Mostly I think the call center companies like AAA, Progressive, USAA, and a few others are better at doing their jobs. They market their product in a manner that makes a prospective customer want to call the 800 number or fill out a form on their website.

That reminds me, my AAA membership is due. Maybe they are hiring agents too…

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This link will no longer be available after 08/01/2009.

Ron Forster, Associate Broker HomeSmart 1715 W Northern Ave #100 Phoenix, AZ 85021 mls@ronforster.com 602-741-5560 http://www.ronforster.com

(WASHINGTON) — Sales of previously occupied homes rose modestly from March to April as buyers who were brave enough to dive into the market took advantage of prices that were 15.4 percent below year-ago levels.

The National Association of Realtors said Wednesday that home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March. The results slightly beat economists’ forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters. (Read “Yale’s Robert Shiller on the Outlook for Home Prices”.)

The median sales price plunged to $170,200, down from $201,300 in the same month last year. That was the second-largest price drop on record after January, when prices fell 17.5 percent.

The number of unsold homes on the market at the end of April rose almost 9 percent from a month earlier to nearly 4 million. That’s a 10-month supply at the current sales pace. “We still need a continuing and consistent rise in home sales to get the inventory down,” said Lawrence Yun, the group’s chief economist. Only then, economists say, will prices stabilize and eventually recover.

Another big problem, Yun noted, is the lack of activity at the higher-end of the housing market, among properties priced at $750,000 or higher.

Interest rates are much higher for loans above $730,000 that cannot be purchased by Fannie Mae or Freddie Mac. And that’s sapping demand for expensive properties. “It’s just stalled. completely stalled,” Yun said. The Realtors group is pushing for the Federal Reserve to start buying up those loans, even if they are not backed by Fannie and Freddie. It also wants the higher loan limits to apply to the whole country, not just expensive areas like California and New York.

According to Bankrate.com’s weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.45 discount and origination points.

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

The average 15-year fixed rate mortgage popular for refinancing declined to 5.95 percent, while the average jumbo 30-year fixed rate held steady at 7.64 percent. Adjustable mortgage rates were mixed, with the average 1-year ARM rising to 6.21 percent and the average 5/1 ARM holding at 6.05 percent.

Mounting worries about the economy and the health of the financial system drew investors out of stocks and into the relative safety of bonds. Mortgage rates are closely related to yields on risk-free Treasury notes.

Amid the nervousness, mortgage rates touched lows not seen since the first week of June. But inflation remains an issue, as evidenced by the Consumer Price Index for June, and will continue to spar with weak economic growth as the factors influence the direction of mortgage rates. The up and down yo-yo of mortgage rates seems likely to continue, with rates fluctuating within a range.

Mortgage rates have been on a wild ride since the beginning of the year. The average 30-year fixed mortgage rate was as low as 5.57 percent in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. But at today’s rate of 6.42 percent, a $200,000 loan would mean a monthly payment of $1,253.63.

Summary of survey results:
30-year fixed: 6.42%, down from 6.48% last week (avg. points: 0.45)
15-year fixed: 5.95%, down from 6.01% last week (avg. points: 0.41)
5/1 ARM: 6.05%, unchanged from last week (avg. points: 0.37)

Source: Bankrate.com

Trump, who paid $41 million for the 60,000-square-foot oceanfront house in 2004, told the Associated Press, “I think it’s a great sign for the area, a great sign for Palm Beach and all that Palm Beach represents. … In an age of so many people getting hurt in real estate, it shows that you can still do well in real estate.”

Source: The Associated Press (07/16/08)

The two mortgage giants are “adequately capitalized,” Bernanke said. However, “weakness of market confidence is having an effect” on the companies, making it difficult for them to raise capital.

“We will work our way through these financial storms,” Bernanke said.

