraisal on the 1,780-square-foot home came in at just $206,000. The buyer couldn’t come up with enough cash to make up the difference and DeCristofaro wasn’t willing to drop the price, so the deal fell through.

On top of already sluggish home sales, are appraisals becoming the newest threat to the local housing market?

Real estate experts said sales are collapsing because appraisers are being more conservative and valuing homes for less than what buyers have agreed to pay. Some owners can’t refinance because appraisers say their homes are worth less than they had counted on.

In DeCristofaro’s case, the low appraisal affected the would-be buyer’s ability to get a mortgage for the contracted price.

“Their lender naturally wouldn’t approve that,” DeCristofaro said.

His house is under contract again to a backup buyer, but because of new rules regulating appraisals, and a more conservative lending environment in general, DeCristofaro is worried about the new sale closing as well.

“It’s shocking. If we just pulled a buyer out of thin air, it would be a different story, but we had multiple offers coming in. It seems strange the lenders wouldn’t support that,” said DeCristofaro, an interior designer who is an investor in the home, which has two other owners.

Real estate broker Robert Searcy has seen a number of sales fall through because of low appraisals.

And that has the potential to hurt property values, too, he said.

“The biggest challenge isn’t the economy, or buyers who can’t qualify for loans. It’s appraisers coming in with ridiculously low appraisals,” said Searcy, who is listing DeCristofaro’s house.

Part of what’s at issue is a new rule that went into effect May 1 prohibiting loan officers, mortgage brokers and real estate agents from selecting appraisers.

New rules for lenders

The rule falls under the new Home Valuation Code of Conduct, the result of an agreement between Freddie Mac, Fannie Mae, the Federal Housing Finance Agency and the New York state attorney general to enhance the independence and accuracy of the appraisal process. It applies to lenders that sell single-family mortgage loans to the government-sponsored enterprises.

The rule was meant to prevent inflated appraisals like those that proliferated during the housing boom.

Houston appraiser Chris Catechis said there were a couple of times in recent years when he felt pressure from mortgage brokers to “hit a value” on a property. If it didn’t, they threatened to take their business elsewhere, which is what he said he advised them to do.
While the appraiser, a partner in Catechis, Campbell & Associates, understands why the new rules were implemented, it has cost him business.

Lenders are now using more appraisal management companies when they select appraisers. These companies often charge a fee to the lender and pay an outside appraiser like Catechis a portion of that fee.

Unfamiliar with the area

One of the unintended consequences of this system, however, is the chance that a management company will hire an appraiser who isn’t familiar with the neighborhood where the house is being evaluated, said Catechis.

“When you have appraisers coming from different parts of town and not knowing areas, they aren’t doing justice to the people that are trying to refinance or sell,” Catechis said. “It really skews the whole appraisal process.”

The appraisal business, in general, has become more difficult in today’s residential real estate market because there are fewer sales — many of which are foreclosures.

Some OK with caution

Catechis said he’s now often required to get two comparable sales that took place within the past 90 days. If there are none, he’ll have to look at similar subdivisions nearby.
“There’s a lot more detail involved in an appraisal for a lesser price,” he said.

Not everyone is as concerned about appraisers taking a more cautious tack.

David Zugheri, of Envoy Mortgage in Houston, said he hasn’t seen a high percentage of homes for sale not appraising.

While the industry is more conservative, “if the value is less than the sales price there’s a strong case that the value really is less than the sales price,” he said.

Copyright © 2009, Houston Chronicle
Distributed by McClatchy-Tribune Information Services.

Overlooked Signs the U.S. Housing Market is Turning

 RISMEDIA, June 12, 2009-(MCT)-In the Sacramento Delta suburbs east of San Francisco - where home prices soared and fell as viciously as anywhere in the country - a housing market rebound is feverishly under way.

A 1,600-square foot rancher listed for $179,000 - after last selling for $425,000 in 2004 - drew multiple offers last month with a high of $210,000 in cash. The topper: The property was a “short sale” whose owner needs lender approval to sell for less than the mortgage owed-and which buyers wouldn’t touch just three months ago.

“My phone was ringing off the hook, my voice mail was on overload and people were coming into the office receptionist saying they couldn’t reach me,” said Christy Howard, a Coldwell Banker Coon and McCreary agent who listed the Antioch house. “Everyone was waiting for the bottom, and the problem is they waited to long, because the bottom has already come and gone.”

Spurred by markdowns up to 80% from market highs, first-time buyers and investors both American and foreign descended en masse in the last three months on San Francisco’s hardest-hit hinterlands as Wall Street and the economic climate improved. They’re picking clean the Delta region’s banked-owned inventory as soon as properties hit the market and are engaged in unprecedented bidding wars even on short sales.

The panicked buying - fueled by buyers’ fear they’ll miss out on fire-sale prices - belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity. It is one of several overlooked signs the U.S. housing-market turnaround has started in the nation’s hardest-hit markets, which is critical to driving an overall recovery:

- After spending most of the 1990s in the $250,000 range, the median-priced home that was sold in the seven-county San Francisco area rose to a staggering $850,000 by its May 2007 peak. It since fell to a low of $399,000 in February - a 53% drop in just 21 months - before posting its first monthly gain in March, albeit a 1% uptick. The median is expected to continue rising at a healthy clip in months ahead since it’s now at the level of nine years ago, before the bubble began inflating.

- California’s statewide inventory of unsold homes - based on the number on the market divided by the present monthly sales rate - stood at a 15.2 months supply in February, 2008. That figure was down to 5.8 months in March, near the historic average.

- At roughly 22,000 units, Las Vegas’ inventory is not far off its recent record high. Yet total sales closed in March showed flourishing demand, the fourth best on record. That monthly record - set during the height of the boom - is expected to be broken this summer.

“Things have been looking up but it’s going unnoticed,” says Forrest Barbee, a board member with the Greater Las Vegas Association of Realtors and a broker for Prudential American Group Realtors. “It’s just going to take the data a little longer to catch up with reality.” Listen to one analyst’s thoughts about housing having hit bottom.

Adds Rick Sharga, senior vice president of RealtyTrac, which compiles home sales and foreclosure data: “We’ve overshot the market in places like Las Vegas and Arizona in terms of fair value and buyers are bidding prices up again on many properties. The challenge is going to be whether there is enough financing to eat up the inventory that’s yet to come.”

