Mortgage Rates Drop For The First Time In 4 Weeks

After 4 weeks of rising costs, Metro Atlanta mortgage rates finally recede.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage rate dropped 7 basis points to 3.59% this week. Depending on where you live, however, you may find that your offered mortgage rates varies. Freddie Mac's "published rate" is a national average based on a survey of more 125 banks.

The rates you receive as an individual vary by bank, and vary by region.  

Mortgage applicants in the North Central Region were most likely to get the lowest rates of all applicants nationwide last week. By contrast, applicants in the Southeast Region were most likely to get the highest rates.

Average mortgage rates in the five U.S. regions, as tracked by Freddie Mac :

• Northeast Region : 3.59 percent for a 30-year fixed rate mortgage
• West Region : 3.58 percent for a 30-year fixed rate mortgage
• Southeast Region : 3.64 percent for a 30-year fixed rate mortgage
• North Central Region : 3.57 percent for a 30-year fixed rate mortgage
• Southwest Region : 3.61 percent for a 30-year fixed rate mortgage

Across all 5 regions, mortgage rates were quoted with an accompanying 0.6 discount points, on average, plus a full set of closing costs. 1 discount point is equal to one percent of your loan size. Closing costs vary by county.

One year ago, the 30-year fixed rate mortgage rate averaged 4.22%. Today, it averages 3.59%. This 63 basis point difference yields a $36 monthly savings per $100,000 borrowed. 

On a $250,000 mortgage, that's $1,080 in savings per year.

If you watched mortgage rates rise through August and felt as if you missed the market bottom, consider this week your second chance. The 30-year fixed rate mortgage does remains above its all-time low of 3.49 percent, but this week's drop in rates in encouraging. It's the biggest one-week drop in rates in more than 3 months.

Talk to your loan officer about how today's mortgage rates can work for your budget. 

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Pending Home Sales Index Makes New High For 2012

In July, the third time this year, the Pending Home Sales Index crossed its benchmark value of 100, moving to 101.7. 

A "pending home sale" is a home under contract to sell, but not yet sold. Data for the index is collected by the National Association of REALTORS® and published monthly.

The rise in July's Pending Home Sales Index reading is important for two reasons -- both of which highlight a U.S. housing market in recovery. Buyer and sellers in Metro Atlanta and across the country would do well to pay attention.

First, the Pending Home Sales Index is at its highest point since April 2010, the last month of that year's federal home buyer tax credit.

From this, we can infer that the rate at which homes are selling in Georgia and nationwide is approaching the same "stimulated" levels that the tax credit afforded two-plus years ago. The difference is that today there are no buyer tax incentives.

The Pending Home Sales Index readings have climbed steadily since the tax credit's expiration, too :

• July 2010 : 78.4 reading
• July 2011 : 90.5 reading
• July 2012 : 101.7 reading

Second, because the Pending Home Sales Index is a relative index; and, because it was assigned a value of 100 when it was launched by the real estate trade group in 2001, when the PHSI reads higher than 100, it tells us that homes are going under contract at a faster pace than they did during the index's first year.

2001 was a strong year for the U.S. housing market. 2012 is on path to be a stronger one.

80% of homes go to closing within two months of contract so, based on the July 2012 Pending Home Sales Index, we should expect for the Existing Home Sales report to rise through the rest of summer and into fall. Home supplies may drop and home prices may rise.

The housing market has expanded slowly and steadily dating to October 2011. Based on last month's PHSI, that momentum will continue. 

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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New Home Sales Reach Multi-Year High

The market for newly-built homes remains strong.

As reported by the U.S. Department of Commerce, 372,000 new homes were sold in July on a seasonally-adjusted, annualized basis. A "new home" is a home that can be considered new construction.

July's New Home Sales report highlights what today's buyers of new construction and the nation's home builders have witnessed for themselves already -- that the market for newly-built homes is improving in Metro Atlanta and nationwide.

The number of new homes sold in July on a seasonally-adjusted, annualized basis matches the tally from May 2012, and is the highest reading since April 2010, the last month of that year's federal home buyer tax credit.

The South Region continues to account for the majority of new construction sales, posting a 48% market share in July. South Region sales were up 9.1 percent as compared to one year ago. The other 3 regions posted higher sales volume as well :

• South Region : +9.1% from July 2011
• Northeast Region : +30.4% from July 2011
• Midwest Region : +21.7% from July 2011
• West Region : +63.8% from July 2011

Also noteworthy is that the increase in new home sales is coming at a time when new home supplies are slipping.

