Home homebuyer august05

homebuyer august05

August, 2005 Newsletter

+++++++++++ August 1, 2005 +++++++++++++++++++

CONTENTS: 
Introduction: New Records for Resale Activity and New Homes
Mortgage Rate Update: Rates Rise
This Month’s Tip: Do You Have The Correct Mindset To Be Shopping For A Home?

Introduction:Welcome to the July edition of the Home Buyer’s
Newsletter, brought to you by the Home Buyer’s Information Center.

Existing-home sales surpassed market expectations and reached another record in June as low mortgage interest rates and favorable market conditions continued to attract buyers, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.7 percent in June to a seasonally adjusted annual rate of 7.33 million from an upwardly revised pace of 7.14 million in May. Sales were 4.4 percent above the 7.02 million-unit level in June 2004; the previous record was 7.18 million in April of this year.

David Lereah, NAR’s chief economist, said home sales were expected to ease slightly from peaks reached over the last couple of months. “Just when you think sales activity is ready to settle into a more sustainable pace, the housing market continues to surprise,” he said. “We’ve been expecting sales to remain at historically high levels, but this performance underscores the value of housing as an investment and the importance of home ownership in fulfilling the American dream.”

The national median existing-home price for all housing types was $219,000 in June, up 14.7 percent from June 2004 when the median price was $191,000; this is the strongest increase since November 1980 when annual appreciation was 15.6 percent. The median is a typical market price where half of the homes sold for more and half sold for less.

Sales of new one-family houses in June 2005 were at a seasonally adjusted annual rate of 1,374,000, according to estimates released jointly on July 27 by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.0 percent above the revised May rate of 1,321,000 and is 14.0 percent above the June 2004 estimate of 1,205,000.

The median sales price of new houses sold in June 2005 was $214,800; the average sales price was $267,400. The seasonally adjusted estimate of new houses for sale at the end of June was 454,000. This represents a supply of 4.0 months at the current sales rate.

Mortgage Rate Update: Rates Rise

Mortgage rates rose slowly but steadily throughout the month of July, reversing all of the decline from the period of mid-May through the beginning of the month. According to mortgage company Freddie Mac, 30-year fixed-rate mortgages averaged 5.73% in the period ending July 28th, after beginning the month at an average of 5.53%. The trend in 15-year fixed-rate mortgages took a similar upward move, averaging 5.32% after starting the month with an average of 5.12%. Although long-term interest rates have increased, it has been slowly and with some stops and starts. Shorter term interest rates, however, been steadily increasing and are expected to continue to do so, which means rates for Adjustable Rate Mortgages (ARMs) will continue to rise, both those already on the books as well as new originations.

For current average mortgage rates, see the rates page.

For more information on mortgages, visit the Mortgage Section

Sponsor: Home Gain

Looking for a Real Estate Agent? HomeGain makes finding and selecting an Agent in your area fast and simple! You can:

*Compare a selection of top-performing agents from brand-name, local brokerages

*Get the facts on prospective agents’ backgrounds, experience, local sales, commission rates, and more.

*Remain anonymous throughout your agent search (no sales pressure!)   More information

This Month’s Tip: Do You Have The Correct Mindset To Be Shopping For A Home?

– by Don Berthiaume

© Don Berthiaume – All Rights reserved
Author, The Home Buyer’s Defense Guide

By learning what you need to know and preparing how to purchase a home ahead of time, you will be less likely to become so enamored with a particular property that you fall into the traps and the pitfalls that are so often the result of IRD, or Irrational Decision Making.

Do not allow your emotions to come before sound and rational reasoning when making the decision to purchase a home.

Let’s face it; if you’ve been out house hunting, you know the feeling you get when you finally think you’ve found a house you really like.

You’re like a kid in a toy store—excited about the possibilities that this “dream house” could really be yours.

When you go to see the home, you’re herded through it like sheep in a predetermined pattern.

– You’re not encouraged to spend as much time as you need in any one place.

– You’re not able to ask as many questions as you would like.

– You’re not asked if you would like to set up another time to come back and go through the house again.

The option to sit down and have a good conversation with the owner is not available to you.

In other words, you’re expected to make a decision on the largest single purchase of your life without having many of the facts you really need.

Of course, you’re likely to get a home inspection and an appraisal done. But, if you think that’s enough to protect you, you’ve got another thing coming to you.

After over 21 years dealing in real estate and its many players, I am here to tell you—it simply is not.

– When it comes down to buying a home, nobody—but you— is going to be watching out for your best interest.

– You need to get as much information as you can before you buy.

– There is no one who can (or will) be as thorough as you.

Why? Because nobody else has to be as thorough.

It’s not their home. They’re not going to be living there.

And, whatever issues you end up having, they can’t see them from their house!

Ask anyone who has ever purchased a home this one question:

“After you purchased your home, were there things that you saw, noticed, or realized about the property that—had they been seen, noticed or realized BEFORE making the purchase —would have changed the way you proceeded with the home buying process”?

Possible changes might have included:

– Offering less for the home,

– Making it a condition of the sale that something be repaired or replaced, or

– Not having gone through with the purchase at all!

Think about that for a moment.

What is the probability that you’re going to be able to keep a level head when the real estate agent is telling you that you need to act quickly because there are three other showings after you?

And you “just love” the house…

If you are unprepared, but feeling pressured, how likely is it that you will make an informed decision quickly when you haven’t even done any homework on the property?

Remember:

– Don’t be pressured into making the mistakes typical homebuyers make.

– Take the time to do your homework and get the information you need to make a rational buying decision, then

– Step back, take a deep breathe and really look at what you’re about to buy.

Don Berthiaume has been involved with real estate for over 21 years. He is the author and publisher of The Home Buyer’s Defense Guide.

Next Month’s Topic: Check Your Emotions at the Door

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