The specter of rising foreclosures - born now of the recession rather than just overleveraged subprime borrowers - is the wild card in future health of the U.S. housing market and the economy by extension. Read about the difficulty borrowers are having with mortgage modifications.

The number of U.S. homeowners behind on payments or in foreclosure shattered the record in the first quarter, the Mortgage Bankers Association reported last week. Nearly one in eight mortgage holders were either delinquent or in the foreclosure process - and prime mortgages in trouble for the first time outnumbered subprime loans on a percentage basis. Read more on the record jump in foreclosures in the first quarter.

Yet the number of pending sales of existing U.S. homes took a surprising upswing in April, rising 6.7% in the biggest monthly gain in more than seven years, the National Association of Realtors reported Tuesday. That increase lags the 9.2% jump in October 2001, but that spike owed to buyers temporarily putting off home shopping following 9/11. See the latest data on pending home sales.

And in an overlooked report that belies the first-quarter delinquency numbers, defaults on privately insured mortgages - where borrowers are more than 60 days behind - fell 3% in April and were down 24% from a record 106,482 in February, the trade group Mortgage Insurance Companies of America reported Friday.

Most important for gauging the strength of the nationwide market is how conditions are improving in the most-depressed regional markets.

With those markets now stabilizing, banks are no longer anxious to dump real-estate owned properties, as houses in their foreclosure portfolios are called, fearing they’ll get appreciably less three months from now for their foreclosed properties.

As a result, they’ll be more judicious about the pace at which they release foreclosures onto the market. The new goal: To maximize the value of supplies in hand rather than unload it helter-skelter and torpedo the housing market like they did while they were shell-shocked by the devastation they’d wrought.

With the banks themselves now somewhat more stable, they’ll also be less likely to want to part with their “toxic assets” knowing the most-scorched, still-serviceable mortgages will be the most valuable on a credit-risk markup once the economy recovers. In fact, the price stabilization in the most-depressed U.S. markets will allow a clearer valuation of the toxic assets we now all hold by virtue of bank bailouts - a modicum of certainty that will hasten the overall recovery.

Homeowners in most of America know by their own property’s value that the spike in U.S. median home values was driven in considerable measure by soaring prices and volume in major markets, especially in California, Florida, Nevada and Arizona. By virtue of their climates and economic-growth rates, those four states have been on the extremes of the U.S. boom-and-bust housing cycle since the 1950s.

You can’t discount how critical an upturn in those states will be, considering they account for 46% of foreclosures nationwide. If foreclosures there are more quickly consumed as they’re starting to be now - fueled in part by foreign buyers who recognize their value - we’ll all reap a return on our bailout money a lot faster.

“The banks are getting smarter and realizing that if they don’t sell it in a short sale, they lose more money going the foreclosure route,” Barbee said.

Adds Sharga: “The banks will be very particular and thoughtful about how they’ll release new foreclosures, because they know now how flooding the market will have a disastrous effect.”

That, and if the chastened lenders would just swallow crow and pony up for rights to an encouraging Beatles song to play on their delinquent-payers’ hold line: “We can work it out.”

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

7 Tips for Consumers Preparing to Purchase a Home

 RISMEDIA, June 3, 2009-June is National Homeownership Month and like many other consumer advocates, the Oregon Bankers Association (OBA) urges consumers to get informed as they prepare to buy a home. Today, there are a growing number of obstacles for home buyers, including a higher credit score standard and more restrictions on credit. Despite current challenges in the secondary mortgage market, home loans are available to credit-worthy buyers and Oregon banks stand ready to assist prospective home buyers.

Whether you live in Oregon or New Jersey, or anywhere else in between, it’s crucial that you have a thorough understanding of the changing market when shopping for a mortgage. Here are seven tips to help you do exactly that:

1. Learn about first-time home buyer programs. Consider taking a first-time home buyers course or visit with your local banker to find out about programs available to you, such as the new federal $8,000 first-time home buyer credit for 2009 home purchases.
2. Get pre-approved. Know the difference between “pre-qualified” and “pre-approved.” Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.
3. Be honest with the lender and yourself. You don’t want to borrow more than you can afford. Your bank can provide a calculator to determine if you can afford to borrow and if so, how much. The American Bankers Association has several home financing calculators available at www.aba.com/aba/static/calculators.htm .
4. Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.
5. Know your credit situation. Obtain a copy of your credit report and FICO score or VantageScore at least six months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that’s hurting your credit score. To obtain a free copy of your credit report, visit www.annualcreditreport.com .
6. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs - there won’t be a landlord to call.
7. Organize your finances before you go to the bank. While each bank may require different documentation, at a minimum you will need:

- Pay stubs.
- Tax returns.
- Financial statements (one that is less than 60 days old).
- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.
- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.

MBA Supports Proposal for $15,000 Tax Credit for All Home Buyers

RISMEDIA, June 17, 2009-David G. Kittle, CMB, chairman of the Mortgage Bankers Association, issued the following statement in support of S. 1230, The Home Buyer Tax Credit Act of 2009:

“Stimulating the housing market is one of the best ways Congress can help accelerate the recovery of our national economy. Offering $15,000 to potential home buyers is a powerful incentive that I believe will jumpstart the housing market.

“The current $8,000 credit for first-time buyers has had a positive effect on the housing market this year. Increasing the amount and expanding the benefit to include all home buyers will have an even larger impact in spurring the housing market and stabilizing the economy.

“As this bipartisan proposal moves forward, we hope that policy makers will make the tax credit refundable as a tax refund if the person’s tax liability is less than the amount of the credit, so borrowers can take full advantage of this benefit. In addition, we believe that the tax credit ought to be made available at the closing table. One of the greatest hurdles for many home buyers is saving money for their down payment. If this money could be made available at the closing table, as FHA has done with the existing tax credit for first-time home buyers, it will have the potential to help even more borrowers.”

A letter to U.S. Senator Johnny Isakson (R-GA), who introduced S. 1230, can be found on www.mortgagebankers.org .

Housing Starts Jump 17.2% in May, Permits Post Gains in May, Too

RISMEDIA, June 17, 2009-Nationwide housing starts rebounded in May from record lows in the previous month, posting a 17.2% gain to a seasonally adjusted annual rate of 532,000 units, according to U.S. Commerce Department figures released this week. While driven largely by a double-digit gain in the volatile multifamily sector, the uptick also reflected a substantial gain on the single-family side and applied consistently to all regions of the country.

