The Home Buyer's Korner

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April 22nd, 2015

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Existing Home Sales for March 2015

Homes Sales

Sales of previously owned homes climbed in March to the highest level since September 2013.  On a year over year unadjusted basis existing home purchases increased 13.5 percent in March and 6.1 percent from a month earlier. The median price of existing homes increased 7.8 percent to $212,100 from $196,700 on a year over year basis.

As the home buying season begins the number of existing homes on the market rose 5.3 percent to 2 million in March from February. The inventory of unsold homes was up from 1.96 million a year earlier. At the current pace, it would take 4.6 months to sell those houses compared with 4.7 months at the end of February. 

Housing is making a slow recovery, but home prices appear to be rising too fast and the only way to relieve the housing cost pressure is to have more supply coming onto the market. Most housing analysts’ say that for housing to be in balance we need a 6.0 month supply.  Unfortunately many home owners are still underwater and can’t afford to sell their homes, while many home builders, although optimistic about sales haven’t made any strong investments in breaking ground and building new homes to eliminate the shortage.

Commerce Department data showed last week that housing starts rose less than forecasted and the weakest pace in more than a year, while permits for new-home construction also fell.

The median time a home was on the market decreased to 52 days in March from 62 days in February and a real estate organization that tracks days on market stated that 40 percent of homes sold in March were on the market for less than a month.

While purchases of existing homes increased in all four U.S. regions, the Midwest saw the largest increase with a 10.1 percent gain. Sales climbed 6.9 percent in the Northeast, 6.3 percent in the West and 3.8 percent in the South.

Sales of single-family homes increased 5.5 percent to an annual rate of 4.59 million. The sales pace of multifamily properties including condominiums advanced 11.1 percent to 600,000. Cash transactions accounted for about 24 percent of all purchases. Sales of distressed property, including foreclosures, accounted for 10 percent of the total and here lies a unique opportunity for first-time home buyers.  

The slowdown of home buying by investors who make up the bulk of cash transactions and distressed home purchases has created a unique opportunity for those looking to purchase a home. Take the time to discuss the local distressed home buying market and explore the opportunities with your real estate agent. Some markets still have an ample supply of these homes and if you’re living in an area where the opportunity still exist, look at several renovation financing options like FHA 203K, FNMA HomeStyle Renovation Loans and even USDA RHS Zero Down Home Loans with its micro home renovation option.

First-time buyers accounted for 30 percent of all purchases in March, up from 29 percent a month earlier, but we need the market to reflect about 40 to 45 percent of home sale by first time home buyers to point to a robust and sustainable housing market. Housing continues to struggle as rising property values limit purchasing power for those in the lower price points and many of them are millennial home buyers. The Federal Home Financing Agency (FHFA) late last year adjusted mortgage rules to reduce risks for lenders, created the new FNMA My Community Mortgage that offers a low three percent down payment option and even cut premiums on FHA home loans, but it simply hasn’t been enough to encourage would-be home buyers to enter the market and more simply needs to be done.

HOME OWNERSHIP TOOLS

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

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