More than 2,200 Central Indiana homes pended in May, with two counties reporting increases compared to the same time period last year, according to pended sales statistics compiled by F.C. Tucker Company. Boone County posted a 32.4 percent increase, and Madison County sales rose 2.5 percent.
May pended home sales in the nine-county area were down 11 percent with 2,227 homes pending compared to 2,501 in May 2008. Year to date, overall pended home sales are down 12.8 percent compared to the same timeframe in 2008.
Available homes for sale in the nine-county region dropped 18 percent in May 2009 with 15,801 homes on the market, 3,458 fewer homes than in May 2008. Four counties experienced above average inventory declines. Marion County experienced the greatest decrease in inventory at 23.7 percent, followed by Madison County with 19.2 percent and Hancock and Hendricks counties with 18.3 and 18.2 percent, respectively.
"Home inventory levels have consistently dropped over the past 12 months, and we're nearing a balanced, six-month inventory level," said John Snavley, Senior Vice President of F.C. Tucker Company. "At current pricing levels, with new homebuyer incentives and low mortgages rates, this is an excellent time to buy a home in Central Indiana."
Even national pundits are stressing that in today's real estate market, now is the time to buy. Recently, CNBC Mad Money host Jim Cramer commented on the nation's state of the economy and real estate market, saying "I think that real estate is a once-in-a-lifetime opportunity... mortgage rates are the lowest in my life, affordability is the best in my life. Clearly, real estate is much better than stocks right now."
With today's combination of lower home prices, some of the lowest interest rates the industry has ever offered, and the $8000 tax incentive for first-time buyers, buying a home has never been so attractive. The only real hurdle left for many Americans is coming up with a down payment. With this in mind, we've put together some of the most frequently asked questions we get about down payments in today's market.
Q. Are there any no-down payment programs left?
Yes. While it's true that most of the popular no-down payment programs disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.
A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you - and the house you intend to buy - qualify for the program. Not all areas qualify, but you'd be surprised at how many neighborhoods in your area do. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.
If you or your spouse is a military veteran, you may qualify for a 100% financed loan from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit. Give us a call to find out if you're one of them.
Q. Are there any other government-insured programs that can help someone struggling with a down payment?
Yes. In 1965, the federal government created the FHA loan programs to encourage homeownership throughout the country. FHA-insured mortgages offer many benefits, including a minimum down payment of 3.5%. FHA-insured loans have grown in popularity recently due to the seller's ability to pay closing costs up to 6% and a temporary increase in loan limits up to $729,750 in certain high-cost areas, which allows more potential buyers to utilize this program.
Q. May I use a gift from family members as part of my down payment?
Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required, but we will gladly walk you through the finer details of this process. Be sure to mention this option when you're filling out an application with us.
Q. May I use funds from my IRA for my down payment?
Yes. First-time home buyers can use funds from an IRA under certain circumstances for a down payment. The rules regarding this option, however, can be complicated, especially with a Roth IRA, and it's important to understand any and all tax implications before tapping into these accounts. Please talk to your tax professional before making any decisions. If you don't have one, we'll gladly refer you to one we work with on a regular basis.
Q. May I use the $8,000 tax credit as my down payment?
No. At the time of the writing of this article, qualified first-time home buyers do not have direct access to the $8,000 credit to use as a down payment. In May, HUD officials made an announcement to the contrary, but statements backing the announcement were quickly withdrawn from the HUD website. This doesn't mean that HUD and lawmakers will not allow this in the future. We're following this issue closely and will let you know if anything changes. Just keep reading our newsletters and other materials we send to you or give us a call and we'll let you know if any progress has been made.
Steve Jackson
Mortgage Consultant
Dilger Financial Group, LLC
317-863-2092
steve@dilgerfg.com
www.indymortgagesource.com
April housing statistics point to continued opportunities for buyers to take advantage of lower housing prices across Central Indiana, while a decrease in available inventory shows steady progress to a more balanced market between buyers and sellers, according to pended sales statistics compiled by F.C. Tucker Company.
Available homes for sale in the nine-county region dropped 16.9 percent in April 2009 with 15,785 homes on the market, 3,211 fewer homes than in April 2008. Three counties experienced above average inventory declines. Marion County experienced the greatest decrease in inventory at 22.8 percent, followed by Madison County with 20.8 percent and Hancock County with 17.6 percent.
