Fed finds housing, banking conditions improved

By Greg Robb

WASHINGTON (MarketWatch) - Home real estate markets and banking conditions are improving across most of the nation, according to the Federal Reserve's latest Beige Book reading of economic conditions released Wednesday. Overall, the report found a modest, moderate expansion underway, with only New York the only one of the dozen Fed districts to report slower activity through mid-February. Most economic conditions are similar to past reports. Manufacturing and nonfinancial services are expanding and reports of consumer spending were positive. Prices remained stable and there was no wage pressure, the report said.

Mortgage fees are on the rise

Mortgage fees are on the rise
And chances are that more of them are on the way, some say

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Higher fees are sneaking into the overall cost of most mortgages. But given ultralow interest rates these days, it’s likely few borrowers will notice.

Mortgage rates are clinging near record lows, with the 30-year fixed-rate mortgage averaging 3.95% for the week ended Feb. 23, according to Freddie Mac’s weekly survey of rates for conventional mortgages.

Still, consumers should pay attention to any fee increases because they could be a sign of what’s to come: increasingly higher costs to get a government-backed mortgage, whether it’s a conforming loan sold to government-sponsored entities Freddie Mac and Fannie Mae or a loan backed by the Federal Housing Administration, said Guy D. Cecala, publisher of Inside Mortgage Finance, a trade magazine for the residential mortgage business.

“The message there for consumers is even though none of this stuff is going to have a big impact right away, the cost of getting government [backed] mortgages is going to go up,” Cecala said.

Paying for tax cut

The guarantee fee that lenders must pay to Fannie Mae and Freddie Mac for securitizing loans will rise by one-tenth of a percentage point on April 1, a cost that will get passed on to borrowers through interest rates that are about an eighth of a percentage point higher, said Bob Walters, chief economist for online lender Quicken Loans.

That fee increase was part of the payroll-tax cut deal reached in December.

For the most part, lenders already have factored those costs into the interest rates they’re quoting now, mainly because it will take a while before they sell the loans to Freddie and Fannie, said Walters. Lenders assume it will take 45 to 60 days to close a loan and another 15 to 30 days before they deliver the loan to Freddie or Fannie, he said.

While this fee increase is slight, some think it could signal more fees to come. Freddie Mac and Fannie Mae need to be profitable, said Karen Mayfield, national mortgage sales manager at Bank of the West in San Francisco. “Let’s face it, the higher fees give them more revenue.”

Annual mortgage-insurance premiums for FHA-backed loans are also set to rise by one-tenth of a percentage point on April 1, Mayfield said. That’s about $200 more a year for mortgage insurance on a $200,000 FHA-backed mortgage, she estimates. Premiums will go up another quarter point for mortgages greater than $625,500, affecting borrowers in high-cost markets like California.

“The government is taking a look at what they think the cost of insurance should be,” said Walters, “and the general consensus is that it should be higher.”

Some borrowers will face another cost when they go to file their 2012 taxes in 2013. That’s because the 2011 tax year is the last in which borrowers can deduct the mortgage insurance they paid either through a private insurance company or through the FHA.

Watch for junk fees

Despite the threat of rising costs, the current low-rate environment is causing borrowers to feel little urgency when it comes to locking in a low rate for a home purchase or refinancing.

“For the last two years, everyone has been predicting at the beginning of the year that interest rates would rise and they’ve done the opposite — they’ve fallen,” Cecala said. “No [borrower] is expecting that they are going to lose their window of opportunity for the foreseeable future.”

But if you’re in the market for a mortgage, be wary of what Cecala calls “junk fees.”

Over the past three years, mortgage lenders have been “making more money on the loan-origination side than they have in the past,” Cecala said. “They find opportunities for building in fees,” though lenders might argue about what is and isn’t a junk fee.

Look for costs such as origination fees, processing fees, document-preparation fees and any other fee that the lender is charging — as opposed to third-party fees, including those for title insurance and appraisals, which are set costs that the lender does not control.

Many of these “junk” fees are negotiable.

