Archive for the 'Market Trends' Category
Homes Sales Drop….But Knoxville TN is a GREAT place to buy??? Part 2
September 1st, 2010 categories: Buyers, Market Trends, Mortgage Rates
Well if you have been watching the Knoxville real estate market you heard that homes sales dropped a whopping 27% last month So what do you do if you live in Knoxville, TN. You want to sell your current Knoxville home and buy another home?? Wait until things get better…when will that happen? From Part 1 we talked about the market from a seller’s prospective. Today I would like to cover today’s market from a buyer perspective and how i think you should proceed in making a smart buy in Knoxville real estate market.
Educate, Take your time, hire a good agent….
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Knoxville Mortgage Rates May Be Low…But Watch The Bouncing Ball..
August 31st, 2010 categories: Buyers, Market Trends, Mortgage Guidelines, Mortgage Rates
Mortgage rates are low right now but pinning them down this week could be a challenge. As Labor Day Weekend nears and Wall Streeters take their head-start on the holiday, trading volume will fall, which will cause mortgage rates in Knoxville TN to get jumpy.
As mortgage rates change, so does the long-term cost of owning a home. Every 1/8 percent adjustment changes a household budget.
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Homes Sales Drop….But Knoxville TN is a GREAT place to buy??? Part 1
August 30th, 2010 categories: Market Trends, Mortgage Rates, Sellers
Well if you have been watching the Knoxville real estate market you heard that homes sales dropped a whopping 27% last month So what do you do if you live in Knoxville, TN. You want to sell your current Knoxville home and buy another home?? Wait until things get better…when will that happen?
According to Local Market Monitor Inc., a Cary, N.C., firm that analyzes real-estate trends for lenders, builders and investors, compiled its first Investor Suitability Report using economic data through July 31 for 315 U.S. markets. Knoxville TN is the 4th BEST place to buy a home in the US according to a recent article in the WSJ.
Wow….you hear that the bottom is falling out on one hand and hear that Knoxville is one of the best places to buy on the other hand…
I’m going to cover how what you need to do as a seller and buyer in the current market here is Part 1 for sellers
So what do you do if you are a seller who wants to sell in this market? Well there are 3 things that sell a home that haven’t changed since I got in the business.
Location, Condition, and Price.
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Existing Home Sales Plummet In July; Home Buyers Gain Leverage
August 26th, 2010 categories: Case-Shiller Index, Consumer Confidence, Existing Home Sales, Market Trends
The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®’ Existing Home Sales report.
It’s a drop of 27 percent from June; single-family home resales are at the report’s lowest levels since May 1999.
Furthermore, because of the sharp drop in sales volume, home inventories are spiking.
Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.
Home supply was just 8.9 months in June.
For home sellers in Maryville , the Existing Home Sales report is a bit of bad news. Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices. It may also increase time-on-market.
For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.
It helps that home affordability is up, too.
Although there’s reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today’s rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.
Mortgage rates are down 0.75 percent since mid-April.
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Bank Mortgage Lending Policies Appear To be Easing
August 24th, 2010 categories: Market Trends, Mortgage Guidelines, Mortgage Rates
The tightening in mortgage-lending policies that characterized the last 3 years appears to be slowing.
According to the Federal Reserve’s quarterly survey of senior bank loan officers, roughly 1 in 10 lenders added mortgage qualification hurdles between April and June. It’s a huge departure from just 2 years ago when the mortgage industry was facing its first wave of challenges.
During that period, eight in 10 lenders added hurdles.
For mortgage applicants in Knoxville , this quarter’s Fed survey results signals that mortgage lending may have reached its limits of restriction.
Since 2007, mortgage guidelines have become increasingly restrictive. There’s extra scrutiny on assets and tax returns; employment history is given more weight; loan purpose matters. There’s a bevy of traits that can stand between you and an approval that didn’t exist a few years ago.
That said, lots of homeowners are still getting loans.
Verifiable income, good credit scores and equity are the “magic formula” and banks want to lend to good credit risks. And the best news for those that qualify is that mortgage rates are fantastic right now.
According to Freddie Mac, mortgage rates are as low as they’ve been in history.
So, if you’re among the many wondering if now is the right time to buy a home — or refinance one — remember that, although mortgage guidelines likely won’t get worse, mortgage rates probably will.
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Loan Application Alert : Conforming, Interest Only Mortgages Guidelines Change Next Week
June 17th, 2010 categories: Buyers, FHA Mortgages, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
If you plan to finance your Farragut home with a conforming interest only mortgage, get your loan application submitted no later than this Friday, June 18.
Starting next week, Fannie Mae is clamping down on the popular loan product.
An “interest only” mortgage is exactly what its name implies — a mortgage for which the monthly payments consist entirely of interest with no principal reduction. Because there’s no amortization, payments are less costly on a month-to-month basis.
For example, assuming principal + interest payments at 5 percent, a $250,000 mortgage carries a monthly payment of $1,342. The payment on a comparable interest only mortgage, however, drops to $1,042.
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Good News For Sellers : Housing Starts Fall To 1-Year Low In May 2010
June 17th, 2010 categories: Buyers, Existing Home Sales, FHA Mortgages, Home Values, Housing Starts, Market Trends, Sellers
Single-family housing starts plummeted to a one-year low in May, just 30 days after soaring to a 20-month high. It’s no wonder home builders are confused.
Against a revised April figure, Housing Starts fell 97,000 units in May, a figure representing almost one-fifth of the total market size.
It’s the worst showing for Housing Starts since May 2009, a surprise to builders and economists alike.
Furthermore, single-family Building Permits plunged in May, too — down 10 percent from April. A permit is a certification from local government that authorizes home construction.
Housing permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.
For home buyers in Knoxville , this should create a sense of urgency.
Home prices are based on supply and demand and supply appears to be falling about the same time that economists predict a surge in home demand. It could spell rising home prices and a complete loss of negotiation power with home sellers.
For now, though, home affordability remains high with properties cheap and mortgage rates near all-time lows. If you plan to buy a home later this year, the May 2010 Housing Starts data may be a reason to move up your timeframe a bit.
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FHA Mortgage Insurance Premiums Approved To Triple In Cost
June 17th, 2010 categories: Buyers, FHA Mortgages, Home Values, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.
In a near-unanimous vote, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.
Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent, among other details of the bill.
Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
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Bank Reposessions Reach Record Levels For The Second Straight Month
June 17th, 2010 categories: Foreclosures, Knoxville Short Sales, Market Trends, Sellers
According to foreclosure-tracking firm RealtyTrac.com, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.
As compared to May 2009, all 50 states now show an increase in annual REO activity.
Data like that won’t surprise today’s active home buyers in Farragut. Foreclosed homes are prevalent, available and accounted for one-third of all home resales made in April.
Furthermore, total foreclosure actions — the sum of REO, default notices, and foreclosure auctions in May — topped 300,000 for the 15th straight month.
Foreclosures remain a huge influence on the housing market.
However, two interesting trends emerged in the data:
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Conforming Loan Costs Are Rising, Says Freddie Mac
June 9th, 2010 categories: Adjustable Rate Mortgages, Buyers, FHA Mortgages, Market Trends, Mortgage Guidelines, Mortgage Rates, Sellers
Mortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A “discount point” is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it. In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn’t do the same for required points.
The press fails to mention discount points entirely.
An increase of 1/10 percent in discount points costs homebuyers and refinancing households in Maryville an extra $100 per $100,000 borrowed.
The hike reminds us that there’s more to a mortgage than just its rate — costs matter, too. And if you’ve only been watching the headlines, you would have missed how costs are rising.
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