Home buying: Most affordable in decades

NEW YORK (CNNMoney) -- Buying a home is now more affordable than it has been in the last twenty years.

Thanks to continued declines in home prices and rock-bottom mortgage rates, the National Association of Home Builders/Wells Fargo Housing Opportunity Index hit a record level of affordability.

ccording to the index, 75.9% of all new and existing homes sold during the three months ended Dec. 31 could have been comfortably purchased by families earning the national median income of $64,200.

That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable.

Unfortunately, being able to afford a home and actually being able to buy one are two different matters entirely. According to Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla., potential home buyers are still finding it difficult to land mortgages.

Mortgages are cheap but you can't get one

"While today's report indicates that home ownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting home buyers and builders remain significant obstacles to many potential home sales," he said.

Those who do land a mortgage, will be able to take advantage of rates thatseem to hit a new low every week. This week interest rates for 30-year loans averaged a record low of 3.87%, according to Freddie Mac.

Where the deals are

Youngstown, Ohio is the most affordable major metro area in the nation to buy a home, according to the NAHB. The faded steel town, located in eastern Ohio, could be on the verge of an economic renaissance with new gas drilling techniques that could help exploit nearby gas reserves, according to the report.

There, 95.1% of homes sold during the quarter were deemed affordable to typical local households earning the area's median family income of $54,900.

The other metro areas near the top of the list included Lakeland, Fla., Modesto, Calif., Harrisburg, Pa., and Toledo, Ohio

Among small housing markets, Kokomo, Ind. had the highest housing affordability index with more than 99% of all homes sold there affordable to typical families. Fairbanks, Alaska, Cumberland, Md., Lima, Ohio, andRockford, Ill. were all very affordable as well.

New Yorkers could only shake their heads at the housing opportunities available outside their metro area. Just 29% of the homes sold in the New York metro area during the last three months of 2011 were affordable for the typical local family.

That's the lowest level in the U.S. -- even though locals typically earned $67,400, roughly $3,000 more than the national median. It was New York's 15th consecutive quarter as the least affordable metro area.

Nearly as expensive are housing markets in Honolulu, San Francisco,Santa Ana, Calif., and Los Angeles. 

Posted at 08:20AM Feb 20, 2012 by Lori Kehoe in General  |  Comments[0]

New home construction starts strong in 2012

NEW YORK (CNNMoney) -- New home construction got off to a strong start for the year, with housing starts and building permits rising in January on a monthly and annual basis -- another sign that the U.S. housing market and broader economy are headed in the right direction.

The Census Bureau reported that housing starts rose to an annual rate of 699,000, up 1.5% from December. Compared to a year ago, housing starts were almost 10% higher.

Building permits, which are less affected by weather than starts, came in at a 676,000 annual rate in January, up 0.7% from the prior month and 19% from a year earlier.

Results were also better thanindustry expectations. A consensus of industry experts from Briefing.com had forecast starts of 671,000 and permits of 675,000.

Housing completions fell to an annual rate of 530,000 in January, however, a drop of 12% compared to December, but up more than 4% from a year earlier.

"Along with the overall positive tides seen recently in the economy, it looks as if residential building is starting to follow suit," said Mike Lubansky, senior financial analyst at Sageworks. "Although residential building still has a steep hill to climb in order to achieve a full recovery to pre-2007 levels, it does look to be on the right trajectory."

For a full-blown recovery, experts say good news needs to continue out of the job market. So far, the unemployment rate has dropped for five straight months, and now stands at 8.3%, the lowest since February 2009.

Initial claims for unemployment benefits have also been falling. On Thursday, a government report showed that the number of Americans filing for jobless claims plunged to the lowest level in nearly four years.

"Today's data are further proof that the recovery solidified in late 2011, and that momentum has carried forward into 2012," said Gus Faucher, senior economist at PNC Financial Services Group. "More importantly, the likelihood of an even stronger recovery is growing."

Posted at 09:45AM Feb 16, 2012 by Lori Kehoe in General  |  Comments[0]

Home repairs: Which jobs come first?

(MONEY Magazine) -- Lean times call for budgetary triage. But while you should clearly opt for orthodontics before Disneyland, the choice is tougher when it comes to home maintenance.

Should you get a paint job or a new furnace? "There's no homeowner's manual that tells you when to do what," says Naperville, Ill., home inspector and structural engineer Mark Waldman.

Posted at 06:05AM Feb 15, 2012 by Lori Kehoe in Real Estate  |  Comments[0]

Mortgage rates cling to record lows this week

The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance.

 Mortgage buyer Freddie Mac says the rate on the 30-year loan was unchanged at 3.87 percent.

