The S&P Case-Shiller house price index climbed 2.2% in May

The S&P Case-Shiller house price index climbed 2.2% in May after a 1.8% increase in April. April marked the first increase in seven months. But overall, the 20-city index is down 0.7% from May 2011.

The chairman of the S&P index committee David Blitzer pointed out that all 20 cities posted positive returns in May and 17 of those cities (except Boston, Charlotte and Detroit) saw their rates of change increase compared to April.

But he cautioned that housing data on sales and other indicators have been mixed lately and that home values usually trend upward in the spring and summer.

“The housing market appears to be stabilizing, but we are definitely in a wait and see mode for the next few months,” Blitzer said.

Despite the recent improvement in values, prices are still off 33% since the peak in the summer of 2006, according to the Case-Shiller HPI.

We tend to look at things on a normalized basis that way its more reflective of the current trend.  Also helps to analyze the data over extended periods of time.  It will be interesting to see if the Federal Reserve moves to create more stimulus over the next couple days.

New Home Supply Shrinks 13 Percent In One Year; Prices Rising

Homebuilder confidence is soaring -- and for good reason. In June, despite a drop in units sold on a seasonally-adjusted, annualized basis, the market for new construction remains strong nationwide.


The Census Bureau reports that 350,000 new homes were sold in June 2012, an 8 percent reduction as compared to May. A "new home" is a home that has not been previously occupied; one that's considered "new construction".


The tally fell short of Wall Street expectations but can still be considered strong.

This is because, in addition to releasing June's New Home Sales data, the Census Bureau revised higher the previously-released results for March, April and May by a collective 33,000 units.

After the prior month revisions, June's results are now the weakest since February, and the strongest of the preceding 21 months. The housing market recovery continues.


Sales of newly-built homes have climbed 15 percent since June 2011. Buyers are buying faster than builders can build, and its contributing to a shrinking national home inventory.

At the end of last month, there were just 144,000 new homes for sale nationwide. This is 13 percent fewer homes than were for sale one year ago. As a result, at the current pace of sales nationwide, the complete stock of new homes would "sell out" in 4.9 months.

This number is noteworthy because a 6.0-month supply of homes is believed to indicate a market in balance. When new home supplies fall below 6.0 months, it suggests a "seller's market", one in which home builders have pricing power over potential home buyers, plus excess leverage in negotiations.

In a seller's market, builders are less likely to offer price reductions and/or free upgrades and it's been a seller's market since October 2011. Not surprisingly, since October 2011, the average new home sale price is higher by 6%.


With mortgage rates at all-time lows and rents exceeding mortgage payments in many U.S. cities, first-time home buyers are expected to power the housing market through the rest of 2012 and into 2013. It helps that there are a bevy of low-downpayment mortgage programs, too.

For example, the FHA has a 3.5% downpayment program for purchases, and the VA and USDA both make "no money down" available to qualified buyers. Fannie Mae and Freddie Mac have downpayment options, too -- you only have to ask about them.

If you're looking at new construction, then, and have just a small amount for downpayment, take a look at today's mortgage rates and see for what you'll qualify. Purchasing power is high because of low mortgage rates. You may be surprised at how much home you can afford.

Courtesy of: Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage.
Email Dan at or click to get a free, no-obligation rate quote.

30-year mortgage rate drops to record 3.56 percent

By msnbc.com news reports
Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.56 percent. That's down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.
Last year at this time, the 30-year rate averaged 4.51 percent.

The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week's previous record of 2.89 percent. The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects and spending at a faster pace.
Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth."Following a lackluster employment report for June, long-term U.S. Treasury bond yields eased somewhat this week allowing fixed mortgage rates to reach yet another record low," said Frank Nothaft, vice president and chief economist at Freddie Mac.
Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks.
U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2 percent, the government reported last week.And the sluggish job market could deter some from making a purchase this year.

Slower job creation has caused consumers to pull back on spending.
Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.
To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans also was 0.7 point, unchanged from the previous week.
The average rate on one-year adjustable rate mortgages rose to 2.69 percent from 2.68 percent last week. The fee for one-year adjustable rate loans slipped to 0.4 point, down from 0.5 point.
The average rate on five-year adjustable rate mortgages dropped to 2.74 percent from 2.79 percent last week. The fee was unchanged at 0.6 point.
The Associated Press contributed to this report.
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Appraisers are getting it!

Happy 4th of July to all!

As I work every day on deals, both standard sales and REOs, it seems to me that the Valuation Industry is beginning to shift from ultra-conservative to more accepting of values presented by the listing agents.  This, I think, is due in part to a combination of a more stable market, listing agents doing better research on pricing, and sellers being more reasonable when valuing.  Now, I have admittedly had a couple of very bad appraisals over the past few weeks but this was due to appraisers not understanding the subject and utilizing the wrong comps.

My advice to all real estate agents, both new construction and resale, take a formal appraisal class.  There you can learn how appraisers view their job duties, the standards that they should adhere to, and equip yourself with the tools necessary to point out inconsistencies should you receive what you consider to be bad valuations.

Happy Selling!!!

Where's the JUICE?

Hey all!!

So as I watched all the reports today I could not help to feel that we need more juice to make the economy move forward. Real Estate orders are increasing, but some builders are doing much better than others.  Builders with strong balance sheets are reporting much better profits than prior months, quarter and year.  Others are just barely hanging on which seems to point to systemic internal problems.  The Fed will act if unemployment gets worse and we have a monthly jobs report on Friday.

Lets see what happens if new job creation falls substantially below consensus of 90,000.

Stay tuned...