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November, 2010 Newsletter

+++++++++++ November 1, 2010 +++++++++++++++++++

Introduction: Increases in Both New and Resales
Mortgage Rate Update: Rates Stable in October
This Month's Tip: Which Comes First?

Introduction: Increases in Both New and Resales

Welcome to the November edition of the Home Buyer's
Newsletter. September saw gains in both new and existing
home sales, with especially strong gains in resale homes.

Existing-home sales rose again in September, affirming that
a sales recovery has begun, according to the National Association
of Realtors®.

Existing-home sales1, which are completed transactions that
include single-family, townhomes, condominiums and co-ops,
jumped 10.0 percent to a seasonally adjusted annual rate of
4.53 million in September from a downwardly revised 4.12 million
in August, but remain 19.1 percent below the 5.60 million-unit
pace in September 2009 when first-time buyers were ramping up
in advance of the initial deadline for the tax credit last

Lawrence Yun, NAR chief economist, said the housing market is
in the early stages of recovery. A housing recovery is taking
place but will be choppy at times depending on the duration and
impact of a foreclosure moratorium. But the overall direction
should be a gradual rising trend in home sales with buyers
responding to historically low mortgage interest rates and very
favorable affordability conditions, he said.

Sales of new single-family houses in September 2010 were at a
seasonally adjusted annual rate of 307,000, according to
estimates released jointly today by the U.S. Census Bureau and .
the Department of Housing and Urban Development.
This is 6.6 percent (±16.9%)* above the revised August rate of
288,000, but is 21.5 percent (±13.3%) below the September 2009
estimate of 391,000.

The median sales price of new houses sold in September 2010 was
$223,800; the average sales price was $257,500. The
seasonally adjusted estimate of new houses for sale at the end
of September was 204,000. This represents a supply of 8.0
months at the current sales rate.


Mortgage Rate Update: Rates Stable in October

Although there was a bit of movement during the month, mortgage
rates ended October very close to the range at the beginning of
the month. According to mortgage company Freddie Mac, 30-year
long-term mortgage rates averaged 4.23% in the period that ended
on October 28th. Rates begin the month at an average of 4.27%.
In 15-year fixed-rate loans, the averages were 3.72% at the start
of October and 3.66% at the end of the month.

In general, rates have remained in a fairly tight range since the
end of August, and many analysts feel that the chances of further
large reductions to be rather slim.
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: Which Comes First?

For those who are purchasing a home who already own one, a fairly
common question has been "what should we do first--get our home on
the market (and get a contract on it) or purchase a home first and
then put our current home up for sale?" For decades, the conventional
wisdom was pretty much to "get a contract on your home first, then
buy your next." Like so many tried and true adages, though, that
advice was, to some degree, shot down by the booming Real Estate
market in the first half of this decade. "Get locked in on the home you
want to buy" the new advice went. "Your current home will sell very
quickly so you won't need to worry."

For a few years, in many areas of North America, that tact was
successful. Many purchased a home without even the provision for
the sale of their current residence. The overall market was so
active that many sellers would not even consider a "contingency"
contract--meaning that the purchase was subject to the sale of
the buyer's current home. For many sellers, the home was listed,
sold in a few weeks (or days, or hours!), settlement was arranged for
both sales and moving was, as scheduled, on closing day. No muss,
no fuss.

As the pace of home sales slackened, however, the risks of buying
without getting commitment for a sale on the present home have
intensified. In many areas, homes that were selling in days or
weeks are now taking months--or in some cases, years--to sell,
slowing down the entire process of buying and selling. By committing
to purchase a home without having a firm contract to sell yours, a
home owner runs the very real risk of owning two homes--and paying
two mortgages--at the same time. This is a situation that could be
rectified quickly,if the home sells, but could go on indefinitely
if there are no offers.

To determine if you are a good candidate for buying BEFORE
selling, ask yourself a few questions:

1) What is the market like for your particular home? Are homes
in your area moving quickly (meaning house, neighborhood, general
geographic area) or do they take a long time to sell?
2) Is your house ready to be sold (meaning no work to be done and
will pass a home inspection easily)?
3) Is your pricing realistic (meaning in line with or below current
sales prices)? Are you flexible?
4) Does your Agent (or you) have a comprehensive plan for
marketing the home?

Unless you can answer an honest and unqualified YES to all of the
above questions, it may not be a wise move to buy your next home
until you have a firm contract on the present one.

Resources on the site:
Setting a Value on a Home <A HREF="http://www.ourfamilyplace.com/homebuyer/value.html">Home Values</A>
Home Seller's Information Center <A HREF="http://www.ourfamilyplace.com/homeseller/">Home Seller's Information Center</A>

Next Month's Tip: Compare Before You Commit

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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