Also, keep in mind that it takes longer these days to get a mortgage approved, so consider getting an interest rate locked in for as long as possible, Cecala said. Any agreement pertaining to lock extensions should be in writing.

Sometimes, lenders will say they’ll extend the interest-rate lock at no cost if the loan doesn’t close on time — getting that promise in writing could save you some money, Cecala said.

Amy Hoak is a MarketWatch reporter based in Chicago.

Average 30-Year Fixed-Rate Mortgage Up From All-Time Record Low

Average 30-Year Fixed-Rate Mortgage Up From All-Time Record Low

In Freddie Mac's results of its Primary Mortgage Market Survey® (PMMS®), fixed mortgage rates moved off their at- or-near record lows for the first time in three weeks amid recent data showing the housing market continues to improve.

·  30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.8 point for the week ending February 23, 2012, up from last week when it also averaged 3.87 percent. Last year at this time, the 30-year FRM averaged 4.95 percent.

·  15-year FRM this week averaged 3.19 percent with an average 0.8 point, up from last week when it also averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.22 percent.

·  5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent this week, with an average 0.7 point, down from last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 3.80 percent.

·  1-year Treasury-indexed ARM averaged 2.73 percent this week with an average 0.6 point, down from last week when it averaged 2.84 percent. At this time last year, the 1-year ARM averaged 3.40 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"New data releases this week suggest the housing market is continuing to gradually improve. Loans that were seriously delinquent (90 days or more past due plus the foreclosure inventory) fell to 5.3 percent of prime mortgages at the end of 2011, representing the lowest quarterly share since the start of 2009, according to the Mortgage Bankers Association. The Census Bureau reported new residential construction starts in January outpaced the market consensus forecast, led by condominiums and apartment buildings, and December's figures had upward revisions. Finally, existing home sales were at the strongest pace in January since May 2010, according to the National Association of Realtors®"

California to Receive $18 Billion in Mortgage Settlement

On February 9, Attorney General Kamala D. Harris announced that California secured up to $18 billion for its distressed homeowners as part of a $25 billion national multistate settlement with the country's five largest loan servicers. More than $12 billion will be used to offer short sales or write down loans over the next three years for about 250,000 underwater homeowners in California, according to the attorney general. Relief will go to areas hardest hit by the foreclosure crisis within the first year of the settlement.

Although the actual settlement has not yet been released, the attorney general has stated that other financial benefits for California include $849 million for refinancing 28,000 borrowers who are underwater but current on their payments; $279 million restitution for 140,000 homeowners who were foreclosed upon between 2008 and 2011; $1.1 billion for unemployed homeowners, transitional assistance, and repairing blight; $3.5 billion to extinguish unpaid loans that remain after foreclosure for 32,000 homeowners; and $430 million to the state attorney general's office for costs and fees. As part of a California guarantee, if the lenders fail to reduce principal balances by a minimum of $12 billion, they will be required to pay fines up to $800 million to the state.

The loans involved in this settlement are those owned or serviced by Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial Inc. The settlement releases the five named lenders from certain federal and state claims pertaining to robo-signing and other foreclosure misconduct by the lenders. It does not affect any individual's rights to bring legal action against a lender. It also does not apply to the majority of mortgage loans, which are those owned by Fannie Mae or Freddie Mac.

This mortgage settlement does not change any homeowner's existing financial relationship with a settling lender. It does not relieve homeowners from any obligation. It does not require a settling lender to stop any foreclosure.

Homeowners seeking relief under the settlement agreement should contact their loan servicer or a HUD-approved housing counselor. More information including detailed FAQs is also available from the California Attorney General's website, or visit the National Mortgage Settlement website.

Tight-fisted mortgage lenders pressure home sales

By John W. Schoen, Senior Producer

Home prices have fallen by a third since 2006, creating tremendous bargains for home buyers. Mortgage rates are at rock-bottom lows, making houses more affordable than they have been in decades. Yet home sales last year fell to the lowest levels since the government began keeping records in 1963.

