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November, 2006 Newsletter

+++++++++++ November 1, 2006 +++++++++++++++++++

CONTENTS:
Introduction: Sales Dip, Prices Decline
Mortgage Rate Update: Rates Up in October
This Month's Tip: Give Your Budget a "Tune Up"
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Introduction: Sales Dip, Prices Decline

Existing home sales dropped in the month of September, according to the
National Association of Realtors®. Sales of all types of homes slipped
1.9% from August, 2006 and were 14.2% below the rate one year ago in
September, 2005. Additionally, prices declined in the month of September,
dropping 2.2% from the level of September, 2005. Both sales and prices
dropped in all types of homes as well as in all areas of the U.S., although
the dip varied by area.

In new home sales, sales of new one-family houses in September 2006
were at a seasonally adjusted annual rate of 1,075,000, according to estimates
released jointly on October 26th by the U.S. Census Bureau and the
Department of Housing and Urban Development. This is 5.3 percent (±15.6%)
above the revised August rate of 1,021,000, but is 14.2 percent (±12.2%) below
the September 2005 estimate of 1,253,000.

The median sales price of new houses sold in September 2006 was $217,100;
the average sales price was $293,200. The seasonally adjusted estimate of
new houses for sale at the end of September was 557,000. This
represents a supply of 6.4 months at the current sales rate.

These new sales numbers should be subject to some additional analysis.
Yes, the number shows as a 5.3% increase, but only after the August number
was revised from 1,050,000 to 1,021,000. As we have mentioned several
times in the past, take some time to look at the overall picture before
just accepting the "headline number."

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Mortgage Rate Update: Rates Up in October

After several months of declining or stable mortgage interest, rates
rose during the month of October. According to mortgage company
Freddie Mac, the average for 30-year fixed-rate mortgages stood at
6.40% after beginning the month at an average of 6.30%. 15-year
fixed-rate mortgages showed a similar increase, rising from an average
of 5.98% at the beginning of the month to 6.10% at the end of October.

Even with this increase, it is important to remember that 30-year
fixed rates have remained under 7.00% for the entire year of 2006--historically
a very low rate.

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: Give Your Budget a "Tune Up"

In many areas of North America, house prices have risen so high
that it is only with a good bit of work that many can afford
to purchase a home. In some parts of the continent, where
prices have jumped the highest, a full 70% of the population
cannot afford to buy a median-priced home. It is possible,
however, to combat this situation--at least to some degree--
by getting a firm grip on your current (and future) budget.
Not only will it help you to afford your home, those with their
budgets in check generally live less stressful lives and,
by efficiently handling their finances, have more funds
available for the things that they truly need and want.


Getting control of yur 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 minset 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 from less than a quarter percent to over 5%--more than
20 times more interest!

Summing Up

Even if house prices retreat a little in the near future, the
big run-up they've enjoyed in the last few years virtually
guarantees that prices will still remain at a high level.
This means that you will need to be much more conscious of
budget considerations than you would have needed to be just
a few short years ago. Having a handle on your budget and
finances may be the difference between being able to afford
a home and not affording one--especially if credit availability
and standards tighten.


Next Month's Tip: Making Property Comparisons

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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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