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May, 2010 Newsletter

+++++++++++ May 1, 2010 +++++++++++++++++++

CONTENTS:
Introduction: Home Sales Jump
Mortgage Rate Update: Rates Steady
This Month's Tip: Sharpen Your Budget Skills
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Introduction: Home Sales Jump

Welcome to the May edition of the Home Buyer's Newsletter.
Both existing home sales and new home sales took significant
jumps in the month of March, good news for both the housing
market as well as the underlying U.S. economy.

Buyers responding to the homebuyer tax credit and favorable
affordability conditions boosted existing-home sales in March,
marking the beginning of an expected spring surge, according
to the National Association of Realtors®.

Existing-home sales1, which are completed transactions that
include single-family, townhomes, condominiums and co-ops,
rose 6.8 percent to a seasonally adjusted annual rate of 5.35
million units in March from 5.01 million in February, and are
16.1 percent above the 4.61 million-unit level in March 2009.

Lawrence Yun, NAR chief economist, said it is encouraging to
see a broad home sales recovery in nearly every part of the
country, with two important underlying trends. “Sales have
been above year-ago levels for nine straight months, and
inventory has trended down from year-ago levels for 20 months
running,” he said. “The home buyer tax credit has been a resounding
success as these underlying trends point to a broad stabilization
in home prices. This is preserving perhaps $1 trillion in largely
middle class housing wealth that may have been wiped out without the
housing stimulus measure.”

On the new home side, sales of new single-family houses in March
2010 were at a seasonally adjusted annual rate of 411,000, according
to estimates released jointly on April 23rd by the U.S. Census Bureau
and the Department of Housing and Urban Development. This is 26 9 percent
(±21.1%) above the revised February rate of 324,000 and is 23.8 percent
(±18.7%) above the March 2009 estimate of 332,000.

The median sales price of new houses sold in March 2010 was $214,000;
the average sales price was $258,600. The seasonally adjusted estimate
of new houses for sale at the end of March was 228,000. This represents
a supply of 6.7 months at the current sales rate.

Although the sales levels here are good news, the most important
part of the equation is the housing inventory levels, which continue
to fall. Until inventory reaches (and stays) at a managable level,
a sustained housing recovery will be challenged.

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

Mortgage Rate Update: Rates Steady

Long-term mortgage rates stayed steady for another week, after
having fallen significantly in the week prior. According to
mortgage company Freddie Mac, 30-year fixed-rate mortgages
averaged 5.06%, down slightly from the previous week and virtually
the same average from the beginning of April at 5.08%. 15-year
fixed-rate mortgages also stood steady, both beginning and
ending the month at an average of 4.39%.

"Mortgage rates on 30-year fixed loans have averaged about 5% over
the first four months of this year, staying within a band of roughly
a quarter percentage point and virtually matching 2009's annual
average," said Frank Nothaft, Freddie Mac chief economist, in a
statement. "These low rates have been helping to moderate house
price declines over the course of the year."

Although many experts expect rates to rise slowly in the long-
term, the current steady mortgage market is advantageous for
spring and early summer buyers.

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: Sharpen Your Budget Skills

If you are in the market to purchase a house and there is going
to be a mortgage involved, your budgetary concerns have never
been as important as they are in today's environment. The mortgage
landscape has changed and continues to change, rapidly. The days
of easy mortgage approvals and loans are largely over. YOu will
need to be qualified in order to get a mortgage, and qualification
goes hand in hand with your budget.

Getting control of your financial situation generally involves
one or two big steps and, frequently, a number of smaller ones.
The combination of the moves you make to get your budget in
line can make a huge difference in your overall financial
posture. It can make the difference between affording--or
not being able to afford--a home. It can mean a comfortable
homeownership experience, or a harried and distasteful one.

Taking Control

The very first step in taking control of your finances--and
your budget--is developing a mindset that says you CAN be in
control, that you CAN become budget minded. If you've spent
years as a spendthrift, this may take some getting used to.
Instead of "I deserve it," you may need to begin saying "I
really don't need it." You may need to put a leash on some
of your expenditures. The easiest way of doing this is to
understand that there is a big difference between what you
WANT and what you NEED. For example, you may WANT a big
gas-guzzling SUV, but what you NEED is probably just a vehicle
that will get you back and forth to work reliably.

Compare

One of the most important steps in getting your budget in
line is to begin the process of comparison shopping for
virtually everything you buy. If you currently make
purchases for convenience rather than price, this new
approach may take some getting used to, but eventually
it will become second-nature.

+ Learn which grocery stores have the lowest overall
price and do the bulk of your shopping there.
+ Watch for sale prices in ads and circulars--buying
like this can reap big savings over time.
+ Use the Internet to make comparisons. There are
numerous sites that will do the actual price comparisons--
including shipping--for products you need to buy. This
is an especially effective tactic in the purchase of
higher-ticket items.

Large or small--It all adds up

Although keeping tabs on the big expenditures (cars,
furniture, appliances and the like) show the quickest
rewards, your total spending for smaller items (groceries,
fuel, supplies and services are some examples) can also
have a big effect on your bottom line. For example, do you
stock up on items when they are on sale or do you pay full
price when the whim hits you? Do you use generic or store
brands, which are often 25-40% less than name brands? If
you insist on name brands, do you clip coupons (and use the
coupons at stores that double or triple their value)? Are
you paying for cellular minutes that you rarely or never
use? How about premium cable or satellite packages with
stations that you almost never watch? How often do you
buy trinkets and "toys" that you never use or even look
at much less use?

Saving money here--on these smaller items--really does add
up. Just a few slight adjustments in buying approaches
and habits can often save $30-40 per month in your grocery
bill, for example. Eliminating an "upper tier" on cable or
satellite may equate to another $25 per month or more. Buying
less "junk" that you don't use can show considerable savings,
depending on how much a "junk" shopper you are. Unless you
are currently a "bare bones" spender, it is not unusual to
be able to cut $100, $200, $300 or more from your current
monthly spending patterns. And that adds up to big money,
even before you factor in the interest that you can gain on
the money you put away. Don't forget to shop for the best
interest rate, too, since on a money market (where you can
have near-immediate access to your cash) interest rates can
vary considerably. Sometimes you can find rates 5 times
higher or more than at other sources.

Summing Up

Having a handle on your budget and finances may be the difference
between being able to afford a home and not affording one--especially
with the much more stringent credit availability and standards
that we see today.


Next Month's Tip: Mortgages: The Whole Picture

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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
.

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.

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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