One big reason is that mortgage bankers have gotten a lot choosier about who they’ll approve for a loan, according to a report by Goldman Sachs economists Hui Shan and Jari Stehn. By some measures, they're pickier than they were before the housing boom took off.

With anecdotal evidence showing that home mortgages are harder to get, the economists crunched Federal Reserve data to show just how much tighter lending standards have become. Using the results of the Fed's survey of loan officers, the report found that lending standards rose sharply after the mortgage market collapsed and the financial system imploded in 2008. Since the recession ended in 2009, lenders haven’t eased their tight grip on mortgage money.

Part of the reason is that there’s less money available to lend. During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up. That market has all but vanished; 90 percent of new mortgages written today are backed by the government.

The new mortgage pipeline also has slowed because it is clogged with paperwork. These days, you’ll have to fill out many more forms and produce a lot more documentation, on average, just to get your loan considered.

The percent of loans that required “full documentation” declined steadily from 2000 through 2006, hitting a low of less than 60 percent. Those “no-doc” loans were a big part of the reason mortgage bankers made the bad underwriting decisions that created the mortgage mess. Today, nearly 90 percent of mortgage applications require full documentation. That’s much higher than the pre-bubble level.

You’ll also have to show a much higher credit score than you did in the go-go days of the housing boom. In a separate report, Mortgage Marvel, an online mortgage-shopping website, analyzed data from more than 700,000 mortgage applications filed last year and found that the average FICO score was 730. That’s a significant jump from the days when borrowers with scores in the high 500s were routinely steered to high-cost subprime loans.

Applications with highest credit scores concentrated in California, Oregon, Wisconsin, District of Columbia and Hawaii, the company said. The states with the lowest credit scores were Mississippi, Arkansas, West Virginia, Louisiana and Oklahoma.

Fed says long-term inflation goal is 2%

By Steve Goldstein

WASHINGTON (MarketWatch) -- The Federal Open Market Committee said Wednesday that the long-term inflation goal is 2%, as measured by the annual change in the price index for personal consumption expenditures. That's the most explicit the Fed has been in terms of setting an inflation target. Eleven of the 17 Federal Open Market Committee participants believe a rate hike would not be appropriate before 2014, according to the first-ever rate forecasts published Wednesday. Three members want the first hike by this year, three want them in 2013, five want them in 2014, four more in 2015, and two in 2016. The Fed also forecasts GDP growth between 2.2% and 2.7% this year, an unemployment rate between 8.2% and 8.5% and PCE inflation between 1.4% and 1.8%; the growth forecast is down from November levels, as are the jobless and inflation views. The Fed sees longer-term rates reaching between 4% and 4.5%.

30-year mortgage rate at record low 3.88%

By Ruth Mantell

WASHINGTON (MarketWatch) - The average rate on the 30-year fixed-rate mortgage ticked down to a record low of 3.88% in the week ended Jan. 19 from 3.89% in the prior week, Freddie Mac said Thursday in its weekly report. These data go back to 1971. A year ago, the 30-year rate was at 4.74%. "Mortgage rates were nearly unchanged this holiday week" amid mixed economic reports, said Frank Nothaft, Freddie's chief economist, in a statement. To obtain the latest rate, payment of an average 0.8 point was required, according to Freddie, a buyer of residential mortgages. A point is 1% of the mortgage amount, charged in prepaid interest. The 15-year fixed-rate mortgage ticked higher to 3.17% in the latest week from a record low of 3.16% in the prior week. These data go back to 1991. Meanwhile, the average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage remained at 2.82%, matching the record low set in the prior week. These data go back to 2005. The 1-year Treasury-indexed ARM fell to a record low of 2.74% from 2.76%. These data go back to 1984.

