What February Looked like in Home Real Estate

Found a great article which I am quoting below on RIS Media below.  They do a great job of gathering information and putting it out there.  There are some interesting statistics below, but the main message is low inventory, rising prices, historically low interest rates, good time to buy:


February existing-home sales and prices affirm a healthy recovery is underway in the housing sector, according to the National Association of REALTORD®. Sales have been above year-ago levels for 20 consecutive months, while prices show 12 consecutive months of year-over-year price increases. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January, and are 10.2 percent above the 4.52 million-unit level seen in February, 2012.

February sales were at the highest level since the tax credit period of November 2009.

Lawrence Yun, NAR chief economist says that conditions for continued housing improvement are at play.  "Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise.  Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable,"  he says.  "The only headwinds are limited housing inventory which varies greatly around the country and credit conditions that remain too restrictive.

Total housing inventory at the end of February rose 9.6% to 1.94 million existing homes avialable for sale, which represents a 4.7 month supply at the current sales pace, up from 4.3 months in January, which was the lowest supply since May, 2005.  Listed inventory is 19.2 % below a year ago when there was a 6.4 month supply. 

The national median existing home price for all housing types was $173,600 in February, up 11.6% from Febraury, 2012.  The last time there were 12 consecutive months of year-over-year price increases was from June, 2005, to May, 2006.  The February gain is the strongest since November, 2005, when it was 12.9% above a year earlier. 

"A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year." Yun said.  "The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year. 

Distressed homes-foreclosures and short sales--acounted for 25% of February sales, up from 23% in January but down from 34% in February, 2012.  Fifteen percent of February sales were foreclosures, and 10% were short sales.  Foreclosures sold for an average discount of 18% below market value in February, while short sales were discounted 15%. 

Accoding to Freddie Mac, the national average commitment rate for a 30-year, conventional fixed-rate mortgage rose to 3.53% in Feburary from 3.41% in January;  it was 3.89% in Feburary 2012.
NAR President Gary Thomas, says interest rates remain extraordinarily low.  "In the history of mortgage interest rates since 1971, the 30-year fixed rate has been below 4% in only 15 months, and they have all been in the past 15 months," he sayd.  "Even with rising home prices, affordability remains historically favorable because home prices over-corrected during the downturn.  This means there is still great value for buyers in the current market."

The median time on market for all homes was 74 days in  February, which is 24% below 97 days in February, 2012.  Short sales were on the market for a median of 101 days, while foreclosures typically sold in 52 days and non-distressed home took 77 days.  One out of three homes sold in February was on the market for less than a month.

First-time buyers account for 30% of puchases in February, unchagned from January; they were 32% in February 2012.

All-cash sales were at 32% of transactions in February, up from 28% in January;  they were 33% in February 2012.  investors, who account for most cash sales, pruchased 22% of homes in February, up from 19% in January; they were 23% in February 2012. 

Mortgages and Dodd Frank Act

Here's an email report I got from a mortgage lender.  It shows that in the near future, buying a house and attaining the American Dream may be next to impossible.  What is my purpose to put it here.  1.  Show how out of control the government is on regulating everything; 2.  show that if you ever plan to own a home, you had better do it pretty darn quickly.

"When the Dodd-Frank Act was signed into law in July 2010, it contained 848 pages.  From there, the regulations it proposed had to be made into 'rules' that the financial industry would follow.  These rules would be released over time.

So far the rules and regulations have grown to 8,843 pages, and the regulators have only addressed 30% of the Bill.

The first of the rules regulating the housing market, the Ability to Pay/QualifiedMortgage (QM) rules has now been released, and while some believe it will help stabilize the housing market, others have reservations.

The 43% Debt to Income limit (DTI) is overly inclusive because it includes jumbo loans.  These are loans made to high income individuals who can well afford a higher DTI.

The rules calls for a three percent point and fee limit--which is also overly inclusive because it includes compensation for loan officers plus affiliated fees.  In addition, capping fees at 3% could cause banks to reject low balance loans as 'not worth it'.

The Avalanche is coming...

Seven more rules are scheduled for release by January 21, and more will come by mid year.  Already various rules and regulations are overlapping...causing confusion and doubt in the banking industry.  The fear is that these regulations will make mortgage lending too restrictive, and result in a housing market in which only the very wealthy may apply.  Many analysts fear that first time buyers and middle class will be cut out of home ownership. 

A second 'unintended consequence' of these regulations is lenders leaving the credit markets.  When it simply becomes too cumbersome to abide by the regulations, banks will invest elsewhere.

At a time when America is facing a severe debt crisis and should be cutting expenses, American taxpayers have now paid an untold number of regulators to write 8,843 pages of regulations--with at least twice that many still be to written. 

But that doesn't seem to be enough spending.  Since all this leads to confusion, the Mortgage Bankers Association has called on the White House to create yet another regulatory agency--a 'housing policy coordinator'.  This agency would be charged with evaluating the downstream effects and unintended consequences of the regulations being put forth.

While some regulations were in order to prevent the kind of abuses that led to the housing crisis, the 'cure is beginning to look more harmful than the disease'.

Will the new regulations help or destroy the American Dream?  We'll find out as new mortgage lending regulations are imposed over the next 6 months.

For now Dodd-Frank appears to be a monster that once fed, will continue to grow beyond all reason."

I too wonder if the health law with it's many intrusive parts will add to this conglomerate of unadulterated growth in rules, regulations, and stifling of the economy.  We'll see.

Texas Land Board Helps Disabled Veterans

As a realtor in Amarillo, I work alot with veterans, especially disabled veterans.  Texas is one of the best states for these special people when it comes to real estate.

The Texas Land Board gives a discount to veterans below the going mortgage rate on homes and remodelling.  The offer a third kind of loan, for land, at a set rate in the 7% range.  If you are 40% or more disabled, you get an additional .5 discount.  Last week this rate was 2.42%.  Can you imagine how much this low interest rate saves you on mortgage payments over 30 years.

I am a preferred realtor with the Texas Land Board in Potter and Randall County, and I love working with this program.

There are only 3 lenders in Amarillo who do these loans, as they make less money on them.  They are PrimeLending (who I usually use), Wells Fargo, and Herring Bank.  I love working with Donna Presley on these loans, as she's an expert with these and can push them through in 30 days usually.  They don't charge any points; although the Land Board charges 1%, and you can usually get your seller to pay your closing costs and include this in those costs. 

The Texas Land Board will let you have one of each of the three loans at one time, and once you pay one of them off, like a remodelling loan, you can get that same kind of loan once again; and YOU NEVER USE UP any credits, as in VA. 

The TLB also has cemeteries, nursing homes, and other benefits for veterans, and you only have to live in Texas one day to qualify.  They will require some of your service documents, and you can find those on their website. 

So call me, and let's get you into a new home at a low interest rate!!

Judy Dendy, Prudential Ada Realtors, 3300 Danvers, Amarillo, Texas  79106,   806-355-9601 or
806-672-3082.