Home sales are set to keep marching upward this year after hitting their highest level in five years in 2012, economists say.
Existing-home sales for the full year rose 9.2 percent from 2011,
according to preliminary data, the National Association of Realtors
(NAR) reported Tuesday.
New home sales, which will be reported Friday, have also been improving.
Housing is finally contributing to the economy's growth instead of
pulling it down, Moody's Analytics chief economist Mark Zandi says.
He expects housing to contribute a fifth of the economy's growth this
year. In 2009, it subtracted more than 1 percentage point from GDP
growth, he says.
Housing has historically led the U.S. economy out of recessions.
Now that housing appears to be mending, with prices rising and more new construction, "the recovery
will start to feel more normal," says David Crowe, chief economist for the National Association of Home Builders.
New home sales are especially important to the economy because buyers
spend money on other items, such as furnishings, appliances and
landscaping.
Rising home values also increase household wealth.
December's existing-home sales, down 1 percent from November to a
seasonally adjusted annual rate of 4.94 million, were almost 13 percent
higher than a year earlier, the NAR says.
Last month's numbers
were weaker than expected, but "the trend is still up," says Liz Ann
Sonders, Charles Schwab chief investment strategist.
Home sales - and prices - are being driven higher by:
• Low interest rates. Average interest rates for 30-year-fixed loans have been below 4 percent for the past 14
months, Freddie Mac data show.
• Job growth. The unemployment
rate stood at 7.8 percent in December, down from its peak of 10 percent
in fall 2010. A better job market is helping more people move out of
friends' and relatives' homes into their own. Net household formations
topped 1 million in each of the past two years, Sonders says. That's
more than twice the level of 2009 and 2010.
Not all economists
see brighter days ahead for housing, given what market researcher
CoreLogic says was a 7.4 percent jump in home prices in November from a
year earlier.
Higher taxes and cuts in government spending,
along with still-tepid job growth, will weigh on the market this year,
says Steven Ricchiuto, chief economist for Mizuho Securities.
"You've probably already seen the best of the housing recovery," he says.
Written by,
Julie Schmit
USA Today
Wednesday, February 20, 2013
Seven ways to build up your credit score to be eligible for the best interest rates.
Credit score requirements for loans are higher than they have been in
the past, so a good credit score is more crucial than ever. In today's
economy most lenders are looking for credit scores of 720 or higher to
secure a low mortgage rate. Here are seven ways to build up your credit
score so you can enjoy the best interest rates available.
- Request your credit reports and assess the situation. Credit bureaus (www.experian.com, www.transusion.com, www.equifax.com) are required to provide you with a free credit report every year. Nationwide consumer reporting companies get their information from different sources, the data in your report from one company may not reflect the same data in your reports from the other two companies, so request all three.
- Check to verify all of the information is correct. If there are any errors, contact the bureaus immediately.
- Your payment history accounts for 35% of your score, so make sure payments are on time every month.
- The amount owed is 30% of your score. A good rule is to use less than 10% of your credit available on each individual card.
- The length of your credit history accounts for 15%, so maintain your accounts instead of closing them. You are not penalized for available credit.
- New credit is 10% of your score and every time you apply for credit an inquiry is added to your report, which drops your score.
- Types of credit used accounts for 10%. Installment loans like vehicle and personal loans demonstrate you can manage various long and short-term credits.
Home selling season isn't waiting until spring this year
There are indications of an unusually early start to the 2013 season as
buyers rush to get off the sidelines before home prices and mortgage
rates go higher.
WASHINGTON - Could we be looking at an early spring this year - not in meteorological terms but real estate? Could the chilly December-to-February months, which traditionally see fewer buyers out shopping for houses compared with the warmer months that follow, be more active than usual? And if so, what does this mean to you as a potential home seller or buyer?
There is growing evidence, anecdotal and statistical, that there are more shoppers on the prowl in many parts of the country than is customary for this time of year, more people requesting "preapproval" letters from mortgage companies, more people visiting websites offering homes for sale and more people telling pollsters that they expect home prices to continue rising and that the worst of the housing downturn is long past. There is even data showing that during holiday-distracted December, there was a jump in visits to homes listed for sale.
Coldwell Banker, one of the largest brokerages in the country, says traffic to its listings website was up 38% during the last month, compared with year-earlier levels. ZipRealty, an online brokerage based in Emeryville, Calif., reports that its website has seen an unusual 33% increase in home shoppers in the first half of January compared with December.
Redfin, a Seattle brokerage, found that during the week of Dec. 30, shoppers requesting home tours by agents jumped 26% over the four-week average, and 9% compared with the same week the year before.
Economists at the National Assn. of Realtors report that foot traffic at houses listed for sale in well over half of all markets around the country was higher in December than the year before. Given the strong December reading, says Paul C. Bishop, vice president for research at the association, sales in the coming weeks should be "robust."
Even in markets that typically hibernate until the snow melts, there are indications of an unusually early start to the 2013 season. Joe Petrowsky, president of Right Trac Financing Group, a mortgage company near Hartford, Conn., says he has received a much higher volume of requests for "preapproval" letters - which tell sellers that a purchaser is qualified for a mortgage loan - compared with what's typical at this time of year.
"I'm seeing twice as many buyers this January as last January," Petrowsky said. "People have finally figured out that prices are moving up, interest rates are really low, and they don't want to miss out on the opportunity."