Home sales continue to trail last year's levels. Madison County posted the only increase in pended home sales over April 2008 at 18.5 percent. In April, 2,272 homes have pended, 10.8 percent less than the same time in 2008. The average sales price is down 11.9 percent from April 2008, decreasing from $140,477 to $123,813.
A recent poll of Tucker sales associates showed 62 percent of their customers were first-time buyers prompted by the $8,000 federal tax credit. The first-time homebuyer's credit includes no repayment and credit recapture on the sale within three years of purchase.
"While overall sales are down, we are seeing a surge of first-time homebuyers come off the sidelines to take advantage of the $8,000 tax credit," said H. James Litten, president of F.C. Tucker Company's Residential Real Estate Services Division.
The Indiana Housing & Community Development Authority (IHCDA) has rolled out a new program designed to help facilitate the sale of foreclosed properties in Indiana. The program is funded by money that Indiana received from the Federal Government as part of the stimulus package. You may be eligible to receive a $15,000 grant from the State if you purchase a foreclosed property that is deemed to be in "an area of greatest need" by HUD. This means you can purchase the home with no money out of pocket!
This credit may be used for:
1) Down Payment Assistance
2) Closing Costs, Points, and Pre-paid Items
3) Repairs
Here are some key points on this program:
1) Property must be a foreclosed property.
2) Must be located in an eligible area. Check here for eligible properties: http://indianahousingnow.org/ProgramGISLookup.html
3) There are income limitations on this program. Check here for income limits based on family size. http://www.in.gov/ihcda/files/MSP_STAND-ALONE_INCOME_LIMITS.pdf
4) Bank must sell you the property at a 10% discount. Sales price cannot exceed 90% of the appraised value.
5) The credit is forgiven after 10 years and partially forgiven in years 6-9.
6) Property residence only.
7) Buyer does not have to be a first time homebuyer.
If you are a first time homebuyer (meaning you have not owned a primary residence in the past 3 years), you may also receive the $8,000 Federal Tax Credit for first time buyers, if you close before December 1st of 2009. You can find details of the $8,000 credit here: http://www.indymortgagesource.com/$8,000housingtaxcredit
Between these two programs, you have the opportunity to take advantage of free money from $8,000 to $23,000 for the government. That coupled with the historical low interest rates and extraordinarily low home prices, make this perhaps the best time ever to purchase a new home! Call me for further details on these programs and call the The Kammeyer Realty Group to begin the search for your new home today.
Steve Jackson
Mortgage Consultant
Dilger Financial Group, LLC
A Division of Main Street Financial, Inc.
317-863-2092
Fax: 317-536-9643
steve@dilgerfg.com
www.indymortgagesource.com
Home sales in Central Indiana are starting to improve in some areas of Central Indiana as the spring home-buying season begins. According to pended sales statistics compiled by F.C. Tucker Company, nearly 2,300 Central Indiana homes pended in March, with five of the nine counties reporting significant increases compared to the same time last year.
Madison County posted the highest pended home sales increase over March 2008 with 33.6 percent, followed by Boone County with 30.5 percent. Other counties showing a rise in sales included Johnson County (14.6 percent), Hancock County (11.7 percent) and Hendricks County (9.9 percent).
"We hope the encouraging March numbers in select areas of central Indiana are an indication the local housing market is gaining momentum, and will continue to improve throughout the year," said H. James Litten, president of F.C. Tucker Company's Residential Real Estate Services Division. "We are seeing more prospective home buyers, especially in the first-time buyer category, come off the sidelines and take a look at the inventory available. We are pleased to see overall Central Indiana inventory declining significantly, a 15.6 percent decrease over last year at this time. Less inventory and increased demand brings better balance and more consumer confidence to the market."
To date, 5,466 homes have pended in 2009, 14.1 percent less than the same time in 2008. The average sales price is down 12.4 percent from March 2008, decreasing from $140,878 to $123,461.
Available homes for sale in the nine-county region dropped 15.6 percent in March 2009 with 15,562 homes on the market, 2,881 fewer homes than in March 2008. Four counties experienced above average inventory declines. Marion County experienced the greatest decrease in inventory at 21.4 percent, followed by Hendricks County with 19.3 percent, then Madison County and Shelby County with 18.7 percent and 17.6 percent, respectively
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