Misuse of Home Buyer Tax Credit Reported

A report earlier this month from the Treasury Inspector General for Tax Administration estimates that 73,799 taxpayers have incorrectly claimed the first-time home buyer tax credit. The report concludes: “The IRS is unable to verify eligibility for the majority of Recovery Act benefits at the time a tax return is processed.”

The IRS didn’t dispute the claim, but said it was studying the matter further. Some have suggested that this report and others will encourage Congress to put some safeguards in place before more claims result from the extension and expansion of the tax credit.

Source: The New York Times, Lynnley Browning (12/22/2009)

Dallas-Fort Worth home prices dip slightly.

Dallas-Fort Worth home prices were down by just a whisker in the latest gauge of the U.S. housing market.

D-FW homes prices fell 0.6 percent in October from a year earlier in the latest Standard & Poor's/ Case-Shiller Home Price Index released Tuesday.

The dip in local home prices was the half the decline a month earlier and the lowest year-over-year drop since September 2007 in the closely-watched report.

The D-FW decline was also one of the lowest in the country and a fraction of the 7.3 percent overall price drop in the 20 cities Case-Shiller measures each month.

Are home sales map for 3Q 2009

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Why U.S. Home Sales Are Both Up and Down

We can’t blame you for being confused about housing. Tuesday, the market cheered a surge in existing-home sales. Then comes today’s news that new-home sales slid 11.3% in November, falling to the lowest level since April.

Up, down. Up, down. What gives?

Though the two reports both concern home sales in November, they aren’t really in synch and so aren’t comparable. The National Association of Realtors records existing-home sale data when the home closes, while the government records new-home deals when contracts are inked.

For home resales, there is typically a lag of a month to six weeks between the signing of contracts and the closing. So most of the November sales reported by the Realtors are based on decisions buyers made in September or October. At that point, lots of people were scrambling to buy homes in time to qualify for a tax credit that was due to expire Nov. 30. (It was later extended through April 2010.)

For the new-home sales, the decisions were made in November, when there was no such scramble to qualify for the tax credit.

Existing inventory includes foreclosures, which continue hitting the market and typically command a steep discount to new homes. Buyers, particularly first-timers, are rushing to take advantage of these falling prices. As Wednesday’s Journal points out, first-time buyers made up 51% of purchases in November, according to the Realtors. Sales of foreclosed and other “distressed” properties - which includes homes built during the housing boom - accounted for one-third of the purchases.

Median prices are another issue: The price tag for existing homes came in at $172,600, while new homes registered $217,400.

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U.S. existing home sales up 7.4 pct in November

WASHINGTON, Dec 22 (Reuters) - Sales of previously owned homes in the United States surged last month as prices continued to fall and buyers rushed to take advantage of a popular tax credit, the National Association of Realtors (NAR) said on Tuesday.

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The group said that sales rose 7.4 percent to an annual rate of 6.54 million units, the fastest pace since February 2007, and higher than the 6.25 million unit pace expected.

October sales were revised lower to a 6.09 million pace from 6.10 million units. Compared to November last year, sales of existing homes were up 44.1 percent, the largest yearly gain on records dating to 1999.

(Reporting by Corbett B. Daly, Editing by Chizu Nomiyama)

US new home sales slump in November

Sales of new homes dropped dramatically in the US last month as the boost from an $8,000 tax credit for new home buyers wore off.

The Commerce Department revealed a 11.3 per cent drop in November new home sales, down to an annual rate of 355,000, well below the 438,000 sales that economists had expected.

The figures are in contrast to Tuesday’s existing home sales numbers from the National Association of Realtors, which reported a surprise 7.4 per cent jump in November sales, more than double the expected rise.

Economists anticipate a quiet December and January for the property market, before sales pick up again in Spring.

Ian Shepherdson, chief US economist at High Frequency Economics, said: “Homes are now very affordable for people in employment who need only conforming – that is, not jumbo – mortgages, and inventory is well down from its peak.”

Economists attributed the drop in new home sales mainly to the extension of the Government’s tax credit for first homebuyers, which had been due to close on November 30.

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Another Big Gain in Existing-Home Sales

Existing-home sales rose again in November as first-time buyers rushed to close sales before the original Nov. 30 deadline for the recently extended and expanded tax credit, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

Conditions Optimal for Buyers
An NAR practitioner survey shows first-time buyers purchased 51 percent of homes in November, compared with an upwardly revised 50 percent of transactions in October. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008. Last month’s mortgage interest rate was the second lowest on record after bottoming at 4.81 percent in April 2009.

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Report: Home Prices Likely to Hit Bottom in March

Home prices in 45 of the largest housing markets are expected to fall another 4.2 percent before they hit bottom in March, according to First American CoreLogic’s LoanPerformance Home Price Index.

By October 2010, prices are expected to be heading upward again by about 1 percent compared to 2009.

The report warned that this progress could be jeopardized by an increasingly large “shadow inventory” of homes owned by banks but not yet on the market. The problem is particularly acute in Michigan and Ohio cities, the report said. It projected a 12.7 percent further decline in values in Detroit, an 11.4 percent decline in most of the rest of southeast Michigan, and a 6.3 percent fall in Cleveland.