The average on the 15-year fixed mortgage rose to 3.16 percent, up from last week's record low of 3.14 percent. Records for mortgage rates date back to the 1950s.

Still, low rates have done little to boost the struggling housing market. Rates have been below 5 percent for all but two weeks in the past year. Yet few people can qualify to buy a home or refinance. Many of those who can have already done so.

From Msnbc.com 

Posted at 08:59AM Feb 13, 2012 by Lori Kehoe in General  |  Comments[0]

Ways to Woo Your Valentine

Flowers, chocolate, stuffed bears... you know the drill. Each Valentine's Day drug stores and retail stores become flooded with useless tokens of love at equally obnoxious dollar amounts and we buy into it every time.

But it doesn't have to be that way! Here are a few great ways to woo your sweetie on Valentine's Day around the house in a more practical sense.

Tackle a project.
Every couple has them - a pile of home improvement projects stacked sky-high. There needs to be shelves in the bathroom. The den needs to be repainted. The kitchen cabinets need new knobs. One day, encourage your mate to go out and have a day to themselves - shopping, going to the movies, hanging out with friends, whatever he or she would prefer. Then, take one project off your shared to-do list and knock it out by yourself (or, perhaps, accompanied by a couple of your buddies.) When your sweetheart comes home, he or she will be so excited that you took the initiative and put forth so much effort to making your home together that much more homey.

Make a DIY Valentine.
As sweet as chocolates and stuffed animals and flowers can be, they are so over. Anyone can stop by the store and pick up a bear and a rose. But a do-it-yourself Valentine is sure to steal your lover's heart. Who knows - it may become a piece of art that hangs in your home for years to come! You can paint an old piece of wood or put something together with construction paper. If it's made with love, it will undoubtedly be received with love and probably won't end up in the thrift store donation bag in a year like that generic stuffed teddy.

Make a getaway.
When all else fails, steal your sweetie away for a weekend of isolation. A change of scenery is always helpful to ignite the fires of passion. Plus, if the house is a wreck, removing yourselves from that situation will give you a renewed sense of peace and relaxation.

No matter what you do, the important thing to remember is that you're building a life and a home together. Every day should be as lovey-dovey as Valentine's Day. Being intentional about expressing your affection is very important and can be fun and practical, too. Good luck!

Posted at 07:29AM Feb 09, 2012 by Lori Kehoe in General  |  Comments[0]

Hot start: Dow, Standard & Poor's have best January since 1997

NEW YORK – It's the best start for stocks in 15 years.

In what was mostly a slow and steady climb, the Dow Jones industrial average rose 3.4% in January and the Standard & Poor's 500 gained 4.4%, the best performances for both indexes to open a year since 1997.

Investors were encouraged by modest but welcome improvement in the U.S. economy, including an 8.5% unemployment rate, the lowest in almost three years. Corporate profits didn't wow anyone — except Apple's — but they were good enough.

"I don't see anything really glamorous or tremendous about the economy or earnings," Harris said. "But I think they're very acceptable, and things are grinding along."

An unexpected drop in consumer confidence dragged stocks down on the final day of the month. The Dow average finished down 20.81 points, or 0.2% at 12,632.91. 

On Tuesday, the Dow started the day up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical €130 billion bailout payment.

Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.

Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal's borrowing costs have risen to record highs.

Back home in the United States, investors have enjoyed a steady climb through January amid signs of an improving economy. Unemployment has fallen from a 10% peak in October 2009 to 8.5% last month.

The Dow lost its gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.

There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.

Eight of the 10 major categories in the S&P 500 were lower for the day. Telecommunications stocks and financial stocks managed small gains.

Stocks rose in Europe on Tuesday on hopes the continent is making progress in its fight to contain the debt crisis, but they lost some of their shine after a run of soft U.S. economic data.

Sentiment in the first half of the day in Europe was buoyant after European leaders agreed the broad outlines of a deal to tie the countries that use the euro closer together and on hopes that Greece is close to a debt-reduction deal with private creditors.

Late Monday, following the agreement by a large majority of countries in the European Union to sign a new treaty designed to stop overspending, Greece's Prime Minister Lucas Papademos indicated that progress was being made.

Though Greece remains the epicenter of Europe's debt crisis, leaders are pushing ahead with other plans to tie economies together. Only Britain and the Czech Republicopted out of signing the new treaty, commonly known as the fiscal compact, which is meant to make it more difficult for countries to run up massive debts, like the ones now roiling the 17-nation eurozone.

The hope among participants is that the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control. For now, investors appear to be giving European policymakers the benefit of the doubt, especially as there are hopes a second bailout of Greece will be agreed alongside a debt-reduction deal between the country and its private creditors, possibly as soon as this week.

