I'm frequently asked questions such as "Where do I go for help with buying?" and "How do I know that this is a good time to buy?" See below for a response I recently gave someone, and give me a call, even if you just want to talk about the process of buying.
"You have a lot of questions in your note – many of which depend on your specific circumstances, but here’s my quick response: go talk to a real estate agent. Even if it isn’t me that you talk to, I can tell you that starting with an agent is the way to go. We usually do not cost the buyer a dime, as we are normally paid at closing out of the seller’s proceeds. What this means is that you can talk with an agent for free and get direction on your search. We maintain relationships with people throughout the industry such as mortgage professionals, so we can help you to find out exactly what your financial parameters are, what sort of loans you can qualify for, and what all of this would mean as far as how much house can you afford. Once you’ve done this, you can work with your real estate agent to start viewing properties – you can even do this online while you’re still in the preliminary stages.
You asked about the current market - I’ve forwarded the flyer below to show you the kinds of deals that are available out there – this one happens to be one of my listings, but there are many homes on the market right now that are similarly well priced. It is an ideal time to buy real estate, as money is cheap (and getting cheaper every day) and there are many good deals on the market. As many people are predicting, I think that there are many people like yourselves who are “waiting out” the market to find the bottom, and then they’ll get serious about finding a property. What I keep recommending is that people get ready now by meeting with a realtor, connecting with a mortgage professional and getting ready for buying.
So, to summarize: Step one – talk to a real estate professional. I’d be happy to meet with you anytime to walk you through the process. After that, you should speak with a mortgage professional about the financial aspects of purchasing real estate. The bottom line is that if you can comfortably afford $1,100 a month, you might as well be building equity in your own home instead of helping your landlord build equity in theirs."
Good luck with your home buying process, and let me know if I can be of assistance.
Thursday, December 11, 2008
Mortgage rates could drop to 4 percent
"Government efforts to provide easier credit to consumers and jump-start flagging home sales could push mortgage rates "well below 4 percent," a federal regulator said Wednesday.
James Lockhart, whose agency oversees government-controlled mortgage giants Fannie Mae and Freddie Mac, made the comments at a meeting of Women in Housing & Finance, an industry group. He did not say how long it would take to achieve such a drop and has declined to provide a firm target for mortgage rates."...
Read entire article on the Associated Press website.
James Lockhart, whose agency oversees government-controlled mortgage giants Fannie Mae and Freddie Mac, made the comments at a meeting of Women in Housing & Finance, an industry group. He did not say how long it would take to achieve such a drop and has declined to provide a firm target for mortgage rates."...
Read entire article on the Associated Press website.
Wednesday, December 10, 2008
Pending Home Sales Holding In Stable Range
Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors®.
The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September, and is 1.0 percent below October 2007 when it was 89.8.
Lawrence Yun, NAR chief economist, said a review of the past year is instructive. “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” he said. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”
Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets, Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas.
The PHSI in the South jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago. In the Northeast the index rose 0.6 percent to 68.1 but is 14.1 percent below October 2007. The index in the Midwest declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago. In the West, the index fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he’s hopeful about considerations by the U.S. Treasury. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan said. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”
Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he said.
Looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.
New-home sales for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.
“Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun said. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.”
The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6.0 percent by the end of 2009, and average 6.2 percent in 2010. NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.
The unemployment rate is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009. Inflation, as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.
# # #
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.
Existing-home sales for November will be released December 23; the next Pending Home Sales Index will be on January 6. For more information, visit: Pending Home Sales
More information about Maine Real Estate.
The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September, and is 1.0 percent below October 2007 when it was 89.8.
Lawrence Yun, NAR chief economist, said a review of the past year is instructive. “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” he said. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”
Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets, Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas.
The PHSI in the South jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago. In the Northeast the index rose 0.6 percent to 68.1 but is 14.1 percent below October 2007. The index in the Midwest declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago. In the West, the index fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he’s hopeful about considerations by the U.S. Treasury. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan said. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”
Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he said.
Looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.
New-home sales for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.
“Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun said. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.”
The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6.0 percent by the end of 2009, and average 6.2 percent in 2010. NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.
The unemployment rate is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009. Inflation, as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.
# # #
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.
Existing-home sales for November will be released December 23; the next Pending Home Sales Index will be on January 6. For more information, visit: Pending Home Sales
More information about Maine Real Estate.
Tuesday, December 9, 2008
Major increase in refinancing
Due to several government bailouts, mortgage applications doubled as refinancing was made more appealing. The Federal Reserve had recently announced that they would buy debt and mortgage-backed securities from Fannie Mae and Freddie Mac. Orawin Velz, the associate vice president of economic forecasting, said that as a result, "Many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound,". 15-year fixed mortgage rates went from 5.78% to 5.13% and rates on one-year adjustable-rate mortgages, went from 6.87& to 6.61%.