The report expects the strongest recoveries next year in California cities. These include:

1. San Francisco, up 5.7 percent
2. Los Angeles, 5 percent
3. San Diego, 4.7 percent
4. Sacramento, 4.6 percent

Source: Inman News (12/21/2009); Realtor online magazine.

Cities Where Homes Are Losing Most Value

Merced, Calif., is a quiet, residential city an easy drive from Yosemite National and Pacific Coast beaches. It's also a perfect case study for the aftermath of the housing crisis.

Homes at the median level in Merced have lost 62% of their value from the second quarter of 2006, when they peaked at $336,743, the biggest drop anywhere in the country, according to data provided to Forbes by Local Market Monitor, a Cary, North Carolina-based real estate research firm. Earlier, home building and buying grew exponentially in Merced, but the metro now suffers from a whopping 16.4% unemployment rate, according to the Bureau of Labor Statistics, reflecting a drop-off in building industry jobs and a grim housing market.

Providence, R.I., where values sank the most in the Northeast;Detroit, the hardest-hit market in the Midwest; and Port St. Lucie, Fla., the biggest loser of value in the South, have also suffered from their local market's slide.

Photos: Cities Where Homes Are Losing Most Value

Full List: Cities Where Homes Are Losing Most Value

It's not news that Las Vegas, where value has dropped 48%,Miami (down 38%), and Orlando(down 31%) saw a burst of homebuilding fueled by bad loans and rampant house flipping between the years of 2002 and 2006, and that those building bubbles subsequently collapsed. But it's the exurban cities just outside of easy commuting distance from the most desirable West Coast and Sunbelt metros where home values have taken the biggest pounding.

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Mortgages Becoming Easier to Obtain

n some parts of the country, borrowers with good credit are more likely to be able to borrow 95 percent of the purchase price than they were just a few months ago.

In Florida and other troubled markets credit remains tight and mortgage companies continue to scrutinize property appraisals, which makes it difficult for some borrowers to get financing. But in most areas of the country where prices are stabilizing or falling only slightly, standards are relaxing.

“We are starting to see...moderation," said Neil Librock, head of credit risk for Wells Fargo & Co.

Source: The Wall Street Journal, Ruth Simon (12/19/2009)

4 out of 10 Recent Buyers Used FHA Loans

4 out of 10 Recent Buyers Used FHA Loans
According to the most recent REALTORS® Confidence Index, 39 percent of recent buyers purchased a home with a Federal Housing Administration-insured loan. REALTORS® who took part in the November survey also reported that the number of first-time home buyers continued to climb to 51 percent.

“FHA helps provide affordable mortgage financing to home owners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market,” said NAR President Vicki Cox Golder. “These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric.”

Distressed Sales, HVCC Concerns
The RCI results also indicated that distressed sales increased to 33 percent of all home sales last month, and that both investors and first-time home buyers are competing for these properties. The preponderance of distressed properties on the market has also influenced buyers’ perceptions of other homes for sale. REALTORS® report that many buyers have pricing expectations that treat every property as if it were in foreclosure.

In addition, REALTORS® expressed ongoing concerns with the impact of the Home Valuation Code of Conduct on recent appraisals. According to some survey respondents, inexperienced or out-of-area appraisers continue to rely heavily on sales prices of distressed properties, even when other comps are available.

“As the first, best source for real estate information, REALTORS® have their finger on the pulse of current housing trends, and their knowledge and experience offer valuable insights into today’s real estate market,” Golder said. “We know that an economic recovery is not possible without a housing recovery, and we will continue to work with policymakers at all levels to ensure that this happens.”

Source - NAR

Dallas housing poised for a rebound – but how big?

fter slogging through two years of decline, the North Texas housing market is headed for a rebound in 2010. The only question, analysts say, is how strong the bounce-back will be. And that depends on the economy, of course."Any sustained turnaround in sales and construction activity will definitely depend on the economy and job growth," said D'Ann Petersen, a business economist at the Federal Reserve Bank of Dallas. "We do see increasing signs that the local economy has bottomed out, and business contacts say they are through cutting staff."

Petersen said there are signals that the worst is over for the Dallas-Fort Worth housing market. Next year will look better for builders and buyers.

"It will be slow going in 2010, but I do think that Dallas' housing market is in a better position than many other areas of the country to respond to positive economic growth," she said.

During the last two months, sales of pre-owned homes have increased significantly from year-ago numbers, and price declines have slowed. At the same time, the number of homes for sale in North Texas has fallen to the lowest level in more than two years.

Given the demand from homebuyers, builders will have to start more houses in 2010, said David Brown, an analyst with Metrostudy Inc.

"There now is currently less than a six-month supply of homes priced under $250,000 and just over a six-month supply of homes priced between $250,000 and $500,000," Brown said.

"If homebuilders are not able to start as many homes as they are closing because of lending constraints, then some of those buyers may be forced into the resale market and could cause new home closings to fall further next year."

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New listing in "Townhomes of District A"

New listing in our subdivision"Townhomes of district A" 15742 SEABOLT PL. Addison, TX 75001 and already has a contract. Houses sales when they are priced well.

Loan Modifications Coming Up Short

Only about 4 percent of the home owners who signed up for loan modifications—fewer than 31,000—had received them by the end of November, according to figures released Thursday by the U.S. Treasury Department.