In London, the FTSE 100 index of leading British shares was up 0.2% at 5,681.61 while Germany's DAX rose 0.2% to 6,458.91. The CAC-40 in France was 1% higher at 3,298,55.

The more skittish mood in markets was evident in the performance of the euro, which was down at $1.31, having earlier traded above $1.32. The euro often garners support when investors look to take on more risk.

Europe's debt woes remain the main worry in the markets. A growing fear is that Portugal may also need to get private creditors to reduce their debts, even though Europe's leaders say Greece's debt-reduction deal is a one-off. Portugal's borrowing costs have been rising consistently to record highs over recent days as the economy shows few signs of improving.

read more at usatoday.com 

Posted at 08:39AM Feb 03, 2012 by Lori Kehoe in General  |  Comments[0]

The american dream is still alive!

In 2000 (a very normal housing year without a bubble), with virtually no discussion of it in the media or in the academic community, 67 percent of Americans lived as a homeowning household. Then came the easy credit conditions which fueled home buying beyond normal and the ownership rate rose to 69 percent. But the subsequent bust brought the ownership rate down to today’s 66 percent.

Not all age groups had similar experiences throughout this cycle. The very young were mildly impacted. The very old did not on average feel any pain – at least according to the statistics, though no doubt there were some retirees who painfully lost a home to a foreclosure. The big impact was felt among people in their 30’s, who have much the same homeownership rate today as back in 2000, well before the bubble. It is also this group where there is potential for re-entering into the homeownership market in the near future.

Also note the general higher ownership rate as people get older and more mature and presumably become more responsible. Note the very high ownership rate among the 65-and-over population, who would have for the large part already paid off their mortgages.

Posted at 09:43AM Jan 31, 2012 by Lori Kehoe in General  |  Comments[0]

New home construction gathers momentum

New home construction slowed slightly in December after a strong November showing, but was still much more active than a year earlier.

Posted at 07:51AM Jan 26, 2012 by Lori Kehoe in General  |  Comments[0]

Home sales show slow progress

As expected, existing-home sales continued their slow rebound, increasing 5.0% in December to an annualized 4.61 million units. Fourth-quarter sales overall were strong, and the market finished out the year with 3 consecutive months of gains, resulting in a final yearly increase for 2011 of 1.7%.

"The pattern of home sales in recent months demonstrates a market in recovery," said Lawrence Yun, chief economist at the National Association of Realtors. "Record low mortgage interest rates, job growth, and bargain home prices are giving more consumers the confidence they need to enter the market."

Total housing inventory dropped 9.2% to 2.38 million existing homes for sale, the lowest number since March 2005. That figure, representing a 6.2-month supply at the current sales pace, is down from a 7.2-month supply in November, reflecting the typical shrinkage of inventory in the winter. Home prices remain the major weak spot, with the median price declining 2.5% from its level at the end of 2010.

Homebuilding data are mixed

New residential construction projects in December were down 4.1% to 657,000 units (annualized). However, starts were up 24.9% over the past 12 months—continuing a trend of positive readings over the last 7 months. Multifamily-structure starts (including apartment buildings) pulled down the overall figure in the most recent report, but, on a brighter note, single-family starts, which make up a majority of housing starts and were hit hard by the housing downturn, increased by 4.4%, the best monthly gain since June. Total permits totaled 679,000, down slightly from November but 7.8% better than a year ago. In fact, year-ago comparisons have been trending positive for 8 straight months, indicating that single-family construction is finding its footing.

Posted at 09:23AM Jan 22, 2012 by Lori Kehoe in General  |  Comments[0]

Home builders more optimistic as economic outlook improves

WASHINGTON – Homebuilders are growing less pessimistic about the housing market, despite tighter lending standards that have slowed home sales.[Read More]

Posted at 09:32AM Jan 19, 2012 by Lori Kehoe in General  |  Comments[0]

Mortgage rates hit another record low

Rates have fallen 0.9% since the beginning of the year. For a homeowner with a $200,000 mortgage, that means a savings of $1,200 a year, said Frank Nothaft, Freddie's chief economist.

With rates at or below 4% for the last eight weeks, home sales are getting a boost, Nothaft added. Existing homes sold at their fastest pace since January last month, according to the National Association of Realtors, and new home sales edged higher in November as well.

Where homes are affordable

Meanwhile, rates for 15-year mortgages remained unchanged, matching last week's record low of 3.21%.

"We've entered the holiday lull with nothing much happening to change rates one way or the other," said Greg McBride, senior financial analyst for Bankrate.com.

