February 2, 2012 WILL HIGH RENTS PUSH PEOPLE TO BUY HOMES? With Marcus & Millichap's National Apartment Report showing that the U.S. average for asking rents in 2011 came in at $1,061 a month, housing analysts believe more apartment tenants will look to own.
Some expect the average monthly rent to rise to as much as $1,101 this year, which Paul Bishop of the National Association of REALTORS® says should prompt more potential home buyers to "think twice before renting."
Source: "High Apartment Rents Seen Pushing People to Buy Homes," Investor's Business Daily (http://news.investors.com/Article/599071/201201261738/higher-rental-rates-help-boost-home-sales.htm)
February 2, 2012 FHA MAY EASE SELLER CONCESSION CAP Many in the real estate industry were concerned that a change announced last year to the maximum seller contributions allowed for Federal Housing Administration-insured loans could cause more deals to fall apart. The FHA announced last year that it would cut seller contributions from 6 percent to 3 percent for purchases using FHA-insured loans. Seller concessions, such as seller assistance to buyers in closing costs, can play a big part in FHA-financed home sales and in closing deals, real estate agents say.
Inman News reports that the FHA may be rethinking its seller contribution cap and will likely announce changes to its policy in April.
“Rather than an across-the-board 3 percent ceiling on all FHA mortgages, the new policy would permit higher seller contributions, probably between 4 and 5 percent, on smaller loan balances,” Inman News reports. “Meanwhile, the 3 percent cap would be mandatory on all loan amounts above some yet-to-be-specified limit.”
Inman News also speculates that a dollar ceiling on seller concessions might be announced, like a maximum cap of $6,000 instead of a percentage.
"The FHA is what's keeping us alive," Steve A. Brown, executive vice president of Memphis-based Crye-Leike, told Inman News. "If they do a 3 percent across-the-board limit, that would knock out a lot of our sales. But if they go with some graduated deal tied into lower-priced homes, then we should be all right."
Source: “FHA Concessions on Seller Concessions?” Inman News (http://lowes.inman.com/inmaninf/lowes/news/138306)
January 31, 2012 2011 MARKS WORST YEAR ON RECORD FOR NEW HOME SALES Sales of new-home declined in December, dropping 2.2 percent, and marking the end to the worst year on record for new-home sales, the Commerce Department reported Thursday.
New-home sales reached a seasonally adjusted annual pace of 307,000 in December — less than half the 700,000 pace that economists consider healthy for the sector.
In 2011, 302,000 new homes were sold nationwide, overtaking 2010’s 323,000 sales that had previously marked the worst year for sales on record.
The new-home sector continues to struggle to compete against discounted distressed properties that are plaguing many markets and have put downward pressure on home prices. Builders also say tighter lending standards are preventing some home buyers for qualifying for financing, and appraisals of new-homes are coming in lower on the agreed upon purchase price, causing more deals to fall through.
In December, the median sales price of a new-home was $210,300, according to the Commerce Department.
Turnaround Coming?
Despite the latest numbers from December, new-home sales rose in the overall final quarter of 2011. Home construction for single-family homes increased in the final three months of 2011, and an index measuring homebuilder sentiment showed builders are more positive about where the market is heading too.
"Although this [December] decline was unexpected, it does not change the story that housing has likely bottomed," Jennifer H. Lee, senior economist at BMO Capital Markets, told the Associated Press.
Source: “New Home Sales 2011: Worst Year on Record,” Associated Press http://realestate.aol.com/blog/2012/01/26/new-home-sales-2011-worst-year-on-record/
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