According to a weekly report from the Market Composite Index, which measures loan application volume, last week´s numbers grew 112.1% from the previous week. While that figure was seasonally adjusted to account for Thanksgiving, the unadjusted figure showed a 51.4% increase, which is down 21.9% from last year.
These changes while beneficial for buyers, were more suited for those wanting to refinance. The Refinance Index report, showing that refinancing volume increased from 203.3% to 3802.8%, while the Purchase Index only increased 37.4%. A real estate//interest rate analyst with Weiss Research, Mike Larson, remarked on the data, stating that "While purchasing a home is a big commitment, refinancing is often a no-brainer,...You may be less inclined to go buy a house in this weak economy. Refinancing will go forward if the gains can hold." Rates are currently lower due to the lenders imposing higher standards, as a result, buyers experience more difficulty getting approval due to not having the required amount of equity, thus buyers are forced to apply and reapply, making the mortgage application index seem to be rising while in fact it is not.
For more information about home buying in Maine, visit http://www.michaelmullett.com/.
According to a weekly report from the Market Composite Index, which measures loan application volume, last week´s numbers grew 112.1% from the previous week. While that figure was seasonally adjusted to account for Thanksgiving, the unadjusted figure showed a 51.4% increase, which is down 21.9% from last year.
These changes while beneficial for buyers, were more suited for those wanting to refinance. The Refinance Index report, showing that refinancing volume increased from 203.3% to 3802.8%, while the Purchase Index only increased 37.4%. A real estate//interest rate analyst with Weiss Research, Mike Larson, remarked on the data, stating that "While purchasing a home is a big commitment, refinancing is often a no-brainer,...You may be less inclined to go buy a house in this weak economy. Refinancing will go forward if the gains can hold." Rates are currently lower due to the lenders imposing higher standards, as a result, buyers experience more difficulty getting approval due to not having the required amount of equity, thus buyers are forced to apply and reapply, making the mortgage application index seem to be rising while in fact it is not.
For more information about home buying in Maine, visit http://www.michaelmullett.com/.
A Boost for Buyers
A little over a week ago, the Federal Reserve announced a $600 billion plan to try and lower mortgage rates, and now the Treasury Department is debating to lower it even more, at 4.5% for home buyers. Both organizations are trying to pump up buying activity in the market.
Previously, the majority of effort aimed at boosting the market, was more geared towards home owners not buyers. There is some skepticism with these latest developments as it does not account for things also holding buyers back, such as fear of falling home prices, unemployment, and problems acquiring loans with good terms and achievable downpayments. The chair of the Fisher Center for Real Estate at the University of CA in Berkley, Kenneth Rosen, commented on these difficulties and the government´s actions, saying "The problem is not interest rates...It's the availability of credit."
Last month, the National Association of Realtors met with the Treasury to work out plans to stabilize home prices with lower mortgage rates. Theoretically, the Treasury would subsidize rates, allowing buyers to have a 30-year fixed-mortgage rate at 4.5%. It is in line with a homebuyer paying points program, which involves a percentage of the home value in return for a lower rate, and the government would pay the cost. According to Lawrence Yun, the chief economist for the organization, this plan would cost $50 billion. Yun remarked that lowering rates to a point below today´s rate, leveling at 4.5%, could generate 500,000 home sales throughout the next year. This would help unload the market, at the moment there are 4.6 million homes sitting there, in other words a 10 month supply of homes, which is 3-4 months more then in a healthy market. Yun feels that a lower mortgage rate would help reduce the fears of buyers about falling home prices. For the last 45 years, rates have not been below 5.37%.
For more information about home buying in Maine, visit http://www.michaelmullett.com/.
Previously, the majority of effort aimed at boosting the market, was more geared towards home owners not buyers. There is some skepticism with these latest developments as it does not account for things also holding buyers back, such as fear of falling home prices, unemployment, and problems acquiring loans with good terms and achievable downpayments. The chair of the Fisher Center for Real Estate at the University of CA in Berkley, Kenneth Rosen, commented on these difficulties and the government´s actions, saying "The problem is not interest rates...It's the availability of credit."
Last month, the National Association of Realtors met with the Treasury to work out plans to stabilize home prices with lower mortgage rates. Theoretically, the Treasury would subsidize rates, allowing buyers to have a 30-year fixed-mortgage rate at 4.5%. It is in line with a homebuyer paying points program, which involves a percentage of the home value in return for a lower rate, and the government would pay the cost. According to Lawrence Yun, the chief economist for the organization, this plan would cost $50 billion. Yun remarked that lowering rates to a point below today´s rate, leveling at 4.5%, could generate 500,000 home sales throughout the next year. This would help unload the market, at the moment there are 4.6 million homes sitting there, in other words a 10 month supply of homes, which is 3-4 months more then in a healthy market. Yun feels that a lower mortgage rate would help reduce the fears of buyers about falling home prices. For the last 45 years, rates have not been below 5.37%.
For more information about home buying in Maine, visit http://www.michaelmullett.com/.
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