Of the largest lenders, Bank of America Corp. had the worst results. It completed a total of 98 modifications. With 7,100, GMAC Mortgage completed the most.

Lenders have blamed their lack of success in part on the failure of borrowers to complete the paperwork necessary for the process.

The government says it will expedite its efforts to push through as many modifications as possible.

Source:Realtor Magazine & Associated Press, Alan Zibel (12/10/2009)

A Good Sign For Housing: Foreclosure Activity Down 8% In November

It may be another sign of a bottoming in the housing market, both in terms of foreclosures and prices. RealtyTrac reports that foreclosure filings fell 8% in November compared to the previous month, down to 306,627. One in every 417 homes in the US received a foreclosure filing during the month. The figure was up 18% from November 2008.

“November was the fourth straight month that U.S. foreclosure activity has declined after hitting an all-time high for our report in July, and November foreclosure activity was at the lowest level we’ve seen since February,” said James J. Saccacio, chief executive officer of RealtyTrac. “Loan modifications and other foreclosure prevention efforts, along with the recently extended and expanded homebuyer tax credit, are keeping a lid on the most visible symptoms of the nation’s ailing housing market — foreclosures and home value depreciation.”

Nevada, Florida, and California remain the states hit hardest by the housing crisis and the inventory of unsold homes in those state may force prices to fall well into 2010.

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Why Loan Modifications Are Like ‘Jurassic Park’

As he appeared before the House Financial Services Committee Tuesday to discuss the slow progress of government efforts to force lenders to ease payment terms on home mortgages, Anthony B. Sanders was reminded of the movie “Jurassic Park.”

It might be possible to bring dinosaurs back to life, but does that make it a good idea? Similarly, says Dr. Sanders, a professor of real estate finance at George Mason University, it might be possible to slash interest rates on millions of loans, but that doesn’t mean we should.

What if the government’s Home Affordable Modification Program somehow finally gains traction and manages to reduce interest rates to 2% on millions of loans and extend their terms to 40 years? That would just create fresh problems, Dr. Sanders says.

“Our banking industry, Fannie Mae, Freddie Mac and our Federal Reserve would now be sitting on trillions of dollars of mortgages, many at super-low interest rates and stretched maturities to 40 years,” he writes. Any rise in inflation and interest rates would then slash the value of those mortgages. “When one considers the precarious balance sheets of our lending institutions and our government agencies, we should think very, very carefully about loading up their balance sheets with these mortgages,” he warns, adding:

“Congress and the Administration should bear in mind that it is not just the banks that will suffer, but our pension funds, our own government agencies and the viability of the economy going forward.” Banks would be “stuck with low-interest, long-maturity loans on their books that will prevent them from lending to other borrowers or small businesses for a long, long time.”

The solution, he says, is to encourage financial institutions to sell distressed loans and mortgage securities at big discounts from face value to private investors, who could then restructure the loans on realistic terms related to today’s house prices. Such sales would force banks and other financial institutions to book big losses, but perhaps regulators could allow those losses to be absorbed in stages over five years.

If U.S. financial institutions don’t clean up their balance sheets by shedding dud assets soon, “we will make the Japanese zombie banks look the role model for a healthy financial system,” Dr. Sanders says.

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Home Values Have Been Stabilizing

U.S. homes lost $489 billion in value during the first 11 months of 2009. That’s significantly less than the $3.6 trillion lost during 2008 and evidence that home values are stabilizing, says Zillow.com, online real estate research firm.

Properties in 48 of the 154 markets tracked by Zillow rose in value this year, but Zillow’s Chief Economist Stan Humphries believes prices could decline again in 2010.

“We believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high. Both these factors will challenge the recent stabilization of home prices," Humphries said in a statement.

Areas where home prices rose the most in 2009 were:

• Boston
• Providence
• Denver, Colo.
• Atlanta, Ga.
• Rochester, N.Y.

Areas where homes continued to lose the most value:

• Los Angeles
• Chicago
• New York
• Miami-Fort Lauderdale
• Phoenix

Source: Zillow.com (12/0920/09)

Tax credit fuels skyrocketing Dallas-area preowned home sales

The North Texas housing market came roaring back in November.

Pre-owned home sales rose 31 percent last month from a year ago – one of the biggest increases on record and the second consecutive month of rising sales.

Median home sale prices were up 5 percent, the largest gain in more than two years.

"This is another positive signal that the local housing market may have turned the corner," said D'Ann Petersen, business economist with the Federal Reserve Bank of Dallas. "It is probably still too soon to declare a rebound, but two months of positive sales certainly suggest improvement."

Throughout North Texas, real estate agents sold almost 5,500 pre-owned homes in November through the Multiple Listing Service, according to statistics released Monday by North Texas Residential Information Systems and the Real Estate Center at Texas A&M University.

The jump in residential transactions came as homebuyers rushed to take advantage of the federal homebuying tax credit, which has been extended into the spring.

"While the tax credit likely played a role in some of the activity, increased sales in areas unaffected by the tax credit suggests buyers are becoming more confident that the worst is behind us," Petersen said. "Home prices have firmed locally and nationally, and that may be spurring buyers to make decisions now, especially given that mortgage rates remain very attractive."

