According to data from the National Association of REALTORS®, the Pending Home Sales Index smashed analyst expectations, jumping 8 percent on a monthly basis in May.
Wall Street calls were for an increase of just 0.5 percent.
It was a surprise result that, coupled with the recent stronger-than-expected New Home Sales and Existing Home Sales readings, has sparked housing market optimism in Ohio and nationwide.
The biggest reason for the optimism is because of what the Pending Home Sales Index measures.
In contrast to “traditional” housing data which reports on how housing performed two months ago, for example, the Pending Home Sales Index is a forward-looking indicator; a predictor of future market activity based on freshly-written contracts between buyers and sellers.
In other words, the Pending Home Sales Index looks ahead — not back. This is reflected in its methodology which states that 80% of homes under contract close within 2 months, and a large percentage of the rest close within Months 3 and 4.
Because May’s Pending Home Sales Index rose sharply, therefore, we can expect similar jumps in the Existing Home Sales figures of June and July.
For housing and home prices, this is a positive but the gains won’t apply to each home equally. The Pending Home Sales Index is still a national report for a market built on local sales. What’s happening on your particular street in your particular neighborhood may not reflect what’s happening somewhere else.
For accurate, real-time data in your local market, ask a real estate agent for statistics.
Maybe homes in Cincinnati are holding value better than we thought.
Between March and April of this year, home values rose 0.8 percent nationally, according to the Federal Housing Finance Agency’s Home Price Index. It’s the index’s first month-to-month improvement since May of last year.
Values are down 19 percent since peaking 4 years ago.
Private-sector data affirms the government’s report.
Tuesday, the S&P’s Case-Shiller Index also showed home values higher by 0.8 percent in April, on a monthly basis. Led by Washington, D.C. and San Francisco, 13 of the Case-Shiller’s 20 tracked markets showed improvement in April.
In March, just 2 markets did.
As a home seller in or near Mt Lookout , it’s nice to see reports of rising home prices after multiple months of “bad news”. However, the data may not be as rosy as it appears to be. National real estate surveys including the Home Price Index and the Case-Shiller Index are flawed for everyday buyers and sellers.
The biggest flaw is “age”. Both the Home Price Index and the Case-Shiller Index report on a near 2-month delay.
This week, the calendar turns to July. Yet, we’re still discussing housing news from April. The housing market of 60 days ago was very different from the housing market of today. Mortgage rates are different, market drivers are different, and the pool of buyers is likely different, too.
We can’t discuss today’s housing market with “April” in mind. The data is irrelevant.
Another flaw is that both reports are national in scope. Real estate, by contrast, is local.
When we cite the Home Price Index or the Case-Shiller Index, for example, and say “home values rose 0.8% in April”, we’re just giving a national average. On the local level, some markets rose by more, some rose by less, and others actually fell.
People buy homes on a specific block of a specific street in a specific neighborhood. Data for homes like that can’t be captured in a national survey.
The group that gets the most value from the Home Price Index and Case-Shiller is Wall Street and policy-makers. The indices do a fair job of reporting how housing behaves as a whole, but for individuals concerned with buying and selling homes, the best place to find real-time, accurate data is from a real estate professional.
A report issued Monday by the U.S. government showed core inflation rising 2.5 percent in the last 12 months for its biggest one-year gain since January 2010.
Everyday living is becoming expensive, it seems.
But there are some U.S. towns in which the cost of living remains affordable — and downright cheap — as compared to the national average. They’re detailed in a BusinessWeek piece titled “The Cheapest 25 Cities In The U.S“.
In comparing costs across 340 urban areas as compiled by the Council of Community & Economic Research, cities in Texas, Arkansas, Tennessee and Oklahoma ranked consistently high. Cities in Hawaii did not.
Take note, though. Although the BusinessWeek piece highlights inexpensive cities in which to live, a low cost of living does not necessarily correlate to a high standard of living. Cost-leader Harlingen, Texas, for example, boasts a poverty rate nearly triple the national average.
Other “Inexpensive Cities” feature similar poverty rates.
