The housing market continues to steam forward.
As reported by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutive monthly gain in September.
It's the longest winning streak in the history of the index and Pending Home Sales are now at their highest levels since December 2006.
A Pending Home Sale is a home under contract to sell, but not yet closed. It's the precursor to an Existing Home Sale.
Trade group data shows that nearly 80 percent of "pending" homes close within 2 months. The majority of those remaining close within months 3 and 4.
When the Pending Home Sales Index rises, it tells us that market activity has picked up. September's data confirms what we've been noticing since February -- the Buyers Market is ending.
With more homes under contract in the marketplace, homebuyers typically face one or more of the following:
1. Competitive, multiple-offer situations
2. Reduced purchase price leverage over sellers
3. Fewer seller concessions
Therefore, if you're buying a home in the next several months, know that the 8-month run in Pending Sales will lead to a run in closed sales. It should result in higher home prices, too
Indeed, we're already seeing it.
website: http://www.homeloansmidwest.com/
youtube channel: http://www.youtube.com/midwesthomeloans
Mortgage markets improved last week after a series of hugely volatile trading sessions.
Rates carved out a wide range on the week, culminating in a late-Friday plunge that dropped rates by about 1/8 percent.
It was the first time in 5 weeks that mortgage rates fell.
Volatility like that of last week is nothing new on Wall Street; it's been a running theme in 2009. Volatility occurs when markets don't agree on what's next for the economy and, this year, there's been a lot of disagreement like that.
Data has been inconsistent. Take last week for example.
At 9:00 AM Tuesday morning, the Case-Shiller Index showed home prices rising nationwide. Because many analysts believe housing fueled the recession, strength in the sector is widely construed a positive for the economy.
Mortgage rates rose on the news.
But then, an hour later, the national consumer confidence report revealed a substantial deterioration in sentiment versus the month prior. The data forced Wall Street to do an about-face.
Housing is important to the economy, but it can't affect growth like consumer spending can. When Americans are less confident about their future income, they tend to keep their wallets closed, retarding economic growth.
Holiday Shopping Season is getting underway and the last thing businesses want to see is a suddenly reserved American shopper.
This week, the volatility should continue.
In addition to the release of key employment and housing data, the Federal Open Market Committee has a scheduled 2-day meeting. The group's Wednesday afternoon adjournment will influence mortgage rates.
The Fed is widely expected to keep the Fed Funds Rate in its target range near 0.000 percent, but it won't be what the Fed does that will matter as much as what the Fed says.
If the FOMC's press release shows optimism for the economy, mortgage rates will rise in response. Alternatively, if the Fed appears more dour, rates will fall.
Either way, consider locking your rate before the Wednesday afternoon announcement.
website: http://www.homeloansmidwest.com/
youtube channel: http://www.youtube.com/midwesthomeloans
Visit msnbc.com for Breaking News, World News, and News about the Economy
At some point in their lives, every home buyer in America has wondered "Is now the best time to buy a home?" In this 3-minute video, NBC's The Today Show does a good job of answering the question.
The conclusion? Yes, but not if you're going to overpay.
The Buyers Market is ending, we learn, as home prices rise across most of the country. Pockets of opportunity remain, however, and the focused home buyer can still find a "good deal".
Some of the video's tips include:
The piece also goes negative on short sales, noting the amount of time required to buy one. Short sales typically do take longer to close versus a "traditional" purchase, but that doesn't mean they should be avoided.
There's plenty of bargains in the short sale arena, too.
website: http://www.homeloansmidwest.com/
youtube channel: http://www.youtube.com/midwesthomeloans
Some days, newspaper headlines are a terrible place to get your real estate news.
Today is one of those days.
After the September New Home Sales report showed sales volume down from August, the mainstream media jumped on the story:
But the headlines miss the point, somewhat. Yes, home sales volume is important to housing, but it's not as important as home supply.
A deeper look at the New Home Sales data reveals an interesting comparison point:
In other words, sales outpaced supply -- a running theme this year and a positive signal for housing.
Since peaking in January 2009, the supply of newly-built homes has now dropped by 40 percent. The average sale price is up 15% over the same period.
This is why you can't get your real estate news from the headlines. You have to dig a little bit deeper to get the real story.
September's New Home Sales report was plenty strong. The housing market recovery continues.
website: http://www.homeloansmidwest.com/
youtube channel: http://www.youtube.com/midwesthomeloans
For August, the Case-Shiller Index showed annual home values improving across 19 of 20 U.S. markets. It's the first time in 3-plus years that the benchmark housing index has shown such strength.
According to a Case-Shiller Index spokesperson, "The rate of annual decline in home price values continues to improve."
It's yet another sign that housing may have already bottomed.
However, just because the Case-Shiller Index shows a stabilization in home values, that doesn't necessarily make it true. This is because real estate happens on the local level and the Case-Shiller Index is more "national". It tracks data in just 20 U.S. cities.
Homeowners everywhere else are unaccounted for.
Furthermore, even within the 20 tracked Case-Shiller markets, there's no allowance for the natural sub-markets that exist. Some neighborhoods under-perform and some neighborhoods out-perform.
Case-Shiller treats them all the same.
Despite its imperfections, though, the Case-Shiller Index remains a helpful, broader measurement of U.S. real estate. Economists believe that housing led the U.S. into the recession and they believe housing will lead us out, too.
If that's true, August's Case-Shiller data is another step in the right direction.
website: http://www.homeloansmidwest.com/
youtube channel: http://www.youtube.com/midwesthomeloans
Because of my 27+ years in both real estate and mortgages. We understand that each customer has specific needs, we endeavor to provide our clients with enhanced services and follow-though.
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