home buying information center

LendingTree Mortgage
Get up to 4 Mortgage Offers. When Banks Compete, You Win!

home buyers information center

August, 2006 Newsletter

Introduction: Both Existing and New Home Sales Fall
Mortgage Rate Update: Rates Decline
This Month's Tip: Choosing A Neighborhood

Introduction: Both Existing and New Home Sales Fall

Existing-home sales were down modestly in June, and home prices were up slightly
from a year ago, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and
co-ops – declined 1.3 percent to a seasonally adjusted annual rate of 6.62 million
units in June from an upwardly revised level of 6.71 million May. Last month’s sales
were 8.9 percent below the 7.27 million-unit pace in June 2005.

David Lereah, NAR’s chief economist, said the housing market is flattening-out.
“Over the last three months home sales have held in a narrow range, easing to a
level that is near our annual projection, which tells us the market is stabilizing,”
he said. “At the same time, sellers have recognized that they need to be more
competitive in their pricing given the rise in housing inventories. Home prices
are only a little higher than a year ago.”

The national median existing-home price for all housing types was $231,000
in June, up 0.9 percent from June 2005 when the median was $229,000. The
median is a typical market price where half of the homes sold for more and
half sold for less.

“The change in price performance is directly tied to housing inventories –
a year ago we had a lean supply of homes and a sellers’ market, with
monthly home sales at an all-time record high,” Lereah said.

Total housing inventory levels rose 3.8 percent at the end of June to 3.73
million existing homes available for sale, which represents a 6.8-month
supply at the current sales pace. By contrast, in June 2005, there was a
tight 4.4-month supply on the market.

In new home sales, sales of new one-family houses in June 2006 were at
a seasonally adjusted annual rate of 1,131,000, according to estimates
released jointly on July 27th by the U.S. Census Bureau and the Department
of Housing and Urban Development. This is 3.0 percent (±12.0%) below the
revised May rate of 1,166,000 and is 11.1 percent (±9.8%)
below the June 2005 estimate of 1,272,000.

The median sales price of new houses sold in June 2006 was $231,300;
the average sales price was $290,600. The seasonally adjusted estimate
of new houses for sale at the end of June was 566,000. This represents a supply
of 6.1 months at the current sales rate.

It appears that things are definitely slowing a bit and prices seem to be
stabilizing. It bears watching to see if this trend picks up steam as we
go through the summer and into the fall.


Mortgage Rate Update: Rates Decline

During the month of July, most mortgage rates declined for the
period. 30-year fixed-rate mortgages averaged 6.72% in the period that ended
January 27th, according to mortgage company Freddie Mac. 30-year
rates began the month of July with an average of 6.79%. 15-year
fixed-rate mortgages began the month at an average of 6.44% and ended
the month at an average of 6.34%. Although we have seen a fairly large
increase in rates during calendar year 2006 (from a low of 6.10% on the
30-year side in January), rates are still relatively low in the longer term
historic picture.

Looking at the past is easy. Trying to look into the future is a good deal
more difficult. Economic activity does appear to be slowing somewhat,
though, and generally this equates to rising bond prices (and lower yields)
which may mean mortgage rates stabilize or fall a bit in the coming months.
It probably would be a good idea to keep a little closer watch on rates than
you might in a more stable environment.

For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section

Sponsor: HomeGain

Looking for a Real Estate Agent?
HomeGain makes finding and
selecting an Agent in your area fast and simple! You can:

*Compare a selection of top-performing agents from brand-name,
local brokerages

*Get the facts on prospective agents' backgrounds, experience,
local sales, commission rates, and more.

*Remain anonymous throughout your agent search (no sales pressure!)

More information


This Month's Tip: Choosing A Neighborhood

Before you can think about decorating or landscaping, before you even
think about a specific house, you will probably need to consider, compare
and choose a neighborhood. Since so much is dependent on the choice of
where you want to live--not the least of which is future resale value--
it is a decision you'll not want to take lightly.

Choosing a neighborhood means determining and comparing a number of factors
and amenities, including:

+ Schools
+ Proximity to shopping and services
+ Available recreation
+ Traffic patterns
+ Health care
+ Future development

Some of these factors will have more emphasis than others, depending on your
personal situation. Parents, for example, will most likely be most concerned
with the issue of schools. An active couple may put emphasis on the types
and extent of recreation that is available. Older buyers may have concerns
regarding access to hospitals and health care. Your first step in choosing
a neighborhood should be an assessment of which of these factors--or others--
are the most important to you.


Due to a number of factors including tax rates, expenditures, physical school
facilities and more, the quality of school districts can vary greatly. Even
within a particular school district, there can be considerable difference
between the highest rated school and the lowest. All things being equal,
most parents will want to gravitate to neighborhoods that offer the best
schools but are within their price range.

Proximity to shopping and services

This is not automatically a positive. Although many home buyers will prefer
to be close to a wide variety of shopping availability, others will prefer
to be further away from extensive shopping areas, largely due to the next

Traffic patterns

Some of us are not that bothered by traffic (otherwise 90 minute commutes
would not exist). For others, though, traffic simply drives them bonkers.
Obviously, if you are one of the traffic-adverse, this factor will have
a pretty big impact on your selection of a neighborhood.

Health Care

Although all of us, given our druthers, would probably prefer easy access
to health care facilities, as we age this factor increases in importance.
Not only for the convenience of, for example, doctor's offices and
clinics, but also for the proximity of emergency health care.

Future development

If a neighborhood is an area that is near future development, this is a
factor that can be perceived either as a positive or a negative, depending
on your outlook. Positive if the future development trends bring added
services or add to your resale. Negative if the future development causes
congestion, overtaxes existing services or lowers resale values.

Summing Up

To make the most of your neighborhood decision, determine the factor or
factors that are of the most importance to you, then make the comparisons
you need to make an informed decision. Your Real Estate Agent, with data
and information at their disposal, should be able to assist you with these
comparisons. It is a good idea to make your comparisons before you begin
to look at individual homes. This will save you from "falling in love" with a house
that is in the wrong neighborhood for your needs.

Next Month's Tip: Developing a Mortgage Strategy


The Home Buying Checklist

Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched.
You can find the checklist

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month and good luck in all your endeavors!

The Team at the Home Buyer's Information Center

buy a home or rent a home?

your house buying checklist

to-do lists for home buyers

find a house

find a realtor

find a mortgage

house inspections

house buying research


LendingTree Mortgage


Get your FREE credit report and score!


Click here for Bargain.com!




 HOME | Your Checklist | To-Do Lists | Agents | Mortgages | Questions

| Find a Home | Inspections | Research | More Links | Bookstore