Indeed, many neighborhoods that weren't affected by the federal homebuying incentive saw dramatic spikes in home sales.

In the Park Cities, pre-owned home sales soared 81 percent in November from a year ago. Sales in close-in North Dallas neighborhoods were up by 60 percent.

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Option-ARM Borrowers Facing Resets

About 93 percent of option-ARM buyers chose to pay a minimum amount less than the interest due, according to a report released last week by Standard & Poors. That means that nearly all of the 350,000 option-ARM borrowers now owe more than they owed when they first purchased their homes.

Many of these loans were written in 2004 and are close to their five-year reset when the loans convert to a standard amortization. Some more recent loans will reset early if the accumulated interest has pushed the loan-to-value ratio above 110 percent.

In one example outlined in the S&P report, the payment on a $400,000 mortgage goes from $1,287 to $2,593.

The authors of the report say that many ARM borrowers aren’t good candidates for refinancing or modification because their loan-to-value ratios are too high for the government’s Making Home Affordable program. Also, about 80 percent of option-ARM loans were stated-income loans and borrowers could be held legally liable for deliberate inaccuracies on their original applications.

Source: CNNMoney.com, Les Christie (11/26/2009)

Government Announces Short Sales Guidelines

The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.

Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)

Existing-Home Sales Record Big Gains

Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.

Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Tax Credit Fuels Surge

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through—there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.

Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.

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DFW Real Estate Advisor: Dallas-Fort Worth home prices down only 1.2% in S&P report

DFW Real Estate Advisor: Dallas-Fort Worth home prices down only 1.2% in S&P report

Dallas-Fort Worth home prices down only 1.2% in S&P report

Dallas-Fort Worth home prices held almost steady in the latest Standard & Poor's/Case-Shiller Home Price Index – down 1.2 percent from a year ago.

It was one the smallest annual declines in more than a year in the closely watched index of home prices around the country.

September prices were down 0.7 percent from August, ending a six-month string of month-over-month gains.

"The month-to-month changes will likely continue to be somewhat bumpy over the coming year," said David Brown, who heads the Dallas office of housing analyst Metrostudy Inc. "I don't think we will see much of an increase in home values until job growth returns and the number of foreclosures begins to drop."

Nationwide, prices fell 9.4 percent in September from a year earlier in the 20 cities Case-Shiller tracks.

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Existing-Home Sales Record Big Gains

Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.

Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Tax Credit Fuels Surge

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through—there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.

Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.

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Buying a Home in Time to Get Credit .

House hunting usually slows down this time of year, as people put their searches on hold during the holidays.

This winter could be different, however, thanks to the extension -- and expansion -- of the first-time home-buyer tax credit.

"We're going to see far more interest in the fourth quarter than we generally do because of the tax credit," says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says.

The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.

All buyers must have a binding contract on a house in place on or before April 30. The purchase must be for a principal residence and must close on or before June 30.

To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased

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Report: Nearly 10% of Texans running late on home loans

Almost 10 percent of Texans were behind in their home loan payments during the third quarter. And about 2 percent of the state's mortgage holders were in foreclosure at the end of September, the Mortgage Bankers Association reported Thursday.

The number of Texans behind on home loan payments has risen by more than one percentage point in the last year.

But the state's loan delinquency rate of 9.84 percent is still slightly behind the national average for the quarter, which is at a record 9.94 percent.

And Texas' foreclosure rate is less than half the national average.

"Despite the recession ending in midsummer, the decline in mortgage performance continues," Mortgage Bankers' economist Jay Brinkman said in the report. "Job losses continue to increase and drive up delinquencies and foreclosures."

Regards,

Delinquent Mortgages Reach Record Levels

Almost 10 percent of all mortgages on one- to four-unit properties are in some stage of foreclosure, up from 2.65 percent a year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association’s National Delinquency Survey released Thursday.

The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in an MBA delinquency survey.

The bankers blamed the high foreclosure levels on unemployment. “Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” says Jay Brinkmann, MBA’s chief economist.

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Weak U.S. home construction weighing down economic rebound; inflation still tame

WASHINGTON - The budding American economic recovery is getting little help from the home building industry, which normally creates jobs and boosts growth as a recession ends.

Construction of homes unexpectedly plunged last month to its lowest point since April, the Commerce Department said Wednesday. The weak figures show that builders still lack confidence that buyers can soak up the glut of unsold homes already on the market - a supply magnified by a record number of home foreclosures.

The figures also illustrate how much the fledgling recovery depends on government support. Builders broke ground on fewer homes in part because of uncertainty in October about whether Congress would extend a tax credit for homebuyers. Earlier this month, lawmakers renewed the credit and extended it to more buyers.

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Renting From Fannie Mae

The firm is letting foreclosed upon families experiencing rent their homes. Is this delaying the inevitable or helping the housing situation?

Homeowners going through foreclosure can rent their houses through Fannie Mae rather than lose them entirely. The "deed for lease" program lets homeowners transfer their title toFannie Mae and sign up for a one-year lease, then month-to-month extensions. Though this program is helping to keep people in their homes, is it helping the housing market, too?

The number of foreclosures has been declining for the past three months, according to Realtytrac. There were 332,292 foreclosed properties in October, down 3% from September but up approximately 19% from last October.

