The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September. Pending home sales lead existing home sales by a month or two.
"There may some temporary factors like bad weather in the South," said Gus Faucher, director of macroeconomics at Moody's Analytics in West Chester, Pennsylvania.
"Higher gasoline may be making potential home buyers a bit cautious. It is signaling further weakness in housing, but we do expect housing to turn around later this year. It just hasn't happened yet."
Pending home sales in the South, which was ravaged by tornadoes, dropped 17.2 percent. Sales were also down in the Midwest and the West.
The weak housing market is one the headwinds facing the economy as it make a slow recovery from the worst recession since the 1930s. The economy grew at a 1.8 percent annual rate in the first quarter after expanding at a 3.1 pace in the last three months of 2010.
(Reporting by Lucia Mutikani, Editing by Chizu Nomiyama)
Last week the House Financial Services Committee put forth a "discussion draft" on FHA reform. The draft has a number of good provisions (providing increased lender enforcement, other risk avoidance tools, etc). However, there are several provisions that I STRONGLY oppose.
The first would raise the FHA downpayment for all borrowers to 5%, and prohibit the financing of all closing costs and the Upfront MIP.
The second would change the whole calculation of the loan limits by making it 125% of median home price by county. It would eliminate the MSA rule - which raises all counties within an MSA (metropolitan statistical area) to the highest limit in that area, and it would eliminate the FHA floor of $271,050 (which means low cost counties would go to 125% of median - under $100k in many areas). It would make the high cost limit $625,500.
It is very important to note that this is a "discussion draft" - not legislation yet.
The bill also includes the issue of moving Rural Housing to HUD.
Current numbers show that 17,000,000 homes expected enter the foreclosure list
A break down by the numbers
3,000,000 Homes currently owned by the bank via Foreclosure
4,000,000 Homes currently owned by Fannie Mae Freddie Mac
an additional 10,000,000 homes purchased between 2005-2007 underwater - preparing for strategic default .
= 17,000,000. Grand Total of Homes are headed for foreclosure (or already in foreclosure)
Now Granted Short Sales and Loan Modifications can and will prevent some homes from entering the foreclosure process but remember there are roughly 5,000,000 TOTAL homes sold per year. and current REO inventory suggest a 3 year supply of inventory and that does not include 'traditional" resale and Short sale inventory
If your looking to buy a home now is the best time ever .
Has the ready set Go no Wait Game of self imposed foreclosure moratorium cost the lenders more than can be recovered in the sale With the increase in aging, non listed, non sold, shadow inventory on the raise and total debt now exceeds the original loan how will banks clear the inventory offer the books ? Will banks offer greater incentives to buyers in the form or repair allowance and upgrades or simply reduce the market price hoping for a quick sale to stop the bleeding?
It is surprising is just how old some of the foreclosures are.
In Contra Costa alone there are 123 homes now scheduled for trustee sale, with loans originated by Countrywide, where the foreclosure process began in 2008. That is 3 years of missed payments, interest and fees. In just this one county that totals $71.5 Million in original loans with balances now nearly $19 Million higher. Although all of these 123 properties have active sale dates many are still being postponed. In fact the largest loan, where the total debt now exceeds the original loan amount by more than 1 Million dollars, has been postponing since January, and was just postponed again until June.
Shadow Foreclosure Inventory
If you're buying or selling a home in Gwinnett County we need to be talking .
Voted Best Of Gwinnett in 2011- Residental Real Estate Agent
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