The Top 10 “cheapest cities”, as shown by BusinessWeek are:
Harlingen, Texas
Pueblo, Colorado
Pryor Creek, Oklahoma
McAllen, Texas
Cookeville, Tennessee
Commerce-Hunt County, Texas
Brownsville, Texas
Fort Smith, Arkansas
Muskogee, Oklahoma
Springfield, Illinois
And, at the other end of the spectrum, the top 5 most expensive cities/areas were, in order, Manhattan, New York; Brooklyn, New York; Honolulu, Hawaii; San Francisco, CA; and Queens, New York.
Manhattan’s cost of living is more than twice the national average.
Compact fluorescent light bulbs are widely praised for their energy-efficiency and relatively low price points. However, unlike traditional light bulbs, they pose a specific health risk to humans and pets.
Most compact fluorescent light bulbs are loaded with mercury vapor and mercury is poisonous – even in very small doses.
And, unfortunately, sometimes light bulbs break, releasing toxins into the air.
The EPA’s advice is specific and geared toward safety. A few of the tips include:
Have people and pets leave the room immediately
Shut down your home’s HVAC unit to prevent airflow
Using rubber gloves, place glass fragments and “powder” in a glass jar, or sealed plastic bag.
In addition, the EPA says to throw out all clothing and bedding that has come into direct contact with a broken bulb. You should not attempt to wash items such as these. They may contain mercury fragments that could contaminate your laundry machines and/or your sewage system.
Lastly, make sure to keep your CFLs separate from your regular trash; they’re not meant for landfills. Compact fluorescent light bulbs should be recycled with a verified waste management company.
On paper, the market for newly-built, single-family homes looks healthy.
Last month, the number of new homes sold on an annualized, seasonally-adjusted basis tallied 319,000. The May reading is the second-highest of the year, and 6 percent above the current 12-month average.
These are strong numbers in isolation. However, after accounting for the dwindling supply of new homes for sale as well, the figures look even stronger.
In May, at the current pace of sales, the complete, national inventory of new homes for sale would have been sold in just 6.2 months.
That’s the quickest pace in a year and a 3-month improvement from a year ago.
To hear it from homebuilders, though, you’d think that sales were crashing.
Homebuilder confidence slipped to a 9-month low this month; builders report slowing foot traffic; and the prospects for the next 6 months appear weak. This is not the portrait painted by HUD’s May New Home Sales report.
As a home buyer in Cincinnati , this dichotomy may work to your advantage.
Falling supplies and rising demand correlate to higher home prices. Yet, builders are pessimistic for their market. Therefore, despite the economics, psychology may help buyers experience more favorable negotiations, including complimentary upgrades and other builder concessions.
If you’re a buyer in today’s market, it’s a reason to consider the new home market. There may be good value once you know where to look.
Wednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The vote was 10-0 — the fourth straight unanimous vote for the nation’s Central Bank.
In its press release, the FOMC said that the economy is recovering, although “somewhat more slowly” than what was expected. Labor markets have been weaker than anticipated and the Fed believes that is, in part, a result of higher food and energy costs, and supply chain disruptions as a result of “tragic events in Japan”.
Some economic bright spots identified by the Fed include expanding household spending, and increased business investment.
These comments were in-line with what Wall Street expected from Chairman Ben Bernanke and the members of the Federal Open Market Committee.
The Fed stayed on message with respect to inflation, too. It acknowledged inflationary pressures on the economy, but attributed them to rising commodity costs and the aforementioned supply-chain disruption. The Fed expects long-term inflation to be stable.
And, lastly, the Federal Reserve re-affirmed its plan to end its $600 billion pledge to bond markets June 30, and to hold the Fed Funds Rate near zero percent “for an extended period” of time.
Again, no surprise.
Mortgage market reaction to the FOMC statement has been even this afternoon. Mortgage rates in Cincinnati are unchanged and leaning lower. Note that sentiment can shift quickly, however. If today’s mortgage rates fit your budget, consider locking in your rate.
Home resales slipped 4 percent in May, falling below the 5,000,000-unit mark on a seasonally-adjusted, annualized basis for the first time since February.
April’s resales were revised lower, too.
Analysts were surprised by the figures because it runs counter to the National Association of REALTORS® monthly Pending Home Sales reports.
