TAG | Pending Home Sales
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What happens when the government stops supporting the Housing Market?
7 Comments · Posted by admin in Bank Owned, Foreclosure, Home Sales Stats, REO, Short Sales
On April 30, the Tax Credit will be gone. Banks seem to be holding ’shadow’ REO inventory that has been reported in the 4-8 million range. Interest rates are set to go higher because of all of the government debt that has been added to the books trying to avert all this.
However, the real scary issue is relayed in a recent Charlie Rose interview with housing expert Robert Shiller:
Charlie Rose: You’ve said that 90% of the housing market is supported by the government.
Robert Shiller: Well, it’s 80% or 90%. Really almost the whole market now is government. And we know this can’t last.Rose: And that means prices are being artificially inflated?
Shiller: It seems to. Government support is especially prominent in sales of existing homes, which shot up to over 6 million on an annual rate in November 2009, the month that the home buyer tax credit initially was supposed to expire.
Fannie Mae has reported the rate of serious delinquencies (90 Days overdue) for conventional loans in its single-family guarantee business jolted to to 5.52% in January from 5.38% in December. This is a 100% increase since January 2009. But look at the chart below and explain to me how we are anywhere near an end to this housing crisis!
It is our stance that we still have some real issues to work thru before we can claim “an end to the housing crisis”.
Jason Roberts
Founder & CEO
Bank Owned · fannie mae · Foreclosures · Freddie Mac · Home Prices · housing market · Pending Home Sales · sell my house · sellmyhouse.com · short sale · stop foreclosure
The National Association of Realtors said Monday its seasonally adjusted index of sales agreements rose 8.2 percent from January to a February reading of 97.6. January’s reading was revised slightly downward to 90.2.
The report “may signal the early stages of a second surge of home sales this spring,” said Lawrence Yun, NAR’s chief economist.
Home sales were spurred on after a sluggish winter, partly because the government extended the deadline to qualify for a tax credit. First-time buyers can get a tax break of up to $8,000 if they sign a contract by April 30. Lawmakers also added credit of $6,500 for existing homeowners who move.
The biggest month-to-month increase was in the Midwest, where pending sales rose by nearly 22 percent. Sales posted gains of 9 percent in the South and Northeast, but fell nearly 5 percent in the West.
Staff Writer
Home Prices · housing market · Pending Home Sales · sell my house · sellmyhouse.com
NAR is reporting slipped 0.6 percent nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January.
Highlights of the report:
- 7% higher than February 2009
- Weather affected closing schedules
- Housing inventory rose 9.5% to 3.59 million units or 8.6 months of supply
- 26% of transactions were cash purchases
- Distressed sales made up 35% of transactions
- Median house prices fell 1.8% to $165,100.
- First time homebuyers made up 42% of transactions.
- Northeast rose 2.4%
- Midwest rose 2.8%
- South retraced 1.1%
- West dropped 4.7%
Home sales surged on the back of a $8,000 tax credit for first-time buyers, but have faltered 3 months in a row. This raises worries that the housing market may be in for a rough few years once the tax credit ends and interest rates begin rising due to the government plan to stop buying mortgages on the secondary market at teh end of March. The overall debt load now on the government balance sheet will result in higher taxes dropping the disposable income consumers use to buy bigger houses or vacation properties.
This data shows that the people who need housing are buying it along with investors looking for great deals. Current homeowners have not been inspired to use the governments new $6500 tax credit to purchase another house. That may be a direct result of the fact that 25% of houses are now worth less than their mortgage balance, so they cant sell their houses.
Staff Writter
Home Prices · Pending Home Sales · sell my house · sellmyhouse.com
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January pending home sales fall 7.6% showing signs of continued weekness
1 Comment · Posted by admin in JKR Investment Group
A week economy and job market combined with brutal winter conditions across the country have taken their toll on January pending home sales which dropped 7.6% from December to January. Issues surrounding the number: Job recovery has not begun based on the latest unemployment numbers. Lending is down across the board. Government incentives such as the tax credit will be expiring in a few months. Foreclosures are still at record levels. Bad weather effect open house events.
www.SellMyHouse.com Staff Writter
