Category — National Housing Market

Home prices rose in May compared with April according to the S&P/Case-Shiller Home Price Index of 20 major housing markets released Tuesday.

Prices were up 1.3% from April, and 4.6% from 12 months earlier.

The Commerce Department announced today that new home sales rebounded in June from the record low in May. 

New home sales increased 23.6% to a seasonally adjusted annual rate of 330,000 last month, up from an downwardly revised 267,000 in May.

This is slightly better than the annual rate of 310,000 economists were expecting.

 Late last night, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline.

Known as the “Homebuyers Assistance and Improvement Act of 2010,” the bill was passed by unanimous consent. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.

This legislation is designed to create a seamless extension, and the new closing deadline for eligible home sale transactions is now September 30, 2010. There will not be any gap between June 30 and the date the President signs the bill into law.

Yesterday, Bloomberg reported that home prices in 20 U.S. cities rose in April from a year earlier, a 3.8% increase.

Last week, mortgage rates fell to the lowest level on record. 

Mortgage company Freddie Mac said on Thursday June 24 that the average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent the previous week.

This is the lowest since rate on 30-year fixed mortgages we’ve seen since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December 2009.

Rates for 15-year and five-year mortgages also hit lows. Rates on 15-year, fixed-rate mortgages fell to an average of 4.13 percent, the lowest on records dating to September 1991 and down from 4.2 percent a week earlier.  Rates on five-year, adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac’s records, which only date back to January 2005.

Last fall, Congress extended an $8,000 tax credit for first-time homebuyers and added a smaller $6,500 credit for current homeowners who were buying a primary residence. To qualify for the credit, buyers had to sign purchase contracts by April 30 and close on the home by June 30.

As the cutoff to qualify for the federal tax credit looms on the horizon, Congress is considering an extension for homebuyers who are racing to close home sales in order to receive a federal tax credit.   

Experts in the  real estate industry warn that many buyers who rushed to buy homes to qualify for the tax credit may not close before the deadline, and this would result in home buyers losing out on thousands of dollars if lawmakers don’t act.

One of the major issues is that there are a large amount transactions that need to be completed, and the companies responsible for handling the sales, including mortgage lenders, appraisers and title insurers and real estate brokers, are struggling to keep up.

Mortgage rates are low, and it seems they will be staying that way for a while.  In fact, they are two one-hundredths of a percentage point away from the rates of 1956…that’s 54 years!

The average rate for a 30-year fixed-rate mortgage is within one one-hundredth of a percentage point of the 4.71% reported the week ending December 3, 2009, and if rates decline two one-hundredths of a percentage point, we’re back to the spring of 1956, when the average rate hit 4.68%, according to National Bureau of Economic Research statistics.

Rates for 15-year mortgages fell for the fourth straight week, to 4.17%, the lowest rate since Freddie Mac started tracking 15-year loans in 1991.

In addition to low mortgage rates, according to a recent BankRate.com article, some lenders are beginning to loosen their requirements for down payments.  The article discusses four types of mortgages that require small down payments, some with zero down options.  While these mortgages may have limited availability, they could be a sign of what’s to come.

U.S. construction spending for April rose above analysts’ expectations; the largest monthly increase in almost 10 years. 

The Commerce Department said construction spending rose 2.7 percent, the biggest advance since August 2000, to an annual rate of $869.1 billion. March’s increase was revised up to 0.4 percent from a 0.2 percent gain.

New homes sales have increased to a rate of 504,000 in April.  This is a 14.8% percent increase from March. 

Experts in the housing industry predicited the rate to be 425,000 for the month, and April was the second straight month of an increase.

Existing home sales have picked up pace in the month of April.  

According to the National Association of Realtors, existing home sales have jumped 7.6% in April. This brings the seasonally adjusted rate of 5.77 million units, the upwardly revised rate was up tp 5.36 million in March.  Year over Year existing home sales also jumped 22.8%. 

“The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” said Lawrence Yun, NAR chief economist.