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July, 2005 Newsletter

+++++++++++ July 1, 2005 +++++++++++++++++++

Introduction: Existing Home Sales Near Record, New Sales Rise
PLUS Some Words to the Wise
Mortgage Rate Update:
This Month's Tip: Making Comparisons

Introduction:Welcome to the July edition of the Home Buyer's
Newsletter, brought to you by the
Home Buyer's Information Center.

Sales of existing homes were at the second highest pace on record in May
as mortgage interest rates continued to decline, according to the National
Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums
and co-ops – slipped 0.7 percent in May to a seasonally adjusted annual rate
of 7.13 million from a record of 7.18 million in April. Sales were 3.5 percent
above the 6.89 million-unit level in May 2004. Aside from the last two months,
the previous record was a sales pace of 7.02 million in June 2004.

David Lereah, NAR’s chief economist, said low interest rates, population
factors and job growth are driving home sales. “Most of the stars continue to
be correctly aligned for the housing market,” he said. “An ongoing problem
is the tight supply of homes available for sale, which is pushing gains in home prices.”

According to Freddie Mac, the national average commitment rate for a 30-year,
conventional, fixed-rate mortgage was 5.72 percent in May, down from 5.86
percent in April; the rate was 6.27 percent in May 2004.

The national median existing-home price for all housing types was $207,000
in May, up 12.5 percent from May 2004 when the median price was $184,000.
The median is a typical market price where half of the homes sold for more and
half sold for less.

On the new home side, sales of new one-family houses in May 2005 were at a
seasonally adjusted annual rate of 1,298,000, according
to estimates released jointly on June 24th by the U.S. Census Bureau and the
Department of Housing and Urban
Development. This is 2.1 percent above the revised April rate of 1,271,000 and is
4.4 percent above the May 2004 estimate of 1,243,000.

The median sales price of new houses sold in May 2005 was $217,000;
the average sales price was $281,400. The seasonally adjusted estimate of
new houses for sale at the end of May was 442,000. This represents a supply
of 4.2 months at the current sales rate.

Words to the Wise

NAR President Al Mansell, of Salt Lake City, cautions buyers to avoid shortcuts
and to take time to fully understand all aspects of the purchase. “In a market
where it’s common to see multiple bids on homes, buyers should avoid the
temptation to skip appropriate inspections or documentation that would protect
their interests,” he said. “Even more important is to understand the riskier loan
products that are on the market today. There are insufficient disclosures
regarding the risks of some of these products, so be sure to work with a professional
who can offer guidance on the kinds of loans that are better suited for your situation.”


Mortgage Rate Update: Rates Fall then Rise then Fall

Mortgage rates see-sawed during the month of June, falling for two weeks,
rising for one week and then ending the month with a decline. After beginning
the month of June at an average of 5.62%, 30-year fixed-rate mortgages
ended the month at an average of 5.57%. The trend in 15-year fixed-rate
mortgages was similar, which began the month averaging 5.10% and ended
the month at an average of 5.05%. These mortgage averages are courtesy
of mortgage company Freddie Mac, and do not include fees and/or points.

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: Making Comparisons

One of the most common mistakes make by home buyers, especially
those making their first purchase, is neglecting to take the
time to make a few simple comparisons before a final committment.
Some of the areas where we advise making comparisons are:

1) Choosing an Agent
2) Choosing a specific property
3) Choosing a mortgage

Most of these comparisons are relatively simple and can be done
by simply evaluating information that you will gather during
your buying process. The key is to take the time to assess the
information at hand.

Choosing an Agent

This is such a crucial step because a mistake made here can be
easily compounded--pick the wrong Agent and you may be shown
the wrong type of houses, or have mortgages that don't make sense
recommended to you or have not enough information available for
you in order to make a good decision.

We recommend getting referrals for Agents from friends, family and
co-workers, then interviewing at least 3 different Agents in order
to make an effective comparison. You will want to know the
experience level, philosophy of their business, special talents
and more for each potential Agent. It is only by having this
information that you will be able to determine which Agent will be
the "best fit" for your personal situation. Do not simply choose
the first Agent who presents themselves (or worse, choose an Agent
because they have a house in which you are interested listed).
To see some guidelines and questions that you can use in the
evaluation and comparison of Agents, see the
section on the site devoted
to that topic

Choosing a Specific Property

Whether there are dozens of homes available or only a few, there
is always the potential for selecting a home that does not
truly fit your needs. This can occur either because buyers
do not investigate enough potential homes or do not spend
the time neccessary comparing those that they did see. Some
of the attributes you will need at hand to make good comparisons:

+ Price
+ Size
+ Schools
+ Condition
+ Amenities

To make this job easier, keep a scorecard for each home you visit
and then recap all homes seen on a single sheet. Make notes
immediately after seeing a property, since they tend to all
blend together if you wait. You can find samples of both scorecards
are recap sheets

Choosing a Mortgage

It was not that long ago hat a home buyer had very limited choices
when it came to a mortgage. In general, mortgages were limited to:

1) 30-year fixed-rate mortgage
2) 15-year fixed-rate mortgage
3) Adjustable rate mortgage (ARM)

Today, there are literally dozens of mortgage choices available for
most home buyers. These include the choices above along with buydown
mortgages, interest only loans, hybrid loans, negative amortization
loans as well as numerous variations of these mortgages.

Making a bad choice here can not only cost a good bit of grief but
also thousands (and perhaps tens of thousands) of dollars. When
choosing a mortgage, it helps if you have both an experienced Real
Estate Agent as well as an experienced Loan Officer to help give you
guidance and direction. It is also important that those that assist
you be unbiased--meaning they are not trying to push a specific lender
or loan type more for their interest than yours.

Remember, though, above all else that is is YOU who must make the
final financial decisions. The mortgage you choose must be a good
fit for both your short-term and long-term goals as well as be a
benefit to your financial situation. To see a discussion on all
aspects of the mortgage process, see the
Mortgage Section on the

Summing Up

Whenever you purchase a home, mistakes can (and often ARE) made.
You can, however, work to minimalize the number and the severity
of any mistakes by making simple comparisons.

Next Month's Topic: Do You Have the Correct Mindset?


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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