The association’s Pending Home Sales Index is purported to be a forward-looking indicator for the housing market because 80% of homes under contract close within 60 days and recent Pending Home Sales readings show an increase in “pending” homes.
This month’s Existing Home Sales, however, fell flat.
May’s drop in home resales wasn’t limited to a particular region or price point, either. All 4 geographic regions lag last May’s results. Five of the 6 valuation ranges fell, too.
$0-$100,000 : +6.7 percent annual change
$100,000-$250,000 : -21.6 percent annual change
$250,000-$500,000 : -16.0 percent annual change
$500,000-$750,000 : -11.0 percent annual change
$750,000-$1,000,000 : -20.7 percent annual change
$1,000,000 or more : -11.0 percent annual change
The Existing Home Sales report wasn’t all bad, however.
Although the months of housing stock rose to 9.3 in May, the number of homes for sale nationwide fell 1%. This suggests that there weren’t as many buyers in May as compared to April — a function of weather, jobs and the economy. Since April, the jobs market and the economy have shown steady, slow improvement and Mother Nature has been less destructive.
Home resales should rebound in June and July, therefore.
If you’re a buyer in today’s market, home supplies are higher and mortgage rates are lower. The combination makes for ample bargain-hunting. There’s excellent “deals” to be found in Cincinnati. Ask your real estate agent for help in finding them.
Despite rising new home sales and an increase in building permits nationwide, home builder confidence slipped to a 9-month low in June. The monthly Housing Market Index from the National Association of Homebuilders registered 13 this month — three ticks lower than last month, and its lowest level since September 2010.
June’s 3-point drop from May is the biggest one-month move since May 2010, the month after the expiration of the federal home buyer tax credit. The retreat could signal favorable pricing for new home buyers in Cincinnati in the months ahead.
When builders get less bullish on housing, they may be more willing to negotiate for upgrades and discounts. Ultimately, this can help new home buyers buy homes at better, lower prices.
A closer look at the Housing Market Index shows why this may be true.
The Housing Market Index is not a single-reading statistic. It’s a composite; the result of 3 separate surveys, each meant to measure a specific facet of a home builder’s business. The survey questions are:
How are market conditions for the sale of new homes today?
How are market conditions for the sale of new homes in 6 months?
How is prospective buyer foot traffic?
How are market conditions for the sale of new homes today?
How are market conditions for the sale of new homes in 6 months?
How is prospective buyer foot traffic?
When builders reply, their responses are tallied and mapped to a scale of 1-100. Readings over 50 are considered favorable. Readings under 50 are considered unfavorable. The HMI has not been higher than 50 in more than 5 years.
In June, the HMI composite reading of 13 was anchored by falling foot traffic and reduced expectations for “future sales”. Homebuilders expect new home sales to be down through the New Year.
Therefore, if you’re a home buyer in Ohio and have considered “buying new”, the time may be right for making an offer. Financing is cheap, home values are low, and builders are pessimistic — a terrific combination for today’s home buyer.
This week marks the official start of Summer in Cincinnati. If your home’s outdoor area has furniture in it, you’ll want to make sure that your furniture is clean.
In this 4-minute video from Lowe’s, you’ll learn tricks to keep your outdoor furniture clean, and protected from the elements. All types of outdoor furniture are covered in the lesson including metal, resin-based, and wooden.
The offered tips include:
Why you should never remove the “care tags” from a furniture pillow
Choosing the proper pressure-washer tip for the job at-hand
How to use car wax as a rust-preventative
Furthermore, the instructional video includes tips for cleaning fabrics and canopies; and for shampooing an outdoor rug.
There’s lot of reasons to keep your outdoor furniture clean — health reasons among them — but it shouldn’t be lost that clean furniture will have a longer useful life than furniture that’s been neglected or ignored.
Clean your outdoor pieces at least twice annually and they’ll give you years of good looks and comfort.
The housing market received a jolt of good news Thursday. The Commerce Department reports that Single-Family Housing Starts improved in May.
As compared to April, last month’s Single-Family Housing Starts rose 4 percent to a seasonally-adjusted, annualized rate of 419,000 units, a figure slightly better than the 6-month average and the highest tally since January.