“Having drawn down standing inventories to very thin levels over the past year, some home builders are now carefully replenishing their supplies in response to demand from smart buyers who are taking advantage of low interest rates and prices,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla.

“Today’s report showing three consecutive months of gains in single-family housing starts and two consecutive months of gains in single-family permits is a very welcome sign that the market may be nearing a turning point,” said NAHB Chief Economist David Crowe. “That said, our recent surveys tell us that builders remain very cautious about the future, and that they are aware of the upcoming expiration of the first-time buyer tax credit at the end of November. Homes that get started now should be able to close by that deadline, and this may be spurring some of the latest construction activity.”

Single-family housing starts gained 7.5% in May, breaking the 400,000 mark for the first time since November 2008 to reach a seasonally adjusted annual rate of 401,000 units. Meanwhile, starts in the much more volatile multifamily sector posted a 77 percent gain following a nearly equivalent decline in the previous month, for a seasonally adjusted annual rate of 124,000 units.

Building permit issuance, which can be an indicator of future building activity, rose 4 percent overall in May to a seasonally adjusted annual rate of 518,000 units. On the single-family side, permits rose 7.9% to 408,000 units, while on the multifamily side, they declined 8.3% to 110,000 units.

Both housing starts and permits were up across every region in May. Starts rose 2% in the Northeast, 11.1% in the Midwest, 16.8%in the South and 28.6% in the West. Permits rose 5.7% in the Northeast, 8.9% in the Midwest, 2.3% in the South and 3.8% in the West.

For more information, visit www.nahb.org .

Isakson Continues Push to Stimulate Housing Market

 

Introduces Legislation to Expand Tax Credit for Homebuyers, Cites Endorsement by Business Roundtable

Drawing on more than three decades of experience in the real estate industry, U.S. Senator Johnny Isakson, R-Ga., today introduced legislation to invigorate housing demand and to boost the economy by expanding the first-time homebuyer tax credit passed by Congress earlier year.

“The first-time homebuyer tax credit has made a difference. First-time home buyers used it and the market stabilized, but we don't have a recession in first-time home buyers. We have a recession in the move-up market,” Isakson said. “One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.”

Specifically, Isakson’s legislation would increase the maximum amount of the credit from $8,000 to $15,000 and expand the current tax credit so that it applies to any buyer of any home, not just first-time buyers. The legislation also would eliminate the income caps of $75,000 for an individual and $150,000 for a couple under the current tax credit so that there is no income limit for eligibility. Finally, the amendment would extend the tax credit for one year from date of enactment and would still allow homebuyers to claim the credit on their 2009 tax return for purchases made in 2010.

“The man who is transferred from Missouri to Georgia can't sell his house in Missouri, can't come to Georgia and can't take the transfer. His employer can't afford to buy the house and hold it for him because of the proliferation of inventory that is owned,” Isakson said. “Today, in the United States, one in two sales made every day is a short sale or a foreclosure. That is an unhealthy market, and it is continuing to precipitate a downward spiral in values, loss of equity by the American people and a protracted, difficult economic time for our country.”

Isakson immediately picked up a bipartisan group of co-sponsors for his legislation, including Senators Lamar Alexander, R-Tenn., Jim Bunning, R-Ky., Saxby Chambliss, R-Ga., Chris Dodd, D-Conn., John Ensign, R-Nev., Joe Lieberman, ID-Conn., Lisa Murkowski, R-Alaska, James Risch, R-Idaho, and David Vitter, R-La.

In addition, the National Association of Realtors and the Housing Working Group of Business Roundtable today endorsed Isakson’s efforts to expand the current homebuyer tax credit as part of recommendations to help return stability and growth to the U.S. housing market.

In announcing its endorsement of the expansion of the homebuyer tax credit as well as other recommendations to boost the housing market, Richard A. Smith, President and CEO of Realogy Corporation and Chair of Business Roundtable’s Housing Working Group, said, “We recognize the earlier efforts made by the Administration and Congress, but strongly recommend taking additional steps to jumpstart the lagging housing market in order to stimulate a broader economic recovery. If the housing market is not corrected or stabilized, the tide of the recession is not likely to reverse in the near term, and the slide in the economy overall will continue. We believe targeted, demand-side solutions – such as the ones Business Roundtable is recommending today – will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole.”

Isakson has pushed hard for a non-repayable tax credit for homebuyers because he knows that it will work. In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.
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FHA Tax Credit Monetization Helps Home Buyers With Upfront Costs

RISMEDIA, June 11, 2009-First-time home buyers who would otherwise qualify for the $8,000 tax credit, but don’t have the money for a down payment

 or closing fees, may now be able to get a loan to help cover those upfront costs.

The U.S. Department of Housing and Urban Development (HUD) announced on May 29 that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages “monetizing” the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.

“This is great news for thousands of families who want to take advantage of today’s low interest rates, competitive prices, great selection and the federal tax credit that is only available until Nov. 30, but could not save enough money for a down payment and closing costs,” said National Association of Home Builders Chairman Joe Robson, a home builder from Tulsa, Okla.

HUD also announced that FHA-approved lenders may purchase the tax credit from the home buyer in advance, so that the home buyer can use the funds for closing costs or to make a down payment in addition to the 3.5% minimum. Home buyers who go directly to FHA-approved lenders will still need to come up with the 3.5% minimum down payment that is required for an FHA-insured loan.

Home buyers previously would be able to use the funds from the tax credit only after filing their federal tax returns and had to come up with the pre-purchase costs on their own.

NAHB estimates that 40,000 more homes will be purchased due to the new FHA monetization program, in addition to the 160,000 sales already expected as a result of the tax credit.

The National Council of State Housing Agencies has a list of states offering first time home buyer tax credit loan programs on their website, www.ncsha.org .

For information on the $8,000 first-time home buyer tax credit, go to www.federalhousingtaxcredit.com

Mobile real estate next big thing, agents say

baltimoresun.com

New cell phone services allow buyers to home in on housing data instantly from wherever they are

By Lorraine Mirabella | lorraine.mirabella@baltsun.com

May 24, 2009

 

Often when real estate agent Karen Fick is showing a house, the prospective buyers will spot another home for sale down the street and wonder about that one. Can they afford it? How many bedrooms does it have? Could it be the one? As an agent with access to Realtor listings, Fick can call up the information on her mobile phone.

