Housing starts in January reached their highest rate in four months, increasing more than analysts expected, the Commerce Department reports. Housing starts jumped 14.6 percent to a seasonally adjusted annual rate of 596,000 units.
Housing starts in January were helped by a 77.7 percent jump in multi-family homes. Single-family home construction, on the other hand, fell 1 percent.
Meanwhile, new home completions dropped to a record low of 512,000 units in January, falling 9.5 percent from the previous month.
And after housing permits surged in December by 15.3 percent, housing permits for future housing projects sank in January. New building permits dropped 10.4 percent to a 562,000-unit pace in January--mostly pulled down by a drop in multi-family and single-family unit permits.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Tuesday, February 22, 2011
Saturday, December 11, 2010
How Home Prices, the Economy, and Your Attitude Are Connected
Home prices are tied to the economy very closely. When the economy is running smoothly, home prices and sales are soaring and people feel more secure with their money and their stability. But when one of these things changes, they all change with it.
If the economy starts to turn, people begin to lose jobs and want to leave the area searching for different work. Because there is less work, less people want to move to the area, leaving sellers stuck. As the housing market begins to lower, home prices drop and people aren’t worth as much money as they were before. They begin to feel poorer and stop making big ticket purchases. The loss of that cash flow hurts the economy more, and the spiral continues.
Housing Market
If the housing market begins to turn, then homes lose value, people feel poorer and the economy suffers. If people begin to feel poorer without either the economy or the Dallas housing market turning, they can drag the whole thing down. Sometimes politicians or other interest groups want people to feel poorer to sway public opinion, so it is possible for this to occur, and it has occurred in the past.
You can do your part to help the economy and the housing market by remaining calm about your finances. Focus on making smart economic decisions and stay calm. It’s important to prepare for a down-turned economy, and keep as level as possible. If you practice this when the market is high, it will be easier on your family when the market is low.
Easier Said
This advice is easier said than done, especially with job loss, the rise of foreclosure rates, and increasing Dallas short sales. The light at the end of the tunnel is getting closer. It will be a long battle to get there, but we will be seeing relief.
If the economy starts to turn, people begin to lose jobs and want to leave the area searching for different work. Because there is less work, less people want to move to the area, leaving sellers stuck. As the housing market begins to lower, home prices drop and people aren’t worth as much money as they were before. They begin to feel poorer and stop making big ticket purchases. The loss of that cash flow hurts the economy more, and the spiral continues.
Housing Market
If the housing market begins to turn, then homes lose value, people feel poorer and the economy suffers. If people begin to feel poorer without either the economy or the Dallas housing market turning, they can drag the whole thing down. Sometimes politicians or other interest groups want people to feel poorer to sway public opinion, so it is possible for this to occur, and it has occurred in the past.
You can do your part to help the economy and the housing market by remaining calm about your finances. Focus on making smart economic decisions and stay calm. It’s important to prepare for a down-turned economy, and keep as level as possible. If you practice this when the market is high, it will be easier on your family when the market is low.
Easier Said
This advice is easier said than done, especially with job loss, the rise of foreclosure rates, and increasing Dallas short sales. The light at the end of the tunnel is getting closer. It will be a long battle to get there, but we will be seeing relief.
Sunday, November 7, 2010
Home Sales Could Enter 'Virtuous Cycle'
Consumer confidence and business spending are key to whether the U.S. housing market will move into a virtuous or a vicious cycle in 2011, NAR Chief Economist Lawrence Yun told a packed audience at the Residential Economic Outlook Forum Friday in New Orleans.
After the downturn, the housing market has clawed its way back to a point of near stability, Yun said, with the pace of new foreclosures easing, sales moving toward historically normal levels and prices on a national basis gaining modestly.
At the same time, affordability remains strong. He said all of the price excesses from the housing bubble have been squeezed out. In San Diego, for example, buyers today would pay $1,564 a month in mortgage payments for a house that at the height of the boom would have cost them $2,833 a month.
The broader economy is also showing positive signs, with businesses enjoying strong profits, sitting on huge cash reserves, and even adding jobs. Yun predicts this positive trend to continue into 2011, with existing home sales reaching 5.5 million units, prices rising a modest 1 percent, and the U.S. gross domestic product increasing to about 2.5 percent.
“We are entering a virtuous cycle,” he said. But for the positive trend to continue, he added, businesses will have to start spending some of their cash to fuel job growth at a far greater pace than they’re doing now. Currently, businesses are adding jobs at a pace of about 100,000 a month. That needs to grow to about 400,000 a month for unemployment
to start shrinking.