At the end of July 2012, there were just 142,000 new homes for sale nationwide. This is the smallest new home housing stock in at least 7 years, and a signal that buyers are buying homes faster than builders can build them. At the current pace of sales, the national supply of new homes would sell out in 4.6 months.

Because economists believe that a 6.0-month supply represents a market in balance, the current new home market is decidedly a "sellers market". Buyers throughout Georgia should expect higher new home prices ahead.

Dating back to October 2011, the housing market has shown slow, steady growth. Home prices have moved higher and so has builder confidence. If you're in the market for new construction consider going into contract soon. The longer you wait to buy, the more you may be asked to pay.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Government : Home Prices Up 3.0% In Last 12 Months Nationwide

The housing market recovery appears to be sustainable.

According to the Federal Housing Finance Agency's Home Price Index, home prices rose by a seasonally-adjusted 0.7 percent between May and June 2012. The index is now up 3.0% over the past 12 months, and made its biggest quarterly gain since 2005 last quarter.

The FHFA's Home Price Index measures home price changes through successive home sales for homes whose mortgages are backed by Fannie Mae or Freddie Mac, and for which the property type is categorized as a "single-family residence". 

Condominiums, multi-unit homes and homes with jumbo mortgages, for example, are excluded from the Home Price Index, as are all-cash home sales.

June's HPI gives buyers and seller in Metro Atlanta reason to cheer, but it's important to remember that the Home Price Index -- like so many other home valuation trackers -- has a severe, built-in flaw. The HPI uses aged data. It's nearly September, yet we're talking numbers from June.

Data that's two months old has limited meaning in today's housing market. It's reflective of the housing market as it looked in the past.

And, even then, to categorize the HPI as "two months old" may be a stretch. Because it often takes 45-60 days to close on a home sale, the home sale prices as reported by the July Home Price Index are the result of purchase contracts written from as far back as February 2012.

Buyers and sellers in search of real-time home price data, in other words, won't get it from the FHFA.

The Home Price Index is a useful housing market gauge for law-makers and economists. It highlights long-term trends in housing which can assist in allocating resources to a particular policy or project. For home buyers and sellers throughout Georgia , however, it's decidedly less useful. Real-time data is what's most important.

For that, talk to a real estate professional.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Carmel, Indiana Rated Top Mid-Sized U.S. City For 2012

CNNMoney has released its Best Places To Live 2012 list.

The annual survey is based on data from Onboard Informatics. Using Quality of Life factors such as education, crime and "town spirit," and focusing on towns with between 50,000 and 300,000 residents, this year's survey ranks the country's best mid-sized cities.

To be eligible for ranking, towns must have a median household income greater than 85 percent, and less than 200 percent, of the state median income; must not be a categorized as a "retirement community" or a town with "major job loss;" and must be racially-diverse.

From a list of 744 eligible towns nationwide, Carmel, Indiana ranked first.

The complete Top 10 Best Places to Live as cited by CNNMoney, and average local home listing price as of July 2012 follows :

1. Carmel, Indiana ($304,340 average listing price)
2. McKinney, Texas ($245,917 average listing price)
3. Eden Prairie, Minnesota ($413,566 average listing price)
4. Newton, Massachusetts ($850,117 average listing price)
5. Redmond, Washington ($518,982 average listing price)
6. Irvine, California ($904,753 average listing price)
7. Reston, Virginia ($467,934 average listing price)
8. Columbia, Maryland ($406,943 average listing price)
9. Overland Park, Kansas ($278,204 average listing price)
10. Chapel Hill, NC ($376,660 average listing price)

In addition to ranking its Top 10 Best Places To Live, CNNMoney also offers a host of data on the top-ranked 100 cities at its website. See whether your hometown ranks, and what the data says about your town.

As you review the rankings, however, remember that while lists like these can be helpful to a home buyer in Metro Atlanta, all "Best Place To Live"-like surveys are subjective. A bottom-ranked town may have no less appeal to you as an individual than a top-ranked one.

Every city has something to offer to its residents.

Therefore, before making a decision to buy a home, make sure to connect with a real estate agent with local market knowledge. That's the best, most reliable way to make sure you're getting the data on the market that matters most to you.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Mortgage Rates Dropping After Release Of Fed Minutes

Eariler this week, the Federal Reserve released the minutes from its 2-day meeting which ended August 1, 2012. Since the release, mortgage rates have dropped.