Mortgages should remain affordable deep into 2012, he added. As the European debt crisis and sluggish U.S. economy keep investors focused on finding safe havens for their cash, demand for U.S. Treasury notes should remain high. That drives down their yields, which mortgage rates closely track.

"For well-qualified buyers, interest rates should be no impediment to home buying in 2012," said McBride.

Refinancers also are pouncing on the bargain rates.

According to the Mortgage Bankers Association, about 80% of all mortgage applications last week came from existing homeowners looking to refinance their old loans into more affordable ones.

Posted at 01:21PM Jan 18, 2012 by Lori Kehoe in General  |  Comments[0]

Home selling secret #2

Posted at 08:04AM Jan 13, 2012 by Lori Kehoe in General  |  Comments[0]

Foreclosures fall to lowest level since 2007

NEW YORK (CNNMoney) -- Foreclosure filings and repossessions fell to their lowest level since 2007 last year.

Total filings of default notices, scheduled auctions and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.

One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That's a significant improvement from the peaks reached in 2010 -- when one in every 45 households received a foreclosure filing and 1.05 million homes were repossessed -- and the lowest levels seen since 2007, the report said.

While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays caused by fall-out from the "robo-signing" scandal that broke in late 2010.

During the year, banks spent more time making sure paperwork was legal and proper, creating a backlog in the foreclosure pipeline. As a result, the average time it took to process a foreclosure climbed to 348 days during the fourth quarter, up from 305 days a year earlier.

"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, chief executive officer of RealtyTrac.

owever, Moore said there were "strong signs" during the second half of the year that lenders are working through foreclosure backlogs in certain markets. He expects foreclosure activity to rise above 2011's level but remain below the peak hit in 2010.

Low rates offer some help for homeowners

Early in 2011, many forecasters were predicting a wave of foreclosures due to resetting adjustable-rate mortgages but low mortgage rates helped many borrowers refinance into more affordable loans and keep their homes, said Moore.

Refinancings accounted for 71% of all mortgage lending in 2011, according to the Mortgage Bankers Association.

The government helped as well, through efforts like the Home Affordable Refinance Program (HARP), which made refinancing easier for borrowers who owe more on their mortgage than their homes are worth.

Turning foreclosures into rentals

Government foreclosure prevention programs, including HARP and the Home Affordable Modification Program (HAMP), have started about 5.5 million mortgage modifications since April 2009, according to the U.S. Department of Housing and Urban Development.

"Programs like HAMP and HARP have definitely made a dent in the foreclosure problem," said Moore "However, they are certainly not living up to their billing of preventing several million foreclosures. In addition, many [HAMP] homeowners fall back into foreclosure later on."

Of course, there were still plenty of factors working against homeowners in 2011, including the continued erosion in home prices. The S&P/Case-Shiller 20-city home price index fell 3.4% over the 12 months ended October 31. Falling prices rob homeowners of home equity, which they can tap if they need emergency cash.

Foreclosure hot spots

Hot spots for foreclosures remain mostly in "bubble states," where speculative investors helped drive up home prices beyond their fundamental values during the mid-2000s housing boom.

Nevada, where one out of every 16 households received some kind of default notice during the year, was the worst hit of all, a distinction it has held for the fifth consecutive year.

Foreclosure free ride: 3 years, no payments

Arizona had the second highest foreclosure rate and California came in third. Florida, which had been running neck-and-neck with the other "Sand States" in past years, fell to seventh, behind Georgia, Utah and Michigan.

Among metro areas, Las Vegas suffered from the highest foreclosure rate in 2011. California put seven cities in the top 10, led by Stockton in the second slot. Other cities in the top 10 included Phoenix, which finished sixth, and Reno, Nev. was eighth. 

Posted at 07:25AM Jan 12, 2012 by Lori Kehoe in General  |  Comments[0]

Sell your home fast secret #1

Sell your home fast secret #1[Read More]

Posted at 06:10AM Jan 05, 2012 by Lori Kehoe in General  |  Comments[0]

Home prices drop for 2nd straight month, survey shows

U.S. home prices fell in most major cities for the second straight month, further evidence that the housing recovery will be bumpy.

The Standard & Poor's/Case-Shiller index released Tuesday showed prices dropped in October from September in 19 of the 20 cities tracked.

Prices in a majority of cities declined for the second straight month, reflecting the typically fall slowdown after the peak buying season. Prior to that, prices had risen for five consecutive months in at least half of the cities tracked.

The Case-Shiller index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The monthly data are not seasonally adjusted.

read more

Posted at 06:10AM Jan 04, 2012 by Lori Kehoe in General  |  Comments[0]