But with the growth of software and Web sites that enable mobile searches of listings and neighborhoods, both agents and consumers alike will increasingly be doing instant home searches on the go, industry experts believe.

"Everybody wants everything right now," said Fick, who has sold real estate for three decades and is now with Long & Foster Real Estate in Baltimore's Federal Hill neighborhood. "Everyone wants instant gratification these days."

While the Web may have revolutionized home shopping, Internet-capable phones are tapping into consumers' demand for even more flexibility, say designers of mobile applications.

*****

The get Atlanta area mobile search capability of listings and neighborhoods on your cell phone go to:

http://SmarterAgent.com/KarenandWarrenOwen  

*****

They say home shoppers want to walk or drive through neighborhoods and do searches based on any number of variables - their current location, price range, size of property, comparable homes. They want instant photos, alerts to open houses quick links to the agents who can show them the home.

Those desires are prompting companies such as Smarter Agent, Trulia.com and Zillow.com to rush to offer new features to more users, not only through iPhones and BlackBerrys but through standard mobile phones. And in a slight twist, Long & Foster earlier this month announced its new VoicePad Mobile technology, which gives buyers access to voice descriptions of homes for sale from any phone.

"We are at the very early stages of mobile in real estate," said Ken Shuman, a spokesman for Trulia.com in San Francisco. "Once you do it, it's so easy to step outside and see open homes."

"It's a change of behavior, but it will take off like wildfire," Shuman predicts.

Trulia, a real estate Web site that lists homes for sale, touts itself as one of the first companies to come up with an iPhone real estate application. It was launched in August and has been downloaded 200,000 times. Online real estate service Zillow.com launched its version of the iPhone home search function, which also uses GPS technology, in April. The companies' products are available to consumers and agents alike and are not affiliated with real estate brokerages.

Trulia's application, which can be downloaded free from Trulia's Web site, is GPS enabled and allows filtered searches, by price range, number of bedrooms and other features. It sends out alerts about upcoming open houses and has a button that will instantly call or e-mail an agent.

"If you're seriously thinking of buying and selling and are engaged in the process, that's what our iPhone app is for, a real utility for folks," Shuman said. "If you want to check out four different open houses, it will give you directions for all of them."

The Zillow applications pinpoint a user's location on a map and shows values and information on surrounding homes, moving with the user as he walks or drives through a neighborhood. Users can research home values, home details and photos as well as find information on recently sold homes.

Smarter Agent, based in Parsippany, N.J., launched in January and is available on almost any mobile device and with all carriers. The consumer pays a monthly fee to the phone carrier, for instance, $2.99 a month on Sprint, and $4.99 a month on AT&T. It now has more than 200,000 users and is growing fast, according to the company, and picked up 20,000 new users in April alone.

The product taps into a consumer's location through GPS technology and returns information about properties in the immediate area, including sales prices, description, pictures and neighborhood information. Searches can be done by city, zip code or community. A "call to see' button connects them with the broker or agent. Eric Blumberg, Smarter Agent's founder and president, says the goal was to make the function available on all cell phones, not just iPhones.

"Every cell phone now is a very powerful tool," Blumberg said. "The question is not 'if' people will do [mobile] searches. It's where is the tipping point, when people will use their cell phones for everything."

Shuman, of Trulia.com, believes that in the current buyers' market, home shoppers will be more likely to go mobile.

"People are more skeptical now, and they're doing more homework," he said.

Wayne Curtis, an agent with Long & Foster in Baltimore's Fells Point office, has been promoting his firm's new VoicePad feature, including the phone number for the service on his home listings for-sale signs. By calling the phone number, a potential buyer can get 24-hour voice descriptions of any listed property in the Baltimore area.

"VoicePad is a 21st Century version of the brochure box," he said and just another way to reach sought-after buyers at a time when homes are on the market for an average of four months. "As long as you broaden the pool [of buyers], you're making it more likely the house will sell."

Two of the three homes he has sold recently had "For Sale" signs with the VoicePad number on it, he said.

In Baltimore, Smarter Agent is just rolling out a branded application of its Homes for Sale product to agents and brokers, and Fick, the Long & Foster agent, is among the first to sign up. Brokers and agents can give their clients the mobile application that the broker or agent pays for, typically a fee of about $40 per month. The clients would then download the application from the broker or agent's Web site. The application would include the agent's "brand," name and real estate firm, and when a buyer wants more information on a property, he would be connected with that agent.

Fick said she views the Homes for Sale feature as something extra for her clients.

"I just think it will simplify things for the buyer," she said. "Any time somebody is looking for a house, it's just human curiosity, when you walk or drive down a street; you want to know information about a house."

For those times when she is out with potential buyers who want more information, "Now we can get that while standing on a street corner," she said. "It gives the customer satisfaction in having an answer right then."

*****

The get Atlanta area mobile search capability of listings and neighborhoods on your cell phone go to:

http://SmarterAgent.com/KarenandWarrenOwen

Mortgage Rates Rise for Second Straight Week

RISMEDIA, June 10, 2009-The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for 30-year fixed mortgages ( www.zillow.com ) increased last week to 5.48%, up from 5.25% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Meanwhile, rates for 15-year fixed mortgages rose to 4.95% from 4.78%, and 5-1 adjustable rate mortgages rose to 4.62% from 4.48% the week prior.

Mortgage Type          Average Rate                  Average Rate
                                   Week ending 6/7/09     Week ending 5/31/09    % Change
30-year fixed             5.48%                               5.25%                                4.4%
15-year fixed             4.95%                               4.78%                                3.6%
5-1 ARM                    4.62%                               4.48%                                3.1%

On Monday, rates for 30-year fixed purchase mortgages rose further, with the average rate on Zillow Mortgage Marketplace at 5.62%. For current, up-to-the-minute rates, visit www.zillow.com/Mortgage_Rates/ .

Thirty-year fixed mortgage rates varied by state. Georgia mortgage rates and Missouri mortgage rates increased the most, from 5.15% to 5.48% in Georgia and from 5.25% to 5.53% in Missouri. New York mortgage rates and Massachusetts mortgage rates were the highest, at 5.56% and 5.55%, respectively. Florida mortgage rates were the lowest, at 5.44%. California mortgage rates were the most requested among all states.

