The Pointing You Home Real Estate Blog

I hope rates don’t go up too far too fast – there is a lot of room for growth in the housing market, and we need to keep rates at a pro-growth level.

See this article from the Wall Street Journal:

Rates for fixed mortgages moved higher over the past week amid positive signals from the long-suffering U.S. housing market, according to Freddie Mac’s weekly survey of mortgage rates.

“Fixed mortgage rates ticked up this week as the housing market ended 2011 on a high note,” said Freddie Mac Chief Economist Frank Nothaft, noting encouraging data like a report that existing home sales rose 5% at the end of the year to 4.61 million houses, the largest amount since May 2010.

The 30-year fixed-rate mortgage averaged 3.98% for the week ended Thursday, up from 3.88% the previous week, though below 4.8% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.24%, up from 3.17% last week and below 4.09% a year earlier.

Read the full mortgage rates article here.

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Great Article I referenced on the show today!

No one was more surprised than Thomas Carpenito with the credit-card invitation that landed in his mailbox earlier this year.

The 27-year-old deli owner from White Plains, N.Y., had about $10,000 in old debts and a credit rating 200 points below “good.” He recalled thinking the post office had delivered the letter to the wrong house.

Far from a mistake, the offer was part of a controversial and growing partnership between debt collectors and banks that profits both. To get the new credit card, Mr. Carpenito agreed to repay $400 on a seven-year-old debt that had expired under New York’s statute of limitations.

“It was totally worth it,” he said. Having no credit cards made Mr. Carpenito feel “like dirt,” he said, especially when out on dates. His new credit card, stamped with the MasterCard Inc. logo, was offered by Jefferson Capital Systems LLC, the debt-collection arm of CompuCredit Holdings Corp., in Atlanta.

CompuCredit, a leader in the business, collected about $15 million in newly resurrected debts and fees by issuing credit cards to people with banged-up credit in the first nine months of this year, according to a securities filing. It also has drawn scrutiny by federal authorities for allegedly deceptive practices.

Read the full article here.

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As mentioned on the Radio show this morning, this forecast by John Cassidy has some really meaningful insights into the next year.

After four years of recession and subpar growth, could 2012 be the year the U.S. economy finally snaps out of its funk? Despite the turmoil in Europe, many Americans would like to think so, among them President Obama (whose electoral prospects are dim unless things perk up).

Let’s start with the good news: Recently the economy has done better than expected. Back in June, citing rising gas prices and the drawing-down of the stimulus, I asked whether it was too early to start talking about a double-dip recession. Despite a lot of subsequent angst, it was. Between July and September, GDP rose at an annualized rate of about 2%; the fourth-quarter figure may well be close to 3%. If that rate of expansion were to be sustained, unemployment would come down (and Obama’s chances would greatly improve). Most professional forecasters think growth will be more modest. In a year-end survey by the National Association of Business Economics, the median prediction for GDP growth next year was 2.4%, which is basically an extrapolation from what we’ve seen over the past six months. As a recovering pessimist — from 1997 to 2007, I spent an entire decade doubting the Greenspan/Bernanke prosperity — I have been trying to be cheerier about the economy’s prospects.
Read the full article here.

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From From Home Channel News

Builder confidence in the market for newly built, single-family homes rose two points to 21 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December. This marks the third consecutive month in which builder confidence has improved, and brings the index to its highest point since May 2010.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving.”

Builder confidence primarily gained strength in the South in December, where a four-point gain to 25 brought that region’s HMI score to its highest level since March 2008. A one-point gain to 16 was registered in the West, while the Midwest held unchanged at 24, and the Northeast slipped one point to 15. The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” Builders are also asked to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB chief economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”

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We have been predicting a 2nd housing price drop here for months – I’m only just now starting to see the media pick up the story.

U.S. home prices will probably decline an additional 6 percent to 8 percent before bottoming, Pacific Investment Management Co.’s Scott Simon said.

Potential home buyers are being kept on the sidelines by policy makers tightening rules for government-backed loans and banks being more restrictive than required by Fannie Mae, Freddie Mac and the Federal Housing Administration, Simon said in a radio interview on “Bloomberg Surveillance” with Tom Keene from Pimco’s headquarters in Newport Beach, California.

“If you can borrow, housing is so cheap, but if you can’t borrow it’s infinitely expensive,” said Simon, the mortgage head at the firm, which runs the world’s largest bond fund.

To read more about the potential for an 8% drop in US home prices, click here.

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I’ve been saying it a while – As the backlog of bank foreclosures hits the market, expect downward pressure on home prices.

U.S. foreclosure filings rose 7 percent in October to a seven-month high as lenders started to speed up action against delinquent borrowers after a yearlong review into documentation, according to RealtyTrac Inc.

A total of 230,678 properties received notices of default, auction or repossession, compared with 214,855 in September, the Irvine, California-based data seller said today in a report. One in every 563 U.S. households got a filing.

Notices plunged almost 31 percent from October 2010, when banks and loan servicers began slowing the process after complaints over the way they handled documents for defaults and home seizures. The monthly gain in filings signal that a “rain delay” in foreclosures may be easing, according to RealtyTrac Chief Executive Officer James J. Saccacio. The backlog has been partly to blame for a stalled U.S. housing recovery, he said.

To ready more about Banks trying to unload their foreclosed properties, click here.

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Congratulations to Skykesville, MD on being rated one of Bloomburg News’ best place to raise your kids 2012!  Very exciting!

Nearby city: Baltimore
Population: 4,634
Median family income: $92,142
Avg. school math score: 90.53 (State avg.: 83.57)
Avg. school reading score: 95.13 (State avg.: 86.51)

To read more about why Sykesville is a great place to raise your kids, click here.

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The big news for the D.C. Metro area housing market this month

October 2011 contract activity in the Washington, D.C. metro area outpaced seasonal patterns, attaining a level that was 18.6% higher than the 5-year October average. There were 4,125 new contracts written in October 2011, 10.4% ahead of the September 2011 total of 3,829. For the past 10 years, new contract activity has averaged a 4.3% increase from September to October. The median sale price of $320,025 was 5.9% lower than October 2010. This, combined with the marked 23.3% month-over-month decrease in new listings, can partially be attributed to the lower jumbo mortgage limits which took effect October 1. New listings were down over 13.2% compared to October 2010 and down 20.3% from the 5-year October average.

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Here is a textbook example of how the entrepreneurial spirit of American can make lemonade out of lemons.  While it’s tragic that these services are needed, it is this sort of free-market thinking that will help pull us out of this recession.

To read the full article “Good business for bad times: Mortgage field services” click here.

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