30-year mortgage rate at record low 3.89%

30-year mortgage rate at record low 3.89%

By Ruth Mantell

WASHINGTON (MarketWatch) -- Mortgage rates have hit record lows, Freddie Mac said Thursday in its weekly report on these rates, following "mixed" labor-market indicators. The average rate on the 30-year fixed-rate mortgage fell to a record low of 3.89% in the week ended Jan. 12, compared with 3.91% in the prior week, according to Freddie, a buyer of residential mortgages. These data go back to 1971. A year ago, the 30-year rate was at 4.71%. "Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated," said Frank Nothaft, Freddie's chief economist, in a statement. To obtain the latest rate, payment of an average 0.7 point was required. A point is 1% of the mortgage amount, charged in prepaid interest. The 15-year fixed-rate mortgage fell to a record low of 3.16% in the latest week from 3.23% in the prior week. These data go back to 1991. Meanwhile, the average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage declined to a record low of 2.82% from 2.86%. These data go back to 2005. The 1-year Treasury-indexed ARM fell to a record low of 2.76% from 2.80%. These data go back to 1984.

30-year fixed-rate mortgage at record low

Jan. 5, 2012, 10:34 a.m. EST

30-year fixed-rate mortgage at record low

Housing market showing signs of improvement, economist says

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Rates on 30-year fixed-rate mortgages matched a record low this week, after recent reports indicated the housing market and manufacturing industry are showing improvement, Freddie Mac’s chief economist said on Thursday.

The mortgage averaged 3.91% for the week ending Jan. 5, down from 3.95% last week and 4.77% a year ago, according to Freddie Mac’s weekly survey of conforming mortgage rates. This is the fifth week in a row that the mortgage has averaged below 4%.

Fifteen-year fixed-rate mortgages averaged 3.23% this week, down from 3.24% last week and 4.13% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.86%, down from 2.88% last week and 3.75% a year ago.

But 1-year Treasury-indexed ARMs rose, averaging 2.8% this week, up from 2.78% last week. The ARM averaged 3.24% a year ago.

To obtain the rates, the fixed-rate mortgages required an average 0.8 point, the 5-year ARM required an average 0.7 point and the 1-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

“Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release.

Pending existing home sales rose 7.3% in November, while construction spending rose 1.2% in November.  “Similarly, manufacturing expanded in December at the fastest pace in six months,” Nothaft said.

§ 

Central bank set to change “mid-2013” guidepost on keeping rates low

Jan. 3, 2012, 2:04 p.m. EST

Fed to map out each member’s rate forecast

Central bank set to change “mid-2013” guidepost on keeping rates low

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — The Federal Reserve has decided to shift its communication strategy to show the likely path of interest rates, according to minutes of its December 13 meeting released Tuesday.

Starting in January, the Fed will release each Federal Open Market Committee member’s individual forecasts of the appropriate level on the target federal funds rate in the fourth quarter of the current year and the new few years.

At the same time, the Fed will report when each official thinks the Fed will hike rates for the first time.

The shift in the communications strategy is designed to give more clarity to financial markets about when the Fed thinks it will tighten policy.

Fed watchers noted that there have been several instances over the past few years when the markets became convinced prematurely that a rate hike was in the offing. The resulting higher rates served only to dampen the recovery.

The Fed is still working on a statement of longer-run policy goals, the minutes showed. This could include a move to a more informal inflation target.

Federal Reserve Chairman Ben Bernanke encouraged a communications subcommittee to have a new statement ready for the FOMC to consider at its next meeting on Jan. 24-25.

In their discussion of current policy, a number of Fed officials backed more easing steps while only a few objected. The Fed members said they were likely to soon alter language about the central bank keeping rates at ultra-low levels through the middle of 2013.

Financial market uneasiness due to the European debt crisis was seen as a key downside risk to the outlook, the minutes showed.

The Fed staff trimmed its growth outlook due to developments in Europe, the minutes showed.

Mortgage rates breaking records again

Demand for purchase loans still off from last year

By Inman News, Thursday, December 22, 2011.

