18 of 20 markets tracked by the Case-Shiller Index showed rising home values in June. It’s the 5th consecutive month with strong numbers and the best showing for the benchmark housing index since home values began deflating in 2006.
Some would argue it’s a sign that housing has finally bottomed out. Even Case-Shiller representatives acknowledge that home prices are “on an upswing”.
Despite the Case-Shiller Index’s popularity with economists and the press, though, it’s falls short of being a perfect housing indicator. As examples:
- Its data is reported with a 2-month lag
- Its sample set includes just 20 U.S. cities
- Real estate isn’t a “national” market — it’s local
Nevertheless, flaws aside, Case-Shiller is still important. It helps identify broader trends in housing and many people believe the housing is the keystone of the economy right now.
This is why June’s Case-Shiller Index gives cause for hope. The nascent housing recovery has a long road ahead but June’s Case-Shiller data shows that we’re heading in the right direction.
Filing an official Change of Address form with the United States Postal Service is one of the most important steps in the moving process.
It’s how bills, letters and catalogs find you after your change of residence.
Strangely, though, a lot of people wait until the last-minute-before-moving before telling the post office that a Change of Address in needed. As a result, mail gets lost-in-transit as “undeliverable”.
It doesn’t have to be like that.
In addition to the USPS’ own online forms, there are third-party companies that combine secure online address changes with money-saving coupons for sure-to-be-needed utilities including cable, phone and electric.
If you’re moving or relocating, think about updatingyour USPS mailing address as soon as you have a move date. This will give the postal service enough lead time to process your order and, if the move doesn’t go through as planned, you can always cancel out.
They key is to make sure your mail delivery stays uninterrupted — from one home to the next.
If you plan to use the First-Time Home Buyer Tax Credit program, time is running out. The program expires November 30, 2009 and closing on a home can take up to 60 days.
That leaves you 6 weeks from today to find a home and go under contract.
The First-Time Homebuyer Tax Credit program was passed as part of the 2009 economic stimulus plan. It credits up to $8,000 in tax payments to qualified buyers.
The qualification criteria are as follows:
- Buyer may not have owned a “main home” in the past 36 months
- The home may not be purchased from a parent, spouse, or child
- Adjusted gross income for the household must be below $95,000 for single tax filers and $170,000 for joint tax filers
Furthermore, not everyone who’s qualified will get the full $8,000. The credit can’t exceed 10 percent of a home’s purchase price, for example, and households with income approaching program limits get lesser benefits, too.
Meanwhile, an interesting note about the First-Time Home Buyer Tax Credit is that it’s a true a tax credit and not a deduction. A person claiming the $8,000 credit whose “normal” tax liability is $5,000 would get a $3,000 refund from the IRS on April 15, 2010.
Review the program’s criteria at your leisure, but don’t wait until October to start looking for homes. If you can’t close by November 30, 2009 for any reason whatsoever, you won’t qualify for the tax credit.
Better to be ahead of the deadline than chasing it.
Single-family Housing Starts rose for the 4th straight month in July, another sign that the battered housing market may be making its comeback.
“Housing starts” are new homes on which construction has recently started.
Not surprising, in a related story, homebuilder confidence moved to a 12-month high.
Ironically, an increase in newly-built homes could actually slow a nationwide housing rebound because values are driven by supply and demand. More in-the-pipeline supply means that buyer demand has to stay strong or else prices will eventually fall.
So far this year, though, demand has kept pace.
Over the past 6 months, the combination of low mortgage rates, aggressive home valuations, and federal and state tax credits has kept buyer activity up and home values on the rise.
It looks like banks are less scared of mortgage loans these days.
In its quarterly survey to member banks, the Federal Reserve asked senior bank loan officers whether “prime” residential mortgage guidelines had tightened in the last 3 months.
Just one-fifth of banks said guidelines tightened last quarter, a dramatically lower figure versus last quarter — a signal that mortgage underwriting may get less restrictive in the months ahead.
It is worth noting, however, that not a single responding bank said its guidelines had eased. For now, getting through underwriting is still much tougher than it was 2 years ago.
Some of the changes today’s borrowers face include:
- Higher minimum FICOs
- Larger required downpayments and equity ownership
- Higher income levels versus monthly debts
- Larger reserve requirements
Furthermore, second mortgages are scarce when loan-to-values exceed 80 percent.
The underwriting changes of the last 24 months preclude many Americans from getting access to today’s low rates if the Fed’s reported trend continues, that could reverse before the end of the year.
Some analysts claim that credit tightening started the U.S. recession. Credit loosening, therefore, could help end it.
Foreclosure-tracker RealtyTrac reports that the number of foreclosures nationwide rose 7 percent on a month-to-month basis last month.
However, 3 states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined.
- California : 30.0 percent
- Florida : 15.7 percent
- Arizona : 5.4 percent
On a per-household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher.
Now, we point out these statistics for two reasons.
The first is to remind you that foreclosures can be highly local. For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others.
And, second — foreclosures can represent a terrific buying opportunity. Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too.
Furthermore, as banks get better at disposing of foreclosed homes, the process of buying one isn’t as challenging as it was, say, 12 months ago.
As part of its research, RealtyTrac.com catalogues a lot of foreclosed homes and lists them online. However, you may find it better to start your search with a local real estate agent that knows the foreclosure market.
So long as buying foreclosures is a high-touch process — and it is a high-touch process — you may want to have a human face and agent to guide you through it.
The complete RealtyTrac report is available online.