From Bloomberg - On the surface, more terrible news in regards to new housing starts and new construction permits. The silver lining asserted in the video is that we are not "effectively adding new housing to the inventory." Yes, less supply will ultimately leads towards stabilizing this dreadful housing market.
Listen to the video to get another opinion on where we're at and what it's going to take to turn this housing market around.
Home prices fell 12.4% during the fourth quarter of 2008, the largest year-over-year decline since the National Association of Realtors began keeping comprehensive records in 1979.
The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.
Prices fell by a record 9.5% in 2008, to $197,100, compared to $217,900 in 2007. In comparison, median home prices dipped a mere 1.6% between 2006 and 2007.
"People are responding to discounted prices and are slowly absorbing the excess inventory," said NAR President Charles McMillan. "Buyers clearly see value in today's pricing."
The biggest losers:
In Cape Coral-Ft. Myers, Fla., which has the third-highest rate of foreclosure filings in the nation, prices fell a devastating 50.8% for the year, to $110,900 from $225,300. That was the most precipitous plunge for any metro area.
In Saginaw, Mich., prices fell 41.4%. In Riverside-San Bernardino, Calif., prices dropped 40.8% and in San Jose, Calif., prices declined 37.7%.
The biggest winners. Yes, some homes are appreciating and, in fact, are doing quite well in some areas. Real estate is local! The importance of this can't be reiterated enough. With that being said, I'm willing to bet most people had no idea that some markets have been performing as strongly as the housing markets identified below:
The Beaumont-Port Arthur area of Texas bucked the national trend. Its median home price jumped 16.7% to $132,600 - the highest increase in the nation. Other winners included Bloomington, Ill., up 9.6%; Dover, Del., up 6.5%; and Bismarck, M.D., up 6%.
Needless to say, foreclosures are a sad and unfortunate circumstance confronted by many Americans today. This video gives brief insight to markets at work and the opportunities that abound from the depths of despair. The real estate industry continues to crash but, as a result, another industry is born.
U.S. mortgage applications rose in the last week of January, reflecting a jump in demand for home refinancing loans even as interest rates rose to their highest levels since early December, data from an industry group showed Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Jan. 30 increased 8.6% to 795.4 after slumping 38.8% during the previous week.
Inside the MBA's purchase and refinance index:
The MBA's seasonally adjusted purchase index fell 11.2% to 261.4 in the latest week. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 9.2%.
The Mortgage Bankers seasonally adjusted index of refinancing applications, meanwhile, jumped 15.8% to 3,906.3.
Inside the mortgage rates:
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.28%, up 0.06 percentage point from the previous week. Three weeks earlier, mortgage rates were 4.89%, the lowest level recorded since the MBA survey began in 1990.
...
The adjustable-rate mortgage share of activity decreased to 2.1% in the latest week, down from 2.4% the previous week.
Fixed 15-year mortgage rates averaged 5.15%, up from 4.98% the previous week. Rates on one-year ARMs increased to 6.09% from 5.96%.
The long and the short is that mortgage rates have been inching up but still remain incredibly cheap.
Plunging home prices and low mortgage rates pushed homebuying activity higher in December, according to a regular industry report released on Tuesday.
The Pending Home Sales Index, from the National Association of Realtors, measures the number of sales contracts signed each month. It rose 6.3% in December to 87.7, after dropping 4% in November to a record low of 82.5.
The index was 2.1% higher than its December 2007 level.
What happened in your local region?
Sales activity gained the most traction the South, where the index jumped 13% in December. The Midwest was also much higher at 12.8%. The Northeast, however, slipped by 1.7% and the index in the West fell 3.7%.
It appears that the significant drop in housing prices coupled with attractive mortgage rates (for those who can qualify for a loan) continue to spur improved home buying activity. We continue to experience this reality ourselves and hear reports from affiliates in different markets that the lower priced portion of the housing market is percolating with activity. In fact, many bank owned properties being dumped on the market at extremely aggressive price points are continuing to generate multiple offers over the asking price.
