Buying a Home Could Be Cheaper Than Renting

 

"New statistics show that depending on your location, buying a home could be cheaper than renting.

 
KREM 2's Chris Nguyen spoke to local realtors who say in Spokane, falling home prices and record-low mortgage rates are enticing more people to become buyers, instead of renters.
 
Officials say homes in Washington State are the most affordable they've been since the 1980's.
 
Joe Mann with the Spokane Association of Realtors says it's a good time to buy because the average home price in Spokane right now is about $178,000.
 
Real estate website Trulia.com says that in most parts of the country, buying a home can be cheaper than renting." [Continue reading...]

Merry Christmas!

 

All of us at Melissa Home Lending join in sending you best wishes for the holiday and the new year!

Home Sales During Housing Bust Worse Than Thought

 

" Existing home sales during the housing bust were actually 14.3% worse than previously reported, a revision to Realtors' group numbers shows.

On Wednesday, the National Association of Realtors (NAR) revised home sale counts back to 2007 due to flaws in their original data analysis. 

In 2007, there were actually just 5.04 million existing home sales, 11% less than the 5.65 million originally reported. Even worse were 2008 and 2009, when there were 16% fewer sales than originally reported. Sales in 2010 were 15% lower.

"The errors started in 2007 and continued to accumulate over time," said Lawrence Yun, NAR's chief economist.

The accuracy of the data is important. Private companies like residential real estate developers rely on it for planning and policy makers make decisions based on it. 

HOME BUILDING SPIKES HIGHER

The data is "key to the economic outlook," said Mark Zandi of Moody's Analytics, "and the revisions help to explain the severity of the housing crash."

David Crowe, chief economist for the National Association of Home Builders, said its members use existing home sales as reported by NAR as a gauge of the overall health of the housing market." [Continue reading...]

Mortgage Rates Fall to Record Lows

 

"Mortgage rates sunk to record lows again this week.

The average rate on the 30-year fixed mortgage fell to 3.94%, matching the all-time low hit in early October, according to Freddie Mac's weekly mortgage rate survey. Meanwhile, 15-year fixed-rate loans hit a new record low of 3.21%, surpassing the record set on October 6. 

Five-year adjustable rate mortgages also plumbed new depths, hitting 2.86% for the week.

"We've been hanging around record lows for a few months now and we finally hit another one," said Keith Gumbinger of HSH Associates, a provider of mortgage data.

Low-interest mortgages will be available at least through mid-2012, according to Freddie Mac's chief economist, Frank Nothaft.

Where homes are affordable

The low rates can translate into big savings for home buyers. Five years ago, a home buyer would have been lucky to land a 5% rate on a 15-year loan. On a $200,000 mortgage, that would have meant the borrower would have paid $1,582 a month. Should a borrower land a 3.2% rate on a $200,000 loan now, the monthly mortgage payment would come to $1,400 -- a savings of $182 a month." [Continue reading...]

Tips for Buying a House

"1. Don't buy if you can't stay put.

If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. If you can't put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process." [Continue reading...]

More Student Debt, Fewer Homeowners

"FinAid's Student Loan Debt Clock is just as alarming, in its way, as those clocks that relentlessly tick up the national debt.

The FinAid clock is fast approaching $1 trillion, ratcheting up at the pace of nearly $3,000 per second.Americans owe more on student loans than they do on their credit cards, a switchover that happened last year.

Consider that the amount you can borrow to buy a home depends not only on how much you earn but also how much debt you already have, and you can see what the student-loan boom has to do with the housing market. 

Rick Palacios Jr., senior research analyst at John Burns Real Estate Consulting, wrote recently that homebuilders should beware.

"Faced with mounting student loan debt, poor job prospects and stagnant wages, an increasing amount of 25 to 34 year olds (a prized demographic for the housing sector) have moved back in with their parents," he wrote.

According to Palacios, the number of adults in that age bracket living with parents is up 26 percent since the Great Recession started in late 2007. They're now nearly 6 million strong." [Continue reading...]

Existing Home Sales Report

"Existing U.S. home sales edged up in October, according to the National Association of Realtors, even as mortgage credit continued to be tight.

Total existing home sales increased by 1.4 percent to a seasonally adjusted annual rate of 4.97 million units from a downwardly revised 4.90 million in September. Yearly sales are up as well, by 13.5 percent.

Sales have been tempered by several factors, said NAR chief economist Lawrence Yun. "Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process," he said.

"In some areas we're hearing about shortages of foreclosure inventory in the lower price ranges with multiple bidding on the more desirable properties," Yun added." Realtors in such areas are calling for a faster process of getting foreclosure inventory into the market because they have ready buyers. In addition, extending credit to responsible investors would help to absorb inventory at an even faster pace, which would go a long way toward restoring market balance."

The national median home price fell once again, declining to $162,500 in October from $165,800 in September. Compared to last year, prices are down 4.7 percent." [Continue reading...]