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September, 2007 Newsletter

+++++++++++ September 1, 2007 +++++++++++++++++++

Introduction: Resales Slip, New Home Sales Increase
Mortgage Rate Update: Rates Drop
This Month's Tip: Inspection Essentials

Introduction: Resales Slip, New Home Sales Increase

Welcome to the September edition of the Home Buyer's

Existing-home sales were essentially unchanged in July,
with increases in the West and Northeast offset by a
decline in the Midwest, according to the National
Association of Realtors®.

Total existing-home sales – including single-family,
townhomes, condominiums and co-ops – slipped 0.2 percent
to a seasonally adjusted annual rate1 of 5.75 million
units in July from an upwardly revised pace of 5.76
million in June, and are 9.0 percent below the 6.32
million-unit level in July 2006.

Lawrence Yun, NAR senior economist, said the market
is holding on despite temporary mortgage disruptions.
“Home sales probably would be rising in the absence
of the mortgage liquidity issues of the past two
months,” he said. “Some buyers with contracts have
been scrambling when loan commitments did not
materialize at the last moment, while other potential
buyers are simply waiting for the mortgage market to

In new construction, sales of new one-family houses in
July 2007 were at a seasonally adjusted annual rate of
870,000, according to estimates released jointly on
August 24th by the U.S. Census Bureau and the Department
of Housing and Urban Development. This is 2.8
percent (±12.0%) above the revised June rate of 846,000 and
is 10.2 percent (±12.3%)* below the July 2006 estimate of

The median sales price of new houses sold in July 2007 was
$239,500; the average sales price was $300,800. The
seasonally adjusted estimate of new houses for sale at
the end of July was 533,000. This represents a supply of
7.5 months at the current sales rate.


Mortgage Rate Update: Rates Drop

Amid all of the discussion of the mortgage issues that have
erupted in the last month, rates eased a bit during the month
of August. According to mortgage company Freddie Mac, 15-year
fixed rate mortgages averaged 6.45% in the period that ended
August 30. These rates began the month of August at an
average of 6.67%, a nearly .25% decrease during the month.
The 15-year fixed-rate average was 6.12% after beginning the
month at an average of 6.32%.

Further trends in mortgage rates are really anyone's guess
and predictions are all over the landscape. Falling rates,
however, combined with one of the biggest housing inventories
in history bode well for buyers. Without question, and in
virtually every area of North America, we are firmly in the
midst of a buyer's market.
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: Inspection Essentials

All of your hard work in preparation for your home purchase--
examining properties, comparing mortgage proposals, interviewing
agents and more--can all be for naught if the property you select
is not a good one. And one of the biggest determinants of whether
a property is "good" or "bad" comes at the time of the whole
house inspection. Choosing the right inspection--and inspector--
then, becomes of utmost importance.

What does a whole house inspection entail?

A whole house inspection examines the structure and the systems
of a house or condominium. The purpose of such an inspection
is to reveal defects (or potential defects) in the basic structure of the
home as well as the electrical, plumbing, heating/cooling, roofing
and foundation of a property. It is not designed to be an engineering
analysis (which is a far more detailed--and expensive--inspection).
Nor is it designed to reveal cosmetic issues (such as a room that
needs repainting) which is the responsibility of the buyer in their
personal inspections. Instead, an inspection will be focused on
issues such as insufficient electrical capacity, a roof that has
reached the end of its useful life, plumbing problems or
malfunctioning appliances.

Finding an inspector

Whole house inspectors can be found in every city and most towns
across North America. A large metropolitan area may have as
many as 50 inspection companies or more available. You will want
to spend some time comparing the qualifications and reputations
of several inspectors rather than jumping on the first one you find
in the phone book or that your agent recommends. Our experience
has been that the best inspectors--those that are the most
thorough--are those whose only job is whole house inspections.
Contractors that do inspections "on the side" may have too
specialized experience or may, in fact, be looking at inspections
as a source of potential repair work.

The cost

The cost of a whole house inspection will vary due to a few factors.
First, the area in which you live will influence the price. Second,
the size of the house will be a determining factor. Third, how
extensive the inspection will need to be will increase or decrease
the cost. In general, an inspection will probably run you from
$200 at the low end upwards to $500 or $600 on the high end,
depending on the factors mentioned above. No matter what the
cost, though, it is money well spent. Imagine the price of replacing
a heating and cooling system on a 3000 square foot house.
It would make the price paid for the inspection look like

Next Month's Tip: Dealing With a Housing Upheaval

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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