The city of Gary, Ind., is selling a dozen homes for $1 each as part of a neighborhood stabilization effort. Potential homebuyers must have lived in Gary for at least six months; have $1,000 in savings; earn at least 80 percent of the median annual income of $35,250 in the area; and demonstrate that they have the financial ability to rehabilitate the home, CNN Money reported.
Only those who do not currently own a home are eligible, and they must live in the house for five years before they assume full ownership. If they leave before that time has elapsed, they forfeit everything, the news outlet said.
Source: CNN Money
How should investors and potential home buyers and sellers view the housing market when the news recently has been so mixed? The National Association of Realtors reported Monday that existing home sales for June fell 1.2% but were more than 15% higher than a year ago. And the national median home price was 13.5% above the level of last June, at $214,000.
Last week the organization for homebuilders reported growing confidence in the market while the government said housing starts fell.
David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, tells The Daily Ticker that the month-to-month decline in existing home sales is a “respite” from recent gains due to a “full percentage point jump in mortgage rates in June.”
Related: Home Flippers Come Roaring Back
“It’s a very rare event to have mortgage rates jump that far that fast” says Rosenberg, and he expects the jump will be temporary.
“The trend is still up but you can’t ignore the fact that mortgage rates shot up very quickly,” says Rosenberg who also writes a daily newsletter. “The good news is that rates have come back down about 40 basis points from a few weeks ago.”
(Click here to check mortgage rates in your area).
Job creation may be even more important for housing than interest rates, according to Rosenberg. He says, “An improving employment and income picture will act as a very strong antidote to any increase in interest rates.”
Related: Big Drop in Housing Starts Suggests a More Shaky Recovery: BNP Economist
Rosenberg expects the housing recovery will continue but at a slower pace so long as we “don’t see continuation of the rapid increase in interest rates as we’ve seen in the past 4-6 weeks.”
Whether you’re a potential buyer or seller in the housing market, watch the video above to see what this veteran economist and strategist has to say about the market.
Bernice Napach at Daily Ticker
Rates on 30-year, fixed-rate home loans spiked 0.53 percentage points to an average of 4.46% this week — the largest weekly increase in more than 26 years, mortgage giant Freddie Mac said Thursday.The 30-year loan, which stood at 3.35% as recently as early May, is at its highest level since July 2011.
Rates for 15-year loans, popular with homeowners refinancing their mortgages, jumped 0.46 percentage points to 3.5%.
An extra percentage point will cost homebuyers with 30-year, fixed-rate mortgages $56 more a month for every $100,000 they borrow.
Related: Best advice now for homebuyers and sellers
“If sustained, the rate increase will take some of the steam out of the housing market,” said Mark Zandi, chief economist at Moody’s Analytics.
The sudden jump in rates is driven by uncertainty over whether the Federal Reserve’s economic stimulus program, called quantitative easing, will continue, according to Keith Gumbinger of HSH.com, a mortgage information provider.
“The aftermath of the Fed meeting and Mr. Bernanke’s remarks … about the future of QE continue to roil markets,” Gumbinger said.
By Les Christie @CNNMoney
Los Gatos High School and Saratoga High School have been named California Distinguished Schools, making them two of 218 distinguished middle and high schools in the state. The awards are based on the schools’ API scores, plus programs that are designed to improve student achievement.
LGHS had a 2012 API score of 886, while Saratoga’s score was 933. The average high school API score statewide is 752.
Los Gatos High School was recognized for its Freshman Transition Plan and for the CASSY counseling and support program, while Saratoga High School’s Media Arts and CrossFit Physical Education programs were used in the distinguished schools analysis. All the programs are designed to link student academic achievement with diverse learning opportunities and a culture that supports students’ emotional and physical wellbeing.
A Distinguished School Celebration and Recognition event will be held on May 17th at the Marriott Hotel in Santa Clara.
By Judy Peterson at Mercury News
The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.
In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.
The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.
“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.
In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.
By Les Christie @ CNNMoney
For the first time in over six months, the supply of homes for sale is beginning to rise.
While inventories are still down nearly 20 percent from a year ago, they did rise more than the seasonal norm in February from January, according to a new report from the National Association of Realtors.
The raw number of for-sale listings rose 10 percent month-to-month, and when seasonally adjusted, they were up 2.6 percent, the biggest jump in over two years.
“Tight inventory has been a critical issue for the housing market: The limited supply of homes has fueled bidding wars and has meant that buyers have little to choose from and agents have little to sell,” said Trulia.com’s Jed Kolko. “Inventory has been tightening because construction levels are still low, adding little new housing stock, and homeowners are waiting to sell until they have more positive equity. This inventory spiral been especially severe since prices bottomed.”
