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Page 15 of 15

Things a Buyer Should Know

Things a Buyer Should Know

This could be a lengthy list since there are so many things buyers should know.  Let’s focus briefly on one that is truly time-sensitive.  That’s the Home Buyers Tax Credit.  The credit applies both for first-time buyers and for move-up buyers.  There are of course, specific requirements that apply to either program (click to email me if you want more information on the specifics).

The most important part of the credit is the timing.  If you are planning to use the credit, you must have a fully accepted purchase contract no later than April 30 and you must close escrow by June 30, 2010.

There’s still time to accomplish this, but you will probably need to avoid certain types of properties in order to meet the deadlines.

What home sellers don’t tell buyers

As buyers ease back into the battered real-estate market, they’re often hitting a stumbling block:  Fibbing by home sellers.

To read the full story, please click here.

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Fewer homeowners see home values falling

Fewer homeowners see home values falling.  A recent report shows that one in five U.S. homeowners owed more on their mortgage than their home was worth in the fourth quarter; however, California’s housing market is bucking the national trend and is telling a different story.

  • Although the report by claims that the percentage of American single-family homes with mortgages in negative equity rose in the fourth quarter, the report does not account for seasonal changes. The traditional home-buying season is April through August. Historically, this time period also is when median home prices rise. In September, median home prices generally show a declining trend, and remain steady from November through February. The change in the median home price noted by is a typical year-end seasonality adjustment in price.
  • Unlike the national median home price, the month-over-month changes in California’s median home price for 2009 were stronger than the long-run average. Low interest rates and tax incentives led to a rise in the demand for housing. As a result, housing inventory was constrained and created upward pressure on home prices.
  • California’s housing market has shown signs of stabilization since early last year. Sales of existing, single-family homes bottomed out in August 2007, and the median home price reached its trough in February 2009. In December, California’s median home price was 25.1 percent above the low for the current cycle.
  • In December, the median price of an existing, single-family home rose to $306,820, an 8.4 percent rise year-over-year, the second consecutive year-over-year increase, and the 10th consecutive month-over-month increase, according to C.A.R.’s December sales and price report.
  • Although home buyers should not focus solely on future home price appreciation, homeowners who purchase a median-priced house, live in their home for at least five years, and sell it at the then current median price, have averaged an annual rate of return of more than 11 percent, according to data collected by C.A.R. over the last 40 years.
To read the full story, please click here
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Mortgage Rates Rise in Response to Wind-Down of Federal Support

2009 saw historically low mortgage rates.  Early last year, the Federal Reserve announced plans to purchase debt and mortgage-backed securities from Fannie Mae and Freddie Mac to lower interest rates for consumers and spur homebuying.  As a result, rates on 30-year, fixed mortgages fell to historic lows.

2010 rates are expected to rise because the Fed’s asset purchase program is scheduled to expire at the end of the first quarter of 2010, and a lack of private demand for mortgage-backed securities could lead to a rise in rates.

“No down payment” loans were very popular during the height of the boom.  For those types of loans, borrowers were not required to put down any money on a house to secure a mortgage.  “No down Payment” loans are now practically nonexistent.  Currently, most lenders require borrowers to put down at least 10 percent, if not more, to secure a loan.  Down payments definitely help protect the lender, but they may also be beneficial to buyers.  For example, the higher the down payment, the lower the loan amount, the lower the monthly payment and the lower the total interest over the life of the loan.

Stakes are high as government plans exit from mortgage markets
The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own.

To read the full story, please click here.

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