The Fannie Mae ( FNM - news -people ) program is helping foreclosed families have more security, says Dean Baker, co-director of the Center for Economic and Policy Research. During many former bubble markets, he notes, ownership costs are significantly higher than the cost of renting an equivalent property. The savings on a moderate-priced home in the Washington, D.C. area that was purchased near the peak of the market could be $1,300 a month; the gap between costs of ownership and costs of renting in Los Angeles could be about $2,000 a month.

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First Time Home Buyer Tax Credit Extencion FAQ

Do you know that even you already sold your house and have
not been living in it, but you had lived in it five consecutive years over the
last eight years, you will be eligible for $6,500 tax credit? Please check out
the FAQ about the First Time Homebuyer Credit extension!

Read more about FAQ>

3rd drop in foreclosures hints at recovery; state-by-state chart

Foreclosures fell for the third-consecutive month in October, another sign the worst of the housing crisis may be past.

RealtyTrac, an Irvine, Calif., real estate firm, reports Thursday that foreclosure filings totaled 332,292 last month, down 3% from September but up 19% from a year earlier. The figure means that one of every 385 homes received a foreclosure notice in October.

CHART:Foreclosures across the USA

"It looks like it's leveling out," says Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, N.J. "We're not seeing further deterioration in the housing market."

RealtyTrac CEO James Saccacio said that the third-straight monthly drop was unprecedented and perhaps a sign "that the foreclosure tide may be turning" but warned that "the fundamental forces driving foreclosure activity in this housing downturn – high-risk mortgages, negative equity and unemployment – continue to loom over any nascent recovery."

Four states – California, Florida, Illinois and Michigan – accounted for 52% of last month's foreclosures.

Seven of the 10 U.S. metropolitan areas with the worst foreclosure rates were in California: Vallejo-Fairfield; Modesto; San Bernardino ; Bakersfield ; Merced; Stockton; and Sacramento.

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Dallas-Fort Worth home prices rose slightly in third quarter

Dallas-Fort Worth home sales prices were up slightly in the third quarter, according to a closely watched national comparison.

Sales prices in the D-FW area were up 0.2 percent from a year earlier in the National Association of Realtors’ quarterly report.

It’s the first time the D-FW price number has been positive since the fourth quarter of 2007.

Nationwide home prices were down 11.2 percent in the third quarter compared with the same period last year, the Realtors group said Tuesday.

Prices fell in 123 of the 153 markets the association tracks through transactions in sales agents’ Multiple Listing Service.

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Dallas-Fort Worth pre-owned home sales score double-digit gain

North Texas pre-owned home sales surged in October – up 11 percent from a year ago.

It was the first double-digit gain in more than a year and the best sign yet that the local housing market has turned the corner.

Real estate agents sold more than 6,300 single-family homes last month through the Multiple Listing Service, according to numbers released Monday by the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.

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Dallas-area home foreclosures up

Home foreclosure rates in the Dallas-Plano-Irving area rose for the month of September over the same month last year, but remain below the national foreclosure rate, according to data released Thursday.

The rate of foreclosures among outstanding mortgage loans was 1.26 percent for September, an increase of 0.35 percentage points compared to September of 2008 when the rate was 0.91 percent, according to First American CoreLogic, a real estate data collection company.

Foreclosure activity in Dallas-Plano-Irving was lower than the national foreclosure rate of 2.93 percent for September 2009, but slightly higher than the Texas rate of 1.15 percent, according to First American, which collects national, state and local data on home prices, foreclosure and delinquency.

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The Basics: Extended Home Buyer Tax Credit 2009/2010

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

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Five Reasons the U.S. Doesn't Need More Home-Buyer Perks

Congress is working on a new and even more generous set of perks for house buyers. A tentative deal in the U.S. Senate would extend the closing deadline for an $8,000 subsidy for first-time buyers to July 1 from Nov. 30. It would also boost the program's income limits for singles to $125,000 from $75,000 and for couples to $250,000 from $150,000, and would offer a new $6,500 reward for existing homeowners who buy again. (More on the home buyer tax credit.)

The National Association of Realtors has called such an extension "essential." The Mortgage Bankers Association agrees. The National Association of Home Builders says, "Failure to act now could derail the fragile housing recovery even before it has time to take root."

I respectfully disagree for perhaps a dozen reasons. Let me offer five.

• Subsidies raise prices, and house prices are already too high.

Consumer subsidies puff up buying power, which artificially increases demand, which raises prices. With most goods, manufacturers respond by increasing supply, which brings costs back down. Some goods face constraints to new supply, though. We can build more colleges, but we can't magically make more of the longstanding, prestigious kind. We can make more pills, but we can't violate drug makers' patents on popular ones. And we can build new houses, but there's only so much space (or building permission) in the choicest locations. That produces a paradox: America's government has for decades spent mightily on affordability initiatives for college courses, health care and houses, and yet prices for all three goods have increased faster than the rate of inflation, resulting in less affordability.