The scenario will be far more negative if businesses continue to sit on their cash. In that case, sales will fall, inventories will rise, the high rate of foreclosures will resume, and the cost to the federal government of bailing out Fannie Mae and Freddie Mac will surge.
Federal Reserve Governor Thomas Koenig, who shared the data with Yun, said the Fed’s continued effort to spur the economy, most recently through a $600 billion bond buying program, is understandable given concerns over the slow pace of growth. But the continued subsidization of the market could unleash inflationary forces.
Yun said he sees possible evidence of inflation building, but it’s not visible now because the housing-cost portion of inflation measurements is holding down prices.
After the downturn, the housing market has clawed its way back to a point of near stability, Yun said, with the pace of new foreclosures easing, sales moving toward historically normal levels and prices on a national basis gaining modestly.
At the same time, affordability remains strong. He said all of the price excesses from the housing bubble have been squeezed out. In San Diego, for example, buyers today would pay $1,564 a month in mortgage payments for a house that at the height of the boom would have cost them $2,833 a month.
The broader economy is also showing positive signs, with businesses enjoying strong profits, sitting on huge cash reserves, and even adding jobs. Yun predicts this positive trend to continue into 2011, with existing home sales reaching 5.5 million units, prices rising a modest 1 percent, and the U.S. gross domestic product increasing to about 2.5 percent.
“We are entering a virtuous cycle,” he said. But for the positive trend to continue, he added, businesses will have to start spending some of their cash to fuel job growth at a far greater pace than they’re doing now. Currently, businesses are adding jobs at a pace of about 100,000 a month. That needs to grow to about 400,000 a month for unemployment
to start shrinking.
The scenario will be far more negative if businesses continue to sit on their cash. In that case, sales will fall, inventories will rise, the high rate of foreclosures will resume, and the cost to the federal government of bailing out Fannie Mae and Freddie Mac will surge.
Federal Reserve Governor Thomas Koenig, who shared the data with Yun, said the Fed’s continued effort to spur the economy, most recently through a $600 billion bond buying program, is understandable given concerns over the slow pace of growth. But the continued subsidization of the market could unleash inflationary forces.
Yun said he sees possible evidence of inflation building, but it’s not visible now because the housing-cost portion of inflation measurements is holding down prices.
Wednesday, October 27, 2010
Simple Tips to Take the Stress Out of the Home-Buying Process - Focus on the Positives
For many prospective buyers, the thought of going through the home-buying process is often filled with a lot of stress. From finding a qualified real estate agent, to narrowing down your choice of homes and then packing your belongings and moving across town can be an overwhelming process.
Here are some tips to help you keep your cool as you begin the process of a buying a home.
-Buying a home is one of the biggest financial decisions you will make in your lifetime, and along with the finances come emotions. When you are choosing a real estate agent to work with, be patient and take the time you need to find an agent that you connect with. Finding a highly-skilled agent who fits with your personality is crucial.
-Every home buyer and seller is in a different situation, so it is important that you don’t compare your timeline and decisions to anyone else’s. As you make your way through the home buying process, remember that there is no right time to buy, just as there is no perfect time to sell. If you find a home that fits your needs, don’t let it slip out of your hands by waiting for interest rates to drop lower as you run the chance of losing out on the home of your dreams.
-It is natural to want to get opinions from those you trust before you make your final choice, but too much input will ultimately make the decision process much harder. Remember to focus on what your immediate wants and needs are so that everyone will be happy with the final decision.
-You probably aren’t going to find a home that is 100% perfect, so it is important to make a list that includes your top priorities that you can’t live without. Be sure to stick to the items on your list and let go of the minor things.
-Negotiation is an important part of the real estate buying process, but be sure you don’t take your negotiating too far. Trying to get an extra-low price or refusing to budge on your offer may cost you the home in the end. Successful negotiation depends on give and take, so make sure you are being fair in your requests.
-Don’t get too caught up in all the physical aspects of a home and forget about the more important issues. While the size of the rooms and the layout of the kitchen might not be exactly what you expected, be cognizant of issues such as noise level, location to amenities and other aspects that will have an impact on your day-to-day life.
-Getting approved for a mortgage should be taken care of well before you find a home and make an offer.
-Create a budget before you move into your new home and be sure to include maintenance and repair costs. Even if you buy a new home, there will be extra costs, so it is important to not come up short and let your new home deteriorate.
-After purchasing a home, a little buyer’s remorse is inevitable, but it will pass. Buying a home is a big financial commitment, but it also yields big benefits. If you are feeling remorseful after buying your home, remind yourself why you wanted to buy a home and what made you fall in love with your new property.
