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January, 2004 Newsletter


+++++++++++ January 1, 2004 +++++++++++++++++++

CONTENTS:
Introduction: Both Existing and New Home Sales Slip Slightly
Mortgage Rate Update: Rates Slightly Lower for the Month
This Month's Tip: Finding a Home: Effective Techniques
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Introduction: Happy New Year to all and welcome to the
January edition of the Home Buyer's Newsletter, brought to
you by the Home Buyer's Information Center.
The Home Buyer's Information Center

Both existing home sales and new home sales dropped
slightly in the month of November, the second month
of declines in a row. Is this a turn-around in the
trend or just a two month decline? Only the upcoming
weeks and months will tell the tale. Most analysts believe
that sales will decline slightly in 2004, but still remain at
strong levels.

The market for existing single-family home sales slipped in
November from record sales levels in recent months but is
maintaining a historically high pace, according to the
National Association of Realtors®.

Existing-home sales declined 4.6 percent to a seasonally
adjusted annual rate of 6.06 million units in November
from a pace of 6.35 million units in October, and was the
fifth highest pace on record. Last month's sales activity
was 6.9 percent above the 5.67-million unit level in November
2002.

David Lereah, NAR's chief economist, said 2003 easily
will be the high-water mark for the housing sector.
"The last five months have been the strongest on record
for existing-home sales. Although sales in November were
off from recent peaks, last month's pace is a very respectable
number," he said. "The market is being driven by low interest
rates, a growing job market and a rising number of households.
We will continue to see strong sales going forward, with 2004
likely to be the second-best year on record."

As for new home sales, sales of new one-family houses in
November 2003 were at a seasonally adjusted annual rate
of 1,082,000, according to estimates released jointly on
December 24th by the U.S. Census Bureau and the U.S.
Department of Housing and Urban Development.
This is 2.4 percent (±10.7%) below the revised October
rate of 1,109,000, but is 5.9 percent (±13.8%) above the November
2002 estimate of 1,022,000.

The median sales price of new houses sold in November 2003
was $209,200; the average sales price was $274,400. The
seasonally adjusted estimate of new houses for sale at the
end of November was 363,000. This represents a supply of 4.1
months at the current sales rate.

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Mortgage Rate Update: Rates Slightly Lower for the Month

Mortgage rates declined slightly in the month of December, with
30-year fixed rates mortages averaging 5.85%, according to
mortgage company Freddie Mac. Rates at the end of November
averaged 5.89% for this type of mortgage. Likewise, 15-year
fixed rate mortages declined from an average of 5.22% to
5.13% in the same period.

Rates have varied very little over most of the last 6 months,
and many analysts believe that rates will be reasonably
stable over the next year, although most likely at a bit
higher rate than they are at the beginning of the year.
Much will be determined, however, as we advance through
the year and see what the level of sustainability of the current
economic recovery. This will do more to determine future
rates than almost any other factor.

For current average mortgage rates, see:
Mortgage Rates
For more information on mortgages, visit the Mortgage
Section at:
Mortgages

++++++++++++++++++++++++++++++++++++++++++++++
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++++++++++++++++++++++++++++++++++++++++++++++

This Month's Tip: Finding a Home: Effective
Techniques

For many homebuyers, one of the most daunting tasks
in the purchase of the home is the process of actually
FINDING a home. Without some effective techniques,
it can often seem more like a lot of wheel spinning
and wasted effort than time actually spent looking
at acceptable properties. Some time spent on
preparation and developing a plan, though, can
bring big rewards.

A Plan

Depending on the area in which you are interested,
there can be anywhere from just a handful to
thousands of homes available. If there are a number
of homes on the market, the first objective
should be to narrow those potential choices down to
a manageable number. Depending on your appetite for
home shopping (and your available time frame) this
may mean focusing on anywhere from a few homes to a
dozen or so. Unless you do some "pruning" to eliminate
much of what is available, your home buying process
will at least be frustrating but could actually be so
counter-productive that you might give up altogether.

As you develop a plan, it is first and foremost
important to remember that it really is NOT that
complicated. Although it will take some effort,
finding an acceptable home is not rocket science,
nor should it be fraught with the unnecessary tension
that so many homebuyers find themselves wrapped up
in. Next, remove the "dream house" notion. Some
buyers have the mistaken idea that there is only one
house that will meet all of their needs--and, as a
result, spend months (and sometimes years!) in the
relentless pursuit of their dream home. Not only is
this incredibly time consuming (and time wasting)
it can be an expensive proposition. As these buyers
go from house to house to house, continually finding
something that isn't "just right" housing prices
increase, interest rates may go up and they will have
missed the opportunity to be developing an equity
position.

Get Qualified for a Mortgage

Since the financial aspect is an extremely important
part of the home buying (and owning) process, it is
crucial to get a clear idea of what you can afford
as quickly as possible. You can accomplish this
either by having a mortgage lender pre-qualify you
or you can do it on your own by analyzing your
income and bills.

See a discussion on this topic on the site:
Mortgage Prequalification

Find Out What is Available

Once you have a general idea of your desired price
range, you will need to see what is available in
the area(s) in which you are interested. The
easiest way of accomplishing this, of course, is
to have an Agent do the searching for you. An
Agent will be able to develop a list of all active
properties that fall within your parameters. Do not
waste time looking at the homes magazines--much of
the information found there is too dated (the homes
are already sold or off the market) to be of much
value.

Narrow Your Choices

You can often narrow down your choices long before
you even begin to physically look at homes. Many
homes probably can be eliminated on the basis of
size (too big or too small), specific neighborhood,
exact price, even the style of the home. You will
not want to be too harsh, here, though, in eliminating
potential properties. Only remove those that will
obviously not fit your needs and wants.

Keep a Scorecard

Once you have focused your choices to a reasonable
number of available homes (which may be as few as a
couple to as many as a dozen) you will want to begin
the process of physically inspecting these homes.
A helpful tool at this point is a "scorecard" that
you can develop on each home. This will make your
comparisons much easier, especially when you see a
number of homes in the same day. A scorecard will
help you to recall, for example, which home had 3
bedrooms and 3 full baths or which one had the
large family room and small kitchen. Once you have
individual scorecards on each home, you can develop
a recap sheet which will list the important features
of all of the homes you have seen, making your
comparisons easy. You can find examples of both a
scorecard and a recap sheet on the site:

Scorecards and Recaps

Summing Up

Finding a home that will meet your wants and needs is not
as complicated a process as many people make it out to
be. If you don't overthink it (keep it simple!) and
are able to make comparisons based on your wants and
needs, as well as use the tools that are available, the
home finding process can actually be a very enjoyable
one!

Next Month's Topic: Avoiding Nasty (and Expensive!) Surprises

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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
here:
Home Buyer's 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 here:
Email Us
or access our feedback page at:
Home Buyers Information Center Feedback

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 your home buying process!

The Team at the Home Buyer's Information Center

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