State           Average 30-yr.               Average 30-yr.
                   Fixed Rate                         Fixed Rate
                   Week ending 6/7/09       Week ending 5/31/09        % Change

Arizona       5.47%                                 5.25%                                    4.2%

California    5.45%                                 5.24%                                    4.0%

Colorado     5.48%                                 5.23%                                    4.8%

Connecticut 5.50%                                 5.26%                                    4.6%

Florida         5.44%                                 5.19%                                    4.8%

Georgia        5.48%                                 5.15%                                    6.4%

Illinois          5.53%                                 5.28%                                    4.7%

Maryland      5.52%                                 5.35%                                    3.2%

Massachusetts 5.55%                              5.30%                                    4.7%

Michigan        5.48%                                5.21%                                    5.2%

Minnesota      5.51%                                5.28%                                    4.4%

Missouri        5.53%                                 5.25%                                    5.3%

New Jersey     5.45%                                 5.24%                                    4.0%

New York       5.56%                                 5.29%                                    5.1%

North Carolina 5.52%                               5.27%                                    4.7%

Oregon            5.50%                                5.27%                                    4.4%

Pennsylvania    5.45%                               5.26%                                    3.6%

Texas               5.45%                               5.25%                                    3.8%

Virginia            5.48%                                5.23%                                    4.8%

Washington      5.45%                                 5.24%                                   4.0%

The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace by mortgage lenders to borrowers who have submitted loan requests. State-level data is gathered for the top 20 states with the highest quote volume on Zillow.

For more information, visit www.zillow.com

RE/MAX is the Only Real Estate Brand with National TV Advertising in 1st Quarter 2009

It was reported today in Inman News that RE/MAX was the only real estate franchise advertising on national TV during the 1st Quarter of 2009. To see the whole story go to:

http://www.inman.com/news/2009/06/9/remax-has-national-tv-itself

RE/MAX Rolls Out New Straight-Talking TV Ads

RISMEDIA, June 9, 2009-RE/MAX is taking their message directly to consumers regarding the current real estate market with a series of new television spots that offer a serious message to home buyers and sellers. Featuring straight-talk about the reality of today’s market, the three 30-second commercials feature Margaret Kelly, chief executive officer of RE/MAX International Inc., who stresses the importance of using an experienced agent.

“Today, in the worst housing market most of us have ever seen, experience is more important than ever,” says Kelly in one of the spots. “Since RE/MAX first opened its doors back in 1973, we’ve seen all the boom and bust markets, but we’ve helped millions of families buy or sell a home.”

According to the company, the commercials will add a new personal dimension to the current RE/MAX television campaign that was introduced in February 2009.

“We’re looking at a different goal with these new spots,” says David Rea, executive creative director for RE/MAX International. “We want to talk directly to the consumer about today’s market and the stability of the RE/MAX organization.”

While many of the real estate industry’s biggest players are scaling back their TV buys due to economic realities, the RE/MAX share of voice for national TV advertising jumped from 50% in 2008 to 99.9% in the first quarter of 2009. RE/MAX remains committed to being visible where consumers still spend a significant amount of their leisure time - in front of a television set.

“There are so many families out there who are worrying about what their home is worth, and whether now is a good time to buy,” says Kelly. “They need to know that no matter what’s happening in real estate nationally, what matters is what’s happening in their town, and in their neighborhood. And there are some great opportunities out there right now.”

RE/MAX vigorously promotes its brand with a strategic media mix of television, cable, radio, print and Internet advertising, and has recently made the move into social networking in an effort to attract new audiences. In addition to their national campaign, RE/MAX continues to make media buys on a regional and local level.

The new spots featuring Margaret Kelly can be seen during popular prime-time network programming, newscasts, and on cable TV. All RE/MAX advertising directs viewers to the company web site, www.remax.com, which offers all home listings in thousands of U.S. cities and towns, and is consistently ranked among the most visited real estate web sites.

The new ads, along with the entire 2009 RE/MAX television campaign, can be viewed on the company’s YouTube page at www.youtube.com/remaxintl .

For more information, visit http://www.remax.com .

Karen and Warren Owen on REMAX.com

Mortgage Rates Move Higher

RISMEDIA, June 8, 2009-Mortgage rates soared higher last week, with the average 30-year fixed mortgage rate rising to 5.65 percent. According to Bankrate.com’s weekly national survey, the average 30-year fixed mortgage has an average of 0.44 discount and origination points.

The average 15-year fixed rate mortgage climbed to 5.06 percent, while the average jumbo 30-year fixed rate rebounded to 6.68 percent. Adjustable rate mortgages were mixed, with the average 1-year ARM slipping to 5.01 percent and the 5-year ARM jumping to 5.20 percent.

Mortgage rates posted another strong move higher this week, as the focus among bond investors has shifted to concerns about budget deficits and inflation. However, mortgage rates still remain well below the 6 percent mark, and are not an impediment to well-qualified borrowers. The Federal Reserve, with more than $1 trillion remaining in their stated mortgage- and government-bond buyback program, could accelerate or possibly increase those purchases in an effort to bring rates lower. Any further announcements are unlikely before the June 24 Federal Open Market Committee meeting.

Mortgage rates remain significantly lower than one year ago. This time last year, the average 30-year fixed mortgage rate was 6.52 percent, meaning a $200,000 loan would have carried a monthly payment of $1,266.77. With the average rate now at 5.65 percent, the monthly payment for the same size loan would be $1,154.47, a savings of $112. 30 per month for a homeowner refinancing now.

Survey Results

30-year fixed: 5.65% — up from 5.45% last week (avg. points: 0.44)
15-year fixed: 5.06% — up from 4.86% last week (avg. points: 0.38)
5/1 ARM: 5.20% — down from 4.94% last week (avg. points: 0.44)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

Region gets good news amid recession

Tech manufacturer will be 14th Fortune 500 company in state.

By Dan Chapman

The Atlanta Journal-Constitution

Wednesday, June 03, 2009

A huge ray of economic sunshine burst upon Georgia on Tuesday with the official announcement that NCR, a Fortune 500 company from Ohio that makes ATMs and check-out machines, is bringing its corporate headquarters, a new plant and about 2,100 jobs to Duluth and Columbus.

Recession? This was more like the good ol’ days of the 1990s, when Atlanta pilfered with abandon corporate and manufacturing jobs from higher taxed, less hospitable Northern and Midwestern climes.

