November, 2003 Newsletter
+++++++++++ November 1, 2003 +++++++++++++++++++
Introduction: Sales Continue Strong
Mortgage Rate Update: Rates Up, Then Down, Then Up...
This Month's Tip: Choosing an Agent
Introduction: Welcome to the November edition of the
Home Buyer's Newsletter. As has been the case throughout most
of the year, sales of both resale and new homes remained extremely
strong in the month of September.
The market for existing single-family homes rose again in September
and set a third consecutive monthly record, according to the National
Association of Realtors®. Existing-home sales rose 3.6 percent to a
seasonally adjusted annual rate* of 6.69 million units in September
from a pace of 6.46 million units in August. Last month's sales activity
was 20.8 percent above the 5.54-million unit pace in September 2002.
David Lereah, NAR's chief economist, said a strong performance was
expected. "We knew the September pace for existing-home sales was
going to be a big number, but after setting records in July and August we
thought the pace might start to slow," he said. "This underscores the
powerful fundamentals that are driving the housing market – household
growth, low interest rates and an improving economy."
On the new home side, sales of new one-family houses in September
2003 were at a seasonally adjusted annual rate of 1,145,000, according
to estimates released jointly by the U.S. Census Bureau and
the U.S. Department of Housing and Urban Development.
This is 0.2 percent (±8.7%) below the revised August rate of
1,147,000, but is 8.3 percent (±11.4%) above the September
2002 estimate of 1,057,000.
The median sales price of new houses sold in September 2003
was $187,400; the average sales price was $256,200. The
seasonally adjusted estimate of new houses for sale at the
end of September was 342,000. This represents a supply of 3.7
months at the current sales rate.
Mortgage Rate Update: Rates Up, then Down, then Up...
Mortgage rates spent the month of October rising and falling and
rising again, ending the month virtually where they started.
According to mortgage company Freddie Mac, 30-year fixed-rate
mortgages averaged 5.94% in the period ending October 30th.
This is virtually the same as the 5.98% average rate at the end
of September. 15-year fixed-rates averaged 5.26% at the end of
the month after beginning the month in the 5.30% range.
With the good 3rd quarter GDP numbers released by the U.S.
Commerce Department last week (and the bond market reaction
to the numbers) expect rates to move at least moderately upward
in the next week or so. The longer term trend, however, is still
a guessing game since much is dependent on the sustainability
of the current economic growth.
For current average mortgage rates, see:
For more information on mortgages, visit the Mortgage
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environment getting as many loan comparisons as
possible is crucial. At LendingTree you can submit
one simple loan request form and within a few business days
get up to 4 bona-fide offers from lenders competing for your business.
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This Month's Tip: Choosing an Agent
If you've made the decision to work with a Real Estate
Agent in the purchase of your home, your first task should
be to find the best Agent possible for your personal
situation. By making sure that you and the Agent are a
"good fit" you can often prevent many problems and
aggravations further down the line (like in the middle of
The most successful relationships with a buyer and an Agent
are those that function as a team--working together for the
best interests of the buyer--you. Like all teams, though, the
first order of business is to determine precisely what the
goals are. "To purchase a house" is way too broad and can
lead to misunderstandings, mistakes and sometimes even major
friction betwee Agent and buyer. When working with an Agent,
your goals should be clearly spelled out as to avoid any
Understanding Buyer Agency
Buyer Agency is a relatively new (evolving over the
last 10-15 years) concept that has revolutionized the
Real Estate industry. Rather than a buyer being forced
to accept a situation where they had to deal with an
Agent who owed allegiences to sellers, they now can have
someone to represent their interests. The old situation
(before the advent of Buyer Agency) had distinct
disadvantages for the buyer, since the Agent could
never reveal information that may be detrimental to the
seller. For example, if the Agent knew of the seller's
motivation for selling, or a minimum price the seller
might accept, this information could not, under any
circumstances, be given to the potential buyer.
Buyers who insist on searching for properties without
representation (dealing with the Agent who has the
home listed) face the same situation today.
A Buyer's Agent, in contrast, makes an agreement with
a buyer to exclusively represent their interests. This
means that the Agent can disclose to the buyer any
information available, even if that information could
be considered more of an advantage to the buyer than
the seller. A Buyer's Agent, therefore, helps to
level the playing field when it comes to negotiation.
Defining Goals and Finding the Right Agent
The first step--before a buyer even contacts an Agent--is to
determine and define exactly what those home buying goals
and preferences are. These include:
* Price range of home
* Type of mortgage desired
* Desired area and/or neighborhood
* Size of home
* Style of home
Once you have focused on these goals, you will be able to
communicate them to a prospective Agent.
In addition to understanding (and being receptive to) your
goals and preferences, the personality of the Agent will
have a good deal to do with your choice. Not only is it
important that you feel comfortable with the Agent, you
will want to consider only those who have a mindset that
matches yours. For example, if you will need a good deal
of contact with the Agent (some call it "hand holding") you
will want an Agent who has a hands-on approach, rather
than one whose approach is more distant. Others, who may
need (or want) less contact with the Agent and who want
to handle much of the process on their own, may feel more
comfortable with someown with a more detached approach.
If you are buying your first home, you will most likely
want an Agent with extensive experience with first time
buyers. Since first timers frequently encounter unique
situations, it is generally a good idea to have an Agent
who has a wide range of experience dealing with such
Where to Find Agents
Be aware: If you search for homes first and contact the
Agent who has a particular property listed, that Agent
will absolutely represent the seller--not you.
* Search newspaper and homes magazines ads for Agents
who advertise that they have experience in and offer
* Ask friends, relatives and co-workers about
experiences--both good and bad--that they have had with
Finding the right Agent for your personal situation can
take much of the potential stress out of a real estate
transaction. A good Agent can be an integral part of
your team, which also will include your lender, a
professional home inspector and a settlement agent
or Attorney. Take the time necessary to compare,
and interview if desired, any prospects.
Next Month's Topic: Buy for the Future
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 here:
or access our feedback page at:
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