In April 2007 I wrote that houses had gotten so expensive that renting had come to make more financial sense. In July, with prices down about 30% nationwide, I charted them against rents and incomes to show that the country was closing in on its historical level of housing affordability, but wasn't quite there yet. It never did get there. Prices in most markets have increased each month since then. We're moving away from normal, not toward it. When the National Association of Home Builders speaks of a "fragile housing recovery," it means an increase in prices. But what about a recovery of the ability of ordinary Americans to buy houses at fair prices? That recovery might have to wait.

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Analyst: Dallas-Fort Worth home prices to turn positive next summer

The long run of declines in Dallas-Fort Worth home prices should turn positive next summer, an industry analyst said Thursday.

First American CoreLogic, a California-based housing and finance information firm, is forecasting that home prices around the country will bottom out by spring.

And in the D-FW area, prices should be slightly positive by August, the firm's economists predict.

"In August 2010, the index is projecting that 12-month appreciation for Dallas-Plano-Irving home prices will be 0.21 percent," First American's latest report said.

That compares with a 0.12 percent decline in home prices here in the 12 months ending August 2009, the analyst said.

First American's assessment of the D-FW home market is a little more positive than other local and national measures, which say prices here are down about 1 percent from a year ago.

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Housing Prices May Fall Further

A number of factors suggest housing prices could drop another 10%.

Over the past few months, there have been suggestions that the U.S. housing market might finally be bottoming out. Since July, the decline in sales of both new and existing homes has moderated. Moreover, over the past three months, there has been a very modest increase in home prices at the national level as measured by the 20-city S&P/Case-Shiller home price index.However, the high inventory of unsold homes, continuing foreclosures, and double-digit unemployment could mean that housing prices have further to fall.

Reasons for cheer. A number of "green shoots" suggest cause for some optimism:

--Inventory reduction. Whereas housing starts are presently estimated to be running at a 600,000 annual rate, underlying U.S. household formation is presently running at an annual rate of approximately 1.5 million units. Lower residential construction relative to household formation is allowing excessive home inventories to be gradually worked off.

--Cheap mortgages. As a result of the Federal Reserve's highly accommodative monetary policy, and the activity of the government-sponsored home lending enterprises, mortgage rates have declined to more affordable levels. For example, 30-year fixed-rate mortgages have fallen below 5% for the first time in many years.

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US ECON: Sept Existing Home Sales Up 9.4% to 5.57 Mln Units

Sales of previously owned homes rose in September by 9.4% to a seasonally adjusted annual rate of 5.57 mln units, the highest sales level recorded since July 2007. Economists were expecting home sales to rise to 5.35 mln units from the 5.10 mln units reported in August (since revised down slightly to 5.09 mln). Existing home sales are now up 9.2% from September 2008.

The National Association of Realtors said about 29% of last month's sales were of distressed homes and approximately 31% of September buyers were first-time homeowners. NAR attributed much of the month's sales increase to the $8,000 first time homebuyer tax credit. NAR Chief economist Lawrence Yun said: 'We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of self-sustaining recovery.'

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Will Proposition 2, 3, 5 open the door for more taxation?

On Nov. 3, 2009, the voters of Texas will once again have an opportunity to take a stand against the burdensome and uneven taxation of residential property. There are four amendments that will directly affect all property owners in the state, and the Texas Association of REALTORS® is imploring all homeowners to vote and be heard on these issues.

So what exactly are you voting for in this election cycle? If you’re like me, you have on more than one occasion glanced at a proposed amendment, scratched your head, and had a bewildered look on your face. The language is so full of legislative jargon, and without background information, it is difficult at times to figure out the intent.

I’m sure that anyone who has ever seen an episode of Star Trek has probably wondered, “How is it that aliens from all across the galaxy can speak and understand English?” The television show explained this phenomenon through the use of an accepted convention in science fiction called a “universal translator.” No matter what kind of gibberish was spoken, it would always come out as plain English. I have no doubt that anyone who has ever consulted with an attorney on a legal issue probably could’ve used something like this.

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Foreclosures Grow in Housing Market's Top Tiers

New data suggest that foreclosures are rising in more expensive housing markets.

About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.

The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.

The Zillow research compared homes against the median values for their local market and broke each market into three tiers by value. Zillow then looked at the share of monthly foreclosures in each tier over the past decade.

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Dallas-Fort Worth could have new-home shortage in 2010

Forget what you've heard about a glut of new houses on the market.

For three years, Dallas-Fort Worth builders have sold more homes than they have constructed. So the inventory of finished new houses has fallen so low that homebuyers may encounter a shortage when next year's market kicks off.

"For homebuilders to maintain their current sales pace, they are going to have to start 30 or maybe 40 percent more homes than they are starting today," said David Brown, who heads the Dallas office of real estate analysis firm Metrostudy Inc.

"There continues to be a demand for new homes, and we are not adding as much supply."

During the last two years, builders in North Texas have sold almost 13,000 more houses than they have started.

That's caused inventory to drop below 5,000 units – about a three-month supply.

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Loan-Modification Plan Hits Target

The federal government said Thursday it had met its goal of beginning trial loan modifications for 500,000 financially troubled homeowners in a sign the foreclosure-prevention plan is gaining traction.

The loan numbers were released as several senior House lawmakers expressed support for extending an $8,000 tax credit for first-time home buyers. Talk of extending the credit shows how lawmakers believe the fragile housing market remains dependent on federal support.