Inman News®

Mortgage rates surveyed by Freddie Mac hit new lows this week, but low rates alone may not be enough to spur homebuyer demand, a separate survey by the Mortgage Bankers Association suggests.
Freddie Mac's Primary Mortgage Market Survey showed rates on 30-year fixed-rate mortgages averaging 3.91 percent with an average 0.7 point for the week ending Dec. 22, down from 3.94 percent last week and 4.81 percent a year ago.
Rates on 15-year fixed-rate mortgages averaged 3.21 percent with an average 0.8 point, unchanged from last week's record low but down from 4.15 percent a year ago.
For five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.85 percent with an average 0.6 point, down from 2.86 percent last week and 3.75 percent a year ago.
Rates on one-year Treasury-indexed ARM loans averaged 2.77 percent with an average 0.6 point, down from 2.81 percent last week and 3.4 percent a year ago.
Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and are almost 0.9 percentage points below where they were at the beginning of the year, said Freddie Mac chief economist Frank Nothaft. That translates into $1,200 in annual savings for a homebuyer taking out a $200,000 mortgage.

Looking back a week, the Mortgage Bankers Association's Weekly Mortgage Applications Survey showed demand for purchase loans was down 7.5 percent during the week ending Dec. 16, and off 6.9 percent from a year ago.
"Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market," Michael Fratantoni, the MBA's vice president of research and economics, said in a statement.
Looking back a month, the National Association of Realtors said Wednesday that existing-home sales increased by 4 percent from October to November, to a seasonally adjusted annual rate of 4.42 million homes. That's a 12.2 percent increase from a year ago, when existing homes were selling at a pace of 3.94 million a year.

5 tips to help your home sell quickly

Check out this link

http://realestate.msn.com/5-tips-to-help-your-home-sell-quickly

Glendora Overnight Parking Exemption for the Holidays

Glendora Overnight Parking Exemption for the Holidays

The Glendora Police Department will not be enforcing overnight parking on Monday, December 19^th thru Monday, January 2^nd for the Christmas and New Year’s Holidays. Enforcement will resume on Tuesday, January 3^rd at 2:00 a.m.

Pending home sales rose 10.4% in October

By Ruth Mantell

WASHINGTON (MarketWatch) -- Pending home sales rose 10.4% in October, hitting 93.3 on an index released Wednesday by the National Association of Realtors. "We hope this indicates more buyers are taking advantage of the excellent affordability conditions," said Lawrence Yun, NAR's chief economist, in a statement. An index reading of 100 is equal to the average level of contract activity during 2001. A sale is listed as pending when the contract has been signed but the transaction has not closed. Not all contracts lead to closings. By region, October pending home sales rose 24.1% in the Midwest, 17.7% in the Northeast and 8.6% in the South. In the West pending sales fell 0.3%. Nationally, pending sales are up 9.2% from last year.

Sales of new single-family U.S. homes rose 1.3% in October

By Jeffry Bartash

WASHINGTON (MarketWatch) - Sales of new single-family U.S. homes rose 1.3% in October to an annual rate of 307,000, the government reported Monday. Sales in September were revised down to 303,000 from an original reading of 313,000, according to data from the Census Bureau and Housing Department. Economists surveyed by MarketWatch had expected new home sales to climb to an annual rate of 320,000 on a seasonally adjusted basis. The median sales price fell $1,000 to $212,300. The supply of new homes on the market dropped slightly to 6.3 months. Sales of new homes are 8.9% higher compared to one year ago, but the housing market remains mired in its worst slump in modern times.

Foreclosure starts rise, delinquencies drop: MBA

Mortgage Bankers Association (MBA) posted their third quarter report on mortgages entering foreclosure and the delinquency rate.  The foreclosure process rose in the third quarter of this year while the seasonally adjusted delinquency rate dropped to its lowest level since 2008.
See the article below. Have a great day! Call me for any of your real estate needs.