A “housing start” is defined as a home on which new construction has started.
In addition, Building Permits saw a boost in May, too, climbing nearly 9 percent overall. Building Permits are a gauge of future construction activity with 89 percent of permits leading to new construction within 60 days.
For several reasons, the May data surprised Wall Street analysts.
First, more homes being built suggests a healthier housing market, yet, earlier this week, the June homebuilder confidence report posted its lowest reading since September 2010.
Second, new home sales are only slightly higher than their all-time lowest annualized readings. Sales volume remains low in Cincinnati and nationwide.
And, lastly, home prices have yet to recover in full. By adding additional inventory, builders may suppress price growth through the remaining portions of 2011.
For home buyers in Ohio , though, the Housing Starts data may be a signal that the market is turning. The data can be used to your advantage.
Home prices are a function of supply and demand and — based on the Housing Starts data plus the number of newly-issued Building Permits — home supply is likely to rise. Demand, on the other hand, despite low mortgage rates, may not. At least not in the short run.
As a buyer, you can use this information to your advantage. If you’re looking to buy new construction, ask your real estate agent about the current new homes supply. There are bargains to be found and May’s Housing Starts data should support low prices for at least the next few weeks.
According to foreclosure-tracking firm RealtyTrac, monthly foreclosure filings fell 2 percent in May to just under 215,000 filings nationwide. A foreclosure filing is defined as any one of the following: a default notice, a scheduled auction, or a bank repossession.
On an annual basis, foreclosure counts have dropped over 16 consecutive months, dating back to January 2010.
Like all things in real estate, though, foreclosures are local. 6 states accounted for more than half of the country’s foreclosure filings in May. Those six states — California, Michigan, Arizona, Florida, Georgia and Texas — represent just 34% of the U.S. population.
But even on a per household basis, the figures remain disproportionate.
Top 10 Foreclosure States : 1 foreclosure per 357 households, on average
Bottom 10 Foreclosure States : 1 foreclosure per 8,764 households, on average
The nationwide foreclosure rate was 1 foreclosure per 605 households.
As a home buyer in Cincinnati , foreclosures matter. Distressed homes account for close to 40% of home resales and that’s because distressed properties often sell at steep discounts; in some markets, up to 20 percent less than a comparable, non-distressed home. Foreclosed homes can be a great “deal”, therefore, but only if you’ve done your homework.
Buying a bank-repossessed home is different from buying from “people”. The contracts and negotiation process are different, and homes are sometimes sold with defects.
If you plan to purchase a Ohio foreclosure, therefore, speak with a real estate professional first. With foreclosures, there’s a lot you can learn online, but when it comes time to submit an actual bid, you’ll want an experienced agent on your side.
The jobs market is recovering slower than expected, and so is housing. But neither condition has slowed U.S. consumers.
According to the Census Bureau, Retail Sales rose for the 11th straight month in May. Excluding cars and auto parts, sales receipts climbed to $322 billion last month. It’s an all-time high and another example of the U.S. economy’s resiliency.
Wall Street didn’t expect such results. As a result, mortgage rates worsened Tuesday.
By a lot.
The connection between Retail Sales and mortgage rates can be fairly tight in a recovering economy. Retail Sales accounts for almost half of all U.S. consumer spending, and nearly one-third of the economy overall. The May report, therefore, showed the economy may be on more solid footing than economists expect.
Plus, lately, as the economy goes, so go mortgage rates in Cincinnati and nationwide.
When the economy has shown signs of life, mortgage rates have increased. When the economy has shown signs of a slowdown, mortgage rates have dropped.
It’s why mortgage markets reacted the way they did Tuesday; May’s Retail Sales data was strong. The resultant surge in conforming mortgage rates — from market open to market close — turned into one of the year’s fiercest, raising average mortgage rates well off their 7-month lows established earlier this week.
At today’s rates, each 0.125 percent change in rates yields a payment difference of $7.50 per $100,000 borrowed. Yesterday, some product rates rose by as much as 0.250 percent. It put a dent in home affordability and household budgets.
With Retail Sales are up 8 percent from last year, therefore, and showing few signs of a slowdown, today may be a prudent date to lock a rate with your lender. As the economy continues to grow, rates are expected to rise.