“It’s a great day to be in Georgia,” said Ken Stewart, commissioner of Georgia’s economic development department. “Hard work does pay off.”

So, too, apparently, do tens of millions in tax breaks and other inducements from the state, Gwinnett County and governments in the Columbus area.

The state alone promised NCR more than $60 million in tax breaks. But Georgia’s gain comes at already downtrodden Dayton’s expense. The town, dubbed by Forbes.com as one of the country’s top 10 “fastest dying cities,” loses its only Fortune 500 company and the possibility of thousands of new jobs to salve the bruised blue-collar city’s wounds.

Four hundred miles down I-75, little thought was given Tuesday to Dayton’s woes. In Atlanta, the talk was about adding another global company —- the metro region’s 14th Fortune 500 company —- to the corporate pile.

Hans Gant, senior vice president with the Metro Atlanta Chamber of Commerce, likened NCR’s decision to GE Energy’s announcement in the late 1990s that it was bringing a headquarters, good-paying jobs and international prestige to Atlanta.

Since then, though, Atlanta has suffered its share of takeovers, downsizings and bankruptcies. The names read like a Who’s Who of the Atlanta That Was: Scientific-Atlanta, Georgia Pacific, BellSouth —- all local titans absorbed by out-of-state companies.

Tuesday restored some of the lost luster, at least in the eyes of local boosters.

“The message NCR sends around the world, in a recession, is that Atlanta is a great place for corporate headquarters, technology and talent,” Gant said. “Hopefully, it will stimulate others to bring their business here.”

NCR promises:

> 1,250 jobs, on top of the 300 already in place in Duluth, which will be home to NCR’s new corporate headquarters. Bill Nuti, NCR’s CEO, said in an interview that marketing, engineering, IT, finance, human resource and business development positions will come to the Satellite Boulevard complex. Average salaries will be “well in excess of $60,000 to $70,000,” Nuti said.

> 870 manufacturing jobs in Columbus, where workers will build ATMs at a new plant. Recruiting is already underway.

> an expansion that already was on target to employ roughly 900 people at a customer service and training center in Peachtree City.

Based on those plans, more than 3,000 Georgians could one day work for NCR. Nuti added that the company may also build a new headquarters at its existing Satellite Boulevard site or elsewhere in Gwinnett County.

The company will invest at least $30 million, a figure Nuti said should rise “quite a bit more when the aggregate is done.” New-job payroll will exceed $150 million a year, an amount necessary to trigger the state incentives.

Nuti himself, however, will continue to live in New York.

While state officials released the main elements of their tax incentives, Gwinnett County officials say they are still working on property-tax abatements for NCR. Nick Masino, vice president of the Gwinnett Chamber of Commerce, said the county offered “millions” in inducements, but only a fraction of the state package.

“This project is huge in the current economy,” said Masino. “We’re leasing up hundreds of thousands of square feet of property. We’re adding 1,200 workers.”

Gwinnett should benefit handsomely from NCR, said Georgia State University economist Rajeev Dhawan, if the jobs are newly created and not transplanted.

“If they bring people in from outside, that brings more money into the area, but it won’t dent the unemployment rate,” said Dhawan. “If they are hiring locally, that is a big boon.”

Robert Crolic, general manager of Atlanta Classic Cars near NCR’s Duluth facility, said the expansion should help car dealers, restaurants, shops and others.

“This will help the real estate market around here,” Crolic said. “There’s a ray of hope.”

First-time Home Buyers Grabbing Houses and Tax Credit

by Kevin Collison

RISMEDIA, June 4, 2009-(MCT)-Generation Y is getting jazzed about a new $8,000 federal tax credit for first-time home buyers-jumping at the opportunity to move up and out of their rentals.

“The last 90 days I’ve seen it go crazy,” Kevin Foster, a real estate agent with Reece & Nichols in Lee’s Summit, said Tuesday. “Every conference room has been full with agents working on offers, and many are people in their 20s.”

Peter Abbey, 26, and his girlfriend, Abigail Barnett, 27, were among them.

Abbey, bar manager at Avenue Bistro in Kansas City, and Barnett, a hospital administrative assistant, had been saving to buy a house the past couple of years but weren’t quite there yet. Until Congress approved the expanded tax credit in February.

Now they’re leaving their rented home in the city for their own place in Roeland Park.

“We were saving money and waiting for the right time, and that definitely helped give us a push,” Abbey said. “We were able to buy a little bit earlier because of the government tax credit.”

The Kansas City Regional Association of Realtors said April sales of new and existing homes were up 10% from March, with almost 2,500 homes sold.
“We’re seeing a lot of first-time buyers back in the market again,” said Chris Collins of Keller-Williams and president of the association. “The tax credit along with historically low mortgage rates is affecting the market.”

The tax credit was part of President Barack Obama’s $787 billion American Recovery and Reinvestment Act. It’s available to people buying their first home in 2009 as long as the purchase is completed by Dec. 1.

Because of the one- to two-month lag between a contract and a done deal, many home buyers are making offers on homes now.

As opposed to a $7,500 tax credit available in 2008, the latest incentive doesn’t have to be repaid if the taxpayer remains in the home for at least three years.

At the national level, a report Tuesday said pending home sales in April were up 6.7% from March, the biggest monthly increase since October 2001, according to a seasonally adjusted index of sales contracts kept by the National Association of Realtors.

“We expect greater activity in the months ahead,” Lawrence Yun, the Realtors’ chief economist, said in a statement Tuesday.

Although economists are encouraged by signs that demand for housing is returning, the outlook is far from sunny. Mortgage rates are rising, making homes less affordable for many borrowers.

The average rate for a 30-year, fixed-rate mortgage is about 5.3% this week compared with about 5% last week, according to Bank-rate.com.
The health of the U.S. housing market, mired in a three-year slump, is one of the key issues facing the economy. Though sales may be recovering, analysts cautioned that prices will take longer to stabilize because of the glut of unsold properties. Prices are unlikely to rise until foreclosures start declining, and that’s unlikely to happen before the end next year.

The national median sales price in April plunged more than 15% from year-ago levels to $170,200, driven by sales of inexpensive foreclosures and other distressed low-end properties.

That was the second-largest yearly price drop on record, according to the national Realtors’ group.

