Signs of a Housing Market Turnaround
Tighter credit is prolonging the seemingly everlasting slump in home sales, but a quarterly Wall Street Journal survey of 28 major metro areas shows that the surge in inventories of unsold homes is slowing.
The latest trends offer some hope for an eventual recovery in a U.S. housing market that generally has been cooling since mid-2005. Even so, many economists and industry executives say that recovery will be very gradual and won't start before 2008 at the earliest, partly because more-stringent lending policies are keeping many potential buyers on the sidelines, while others are holding off in hopes of prices heading even lower. Meanwhile, there is still a glut of homes on the market in much of the country.
House prices are likely to remain weak in many areas until inventories of unsold homes fall. That process has begun in a few places where the number of homes listed for sale at the end of June was down 16% from a year earlier. Some frustrated sellers who don't need to move have taken their homes off the market, which has also lowered inventory somewhat.
If you are in the homebuying mode as opposed to selling, now may be the most favorable time for you to begin looking, before things turn around and you say, "wish we had started this process sooner when conditions were more favorable to buyers…" Contact us for a free consultation to find out if now is the best time for you to look at buying a home.
Interest Rates Level Off
For nearly 10 months interest rates moved up a little, then down a little, but the average cost for most types of mortgages remained below 6.5%. Then rates unexpectedly took off in late May, making home loans more expensive than they’ve been since, well, this time last year.
A recent survey of major lenders found the average:
30-year fixed-rate loan — the most popular way to pay for a house — costs 6.78%.
15-year fixed-rate loan costs 6.46%.
That means payments would be $650 a month for every $100,000 borrowed with the average 30-year, fixed-rate loan. That’s just $6 a month less than you’d have paid in July 2006 but $38 a month more than in mid-March when interest rates were below 6.2%.
Interest rates have stabilized over the past couple of weeks and, if borrowers are fortunate, they’ve peaked and may drift lower over the next couple of months. That’s what happened last summer after 30-year fixed-rate loans topped out at 6.93% the last week in June.
For more on what mortgage rates are running here locally in the Greater Dayton OH area, give us a call or leave us a comment and we'll get back to you.
Rent-to-Own Real Estate Deals - Beware!
Rent-to-own contracts that substitute for mortgages and conventional home loans are enjoying a surge in popularity in several regions of the country. The slumping real estate markets in parts of the U.S. fuels these deals, where homes can sit on the selling block for months at a time.
Add to this the recent tightening of rules and regulations for bad credit loans and a near perfect storm has been created for rent-to-own scenarios. It sounds like a great way for home sellers to speed up the sale of their home.
While the benefits of rent-to-own arrangements may seem strong, both the buyer and seller need to be aware of problems that can result from poor planning. Get the complete story here:
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Housing Slump Could Last Til Year's End
The U.S. housing market will continue to slump for the remainder of 2007, with home sales falling further and price growth continuing to slow. This word from a leading industry economist, David Berson, vice-president and chief economist at Fannie Mae, said 2006 and 2007 combined will show the biggest drop in sales since the housing downturn of 1989-91.
An increase in mortgage rates over the past few months, particularly in the past month, will soon have an additional negative impact on housing demand, according to Berson.
He expects new and existing home sales to decline by 10.2 percent in 2007 to the lowest level since 2002. Single-family starts are expected to fall 21.7 percent.
For more on this news… click here:
Four Easy Home Improvements
If your house needs a makeover, but remodeling is beyond your reach, try these four simple fixes:
Touch-up exteriors. Repainting the trim and front door of your house can significantly boost its curb appeal. This kind of retouching work is easy on the budget and can be done in just a couple of hours.
Replace your floors. The widespread availability of affordable "floating floors" (flooring options that can be installed on top of existing boards or linoleum) makes updating the floors in your rec room or pantry a cinch. You'll probably save a minimum $500 to $600 dollars by doing it yourself.
Update your hardware. Switching out old light fixtures and faucets is a simple, affordable way to modernize your home. While you're at it, equip your house with fixtures that support halogen light bulbs to save money on your electricity bill.
Transform your yard. Landscaping doesn't have to break the bank. Replacing overgrown shrubs and bushes and adding some flowers for color is an economical way to add value to your home.
Many home repairs can be easily mastered by determined do-it-yourselfers, but there are still some things best left to the experts. If you need to re-floor your entire house, contact a flooring service, and call in the electricians whenever you're dealing with circuit boards or wiring in the walls.