On a wave of uncertainty about Greece and its debt; and weaker-than-expected economic data at home, conforming 30-year fixed rate mortgage rates have fallen to levels not seen since December 2, 2010.
Mortgage rates have dropped 8 weeks in a row. Not even last year’s Refi Boom produced an 8-week winning streak. This season’s streak is historic.
The 30-year fixed rate mortgage now averages 4.49% nationally, down 42 basis points, or 0.42%, since early-April. For every $100,000 borrowed, that equates to a monthly savings of $25.24.
Adjustable-rate mortgages have shed even more, giving back 50 basis points since the streak began.
Because of low rates, it’s an excellent time to buy or refinance a home relative to just a few weeks ago. Note, though, that depending on where you live, you may find your quoted interest rates to be slightly higher or lower than what Freddie Mac reports in its survey. This is because the Freddie Mac figure is a national average.
Mortgage rates and fees vary by region:
Northeast : 4.49 with 0.6 points
Southeast : 4.52 with 0.8 points
North Central : 4.52 with 0.6 points
Southeast : 4.52 with 0.6 points
West : 4.45 with 0.8 points
You’ll notice that, in the West Region, rates tend to be low and fees tend to be high; in the North Central Region, the opposite is true. You should expect Ohio to have its own pricing norm within this region, too.
Is there a particular rate-and-fee setup that suits you best? The good news is that you can ask for it — no matter where you live.
If having the absolute lowest mortgage rate is more important to you than having the absolute lowest fees, ask your loan officer to structure your loan in the “West” style. Or, if low costs are more your style, ask for them.
Mortgage rates appears as if they’re headed lower but don’t forget how quickly markets can change. Once they do, mortgage rates in Cincinnati should spike. Exploit today’s market while you still can.
If you have a flair for home decoration projects, Better Homes & Garden has some terrific ideas for you on its website.
Titled “Fast and Fabulous Decorating Projects”, the lifestyle company offers inspiration for 20 do-it-yourself art projects that can breathe life into old furniture, and add pop to your home.
Published in thumbnail format, the guide is quick-to-browse and long on ideas.
In addition, because many of the highlighted projects involve the re-purposing and/or the recycling of existing furniture and other home goods, not only do costs stay low, but it’s likely that you have the required project materials in your home already:
A sampling of the projects includes:
Making bathrooms more private using stenciled window patterns
Creating slip-covered, upholstered headboards
Disguising less-than-perfect cabinet/cupboard doors with prints
Transforming old mirrors and windows into functional message boards
Decoupaging retro posters to revitalize old furniture
The projects range in difficulty from basic to advanced. Some require nothing more than scissors and glue; others require advanced skills in woodworking and sewing. There’s something for everyone.
A mortgage comes with many moving pieces and understanding them is the key getting a great deal. Unfortunately, studies show that few Americans have a firm grasp of how mortgages work — from mortgage types to mortgage fees.
In this back-to-basics interview on NBC’s The Today Show, you’ll learn some mortgage planning basics to help you get smarter with your next home loan in Cincinnati or anywhere else — purchase or refinance.
Some of the topics covered include:
The mortgage applicants for whom adjustable-rate mortgages are a better choice than fixed-rate mortgages
Why you should include “How Good Is This Lender?”-type questions in the rate shopping process
What a pre-approval letter is good for, and what it is not good for
There is also one of the most simple explanations of “discount points” ever offered on network television.
The video runs 4-and-a-half minutes. For first-time buyers and experienced ones, it’s worth a watch. You’ll pick up some tips to use on your next mortgage.
The summer housing market is heating up.
Compact fluorescent light bulbs are widely praised for their energy-efficiency and relatively low price points. However, unlike traditional light bulbs, they pose a specific health risk to humans and pets.
On paper, the market for newly-built, single-family homes looks healthy.
Wednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
Home resales 
The housing market received a jolt of good news Thursday. The Commerce Department reports that Single-Family Housing Starts improved in May.
The jobs market is recovering slower than expected, and so is housing. But neither condition has slowed U.S. consumers.
If you have a flair for home decoration projects, Better Homes & Garden has some terrific ideas for you on its website.
