A recent quote on CNN Sunday by Shaun Donovan, HUD Secretary, has caused plenty of turmoil in the real estate industry.  After stating that a restoration of the homebuyer tax credit is "not off the table" and that it is "too soon to say" if the tax credit would be revived, Donovan's remarks sparked controversy among real estate professionals.

HUD spokesperson tried to back pedal yesterday by claiming that "There are no discussions underway to revive the credit." However, just the talk of a revision could cause the home sales to stall even further.  The existing home sales in July showed a drastic decline, and if the figures for August are anything like July's a push for Government interference could certainly rise.  The Pending Home Sales Index will be released by the National Association of Realtors (NAR) on Thursday, September 2, 2010.

 

Due to the expiration of the Homebuyer Tax Credit sales of existing homes were expected to fall and fall they did.  During the month of July home sales dropped 27.2% in a monthly comparison, according to the National Association of Realtors (NAR).

Sales are currently at the lowest level in over a decade, and are expected to continue at this pace for months to come.  According to Lawrence Yun, Chief Economist at NAR, "Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place it in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”

Home prices on the other hand are starting to rise.  The national median existing home price was up in an annual comparison by .7% in July, while distressed home sales remained firm from June accounting for 32% of the home sales during the month of July.  

Yun went on to say, “Thanks to the homebuyer tax credit, home values have been stable for the past 18 months despite heavy job losses, over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

This leaves the opportunities for potential homebuyers unlimited!  Mortgage rates are at record lows, home prices are remaining stable and there is no limit to the homes on the market at the moment.  If there was ever a time to purchase home, it's now, these circumstances won't last forever.





 

Mortgage rates on a 30 year fixed rate mortgage broke another record last week, falling to 4.42%, according to mortgage giant Freddie Mac.  These rates reflect the lowest rate seen since Freddie Mac began tracking rates in 1971.

Freddie Mac collects mortgage rates from lenders across the country weekly, Monday through Wednesday.  As rates are so closely tied in with long term treasury bonds, the rates are capable of fluctuate significantly, even on a given day.

Rates on a 15-year fixed rate mortgage dropped to 3.90%, continuing to decline since spring of this year.  Rates began falling when the European Debt Crisis reared its ugly head and investors began moving their funds into safer treasury bonds.
 

According to a survey conducted by Bankrate, Inc., a online financial rate website, the closing costs across the nation are on the rise. National average shows that closing costs are nearly $1,000 more this year that they were in 2009.

Mortgage rates hit another record low this week coming in at 4.44% on a 30-year fixed rate mortgage, according to mortgage giant, Freddie Mac. Mortgage rates are closely tied in with long-term treasury bonds and as investors continue to shift their money from stocks to treasury bonds, the yields continue to drop.

The $1.2 billion loss shown on the Financial statement of mortgage giant, Fannie Mae during the 2nd quarter is the smallest loss shown since the September of 2008! The quarter before showed a $11.8 billion loss! Although the financial condition of the government run company is improving, $1.5 billion in government assistance was still requested by the company. To date Fannie Mae has borrowed $85 billion from the Treasury Department at a hefty interest rate.

A small decline in the percentage of US Homeowners that are struggling with and "underwater mortgage", a term used when what is owed on the home exceeds the value of the home, was evident in the second quarter, according to Zillow.com, a national real estate website.

The foreclosure rate is rising as many of the nation's homeowner's fall behind in their monthly mortgage payments.  According to RealtyTrac, Inc., more foreclosure warnings have been received during the first 6 months of this year than were distributed during the first half of 2009. The high unemployment rate appears to be the culprit, as unemployment continues to climb, so does the number of foreclosures.

Falling to 66.9% in the second quarter of this year, according to the Census Bureau, the average number of homeowners in the country has fallen to the lowest level seen in over a decade.

New benefits under the Homebuyer Tax Credit for military members serving outside of the U.S. have been extended by one year.  First time homebuyers that are members of the military have until April 30, 2011 to enter into a purchase contract. If a contract is signed by the April 30th deadline, homebuyers will then have until June 30, 2011 to close on the purchase.

According to mortgage giant, Freddie Mac, mortgage rates on a 30 year fixed mortgage fell again this week to a record low of 4.57%.  This marks the lowest rate ever recorded by Freddie Mac, who began keeping track of mortgage rates in 1971.