But Jeff McCalmon of Suburban Financial/Tightwad Bank said the tax credit is getting the desired results.

“It’s jump-starting the market because it gets started with first-time buyers and then other people move up,” said McCalmon, who worked with Abbey and Barnett on obtaining their loan.

Shelley R. Denman, past president of the Mortgage Bankers Association of Greater Kansas City, said loan activity is on an upswing with about 50% coming from first-time buyers.

Her bank, Peoples Bank of Overland Park, has just completed the best three months since 2003.

“Ever since that (tax incentive) came out, we’ve seen a massive increase in first-time homebuyers,” she said.

Kalie George is using the tax credit to help her buy a 1930s bungalow in Kansas City, Kan. She’s getting a great price as well, $34,000, because the house was in foreclosure.

“I’m 22 and a first-time buyer,” she said. “It definitely made it more feasible to make things happen.”

Tax Credit Details:

- First-time home buyers can claim 10% of the home’s purchase price on their tax return-up to $8,000, or $4,000 if married filing jointly.
- The home must be purchased by Dec. 1.
- The credit doesn’t have to be repaid if the buyer lives in the home for 36 months after the purchase date.
- The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don’t have to wait to get the money from the Internal Revenue Service.

The Associated Press contributed to this report.

Copyright © 2009, The Kansas City Star, Mo.
Distributed by McClatchy-Tribune Information Services.

BREAKING NEWS - Pending Home Sales Up for Three Months in a Row

RISMEDIA, June 2, 2009-Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7% to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008 when it was 87.5.

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,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

The Pending Home Sales Index in the Northeast shot up 32.6% to 78.9 in April and is 0.8% above a year ago. In the Midwest the index rose 9.8% to 90.4 and is 11.1% above April 2008. The index in the South slipped 0.2% to 93.0 in April but is 3.5% higher than a year ago. In the West the index rose 1.8% to 94.8 but is 2.9% below April 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger downpayment. Buyers who are wondering about their options should contact a Realtor®, who can advise consumers on the housing assistance programs and resources available in a given area.”

NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

For more information, visit http://www.realtor.org

Tax Credit, Low Interest, and Big Inventory Lure Rookies into Housing Market

RISMEDIA, June 2, 2009-(MCT)-Even in a sputtering economy, one segment of the U.S. housing market is feeling a bounce. First-time home buyers-loaded for bear with a new

$8,000 tax credit, historically low interest rates and a big inventory to choose from-are happily diving into domestic life, according to real estate agents, economists and mortgage lenders.

Craig Brown, a 26-year-old marketing developer for an online sales company, feels as if he were getting a free, federally funded fresh start.

“The tax credit was what brought me into the house hunt. I could pay off my debt and get an extremely low loan rate. I couldn’t pass it up,” he said.

The $8,000 tax credit for first-time buyers, passed by Congress as part of its plan to jump-start the slumping U.S. housing market, has new graduates, newlyweds and young professionals alike scrambling to get their financial houses in order-sometimes with the help of their parents-to purchase a home by the program’s Dec. 1 deadline.

The tax credit does not have to be repaid by buyers who live in the home for at least three years.

The tax credit got even more attractive Friday, when Housing and Urban Development Secretary Shaun Donovan announced that the Federal Housing Administration will allow first-time buyers to apply the credit toward the purchase costs of an FHA-insured home.

That move allows state housing finance agencies and some nonprofits to “monetize” the tax credit so buyers can apply it toward their down payments, according to a HUD news release.

The National Association of Home Builders estimates that the tax credit will stimulate 160,000 home sales nationwide-101,000 of which will be by first-time buyers. Fifty-nine thousand homeowners will then be able to buy another house because a first-time buyer purchased theirs.

“It’s really a big deal,” said Linda Davidson of Service First Mortgage Co. in Garland, Texas. “The $8,000 tax credit is making things crazy. In almost every conversation we have with borrowers, it comes up. Even if they are not first-time buyers, they ask about it. Everybody wants it.”

But not everyone can get it.

The program is open only to people who have not owned a principal residence for three years before the purchase, Davidson said.

There are also income limitations, but they are fairly generous: Single taxpayers with incomes of up to $75,000 and married couples with incomes of up to $150,000 qualify for the full tax credit. Singles with incomes below $95,000 and married couples with incomes below $170,000 can be eligible for a partial credit.

‘Surgical impact’

The tax credit is “driving interest” nationwide, said Lawrence Yun, senior economist for the National Association of Realtors.

“In our most recent data from a month ago, we found that roughly half of all home buyers were first-time buyers. That is much higher than the usual one-third to 40% of first-time buyers in a normal market,” Yun said.

He said qualitative data suggest that the tax credit is also increasing foot traffic at open houses and phone inquiries to brokerage agencies.

“This is one program coming out of Washington that is apparently having a surgical impact on getting first-time buyers back in the market,” he said.

“That’s definitely one factor that has improved our market,” said Ruth Story, a broker associate at Keller Williams Realty. “This is the busiest second quarter I’ve seen in 25 years. It’s a combination of things: The low interest rates are very attractive, the tax credit combined with that and the fact that buyers still view our market as being affordable.”

Peer demographic

It’s a nice niche market for a young real estate agent like Grace Taylor, a 26-year-old agent at Helen Painter Group Realtors who is working with four first-time buyers ages 25 to 30.

“They all know it’s a great time to buy and that interest rates are low. But when someone is giving you free money, it pushes them over the edge,” Taylor said.
Nathan McDaniel, a 23-year-old loan officer at Cendera Funding, is also tapping his peer demographic. He says his age helps him connect with younger buyers, who make up a large part of his business. And all of them are interested in snagging the tax credit, he said.

“It really seems anyone who was thinking about getting a place is moving up their timetable so they can get it,” McDaniel said. “Even people who don’t have the down payment, they are getting gift funds from relatives so they can take advantage of it.”

He has made several loans to recent college graduates who were initially holding off “to see if they were going to get married.” Two of them bought a home, McDaniel said. “The tax credit has speeded up the timeline of age and lifestyle,” he said.

Prabhath Boya, a 28-year-old Fort Worth attorney, shopped for a house last year but didn’t find what he wanted. After a “hard” 3 1/2 -week hunt, however, he now has a house near TCU under contract.

“I’ve been living in an apartment for almost two years and looking at interest rates and opportunities,” Boya said. “This is as good a time as anyone can imagine, rates-wise and pricing-wise.”