-When choosing a home, buy it because you love it. A home’s most important role is to serve as a comfortable, safe place to live, so don’t get bogged down with thinking about your home’s appreciation.
Here are some tips to help you keep your cool as you begin the process of a buying a home.
-Buying a home is one of the biggest financial decisions you will make in your lifetime, and along with the finances come emotions. When you are choosing a real estate agent to work with, be patient and take the time you need to find an agent that you connect with. Finding a highly-skilled agent who fits with your personality is crucial.
-Every home buyer and seller is in a different situation, so it is important that you don’t compare your timeline and decisions to anyone else’s. As you make your way through the home buying process, remember that there is no right time to buy, just as there is no perfect time to sell. If you find a home that fits your needs, don’t let it slip out of your hands by waiting for interest rates to drop lower as you run the chance of losing out on the home of your dreams.
-It is natural to want to get opinions from those you trust before you make your final choice, but too much input will ultimately make the decision process much harder. Remember to focus on what your immediate wants and needs are so that everyone will be happy with the final decision.
-You probably aren’t going to find a home that is 100% perfect, so it is important to make a list that includes your top priorities that you can’t live without. Be sure to stick to the items on your list and let go of the minor things.
-Negotiation is an important part of the real estate buying process, but be sure you don’t take your negotiating too far. Trying to get an extra-low price or refusing to budge on your offer may cost you the home in the end. Successful negotiation depends on give and take, so make sure you are being fair in your requests.
-Don’t get too caught up in all the physical aspects of a home and forget about the more important issues. While the size of the rooms and the layout of the kitchen might not be exactly what you expected, be cognizant of issues such as noise level, location to amenities and other aspects that will have an impact on your day-to-day life.
-Getting approved for a mortgage should be taken care of well before you find a home and make an offer.
-Create a budget before you move into your new home and be sure to include maintenance and repair costs. Even if you buy a new home, there will be extra costs, so it is important to not come up short and let your new home deteriorate.
-After purchasing a home, a little buyer’s remorse is inevitable, but it will pass. Buying a home is a big financial commitment, but it also yields big benefits. If you are feeling remorseful after buying your home, remind yourself why you wanted to buy a home and what made you fall in love with your new property.
-When choosing a home, buy it because you love it. A home’s most important role is to serve as a comfortable, safe place to live, so don’t get bogged down with thinking about your home’s appreciation.
Sunday, October 24, 2010
What You Should Know Before Buying a Home
There are so many things to understand as you embark on purchasing a home, especially if it's your first purchase. Learn the basics as you get started and understand everything you need to know as it relates to financing.
Here are 10 tips about financing:
1. Before you start looking for a home, get pre-qualified for a loan. Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage.
2. If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit. A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan.
3. You will need a down payment. Down payment requirements vary depending on the type of loan. Many down payment assistance programs exist. These programs may loan or grant you the funds necessary for the down payment. Consult with a lender about programs available in your area.
4. You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to:
* Escrow fees charged by the company handling the transaction
* Title policy issuance fees charged by the title insurance company
* Mortgage insurance fees
* Fire and homeowners insurance
* County Recorder fees for recording your deed
* Loan origination fees
Consult your lender for an actual estimate of these costs, as well as information about loan programs which can assist in financing your closing costs
5. Some loans have "points" and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to comparison shop lenders to make sure your loan is at a competitive yield.
6. Should you select a mortgage with a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a low rate during the first few years of an adjustable mortgage to make it appealing to you. If interest rates are low you might want to take a fixed rate to protect yourself against the possibility of rising interest rates.
7. Be aware of the two main types of loan categories.
* Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.
* Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan
8. If you are a low or moderate income home buyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies, like the California Housing Finance Agency (CalHFA). Most lenders specializing in real estate mortgage loans are aware of these types of loan programs.
9. Why might I have to pay mortgage insurance? Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans.
10. Many organizations offer home loan counseling to prospective home buyers. These organizations provide classes for homebuyers to cover the steps to homeownership. They will cover home selection, realtor services, lenders, loan programs, homeownership responsibilities, saving for a down payment, and other important pieces of information. Many first-time home buyer programs require homebuyers to attend this type of class to be eligible for selected programs.
Here are 10 tips about financing:
1. Before you start looking for a home, get pre-qualified for a loan. Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage.
2. If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit. A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan.
3. You will need a down payment. Down payment requirements vary depending on the type of loan. Many down payment assistance programs exist. These programs may loan or grant you the funds necessary for the down payment. Consult with a lender about programs available in your area.
