James Walker

Pending home sales index rises again in June
More good news: Pending home sales rise in June for 5th consecutive month

On Tuesday August 4, 2009, 11:01 am EDT

Buzz up! 0 Print.Companies:Centex CorporationDR Horton Inc.Pulte Homes Inc.

WASHINGTON (AP) -- Pending U.S. home sales rose in June for the fifth straight month, another encouraging sign of life for the embattled U.S. housing market, the National Association of Realtors reported Tuesday.


For June, the Realtors group said its pending home sales index rose 3.6 percent to 94.6, from an upwardly revised reading of 91.3 in May. The last time there were five consecutive monthly gains was July 2003.

The results were far better than analysts expected. Economists surveyed by Thomson Reuters expected the index to come in at 91.2.

The report tracks signed contracts to purchase previously owned homes and is considered a barometer for future home sales. Typically there is a one- to two- month lag between a sales contract and a completed deal.

The jump in pending home sales coincides with other positive trends in the residential real estate market.

"The housing market is healing and the patient is getting healthier at an accelerating pace," said economist Joel L. Naroff, president of Naroff Economic Advisors Inc.

For the first time in five years, home resales have risen for three months in a row, increasing almost 4 percent in June. Low prices, attractive mortgage rates and a first-time homebuyers tax credit of up to $8,000 have kick-started sales.

"Because housing is so affordable in today's market, job security and the first-time buyer tax credit are bigger factors in influencing home sales," said Lawrence Yun, the Realtors group's chief economist, in a statement.

Also Tuesday, homebuilder D.R. Horton Inc. said its fiscal third-quarter losses shrank from the year-ago period, as it took smaller charges against the falling values of its land and unsold homes.

D.R. Horton's results followed similar numbers from Pulte Homes Inc. and Centex Corp., which reported quarterly earnings Monday that showed new-home orders picked up during the first half of the year.

Yun said he expects existing home sales to gradually rise over the balance of the year, with conditions varying around the country.

"It appears home sales are on a sounder footing and inventory is gradually being absorbed," he said.

Regionally, the pending home sales index jumped 7.1 percent to 100.7 in the South and 2.9 percent to 100.4 in the West. The index inched up 0.4 percent to 81.2 in the Northeast, and up 0.8 percent to 89.9 in the Midwest.

Article found today on yahoo finance

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James Walker

http://www.walkerlistings.com

Mortgage loan lender offers closing cost, warranty program

07.21.09
By Timothy Jones

Americans looking to get an affordable home loan may be able to take advantage of a program which will not only pay for a portion of their closing costs, but give them a two-year warranty on the house.

As part of its HomeSteps program, Freddie Mac is offering the warranty - called Home Protect - along with 3.5 percent of the sales price in closing costs for homebuyers who qualify for the program and plan to use the property as their primary residence.

The program, which began last week and runs through October 30 of this year, focuses on HomeStep homes - properties owned by the real estate unit of Freddie Mac.

Freddie Mac says the Home Protect warranty will cover major appliances such as hot water heaters and washers and dryers to services in the home like electrical and plumbing. To qualify to have the first two years of the warranty paid for by Freddie Mac, homes must be purchased for more than $25,000, must be a single-family HomeSteps property and must be in the contiguous 48 states or Washington D.C.

Ingrid Beckles, senior vice president of default asset management at Freddie Mac, said the program will not only help many Americans looking for affordable housing, but may have a greater impact on the neighborhoods these homes currently occupy and the overall economy.

"We expect SmartBuy's comprehensive two-year warranty and closing cost offer to help more families buy and own HomeSteps homes, which in turn will help support home values and stabilize communities," she said. "Today's announcement shows another way Freddie Mac is addressing impacted markets to achieve the goals of the Obama administration's economic recovery effort."

With recent figures from RealtyTrac showing that the total number of foreclosures in the first half of the year increased 15 percent over the same period in 2008, it appears that American homeowners need all the help they can get.

2009 Home Buyer Tax Credit Overview

In an effort to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit for first-time home buyers. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 200

1. The tax credit is for first-time homebuyers only.

o The Law Defines "First Time Home Buyer" as a buyer who has not owned a principal residence during the three year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the homebuyer and his/her spouse.

2. The tax credit does not have to be repaid.

o This is a true tax credit however buyers must use the residence as their principal residence for at least 3 years or face recapture of the tax credit amount. Certain exceptions apply see IRS form 5405 for details.

3. The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

4. The $8,000 Homebuyer tax credit can be combined with the MRB homebuyer program.

5. Prospective homebuyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding.

o Reducing tax withholding (up to the amount of the eligible credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment. Specific rules and guidelines do apply.

2009 Home Buyer Tax Credit Q & A

Are there any income limits for claiming the tax credit?

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

What is "modified adjusted gross income"?

Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?

The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit.

How does a home buyer claim the tax credit? Do they need to complete a form or application?

Participating in the tax credit program is easy. The buyer claims the tax credit on their federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, they will want to be sure that they qualify for the credit under the income limits and first-time home buyer tests.

What types of homes will qualify for the tax credit?

Any home that will be used as a principal residence will qualify for the credit. This includes new and resale homes.

It states that the tax credit is "refundable." What does that mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion, or all the amount of the refundable tax credit.

If a buyer purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on their 2008 tax returns, how can they claim the new $8,000 tax credit instead?

Home buyers in this situation may file an amended 2008 tax return with a 1040X form. Buyers should consult with a tax advisor to ensure they file this return properly.

A buyer is not a U.S. citizen. Can they claim the tax credit?

Maybe, anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

Is a tax credit the same as a tax deduction?

No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed

If a buyer is qualified for the tax credit and buys a home in 2009, can they apply the tax credit against their 2008 tax return?

Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Please feel free to call me if you have any questions,

James Walker

Real Estate Professional

Keller Williams Realty SWMC

Cell # 512-618-8814

j.walker@kw.com