Home Prices Drop in May

A government report says U.S. home prices fell 4.8% in May from the same month last year.

The Office of Federal Housing Enterprise Oversight also says prices, on a seasonally adjusted basis, fell 0.3% from April to May. The index is down almost 5% from its peak in April of last year.

OFHEO oversees the government-sponsored mortgage-finance companies Fannie Mae and Freddie Mac.

The index is calculated using mortgage loans of $417,000 or less.

Home Prices Rise Four Straight Months - Is Anyone Listening?

Amidst the gloom on Wall Street about housing someone forgot to check the stats. The National Association of Realtors® has now reported four straight months of rising housing prices, but it seems no one is listening.

According to NAR statistics, the median home price has fallen from a high of $230,200 in July 2006 to a low in February 2008 at $195,600, a drop of 15%. Since February, however, it has risen steadily every month. By May the index had risen to $208,600, up $13,000 and a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen from a low of $242,000 also in February of this year to $253,100, a rise of $11,100 or 4.5%. It, too, has risen every month since February of this year.

So why the crisis? Why the continual gloom and doom reports? Is this the bottom?

No one can know for sure until we all look back and can clearly define where the bottom was, but the hard data is clear. The median price has risen four straight months. The average American is out there taking advantage of bargains in their local real estate market. They are not listening to Wall Street but following their own belief that the best time to buy is when no one else is, and they are out there buying. If this keeps up, February may prove to have been the low in prices.

What do you think? Have we passed the bottom of this mess? Use our comment link below to sound off and give us your opinion. Your email address will never be published here to protect your in-box from too much mail.

Foreclosures: 343,000 and Counting

The number of Americans losing their homes to foreclosure continued to soar in June, according to a report released recently.

RealtyTrac, an online marketer of foreclosed properties, reported that lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back.

During the first six months of 2008, 343,159 Americans lost their homes, up 136% from 145,696 recorded during the same period in 2007.

There was a shred of good news: When compared with May, filings declined 3%. Part of that decline may be traced to the actions of some states, including Maryland and Massachusetts, which have put moratoriums on foreclosures.

Adding to foreclosure woes is that home prices have been falling all year, down more than 14% in the first quarter, according to the latest figures from the S&P Case-Shiller Home Price Index.

Price declines strip homeowners of equity, making many mortgage borrowers owe more than their homes are worth. When they're underwater, they can't borrow against home equity to help out during a rough financial stretch.

Is foreclosure looming on your horizon? Check out this website. http://ForeclosureSurvival2008.com

The New Housing Stimulus Package

Even with Presidential veto threats looming, the housing stimulus package has taken another necessary step to being implemented – it has taken on another round of changes, passed the Senate, and is on its merry way to the White House again.

The package is much larger than our aforementioned Foreclosure Prevention Act – it goes by a few different aliases, all hoping to do the same thing – give the US economy the kick in the pants it needs.

Here are the highlights of the new package:

• We all know conventional and FHA loan limits have been raised through 2008. Currently set to expire on New Year’s Eve, the housing stimulus package includes plans to keep them higher than they were in years past – it’s likely to be somewhere around the $700,000 mark. This means lower rates on bigger loans.
• Tax credits for “first-time home buyers” – it’s in quotes for a reason. This group is defined to include actual first-time home buyers and buyers who have not owned a home for at least three years. The tax credit for those buyers can be up to $8,000.
• A property tax reduction for American homeowners—$500 for single filers and $1,000 for joint filers—for the 25+ million homeowners who pay property taxes, but choose not to itemize their deductions.
• What about homeowners already in distress? They’re covered, too – the FHA is working on programs, including FHA Secure, to assist homeowners currently behind on their mortgage and for those who currently owe more than their home is worth. It could help up to 400,000 homeowners potentially facing foreclosure.
• And for the lenders? Better disclosure with regards to the potential changes in mortgage payments during the loan’s lifetime. The information will need to be provided at least seven days before closing.

Those are just the high points of the housing stimulus package. While controversial, Congress has taken ample time to discuss, re-write and re-discuss the bill. It’s coming to the point of fruition – will President Bush sign or not? If he doesn’t, the fact remains that Congress could be so united in the housing stimulus package that they will override him.

What do you think? Will this package pass and get a signature from the President, or will he veto it in this election year? We'd love to hear your opinion. Just click the "comment" link below and tell us what you think. Don't worry, even though you need to insert your email address to post, that email address will not show up here on the site… and no one is going to contact you directly using your email address.. that's our promise! We'd love to hear from you.

Housing Rescue Pace Slows

Hope Now, the mortgage industry alliance of lenders, servicers and housing counselors, reported recently that it helped roughly 170,000 homeowners avoid foreclosure in the month of May. That's down 7% from the 183,000 loan workouts it reported for April.

The group estimates that its members have helped keep 1.7 million homeowners out of foreclosure since July 2007. Repayment plans are considered most effective for borrowers experiencing a temporary financial set back - such as a layoff - in which they fall behind on their mortgage payments.

Housing advocates contend that repayment plans are typically not sufficient to keep today's subprime borrowers in their homes because they don't reduce the borrower's delinquent debt - they simply give borrowers more time to repay their outstanding debt on top of their regular mortgage payments.

While the number of homeowners that Hope Now helped dipped 7% from April to May, the number of homes lost to foreclosure during that same period jumped 35% to 73,000, according to RealtyTrac. Foreclosure filings were up 7% in the same period. That's a trend foreclosure experts expect will continue for the next 18 months.