4. You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to:
* Escrow fees charged by the company handling the transaction
* Title policy issuance fees charged by the title insurance company
* Mortgage insurance fees
* Fire and homeowners insurance
* County Recorder fees for recording your deed
* Loan origination fees
Consult your lender for an actual estimate of these costs, as well as information about loan programs which can assist in financing your closing costs
5. Some loans have "points" and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to comparison shop lenders to make sure your loan is at a competitive yield.
6. Should you select a mortgage with a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a low rate during the first few years of an adjustable mortgage to make it appealing to you. If interest rates are low you might want to take a fixed rate to protect yourself against the possibility of rising interest rates.
7. Be aware of the two main types of loan categories.
* Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.
* Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan
8. If you are a low or moderate income home buyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies, like the California Housing Finance Agency (CalHFA). Most lenders specializing in real estate mortgage loans are aware of these types of loan programs.
9. Why might I have to pay mortgage insurance? Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans.
10. Many organizations offer home loan counseling to prospective home buyers. These organizations provide classes for homebuyers to cover the steps to homeownership. They will cover home selection, realtor services, lenders, loan programs, homeownership responsibilities, saving for a down payment, and other important pieces of information. Many first-time home buyer programs require homebuyers to attend this type of class to be eligible for selected programs.
Saturday, October 23, 2010
Survey: Economy Driving People Out of the Housing Market
Nearly two-thirds of Americans say the current economic situation is making them less likely to buy a house, according to a new national survey by FindLaw.com (http://www.findlaw.com), a popular legal information website.
Sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy. Despite record-low mortgage rates and an abundance of houses available on the market, only 8 percent of people say the current economic situation makes them more likely to buy a house. About a quarter of people – 28 percent – say they are neither more likely nor less likely to buy a house because of the economy.
In particular, the current economy is driving lower-income individuals and families out of the market. People with annual incomes less than $50,000 were significantly more likely to say they are less inclined to buy a house than people with higher incomes.
"The current economic situation has greatly changed the dynamics of the housing market," said Stephanie Rahlfs, an attorney and editor with FindLaw.com. "Although mortgage rates are near record lows, stricter lending requirements are often making it more difficult for many people to obtain mortgages. High unemployment rates are raising concerns about housing appreciation, affordability and foreclosures. Together, these factors are causing many people to shy away from the idea of buying a house. Buying a home, selling a home and owning a home are all becoming more complicated, and it's important to know the ins and outs of contracts, finances and your rights as a buyer, seller or owner."
Free Internet resources such as the FindLaw Real Estate center (http://realestate.findlaw.com/) can provide helpful information on buying, selling and owning a home, including obtaining a loan, borrowers' rights, finding the best mortgage, homeowners' rights, avoiding foreclosure and more. It also has useful information for renters, including negotiating a lease, tenants' rights, and fair housing and discrimination laws.
The FindLaw.com survey was conducted using a demographically balanced telephone survey of 1,000 American adults and has a margin of error of plus-or-minus 3 percent.
Sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy. Despite record-low mortgage rates and an abundance of houses available on the market, only 8 percent of people say the current economic situation makes them more likely to buy a house. About a quarter of people – 28 percent – say they are neither more likely nor less likely to buy a house because of the economy.
In particular, the current economy is driving lower-income individuals and families out of the market. People with annual incomes less than $50,000 were significantly more likely to say they are less inclined to buy a house than people with higher incomes.
"The current economic situation has greatly changed the dynamics of the housing market," said Stephanie Rahlfs, an attorney and editor with FindLaw.com. "Although mortgage rates are near record lows, stricter lending requirements are often making it more difficult for many people to obtain mortgages. High unemployment rates are raising concerns about housing appreciation, affordability and foreclosures. Together, these factors are causing many people to shy away from the idea of buying a house. Buying a home, selling a home and owning a home are all becoming more complicated, and it's important to know the ins and outs of contracts, finances and your rights as a buyer, seller or owner."
Free Internet resources such as the FindLaw Real Estate center (http://realestate.findlaw.com/) can provide helpful information on buying, selling and owning a home, including obtaining a loan, borrowers' rights, finding the best mortgage, homeowners' rights, avoiding foreclosure and more. It also has useful information for renters, including negotiating a lease, tenants' rights, and fair housing and discrimination laws.
The FindLaw.com survey was conducted using a demographically balanced telephone survey of 1,000 American adults and has a margin of error of plus-or-minus 3 percent.
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