He called the depressed housing market the central economic issue and urged Congress to approve legislation helping consumers refinance out of troubled mortgages, set a stronger regulator for mortgage giants Fannie Mae and Freddie Mac, and approve a new Treasury Department plan to bolster the two firms, which back half of U.S. mortgages.

Source: The Associated Press, Jeannine Aversa (07/16/08)

The new rules apply to all lenders and not just to banks supervised by the Fed. Most are expected to take effect Oct.1, 2009. Escrow requirements won’t go into effect until April 1, 2010.

Here are the new requirements:
Prevent loans made without documenting borrower’s income.
Require lenders to escrow money to pay taxes and insurance for risky borrowers.
Limit and in some cases ban prepayment penalties.
Prohibit lenders from making a loan without considering a borrower’s ability to repay a home loan from sources other than the home’s value.
Require mortgage advertising to contain information about rates, monthly payments and other features of the loan.
Insist lenders credit a mortgage payment to a home owner’s account on the day it is received.
Brokers and others are forbidden from “coercing or encouraging” an appraiser to misrepresent the value of a home.

Source: The Associated Press, Jeannine Aversa (07/14/08)

The program would allow the FHA to help as many as 400,000 homeowners.

Now the bill goes to a bipartisan committee in the House for revision. Rep. Barney Frank (D-Mass.), the Financial Services Committee chairman and a primary supporter of the bill, says the few but significant revisions House leaders seek could be made in as little as one week.

The measure includes higher limits for FHA loans and creates a new regulator for Fannie Mae and Freddie Mac. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time homebuyers.

In a statement, NATIONAL ASSOCIATION OF REALTORS® President Richard F. Gaylord said the bill “is a big step toward helping people buy and keep their homes.

“We are eager for the House and Senate to come together to finalize an aggressive bill that will ensure that every American who can afford to own a home and wants to do so will have the opportunity, and that every American who responsibly owns a home is able to keep it,” Gaylord said.

NAR has expressed ongoing support for many of the provisions in the legislation, including Federal Housing Administration Modernization that will make FHA-backed mortgages more available, a tax credit for first-time homebuyers, reform of Fannie Mae and Freddie Mac, and a program to expand FHA that would allow more mortgages to be refinanced.

“The tax credit for first-time home buyers would be a strong stimulus to a weak housing market, and FHA stabilization should help thousands of families refinance existing mortgages and in many cases keep their homes,” Gaylord said.

Source: NAR, The Associated Press (07/11/08)

However, the 15-year fixed rate fell to 5.91 percent from 5.92 percent; and the one-year ARM was unchanged at 5.17 percent.

Freddie Mac chief economist Frank Nothaft attributes the fluctuation to the higher-than-anticipated decline in the National Association of REALTORS®’ pending home index.

Source: Chicago Sun-Times (07/11/08)

The data covers listings of single-family homes, condos, and town houses for sale on local multiple-listing services. This is the first decline since the firm began keeping tabs in mid-2006.

The data doesn’t include New York City, but Miller Samuel Inc., an appraisal firm, says the city’s inventory was up 31 percent compared to June of 2007 because Wall Street firms have cut jobs.

The following is a list of cities and their percentage of inventory decline:
Boston: -10%
Dallas: -10.6%
Houston: -2.4%
Las Vegas: -18.5%
Los Angeles: -7.4%
Minneapolis: -4.8%
Orange County, Calif.: -15%
Orlando: -3.1%
Phoenix: -2.6%
Sacramento: -22.4%
San Diego: -6.7%
Tampa, Fla.: -7%

Source: The Wall Street Journal, James R. Hagerty (07/10/08)

Roadblocks include Rep. Barney Frank (D-Mass.), the Financial Services Committee chairman who won House approval of his version in May. He has made it clear he doesn’t plan to accept the Senate proposal without changes.

Speaker Nancy Pelosi (D-Calif.) is working to quell a revolt in the House by representatives who insist that housing tax breaks and any spending in the package must be paid for with tax increases or spending cuts to prevent an increase in the deficit.