In the Washington, D.C., area, Long & Foster Real Estate, the country's largest independent broker, reports strong "signs that we are going to have an early spring" in terms of home sales. In an unusual occurrence for January, according to Steve Wydler, a Long & Foster agent in Northern Virginia, "multiple offer situations are becoming increasingly common, with prices being escalated above asking price."
Gretchen Castorina, an agent with brokerage firm Allen Tate in Chapel Hill, N.C., says "spring started last month" in terms of new clients and multiple-bid competitions. Even in the dark final days of December, Castorina says she was busy. "I was showing houses on Dec. 31," she said, and had written a contract for buyers just before Christmas.
Jo Ann Poole, an agent with Simi Valley Real Estate, says that for a variety of reasons, "in the last 10 days people have figured it out" and are making real estate moves that might have normally been pushed back into the spring months.
Polling by Fannie Mae, the government-backed mortgage investor, may shed some light on what's motivating buyers. In a survey of 1,002 adults in December, Fannie found the highest share of consumers in the survey's 21/2-year history who expect home prices to rise during the coming 12 months. Forty-three percent expect mortgage rates to jump, and 49% believe that the cost of renting will increase.
Roll all this together, says Doug Duncan, Fannie's chief economist, and you can see why consumer sentiment "could incentivize those waiting on the sidelines... to buy a home sooner rather than later" - pushing spring behavior into midwinter.
What's missing from this equation? More owners listing their homes for sale. Inventories of available homes are down in most markets, mainly because many sellers are under the impression that it's still a buyer's market filled with low-ballers who won't pay them a fair price. In many parts of the country, that is last year's news. In 2013, it's simply no longer the case.
Written by,
Kenneth Harney
WASHINGTON - Could we be looking at an early spring this year - not in meteorological terms but real estate? Could the chilly December-to-February months, which traditionally see fewer buyers out shopping for houses compared with the warmer months that follow, be more active than usual? And if so, what does this mean to you as a potential home seller or buyer?
There is growing evidence, anecdotal and statistical, that there are more shoppers on the prowl in many parts of the country than is customary for this time of year, more people requesting "preapproval" letters from mortgage companies, more people visiting websites offering homes for sale and more people telling pollsters that they expect home prices to continue rising and that the worst of the housing downturn is long past. There is even data showing that during holiday-distracted December, there was a jump in visits to homes listed for sale.
Coldwell Banker, one of the largest brokerages in the country, says traffic to its listings website was up 38% during the last month, compared with year-earlier levels. ZipRealty, an online brokerage based in Emeryville, Calif., reports that its website has seen an unusual 33% increase in home shoppers in the first half of January compared with December.
Redfin, a Seattle brokerage, found that during the week of Dec. 30, shoppers requesting home tours by agents jumped 26% over the four-week average, and 9% compared with the same week the year before.
Economists at the National Assn. of Realtors report that foot traffic at houses listed for sale in well over half of all markets around the country was higher in December than the year before. Given the strong December reading, says Paul C. Bishop, vice president for research at the association, sales in the coming weeks should be "robust."
Even in markets that typically hibernate until the snow melts, there are indications of an unusually early start to the 2013 season. Joe Petrowsky, president of Right Trac Financing Group, a mortgage company near Hartford, Conn., says he has received a much higher volume of requests for "preapproval" letters - which tell sellers that a purchaser is qualified for a mortgage loan - compared with what's typical at this time of year.
"I'm seeing twice as many buyers this January as last January," Petrowsky said. "People have finally figured out that prices are moving up, interest rates are really low, and they don't want to miss out on the opportunity."
In the Washington, D.C., area, Long & Foster Real Estate, the country's largest independent broker, reports strong "signs that we are going to have an early spring" in terms of home sales. In an unusual occurrence for January, according to Steve Wydler, a Long & Foster agent in Northern Virginia, "multiple offer situations are becoming increasingly common, with prices being escalated above asking price."
Gretchen Castorina, an agent with brokerage firm Allen Tate in Chapel Hill, N.C., says "spring started last month" in terms of new clients and multiple-bid competitions. Even in the dark final days of December, Castorina says she was busy. "I was showing houses on Dec. 31," she said, and had written a contract for buyers just before Christmas.
Jo Ann Poole, an agent with Simi Valley Real Estate, says that for a variety of reasons, "in the last 10 days people have figured it out" and are making real estate moves that might have normally been pushed back into the spring months.
Polling by Fannie Mae, the government-backed mortgage investor, may shed some light on what's motivating buyers. In a survey of 1,002 adults in December, Fannie found the highest share of consumers in the survey's 21/2-year history who expect home prices to rise during the coming 12 months. Forty-three percent expect mortgage rates to jump, and 49% believe that the cost of renting will increase.
Roll all this together, says Doug Duncan, Fannie's chief economist, and you can see why consumer sentiment "could incentivize those waiting on the sidelines... to buy a home sooner rather than later" - pushing spring behavior into midwinter.
What's missing from this equation? More owners listing their homes for sale. Inventories of available homes are down in most markets, mainly because many sellers are under the impression that it's still a buyer's market filled with low-ballers who won't pay them a fair price. In many parts of the country, that is last year's news. In 2013, it's simply no longer the case.
Written by,
Kenneth Harney
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