Treasury Secretary Timothy Geithner said the number of people participating in the modification effort is, for the first time, increasing at a rate faster than that of new families facing the risk of foreclosure. But the number of families at risk is still "unacceptably large," he said.

Under the modification program, eligible borrowers who are behind on their mortgage payments or at risk of imminent default can get their payments reduced. It is too soon to tell whether the program will be a success; most of the modifications are still in a trial period.

Borrowers typically must be current on their payments in the trial program after three months -- and submit such documentation as tax returns and pay stubs -- to qualify for a reworked mortgage.

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Dallas-Fort Worth new home sales drop 34% in 3Q

New-home sales in the Dallas-Fort Worth area continued to fall in the third quarter despite tax incentives that brought out more first-time buyers.

Sales by builders dropped almost 34 percent from the year-earlier quarter, housing analyst firm Residential Strategies Inc. said Wednesday.

The total of 4,163 new-home sales was virtually unchanged from the second quarter of 2009.

"There was a flurry of buying activity this summer with people wanting to take advantage of the federal tax credit," said Residential Strategies' Ted Wilson. "Some of it will be pushed into the fourth quarter."

The income tax credit of up to $8,000 for first-time buyers is to expire Nov. 30.

The credit also hasn't caused an increase in sales of pre-owned homes, which were down 8 percent in September from a year earlier. Last month, real estate agents sold 6,020 single-family homes through their multiple listing service.

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Dallas-Fort Worth home prices fall only 1.6% in latest measure

Dallas-Fort Worth home prices fell by the smallest percentage in almost two years in the latest housing market snapshot.

D-FW prices were down only 1.6 percent in July from a year earlier in the closely watched S&P/Case-Shiller home price index.

And local home prices were up from June to July, the fifth consecutive month of increases. The July figure is also the highest point in the home price index since last September.

The small annual decline in North Texas home prices is a big improvement from earlier in the year, when the Case-Shiller index showed that prices were falling by more than 5 percent from 2008.

The just-released data is more proof that home price declines bottomed in North Texas in early 2009.

"The rate of annual decline in home price values continues to decelerate, and we now seem to be witnessing some sustained monthly increases across many markets," Standard & Poor's David Blitzer said Tuesday in the report. "These figures continue to support an indication of stabilization in national real estate values."

Analysts are keeping an eye on how the housing market reacts later this year when a popular federal home buying tax credit expires.

Nationwide home prices in July were still 13.3 percent below where they were a year earlier. But the index has been higher for three consecutive months, a strong indication that home prices have bottomed out.

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Coldwell Banker: Dallas homes for corporate transfers highest in Texas

Corporate transferees will have to dig a little deeper to pay for digs in Big D.

At least that’s what Coldwell Banker Real Estate says in its annual home price comparison index, which tracks the cost of homes in more than 310 U.S. markets in areas that would appeal to "typical corporate middle-management transferees."

With an average price of $332,375, Dallas has the highest cost in Texas. The 2009 price estimate is up six grand from last year’s estimate.

The home price breakdown released Wednesday tracks the average cost of a 2,200-square-foot single-family home with four bedrooms, two and one-half baths, family room and two-car garage in neighborhoods that would appeal to relocating corporate managers.

Coldwell Banker found that the nationwide average price for this type of dwelling is $363,401 – higher than the Dallas average.

The residential sales firm said the same house would run $248,960 in San Antonio, $226,500 in Austin, $159,847 in Houston and just $153,450 in Fort Worth.

But the information collected citywide by local real estate agents through the Multiple Listing Service doesn't show this same price disparity between Dallas and other Texas cities. That’s because Coldwell Banker only uses a narrow range of home listings for its annual report -- homes in specific neighborhoods that would appeal to corporate executives.

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Now marked down: Dallas mansions

he French-style Highland Park house has limestone floors, a three-car garage, a swimming pool and guest quarters out back. But what's likely to catch a buyer's eye is the sign out front: "New Price."Now offered at $4.45 million, the 6,788-square-foot mansion has been marked down by close to $1 million since it came on the market last spring.

"It's one of those listings you are scratching your head," said agent Joan Eleazer. "You know that the market is bad, but why hasn't this great house sold?"

With the latest price cut, Eleazer, who works for Briggs Freeman, is finally getting some nibbles from potential buyers.

"Pricing makes all the difference," she said.

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Where Home Prices Are Hitting Bottom

There's more to indicate that the housing recession has hit bottom than Thursday's dual announcements that housing starts rose 1.5% from July, and new jobless claims dropped by 12,000 last week.

Homeowners looking to sell are also putting the brakes on the trend of aggressive price cuts, indicating that the real estate market may be closer to salvation than previously thought. In 20 major U.S. housing markets, the percentage of homes that have suffered price reductions is dropping.

In Depth: Where Home-Price Slashing Is Slowing Down

Thirty-nine percent of for-sale homes in 20 major U.S. metros have had their prices reduced. That's a drop of six percentage points, from 45% at the beginning of the year, according to data provided to Forbes by Altos Research. That the number of for-sale homes with startling cuts has dropped is a sign that the real estate market may soon reverse its downward slide.