That means rewriting a $14.5 billion array of housing tax breaks, which falls $2.4 billion short of being fully offset.

There is also a push by some lawmakers for far more money for fixing up foreclosed properties. The Congressional Black Caucus also opposes language in the Senate bill that bars the FHA from insuring mortgages obtained by borrowers whose down payments were paid by the seller.

Source: The Associated Press, Julie Hirschfeld Davis (07/09/08)

The Financial Accounting Standards Board is reviewing a rule that might force financial firms to take mortgage-backed securities that are currently off their balance sheets and place them on balance sheets.

If Fannie and Freddie were to have to add portions of their securitizations business back on to their balance sheets, Fannie Mae would need to raise $46 billion in cash to meet capital requirements. On the other hand, Freddie Mac would need to raise $29 billion, Lehman Brothers analyst Bruce Harting wrote in a research note Monday.

The accounting board has made no decision on changing its rules, and any proposal would include a “rigorous” review process that would likely take several months, Neal McGarity, a spokesman for the group said.

Source: The Associated Press, Stephen Bernard (07/08/08)

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5.

Lawrence Yun, NAR chief economist, says some pullback after a sharp increase in the previous month was expected.

“The overall decline in contract signings suggests we are not out of the woods by any means,” he says. “The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy.”

Location Matters

Here’s how the PHSI fared across the region:
West: slipped 1.3 percent to 97.5 in May but is 2 percent higher than May 2007.
Northeast: declined 2.9 percent to 77 in May and is 16.4 percent below a year ago.
Midwest: fell 6 percent to 78.6 and is 13.8 percent below May 2007.
South: dropped 7.1 percent in May to 84.5 and is 22.1 percent below a year ago.

Yun says location has never mattered more than in the current market. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half,” he says. “Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”

Double-digit pending sales gains in May from a year ago were noted in Colorado Springs, Colo.; Sacramento, Calif.; and Spartanburg, S.C.

Housing Bargains

NAR President Richard F. Gaylord says the current market offers immediate benefits and long-term value for many buyers. “Home buyers are getting a great deal right now,” he says. “Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009.”

Existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million, and then increase 5 percent next year to 5.58 million.

“The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market,” Yun says. “Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets.”

The Market Forecast

Other NAR projections:
The aggregate median existing-home price is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100.
New-home sales are likely to fall 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000.
Based on current indicators, the 30-year fixed-rate mortgage is forecast to rise gradually to 6.5 percent by the end of this year, and then hold at that level for most of 2009. NAR’s housing affordability index is improving this year and is likely to rise 15 percentage points to 127 for all of 2008.
Housing starts, including multifamily units, will probably fall 28.7 percent to 966,000 this year, and then drop another 9 percent in 2009 to 879,000. “In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into 2009,” Yun says.
The median new-home price is expected to decline 3.2 percent to $239,300 this year, and then rise 5.3 percent in 2009 to $251,900.
Growth in the U.S. gross domestic product (GDP) is seen at 1.6 percent in 2008 and 1.4 percent next year. The unemployment rate should average 5.4 percent this year and 5.8 percent in 2009.
Inflation, as measured by the Consumer Price Index, is forecast at 3.7 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.5 percent in both 2008 and 2009.

Investors, alone and in groups, are negotiating volume deals as they purchase whole subdivisions and bundles of 10 to 50 defaulted loans for pennies on the dollar.

“What we’re seeing today dwarfs [the 1980s] by five or 10 times,” says Bob Leonetti, president of SMI Funding, an Austin, Texas, company that originates and acquires private and conventional mortgages. “There are huge opportunities for investors.”

“People who have cash positions now are going to do very well,” says Central Florida real estate practitioner Mike Norvell of Developers Capital Realty in Leesburg, Fla. “It’s just crazy the prices you can buy for right now for cash.”

Source: Investor’s Business Daily, Kathleen Doler (07/07/08)