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Case-Shiller: Home Prices Pick Up
Tweet Share on Facebook June 26, 2012 CommentCould home prices finally be on the upswing?
After seven consecutive months of disappointing data showing property values continuing to slide, average home prices increased more than 1 percent in April for both the 10- and 20-city groups the S&P/Case-Shiller Home Price Indices track.
Though prices fell about 2 percent from levels a year ago, declines were less severe than they have been in more than a year. That, coupled with the monthly uptick in values, is bolstering the notion that the housing market is stabilizing.
"With April 2012 data, we finally saw some rising home prices," said David M. Blitzer, chairman of the Index Committee at S&P Indices, in a statement. "While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign."
[Read: New Home Sales Spike to 2-Year High.]
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New Home Sales Spike to 2-Year High
Tweet Share on Facebook June 25, 2012 CommentIt looks like construction could be making a comeback.
Sales of newly built homes shot up to their highest level in more than two years, the Commerce Department reported Monday, jumping almost 8 percent from April. Year-over-year, sales were a whopping 20 percent higher.
Prices for new homes rose almost 6 percent over last year's May numbers, as well.
That's good news for the construction industry, which has languished in the wake of one of the nation's worst housing busts. Strengthening demand for new homes has also boosted builder sentiment, which rose to its highest level in five years, according to the National Association of Home Builders.
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May Numbers Throw Cold Water on Hopes for Housing Recovery
Tweet Share on Facebook June 22, 2012 CommentAfter a few months of more encouraging data earlier this year, a slew of less-than-stellar May numbers threw cold water on hopes that the housing market could be finally turning around.
Instead, it seems the promising recovery has hit a plateau. Home sales and new construction activity retreated in May while delinquency and foreclosure rates ticked upward, peeling back progress made in late 2011 and early 2012.
Trulia's May housing barometer, which measures how far the market is on its way back to normal, fell to 35 percent, down from 37 percent in April. Since January, the barometer has hovered between the 33 to 37 percent range.
Here's a look at what contributed to the pullback in the housing recovery:
Construction starts. Although construction activity was up almost 30 percent from a year ago, the sector still has a long way to go, according to Trulia. New housing starts are just 23 percent of the way back to normal, underscoring how much the industry was decimated in the wake of the housing bust.
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How Low Can They Go? Mortgage Rates Fall (Again)
Tweet Share on Facebook June 21, 2012 CommentDefying logic, mortgage rates sunk to new lows this week on news that the U.S. and global economy could be slowing down more than economists originally anticipated.
Interest rates on 30-year fixed-rate mortgages averaged 3.66 percent, Freddie Mac reported Thursday, falling from a 3.71 percent average last week. Borrowers opting for a 30-year fixed-rate mortgage this time last year were stuck with a (comparatively) sky-high interest rate of 4.5 percent.
"Mortgage rates are reaching record lows based on overall uncertainty in Europe," says Doug Lebda, CEO of LendingTree.com.
That uncertainty has spooked investors causing a rush into the perceived safe-haven of U.S. treasuries, which drives down yields. Because mortgage rates are pegged to the 10-year U.S. treasury, when yields fall on treasuries, mortgage rates retreat as well, Lebda says.
[Read: McMansions Making a Comeback.]
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Super Size It: McMansions Making a Comeback
Tweet Share on Facebook June 21, 2012 CommentAfter greed and excess torpedoed the housing market a few years ago, Americans understandably began favoring more modest homes instead of pricey palatial abodes.
But it seems old habits die hard.
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Supply, Not Demand, to Blame for Pullback in May Home Sales
Tweet Share on Facebook June 21, 2012 CommentWhen it comes to weak home sales data, the blame usually falls on skittish consumers, too afraid to commit to such a big purchase in a still-shaky economic environment.
Not this time.
Sales of previously owned homes fell 1.5 percent in May, according to the National Association of Realtors, but this time economists blamed a tightening supply of homes for sale.
"The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand," said Lawrence Yun, NAR chief economist, in a statement. "The normal seasonal upturn in inventory did not occur this spring."
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Stage Could Be Set for a Rental Market Bubble
Tweet Share on Facebook June 20, 2012 CommentYet another sign of the shifting landscape of the housing market over the past few years, an additional 1.5 million households moved into rental housing over the year ending March 2012, according to a new report.
That's a 4 percent increase in a single year, said the June 2012 Economic Outlook published by government mortgage giant Freddie Mac, and the highest year-over-year percentage increase in recent history, according to Christina Aragon, director of strategy and branding at Rent.com.
"A 4 percent increase in households moving into rental housing is significant," Aragon wrote in an E-mail, noting that the previous few years have seen jumps in the renter population, but not quite as dramatic.
While the increase might be significant, Aragon isn't all that surprised, especially given that the number of U.S. households grew by nearly 1 percent last year, the steepest increase since 2007. Meanwhile, the homeownership rate—currently around 65 percent—has sunk to its lowest level in 15 years.
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Should You Consider an Adjustable-Rate Mortgage?
Tweet Share on Facebook June 19, 2012 CommentAdjustable-rate mortgages have had some bad press over the past few years, taking heat for contributing to the massive housing bust that brought the U.S. economy to its knees. Consequently, fixed-rate mortgages, known for their predictability, have become the go-to loan product for many borrowers.
But that stability comes at a cost—higher interest rates—and may end up being needlessly expensive.
Consider this: The typical mortgage is paid off or refinanced in seven to 10 years. If you have a seven-year window, why pay for 30 years worth of interest-rate stability?
Here are some things to think about when considering whether an adjustable-rate mortgage is right for you:
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Housing Starts Slump in May
Tweet Share on Facebook June 19, 2012 CommentIt's more mixed messages from the housing market this week.
After building permits—a leading indicator of future construction—surged almost 8 percent in May, the optimistic mood for the recovering housing market was dampened by news that builders broke ground on significantly fewer homes last month.
Overall housing starts plunged almost 5 percent in May to a seasonally adjusted annual rate of 708,000, according to the Commerce Department, disappointing economists who expected an almost 1 percent increase. Housing starts remain well below historical and demographic norms. According to economists, the U.S. economy should be cranking out close to 1.6 million homes a year.
[See a slideshow of the cities with the fastest shrinking inventories.]
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Romney Bests Obama With Homeowners, Realtors
Tweet Share on Facebook June 13, 2012 CommentIf the nation's realtors and homeowners have their way, President Obama will be a one term president.