The Fed Minutes are released on a schedule, three weeks after the FOMC adjourns from one of its 8 scheduled meetings of the year.

The Fed Minutes are meeting minutes; like you'd see after a corporation shareholder meeting, or after a condo board meeting. Specifically, the Fed Minutes details the conversations among Federal Reserve members which shape our nation's economic policy.

The most recent Fed Minutes show a central bank closer to adding new market stimulus than previously believed.

At its last meeting, the Federal Reserve's debate focused on the rate of economic growth and whether it was occurring too slowly to be long-lasting. The Fed appears to think so. Without a "substantial and sustainable strengthening" in the pace of economic expansion, it said, additional monetary stimulus would be "warranted fairly soon".

Other notes from within the Fed Minutes included :

• On employment : Unemployment rates will "decline only slowly"
• On housing : The market appears "to have improved, somewhat"
• On inflation : Retail energy costs are keeping consumer prices low

However, the Fed expressed an "unusually high level of uncertainty" about its assessments owing to the ongoing European sovereign debt problems. "Spillovers" remain possible and default threats continue to weigh on markets. 

The Federal Reserve's next scheduled meeting is September 12-13, 2012.

Since the minutes were released -- and for the first time this month -- mortgage rates in Georgia made a big move lower. This is in contrast to the rest of August through which mortgage rates have climbed steadily.

According to Freddie Mac, on August 1, the average 30-year fixed rate mortgage rate was 3.49% nationwide. Today, the rate is 3.66%. Between now and the Fed's next policy-making meeting September 13, though, mortgage rates are subject to change. If today's mortgage rates fit your budget, consider locking in. 

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Existing Home Sales Rise To 4.47 Million

Home resales climbed 2% last month as the housing market continues its measured, steady recovery.

According to the National Association of REALTORS®, Existing Home Sales rose to 4.47 million units in July on a seasonally-adjusted, annualized basis.

An "existing home" is a home that cannot be classified as new construction and, despite a reduction in the national homes inventory, the number of previously-occupied homes sold in July was higher by 10% as compared to one year ago.

The Existing Home Sales also reported the folliowing :

• First-time buyers accounted for 34% of all purchasers, down from 34% in June
• Real estate investors accounted for 16% of all purchasers, down from 19% in June
• Cash buyers accounted for 27% of all purchasers, down from 29% in June

In addition, the real estate trafde group reports that distressed sales accounted for a smaller percentage of the overall home resale market in July. Just 24% of home resales were for homes in various forms of foreclosure or short sale.

This is down one percent from June, and five percent from July 2011.

It also marks the smallest percentage of homes sold in "distressed" status since the trade group began to track such data 4 years ago.

Lastly, nationwide, the supply of homes for sale dropped to 6.5 months. At the current pace of sales, therefore, the complete U.S. home resale inventory would be sold by the end of Q1 2013.

There are now 2.40 million homes for sale -- a 24% reduction from July 2011.

For today's Metro Atlanta home buyers, the July Existing Home Sales report reinforces the notion that housing is in recovery and what the nation's home builders have been saying since late-2011 -- the next six months for housing will likely be strong. Growth may not be linear, but it figures to be consistent.

With home inventory low and mortgage rates the same, the home resale market looks ripe for good deals.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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States With The Highest And Lowest Closing Costs, 2012

Mortgage rates have been on steady decline in Georgia since the start of 2012 as uncertainty for the future of the Eurozone and questions about the soundness of the U.S. economy have led investors into mortgage bonds in droves, lowering the 30-year fixed rate mortgage to its lowest point in history.

But it's not just mortgage rates that are down. Closing costs are, too.

According to Bankrate.com's annual Mortgage Closing Cost Survey, the average mortgage applicant paid seven percent fewer closing costs in 2012 as compared to 2011, on average. The year prior, costs had increased thirty-seven percent, on average.

A "closing cost" is any fee paid in conjunction with a mortgage settlement that would not be payable if the home was financed with cash. Closing costs for purposes of the Bankrate.com survey include such items as underwriting fees and appraisal costs. County transfer stamps, where required, however, were not included.

Like everything in real estate, closing costs vary by locale. There are some states in which closing costs tend to be high, and other states in which closing costs tend to be low.

