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January, 2007 Newsletter

+++++++++++ January 1, 2007 +++++++++++++++++++

Introduction: Sales and Prices Fall From 2006
Mortgage Rate Update: Rates Up Slightly
This Month's Tip: Do Your Research

Introduction: A Happy New Year to all of our readers! Wishing all
a safe and prosperous 2007!

Both new and existing home sales saw slight increases from October
but both also so declines in both volume and prices from a year ago.

According to the National Association of Realtors®, sales in the month
of November were up 0.6% from October 2006 but were down 10.7% from
November 2005. Inventories were down slightly to a 7.3 month supply
at the current sales pace.

Prices were down from November 2005's national median price of $225,000
to November 2006's median price of $218,000, a drop of 3.1%.

On the new home side, sales of new one-family houses in November 2006
were at a seasonally adjusted annual rate of 1,047,000, according to estimates
released jointly on December 27 by the U.S. Census Bureau and the Department
of Housing and Urban Development. This is 3.4 percent (±12.9%) above
the revised October rate of 1,013,000, but is 15.3 percent (±13.1%) below the
November 2005 estimate of 1,236,000.

The median sales price of new houses sold in November 2006 was $251,700;
the average sales price was $294,900. The seasonally adjusted estimate
of new houses for sale at the end of November was 545,000. This
represents a supply of 6.3 months at the current sales rate.

Analysts are a bit torn over prospects for 2007 with some (mostly industry
analysts) calling for just a slight decline in sales activity and prices for the
year while others are predicting a more sizeable decline, due mainly to
the high rates of inventory in both new and resale properties (a 6 to
7 month supply at current sales rates). For buyers just entering the
market, it may make sense to make lots of comparisons since there are,
in most cases, plenty of homes to consider. As for pricing, you will want
the most up-to-date information available. Comparative sales from a
year ago, in most markets, are not going to give you an accurate picture
of current values.


Mortgage Rate Update: Rate Up Slightly

Mortgage rates ended year 2006 up slightly for the month of December.
30-year fixed-rate mortgages averaged 6.18% for the period ending
December 28th, after beginning the month at an average of 6.11%
according to mortgage company Freddie Mac. 15-year fixed-rate
mortgages showed a similar trend, up a bit from an average of 5.84%
at the beginning of the month to an average of 5.93% at month's

For the year, we saw both increases and declines as rates rose
mid-year and then dropped in the final quarter. For the year, 30-year
fixed-rate averages began at 6.21% and ended at 6.18% showing
little change year to year. 15-year rates rose a bit more over the
year: 5.76% in January 2006 and 5.93% in December.

For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section

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This Month's Tip: Do Your Research

Most people would never even consider the purchase of a relatively
inexpensive item, such as a television, without first doing some
basic research. It is amazing, then, to see the number of people
who embark on the biggest purchase of their life (and the purchase
that can cause the most joy or grief)--their home--with little or
no research. Although the research process is not overly simple,
it is not that overwhelming that it should be avoided. And, it
is incredibly important to your overall satisfaction with your
new home!

Since there are so many components of the home buying process,
you will need to organize yourself a bit to determine what
research and investigation will need to be done, and when you
will need to do it. The most important research, and the general
order of doing it, will include:

+ Mortgage choices
+ Real Estate Agents
+ Home Pricing--CMA--Comparative Market Analyses
+ Inspectors and inspections
+ Closing Agents
+ Insurance

Mortgage Choices

Since one of your first priorities should be pre-approval for
a mortgage (before you've even looked at the first house) you'll
need to make some comparisons of the types of mortgages available
as well as the various terms you can choose and different loan
providers (banks, savings and loans, brokers).
You will find
a complete discussion on this subject, as well as numerous resources
available here

Real Estate Agents

Picking the right Agent for your needs and wants can be a huge
time and aggravation saver. Picking the wrong Agent for your situation
can turn the house hunting and buying process into a potential
nightmare. In addition, the right Agent should be able to assist
you with additional research--for example, a CMA (Comparative Market
Analysis) which is the next point of research. In addition, a good
Agent can point you in the right direction for other services, such
as inspectors, insurance and the like.
See more information on
selecting an Agent


This is an extremely important part of your research process, since
it will do much to ensure that you are paying the right amount for
a property. A CMA is a comparative tool that takes into account the
current listing and sales prices for properties in the neighborhoods
in which you are interested. With this information in hand, you
should be able to determine fairly accurately at what price an
individual property should sell.
More information on the site.

Inspectors and Inspections

Once you have chosen a particular home that fits your needs, it
is imperative that you have the property inspected by a professional.
This research is crucial since it may dislose a major defect or
highlight deferred maintenence that will need to be dealt with.
The $300-500 that you will probably spend on a professional home
inspector could save you thousands of dollars in the long run.
See more discussion here.

Closing Agents

Who will do the closing (the settlement) of your purchase will
vary from locality to locality, depending on what is customary
in your area. For example, in some areas an Attorney will be
required while in others, closings are typically done by title
companies. In any case, you will need to research and make
arrangements in advance for a closing agent to handle your
See more information on what typically occurs
at a closing or settlement here


Although there will not likely be huge differences in the price
or coverage of Homeowner's Insurance, there will be variables,
so you will want to make some comparisons of what is available and
at what cost. Start with the Insurance Agent that you already
have--whether for auto, renters or other insurance--and compare
from that point. You will want to compare the insurance company
reputation as well as coverage, deductible amount as well as
the annual cost.

Summing Up

Taken a small bite at a time, the research you will need to do
for your home purchase should not be overwhelming. Ignoring
the research you need, though, can put you in a very
uncomfortable position.

Next Month's Tip: Prepare for Your Move


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

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