Hint of Housing Recovery (Based on Spring 2009)
Without being so bold to "Call the Housing Recovery", I will instead show you the data and say that "We are improving..."
Read more at www.Agent619.com: Hint of Housing Recovery
Many indicators are showing that the housing market is improving. Pending home sales, a forward-looking indicator based on signed contracts, rose in June for the fifth straight month. And in April, pending home sales had their biggest monthly jump since October 2001. Existing home sales rose 3.6% in June and 2.4% in May, with some homes receiving multiple offers. And the most recent Standard & Poor’s/Case-Shiller 20-city housing price index shows a month-to-month increase of 0.5% in housing prices in May. It is the first monthly gain since July 2006. This has led some industry experts to anticipate that the decline in housing prices will soon bottom out. Please remember that pricing reversals in San Diego County don't move overnight, but instead over a quick month or more than likely over a 4-6 month term.
Nationally, about one in three homes sold in June was a foreclosure or distressed sale, down from the 40% to 50% seen earlier in the year. This has dragged down the median price to $173,000, which is 16.8% below a year ago. The median price of an existing home has fallen 26% from the peak reached in July 2006. In south bay San Diego (East Chula Vista in particular) nearly 85% are either bank foreclosed homes or pre-foreclosure status (aka Short Sales).
In response to the troubled housing market, the Federal Reserve has moved aggressively to push down mortgage rates by buying as much as $1.75 trillion of housing debt and Treasuries this year. This policy has been successful. Rates on 15-year and 30-year fixed-rate mortgages are hovering at historic lows.
Homebuyers often fail to consider the savings that come with low interest rates, particularly over the life of the loan, or even the partial life of the loan. For example, on a 30-year fixed-rate loan amount of $200,000 at 5%, the interest paid over the life of the loan is $186,512. That brings the total loan payments to $386,512. At 6%, the amount of interest paid rises to $231,676, a 24% increase. At 7%, it’s $279,018, a 49% increase.
Let's have a talk about your options right now. If you're thinking about buying or trying to time the market bottom it will already be too late. Did I mention that any further price drops could be totally meaningless if your monthly payments increase by $300 or more if interest rates jump up like the financial experts predict? Again, let's just talk about options and you decide for yourself if you're ready.
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