The five states with the lowest closing costs for 2012, on average, are :

1. Missouri : $3,006
2. Kansas : $3,193
3. Colorado : $3,199
4. Iowa : $3,257
5. Arkansas : $3,325

By contrast, the two most expensive states in which to close a mortgage this year are New York ($5,435) and Texas ($4,619). All figures assume a $200,000 loan size with 20 percent equity and excellent credit.

The good news is that, as a home buyer or refinancing household, you're often not required to pay the closing costs which are itemized by your bank. When asked, many lenders will offer a low-closing cost or zero-closing cost option.

With low- and zero-closing cost programs, qualifying mortgage rates are raised by a small amount, which increases your monthly mortgage payment. Up-front settlement costs, however, are reduced or eliminated. 

Opting for a low- or zero-closing cost mortgage is a trade-off between upfront costs and ongoing costs. Talk to your loan officer about your options to see which path is best for you.

View average closing costs for all 50 states at Bankrate.com.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Single-Family Housing Starts Remain Strong

The market for newly-built homes remains strong.

As reported by the U.S. Census Bureau, July featured 502,000 single-family housing starts nationwide on a seasonally-adjusted, annualized basis, marking the fourth straight month during which single-family starts posted north of one-half million.

The last time this milestone occurred was in the four months ending April 2010 -- the last month of that year's federal home buyer tax credit.

A "housing start" is a home on which construction has started and the rise in single-family housing starts is yet one more signal to buyers in Metro Atlanta and nationwide that the housing market has likely put its worst days behind it.

Home builders, it appears, agree with that sentiment.

Last week, the National Association of Homebuilders reported builder confidence to be at a 5-year high. Sales levels have been growing since January and builders expect the next six months to be blowout.

One of the main drivers of today's new construction market is rising rental costs throughout many U.S. markets. It has helped to create an influx of new home buyers at a time when low mortgage rates have helped to keep new homes affordable.

As compared to one year ago, today's home affordability is high.

• July 2011 : A $1,000 mortgage payment afforded a loan size of $196,200
• July 2012 : A $1,000 mortgage payment afforded a loan size of $223,000

That's a 13.7% purchasing power increase in just twelve months -- one reason why builders report buyer foot traffic through new construction at pre-recession levels.

The ability for buyers to access low downpayment mortgage programs is helping home sales, too.

The FHA offers a 3.5% down payment program and today's home buyers are taking advantage. FHA mortgages now account for an estimated one-third of purchase money mortgages, and the VA and USDA are gaining market share, too, with their respective 100% financing program for certain qualified buyers.

With low rates, low downpayments and soon-to-rise home prices, it's a good time to be a home buyer. If you've been shopping new construction, consider going under contract soon. As mortgage rates and prices rise, your personal home affordability falls.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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How To Repair Water-Damaged Hardwood Floors

For Metro Atlanta homeowners with hardwood flooring, a little bit of in-home water can do a whole lot of damage. Over prolonged periods of time, water can warp, buckle, and/or cup hardwood flooring, leading to an expensive and time-consuming repair process.

Not all warped woodwork requires replacement, though. Some warped floors can be fixed as a DIY project using nothing but a dehumidifier and time. The key is to identify -- and rectify -- the water damage issue quickly.

Your first step is to dry all water-damaged areas thoroughly.

Using absorbent towels, remove traces of moisture from the damaged floor's surface. For standing water problems, use a water vacuum. If water entered the affected room by seeping through a wall, or falling through a ceiling, for example, make sure the water's source has been identified and "plugged". 

Next, rent or buy a dehumidifier.

A dehumidifier is a small, household appliance meant to reduce humidity in the air. Dehumidifiers are often used for health reasons but, in the case of water-damaged flooring, a dehumidifier can help to extract water from wood planks, returning the wood to its original, non-warped form more quickly.

With the above steps completed, if the warping persists, plan to wait. It may take a week, a month, or longer, but -- eventually -- for all but the most damaged flooring, your hardwood will return to shape. Expect the process to happen more quickly during winter as the wood contracts in colder, drier air. 

Lastly, if your floors have been damaged as a result of heavy rains or water entering your home from the outside, consider a professional inspection to identify how and why the damage occurred. Your gutter may be clogged, for example, which can result in overflows which can damage your home's foundation.

It can be labor-intensive to dry your wood floors. Compared to the cost of replacement, however, calling this a DIY can be sensible.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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