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Dallas-Fort Worth home foreclosure filings jump 34%

The number of homes facing foreclosure in Dallas-Fort Worth next month shot up 34 percent from a year ago.

But much of the increase is due to loan modification programs, which have carried over foreclosure filings from previous months.

Almost 6,000 homes are scheduled to be sold at foreclosure next month, Addison-based Foreclosure Listing Service said Thursday.

The biggest jump was in Collin County, where foreclosure filings are up 61 percent from October 2008.

But the current statistics overstate the problem because lenders who are negotiating with problem borrowers frequently carry over postings for several months, which adds to the volume.

“We are still seeing a lot of reposts – it’s nuts,” said Foreclosure Listing Service president George Roddy. “It’s creating an artificial high.

“If we keep going like this, we will have 60,000 home foreclosure postings this year in the Metroplex, which is horrendous.”

But less than half of the homes set for forced sale each month are actually foreclosed on by the lender.

In many cases, the borrower and debt holder reach a new agreement or the foreclosure is delayed.

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Dallas-Fort Worth pre-owned home sales fall 15% in August

North Texas home sales fell by double-digits in August from a year earlier.

But despite the decline, prices are still holding up.

Local real estate agents sold 6,338 pre-owned homes though the multiple listing service last month – a 15 percent decline from August 2008, according to the latest statistics from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information System.

Home sales are down 19 percent through the first eight months of 2009 compared with the same period of last year.

But so far, median sales prices have fallen only 2 percent and were unchanged last month at $150,000.

At the end of August, 38,166 homes were listed for sale in the area – 14 percent less than a year earlier. That adds up to a 6.5 month supply.

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Forecast says Dallas will be one of top 10 home markets for 2009

Despite continued sale declines, a new forecasts predicts the Dallas area will be one of the top home markets in the country this year.

Fort Worth, Houston, San Antonio and Wichita Falls are also on the list of what are expected to be the 10 top-performing housing markets, according to a report released Wednesday by analysts at Local Market Monitor.

The study indentified home markets where residential values are expected to remain level, did not see a housing boom and have had modest employment declines.

“Home prices in these areas are generally below the US average and reflect where the recession has so far had a relatively mild impact,” the report says.

Dallas has ranked high in previous studies done by North Carolina-based Local Market Monitor.

“This means that Dallas-Plano-Irving will fare among the best over this next year, a factor that bodes well considering the state of the national housing crisis,” a representative of the research firm said.

Home sales prices in North Texas are down about 2 percent so far this year, according to data collected by local real estate agents. By comparison, U.S. home prices have fallen by more than 15 percent.

Most Texas cities fared well in the report, but other major U.S. home markets got bad marks.

Fresno, Las Vegas, Miami, Orlando, Phoenix, Portland, San Jose, Tacoma, Tucson, West Palm Beach, Fla., and Stockton, Calif., were rated as cities with the worst home market prospects.

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Dallas-area home listings fall substantially.

Sellers are waiting for better times to put their house on the market. Seven months of supply is still buyers market, but much better than twelve months. However the lower supply helped DFW to keep prices flat for the 2Q, while nationwide home prices

North Texas homebuyers who are hoping to find a huge supply of houses for sale may be in for a surprise. While many markets in Florida and the West are suffering from a surplus of for-sale signs, the number of houses available in the Dallas-Fort Worth area has fallen substantially in the last year.

The supply of pre-owned homes for sale is down almost 17 percent from this time last year and has fallen by a quarter from the summer of 2007.The drop in inventory of newly built homes is even steeper – about 50 percent since mid-2007.

And lower inventories generally provide support for home prices.

"Our housing inventory never got as high as we saw around the rest of the country, and it's certainly fallen significantly over the last couple of years," said David Brown, who heads the Dallas office of housing analyst Metrostudy Inc. "We don't have the supply issue we had in the downturn of the late 1980s."

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Jobless claims show labor market may slow recovery

July new US home sales up 9.6 percent

Where will housing be in 2012?

In 3 years, market will likely be governed by local issues, not credit crisis

Americans have not seen a boring housing market since the last millennium. You know — the average, ordinary kind of market where supply just about matches demand, prices are steady, and real estate ceases to be a topic of daily conversation. Instead, we've had six years of upside craziness followed by three years of downside terror. Now we're in a tug-of-war between those who think we've finally found a bottom and those who are convinced that the overhang of unsold homes is going to push prices considerably lower.

By 2012 we may finally get back to blissful boredom. With any luck, three years should be long enough for the U.S. economy to recover and for the nation's housing inventory to shrink to more normal levels. At that point, housing will return to its old ways, with prices governed not by national mood swings and global credit crises but by local issues ranging from zoning to immigration to job growth.

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Mortgage rates climb to 5.29 percent

A year ago, the 30-year fixed-rate mortgage averaged 6.52 percent

Rates on 30-year mortgages rose this week, remaining above 5 percent after reaching a record low earlier this year, Freddie Mac said Thursday.

The average rate on a 30-year fixed-rate mortgage was 5.29 percent this week, up from 5.22 percent last week, Freddie Mac said. Last year at this time, the 30-year fixed-rate mortgage averaged 6.52 percent.

Rates on 30-year mortgages dropped to a record low of 4.78 percent earlier this year, but have been above 5 percent since June.

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