Buyer Foot Traffic Through New Construction Up Nearly Threefold Since 2009
Home builder confidence in the newly-built, single-family housing market remains high.
In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.
When home builder confidence reads 50 or better, it reflects favorable builder conditions in the single-family, new home market. Readings below 50 suggest unfavorable builder conditions.
The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.
Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.
In March, home builders provided mixed replies to the survey questions :
- Current Single-Family Sales : 29 (-1 from February)
- Projected Single-Family Sales : 36 (+2 from February)
- Buyer Foot Traffic : 22 (Unchanged from February)
It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. The reasons for this are several and should be of interest to today’s home buyers.
First, the jobs market is heating up. The U.S. economy has added more than 1 net new million jobs over the last 6 months and that is increasing the pool of potential home buyers in Texas and nationwide.
Second, the housing market, in general, is improving. Home sales are brisk in many U.S. markets and home supplies are dropping. This creates pressure on home prices to rise.
And, third, low mortgage rates have helped pushed home affordability to all-time highs. More home buyers earning the national median income can afford a median-priced home than at any time in history.
It’s all culminated in a monthly Buyer Foot Traffic reading which, at 22, is nearly triple the foot traffic reading from just three years ago. Home buyers — in Plano and everywhere else — are out in full-force, capitalizing on today’s buyer-friendly market.
If you’re looking to buy new construction in the second half of 2012, consider moving up your time frame. Market conditions are constantly changing, and may move out of your favor. As builder optimism increases, the price you pay for your new home may increase, too.
Start your New Home Search now - or call us 214-212-6770 with any questions – we work as Buyers Agents and represent your interest with the home builder when it’s time to buy an new home.
Loans For Underwater Homeowners : HARP 2.0 Now Available
The new, revamped HARP program is now available in Texas and nationwide. It was officially released Saturday, March 17, 2012 by Fannie Mae and Freddie Mac.
HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the conforming mortgage loan product meant for “underwater homeowners”. Under the HARP program, homeowners in Allen can get access to today’s low mortgage rates despite having little or no equity whatsoever.
HARP is expected to reach up to 6 million U.S. homeowners who would otherwise be unable to refinance.
HARP is not a new program. It was originally launched in 2009. However, the program’s first iteration reached fewer than 1 million U.S. households because loan risks were high for banks, and loan costs were high for consumers.
With HARP’s re-release — dubbed HARP 2.0 — the government removed many of HARP’s hurdles.
In order to qualify for HARP, homeowners must first meet 3 qualifying criteria.
First, their current mortgage must be backed either Fannie Mae or Freddie Mac. Loans backed by the FHA or VA are ineligible, as are loans backed by private entities. This means jumbo loans and most loans from community banks cannot be refinanced via HARP.
- To check if your loan is Fannie Mae-backed, click here.
- To check if your loan is Freddie Mac-backed, click here.
The second qualification standard for HARP is that all loans to be refinanced must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Mortgages securitized on, or after, June 1, 2009 are HARP-ineligible.
There are no exceptions to this rule.
And, lastly, the third HARP qualification standard is that the existing mortgage must be accompanied by a strong repayment history. Homeowners must have made the last 6 mortgage payments on-time, and may not have had more than one 30-day late within the last 12 months.
If the above three qualifiers are met, HARP applicants will find mortgage guidelines lenient overall :
- Refinancing into a fixed rate mortgage allows for unlimited loan-to-value
- The standard 7-year “waiting period” after a foreclosure is waived in full
- Except in rare cases, home appraisals aren’t required for HARP
Furthermore, HARP mortgage rates are on par with non-HARP rates. This means that HARP applicants get access to the same mortgage rates and loan fees as non-HARP applicants. There’s no “penalty” for using HARP.
To apply for HARP, check with your loan officer today.
Foreclosure Volume Slated To Rise This Spring
After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac.
In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.
A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.
Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.
This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance.
Like all things in real estate, though, foreclosures remain local.
For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.
- Nevada : 1 foreclosure for every 278 housing units
- California : 1 foreclosure for every 283 housing units
- Arizona : 1 foreclosure for every 312 housing units
- Georgia : 1 foreclosure for every 331 housing units
- Florida : 1 foreclosure for every 341 housing units
Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include :
- Atlanta : 1 foreclosure for every 244 housing units
- Chicago : 1 foreclosure for every 302 housing units
- New York : 1 foreclosure for every 3,439 housing units
- Seattle : 1 foreclosure for every 1,229 housing units
- Washington : 1 foreclosure for every 1,198 housing units
One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It’s no wonder foreclosed homes are in high demand among today’s Frisco home buyers.
However, if you plan to buy a foreclosure in Texas , be sure to work with an experienced real estate agent. Foreclosed homes are often sold “as-is”, and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections.
Will Texas Home Values Go Up in 2012?
Will your north Texas home gain value over the next 12 months?
Nobody can know for sure, of course, but should recent housing trends continue, there’s concrete cause for optimism.
The housing economy has suffered since 2007, knocking home values down nearly 20% nationwide. And while some areas have fared better as compared to others but, in general, home values are down.
Mortgage rates are down, too, and that’s good news for buyers. The combination of low rates and low prices has led home affordability to an all-time high. As you’ll hear in this 4-minute interview with NBC’s The Today Show, carrying a mortgage costs 25% less per month as compared to just 3 years ago.
Some other notes from the interview include :
- There are more buyers out looking for homes today, which leads to more sales
- The housing market is expected to get gradually better, month-by-month, in 2012
- Foreclosures will continue to be a big part of the housing market
With housing supplies shrinking, buyers may find their best “deals” today — before the Spring Buying Season begins in February.
However, we can’t forget that housing markets are local — not national. Each town and neighborhood has its own market drivers and prices where you live may have already started to climb.
For accurate, up-to-date data on the housing market, talk with a North Point real estate agent. We have the later data.
Fed Minutes Show An Improving U.S. Economy Threatened By The Eurozone
Federal Open Market Committee meeting
The Federal Reserve has released the minutes from its most recent Federal Open Market Committee meeting. The Fed Minutes are a detailed meeting recap; the companion piece to the more brief, more well-known press release.
As a comparison, the minutes of the last FOMC meeting contained 60 paragraphs and 7,027 words. The post-meeting press release was just 5 paragraphs and 382 words.
December’s Fed Minutes shows Fed members with a positive, cautious, take on the economy.
Recent data suggests that the U.S. economy is expanding, the Fed said, but “strains” in global financial markets pose “significant risks” to the downside. This tell us that the Fed believes its economy-stimulating programs are working, but that officials remained concerned by events in the Eurozone.
The U.S. economy could be impacted by fallout.
Other meeting consensus included :
- On growth : The economy is expanding, despite slowing in “global economic growth”
- On housing : Data suggests the “depressed” market “could be improving”
- On inflation : Prices are stable, and remain within tolerance levels
The Fed’s analysis was of little surprise to Wall Street, and going forward, Fed Chairman Ben Bernanke wants to keep it that way. The Fed Minutes contained a passage regarding market communication, and how the Fed will be more pro-active about it in the future.
With the release of its minutes, in a section called “Market Policy Communications”, the Federal Reserve showed its plans to release 4 times annually its economic forecasts, and plans for the Fed Funds Rate. This signals in a shift in Federal Reserve transparency.
The Federal Reserve will begin including the forecast in its economic projections beginning after its next policy meeting, January 24-25, 2012.
Mortgage rates were little changed after the release of the Fed Minutes.