(Read More: Map: Tracking the US Real Estate Recovery)
Tight supply has pushed the nation’s home builders to ramp up production far faster than they expected. That has increased costs, as they must now pay more for less available labor and for materials. Miami-based Lennar this week reported a 34 percent jump in new orders.
“We’ve been producing homes at about 5-600,000 a year, we probably need a 1.25 million to keep up with normalized household production and population growth,” Lennar CEO Stuart Miller told CNBC. “There’s no question we are in recovery.”
Diana Olick by CNBC Mar 21, 2013
MLSListings® reports median single-family home price down -4.2% in Jan-13 over Dec-12, sales fall to 1,286.
Click here to view additional Market Reports
Jan-13 Quick Facts:
The median price of existing single-family homes decreased to $575,000 down -4.2% vs Dec-12.
Existing single-family home sales decreased -32.6% from Dec-12 for a Jan-13 total of 1,286 sold units.
Condos increased in price to $399,000 up 2.3% vs Dec-12.
Existing condo sales decreased -35.1% in Jan-13 over Dec-12 for a total of 357 sold units.
MCLEAN, VA–(Marketwire – Jan 15, 2013) – Freddie Mac (OTCBB: FMCC) released today its U.S. Economic and Housing Market Outlook for January showing that despite the fiscal uncertainties facing the country, consumer confidence has remained fairly resilient in recovering from its Great Recession lows, buoyed by improving labor and housing market news. Unfortunately, business owners and managers are more sanguine about the nation’s business outlook than consumers seem to be.
Outlook Highlights
December registered 155,000 job gains and November’s payrolls were revised up 24,000, bringing the employment increase for 2012 to 1.86 million, the best since 2006.
Assuming the uncertainty of the fiscal policy debates during the first quarter fails to derail the economic expansion, the U.S. will likely see about two million new jobs created in 2013, gradually nudging the unemployment rate lower.
Over the first 11 months of 2012, home sales were up 9 percent from the same period of the prior year; similar gains are projected for 2013.
With the unemployment rate in December holding at an elevated 7.8 percent, it’s likely to ensure a continuation of an accommodative policy stance by the Federal Reserve through the coming year. Therefore, relatively low interest rates will continue to be a feature of mortgage lending and the broader capital markets in 2013.
A short preview video and the complete January 2013 U.S. Economic and Housing Market Outlook are available here. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.
Quotes
Attributed to Frank Nothaft, Freddie Mac vice president and chief economist.
“As we begin 2013, the economy is undoubtedly at a better place now than at this time in 2012. And despite the clouds of fiscal uncertainty facing the country, positive jobs reports and the strengthening housing market continue to be the bright spot as we begin the New Year.”
Get the latest information from Freddie Mac’s Office of the Chief Economist on Twitter: @FreddieMac
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com.
CONTACT:
Chad Wandler
703.903.2446
Chad_Wandler@FreddieMac.com
Bay Area home sales continued a steady string of yearly gains in October, with middle to high-end homes accounting for the increased inactivity, according to a report Wednesday.
The nearly 8,000 sales of all types of homes in the nine-county Bay Area last month shows the market is continuing to recover from the worst downturn in decades, the real estate information service DataQuick reported.
Homes sales were up 21 percent from a year ago, and have increased over the previous year for 16 months in a row, the company said. But sales still are about 9 percent below the average October for the past 25 years.
There were 50 homes sold for $2 million or more in Santa Clara County in October, the most for an
October in DataQuick’s records going back to 1988.
“The middle and high end of the market are driving the increase,” said Andrew LePage of DataQuick.
“We’re seeing more and more people getting off the sidelines, drawn by low rates that have gotten even lower and improvements in consumer confidence,” LePage said. “More people feel more confident in their jobs and believe we’ve probably hit bottom with home prices, so they’re not worried about being underwater.”
The average rate for a 30-year fixed mortgage was 3.4 percent in the past week.
By Pete Carey at Mercury News.
NEW YORK (CNNMoney) — Federal Reserve Chairman Ben Bernanke on Tuesday urged lawmakers to act as soon as possible to avoid the fiscal cliff.
“Coming together to find fiscal solutions will not be easy, but the stakes are high,” Bernanke said, speaking before the Economic Club of New York.
The Fed chief cited projections from the Congressional Budget Office that predict the $7 trillion combination of spending cuts and tax increases could send the U.S. economy toppling back into recession.
He also cited Europe’s debt crisis as an obstacle to U.S. economic growth.
“Currently, uncertainties about the situation in Europe and especially about the prospects for federal fiscal policy seem to be weighing on the spending decisions of households and businesses as well as on financial conditions,” Bernanke said.
“Such uncertainties will only be increased by discord and delay,” he added.
Bernanke said U.S. economic growth has been “disappointingly slow” and although the unemployment rate has been declining, it is still well above its pre-recession level.
By Annalyn Kurtz @CNNMoney November 20, 2012: 2:30 PM ET