Maureen Haney

By Amy Hoak

CHICAGO (MarketWatch) -- The percentage of mortgages entering the foreclosure process rose in the third quarter, while the seasonally adjusted delinquency rate dropped to its lowest level since 2008, according to the Mortgage Bankers Association's National Delinquency Survey, released on Thursday. The foreclosure-start rate rose to 1.08% of all mortgages for one- to four-unit residential properties in the third quarter, up from 0.96% in the second quarter, yet down from 1.34% a year ago, according to the report. Meanwhile, the seasonally adjusted delinquency rate fell to 7.99% in the third quarter, down from 8.44% in the second quarter and 9.13% a year earlier. "While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet and that the issues continue to vary by geography," said Michael Fratantoni, MBA's vice president of research and economics, in a news release.

Please Stop by & see us!

   

Village Holiday Stroll

Friday November 18, 2011

6:00 PM to 9:00 PM

Coldwell Banker Millennium

Maureen Haney

134 North Glendora Avenue, Glendora

Please bring a new unwrapped toy to the

Coldwell Banker Millennium office

Some of the Nights Events in the Village:

· The Tree Lighting Ceremony will start at 6:30 PM in the Plaza and will include the Mayor & City Council Members reading the story of Christmas

· Santa will arrive at the Plaza in a vintage Fire Truck at approximately 6:45 to 7:00 PM. and will be available to visit with the children from his “Easy Chair”

· The GHS Choirs-Royal Stewarts & Silhouettes-will entertain in the Plaza from 7:00 to 9:00 PM

· There will be two Dickens’ groups in period attire roaming the street for the entire evening.

Please stop by Coldwell Banker Millennium

30-year mortgage falls below 4% again Rates on adjustable-rate mortgages up in latest survey: Freddie Mac

Nov. 10, 2011, 10:52 a.m. EST

30-year mortgage falls below 4% again

Rates on adjustable-rate mortgages up in latest survey: Freddie Mac

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Average rates on 30-year fixed-rate mortgages fell below 4% for the second time this year, according to Freddie Mac’s latest survey of conforming mortgage rates.

Rates on the 30-year mortgage averaged 3.99% for the week ending Nov. 10, down from 4% last week and 4.17% a year ago, McLean, Va.-based Freddie Mac said Thursday.

Rates on 15-year fixed-rate mortgages also dropped slightly, averaging 3.3% this week, down from 3.31% last week and 3.57% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.98% this week, up slightly from 2.96% last week. The ARM averaged 3.25% a year ago.

And 1-year Treasury-indexed ARMs averaged 2.95% this week, up from 2.88% last week. The ARM averaged 3.26% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 of a point, the 15-year fixed-rate mortgage required an average 0.8 point and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

“Fixed mortgage rates were little changed this week amid a mix of economic data reports,” said Freddie Mac chief economist Frank Nothaft in a news release.

“The economy added 80,000 net jobs in October, below the market consensus forecast, but employment gains over the prior two months were revised up by 102,000 and the unemployment rate fell to 9%, the lowest in six months. Factory orders improved in September, yet the expansion in the service industry slowed in October,” he said.

Low home prices and mortgage rates have kept affordability high, Nothaft said, adding that the National Association of Realtors’ housing affordability index in September hit its third highest reading on record. 

Nov. 8, 2011, 12:00 a.m. EST

The great $26 billion real estate swindle

Commentary: Pity anyone who took the tax credit to buy a house

By Brett Arends, MarketWatch

BOSTON (MarketWatch) — Call it the Great Rock & Roll Real Estate Swindle. Call it a $26 billion Bait & Switch. Call it the Mother of All Boondoggles.

Call it whatever you want.
But as foreclosures surge again and house prices continue to slide, new data out Monday reveals more of the grim verdict on the $26 billion federal program in 2009 and 2010 to offer tax credits to home buyers.
You may remember that between the spring of 2009 and September 2010 the government handed out credits of up to $8,000 to induce people to buy a new home. It was supposed to gee up the housing market.
How’d that work out?