‘Weeded out’

The national housing meltdown has spurred tougher lending restrictions, culling the herd of would-be first-timers with less-than-stellar credit.

When the tax credit was announced in February, Davidson said her office was flooded with people who wanted to pre-qualify for loans. Unfortunately, most of them are still renters.

“It was overwhelming. Our pre-qualifies were double what we see in a normal month-but 70% of them didn’t qualify,” she said.

Now that the bad applicants have been “weeded out,” Davidson said she’s qualifying people who have done their homework and have their finances in order.

Story is seeing the same thing.

“It’s a different kind of first-time buyer,” she said. “The credit restrictions are so tight, so we are seeing real quality buyers. The profile of the first-time buyers has changed. They have been waiting, watching and saving. And they are ready when the right house comes along.”

Michael and Ambra Cole fit that profile. After living in Switzerland for five years, they moved to Fort Worth in July 2007 when Michael, 36, went to work as a management professor at the Neeley School of Business at TCU. Ambra, 34, works as an account manager for an employment agency.

The couple spent nearly two years saving, watching the market and scouting locations. They scoured Internet listings and then viewed about 25 houses over four months before the right home popped up in the Berkeley Place neighborhood near TCU.

They were the first house hunters to see the home, and they quickly cut a deal. Location and resale value were the prime attractions, Michael Cole said.

“We really tried to do our homework in advance rather than falling in love with the first house we saw,” he said. “The low interest rates, the right house in the right neighborhood — it all came together.”

Within budget

Yun says first-time buyers nationwide seem to have adapted to a more realistic view of real estate.

“We are seeing more lower-price home transactions,” he said. “The lower price point sales indicate to me that many homeowners are trying to stay within their budgets.

“The old-fashioned American way was that one starts in a starter home and after a few years people build equity and trade up,” Yun said. “That is the old-fashioned way to accumulate wealth without stretching themselves. I think we are moving back into that stage, and that’s healthy.”

Craig Brown, the young house hunter, is a model for that new long-run reality.

“The reason that I didn’t buy before was that I would have been stretching myself too thin,” he said. “I didn’t want to be in a position of having no room for error.”
He’s already looking ahead even as he searches for a home in the $130,000 to $140,000 range in Carrollton and north Dallas. And flipping that first house isn’t part of the equation.

“I’m thinking about finding a couple of roommates, and that can pay my mortgage,” he said. “And whenever I get married, I can use this property as a rental property.”

The $8,000 tax credit - key elements of the 2009 First-Time Home Buyer Tax Credit:

Who qualifies?

- First-time home buyers who have bought or will buy between Jan. 1 and Dec. 1. The IRS defines a first-time home buyer as someone who has not owned a principal residence during the last three years.
- The credit does not have to be repaid if the buyer occupies the home for at least three years.
- The credit is 10% of the home’s purchase price, up to $8,000.
- The credit may be applied to primary residences, including single-family homes, condos, town homes and co-ops.

Copyright © 2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.

Recovery Act’s Homebuyer Tax Credit Can Immediately Help Thousands of First-Time Homebuyers

RISMEDIA, June 1, 2009-Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that this action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. This announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize’ up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5% of appraised value or their closing costs, which can help achieve a lower interest rate.

“We believe this is a real win for everyone,” said Donovan. “The Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.”

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5% downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5% minimum down payment, but, under the terms of this announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. This action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

According to estimates by the National Association of Home Builders, the Administration’s homebuyer tax credit will stimulate 160,000 home sales across the nation- 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA’s current market share, it’s estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.

For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

For more information, visit www.hud.gov

Home Prices Fall in First Quarter; Pace of Decline Lessens Considerably

RISMEDIA, June 1, 2009-U.S. home prices fell in the first quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA) seasonally-adjusted purchase-only house price index (HPI). The previously announced, but revised January and February indexes showed increases in house prices, which were offset by a March decrease. The purchase-only HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.5% lower on a seasonally-adjusted basis in the first quarter than in the fourth quarter of 2008.

This decline was much more modest than the 3.3% decline in the prior quarterly period. Over the past year, seasonally-adjusted prices fell 7.1% from the first quarter of 2008 to the first quarter of 2009.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, showed more strength over the latest quarter than the purchase-only index. The all-transactions HPI rose 0.4% in the latest quarter and fell only 3.3% over the four-quarter period.

FHFA Director James B. Lockhart stated: “Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country, especially areas not covered by the other major repeat sales price index,” said Lockhart. “I am hopeful that this first quarter data combined with recent market stimulus programs, such as the first-time homebuyer tax credit and President Obama’s Making Home Affordable Program may mean that home price depreciation may be easing.”

While the national, purchase-only house price index fell 7.1% from the first
quarter of 2008 to the first quarter of 2009, prices of other goods and services fell 0.9%. Accordingly, the inflation-adjusted price of homes fell approximately 6.2% over the latest year.

Other significant findings include:
-As estimated in FHFA’s seasonally-adjusted, purchase-only indexes, six of the nine Census Divisions experienced price declines in the latest quarter. Prices were weakest in the Mountain Census Division, which experienced a 3.1% price decline in the quarter and strongest in the New England Division, which saw a price increase of 1.3%.
-Seasonally-adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 20 states. Prices fell over the latest four quarters in 46 states
and Washington, D.C.
-Of the newly-released purchase-only indexes for the 25 most-populated
metropolitan areas in the U.S., four-quarter prices declines were greatest in
the Miami-Miami Beach-Kendall, FL Metropolitan Division. That area saw
price declines of 37.6% between the first quarters of 2008 and 2009. Prices held up best in the Dallas-Plano-Irving, TX Metropolitan Division, where prices rose 0.1% over that period.
-FHFA’s standard all-transactions indexes, which are available for far more
metropolitan areas than the purchase-only measures, indicate the strongest
market conditions in parts of Texas and the weakest conditions in parts of
California. Among the 294 ranked metropolitan areas, Corpus Christi, TX
had the greatest price increase over the latest four quarters with a rise of 4.1%. With a 37.8% decline, prices in Merced, CA were the weakest.
-Of the 20 ranked cities with the greatest four-quarter price declines (measured in the all-transactions indexes), all but two- Las Vegas-Paradise, NV and Phoenix-Mesa-Scottsdale, AZ- were in California or Florida.