 Gap between younger and older Americans widening

Mean Street host Evan Newmark leads a discussion with FINS reporter Julie Steinberg and WSJ's Emily Glazer about the wealth gap between the young and old and how younger people can help bridge the gap. Photo: REUTERS/Lee Jae-Won

Zillow.com, the real estate information company, says the average price of an American home fell again last month to $171,500 — the lowest level in eight years. That’s down 4.4% from a year ago, although it’s been about stable over the summer.
Now compare the average prices with those that people paid in 2009 and 2010, when they took advantage of the credits.
According to Zillow, prices during that time averaged about $186,000.
In other words, based at least on average prices, you’ve lost about $14,500 — nearly twice the value of the credit. Stan Humphries, Zillow’s chief economist, says the credits, effectively expired in June 2010, when prices nationwide averaged $182,000. Since then we’re down $10,500.
The biggest losers? Step forward all those who took up Uncle Sam’s $8,000 bribe and rushed out to buy a new home in Santa Barbara, Calif. You have already lost $50,000 of your $440,000 investment. And that’s even counting the $8,000 bribe!
Others who are already down more than $30,000 include home buyers in places like San Francisco, Seattle, Flagstaff, Ariz., and anyone who bought down the road from the underground bunker of MarketWatch’s own Paul “The Road” Farrell in San Luis Obispo, Calif.
Oh, and check out Carson City, Nev. The typical homes only cost about $190,000, and even after counting the $8,000 credit you’re already down $8,000.
The IRS says the entire program cost taxpayers $26 billion (though of course it was put on the national credit card, on which interest rates are very low). That money has vanished. It has, as the saying goes, “gone to money heaven.”
Zillow tracks prices closely in 157 cities and major towns around the country. Humphries says that in 110 of those, prices today are more than $8,000 lower than they were in June 2010.
The picture is even worse when you compare prices today with the average for the entire year-and-a-half that the credits were in place. By that measure, prices have fallen by more than $8,000 in about 130 cities and towns.
But look on the bright side. Home buyers in about two dozen metro areas have kept at least some of the $8,000. And in a few — six, to be precise — the market is actually up overall.
Leading the pack? Three cheers for Honolulu. Average prices have risen about $4,500 since the period when the tax credits were being handed out — meaning potential profits on your new home near Diamond Head of maybe $12,500 overall.
If that doesn’t count as a success, I don’t know what does.

Real Estate Outlook: Pending Sales Decline

There was a glimmer of hope in this article, "The West fared the best in pending sales for September". Have a great day, Maureen Real Estate Outlook: Pending Sales Decline
by Carla Hill

Pending homes sale declined in September, down 4.6 percent from the month prior. Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained. “A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” he said. The current rate of pending sales is 6.4 percent higher, though, than September of 2010. The largest decline was seen in the Midwest, which fell 6.2 percent for the month. The South and Northeast were a close second and third, falling 5.5 and 4.7, respectively. The West fared the best in pending sales for September, declining only 2.1 percent. Why the declines at all? "America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates,” Yun said. “The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates.” Yun noted the need for higher loan limits. The numbers aren't helped either by the recent declines in consumer confidence. The Conference Board Consumer Confidence Index® reports that while confidence had risen slightly in September, it declined once again in October. It is now at levels seen during the 2008-2009 recession. Says Lynn Franco, Director of The Conference Board Consumer Research Center, "Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased. Consumers' assessment of present-day conditions did not fare any better. The Present Situation Index posted its sixth consecutive monthly decline, as pessimism about the current economic environment continues to grow." Even more pessimistic was consumer's view of the jobs market. According to the Index, "Those anticipating more jobs in the months ahead edged down to 11.3 percent from 11.9 percent, while those expecting fewer jobs decreased to 27.4 percent from 28.6 percent. The proportion of consumers anticipating an increase in their incomes declined to 10.3 percent from 13.5 percent." The remodeling industry has also seen a decline, according to the most recent National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). "Remodelers report that while many consumers show interest in having remodeling work done, they are slow to commit to projects,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo. “Consumers are in a ‘wait and see’ mode with regard to current economic conditions.” All three components used to access the market decreased in the third quarter, including major additions, minor addition, and maintenance and repair. Regionally, there is a silver lining to this report, as the Midwest and South both posted remodeling gains.