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You heard it here first folks...well, maybe...
Under a compromise reached Wednesday, the existing $8,000 credit would be extended for first-time home buyers who sign a contract for a home by the end of April 2010 and close by the end of June.
It also creates a $6,500 credit for people who buy a home but have owned a home for at least five consecutive years out of the past eight years.
The income limit would be raised to $125,000 a year for individuals and $225,000 for married couples, up from the current income limits of $75,000 and $150,000, respectively.
Thank you National Association of Realtors...you oughta be the only lobbyists allowed on the hill!!
Thursday, October 29, 2009
Wednesday, October 21, 2009
And the news is...
59% of Home Buyers Rely on Low Down-Payment Government Mortgages
________________________________________
RISMEDIA, October 21, 2009—
The new home market is cooling down and government intervention has been a key driver to new home sales, according to a recent monthly survey of home builders, just released by John Burns Real Estate Consulting.
In addition to the tax credit that expires Nov. 30, government mortgage programs have been critical in 2009. The survey reveals that 59% of this year’s sales have been dependent on FHA, VA or USDA financing programs with 96.5% to 100% LTV.
What percentage of your home buyers this year used this type of financing?
Region Cash FHA Jumbo Other Conforming USDA VA Don’t
Insured Loans Loans Loans Know
Midwest 3% 59% 1% 18% 3% 3% 13%
Northeast 7% 41% 8% 28% 2% 6% 8%
Northwest 5% 34% 13% 31% 6% 11% 1%
Northern CA
Region 4% 68% 0% 16% 0% 8% 3%
Northern
Florida 6% 47% 2% 15% 16% 9% 5%
Southeast 7% 48% 6% 18% 3% 11% 7%
Southern
California 6% 48% 15% 19% 0% 8% 3%
Southern
Florida 22% 59% 4% 13% 0% 3% 0%
The highest use of FHA financing was reported by Northern California builders, while Southern Florida builders reported the highest percentage of cash purchases. “The cash sales are most likely due to investor purchases of attached homes,” said Jody Kahn, a vice president with the firm.
Not surprisingly, Southern California reported the largest use of jumbo mortgages. “The tough underwriting and higher pricing of jumbos has constrained sales of move-up homes,” said Kahn.
This month’s survey consists of 262 home building industry executives from public and private companies. In total, their insight is reflective of on-the-ground conditions in 86 MSAs and 1,741 communities.
“The good news for builders is that there seems to be momentum behind the effort to extend the federal tax credit and that the FHA is going to become more conservative, but not significantly curtail operations,” said CEO John Burns. “Political winds can change quickly though, so stay tuned.”
Survey Highlights:
-The average unsold, finished inventory per community decreased nationally to 2.7 from 3.7 last month. This significant decline in inventory indicates the speculative starts from the summer are being converted to closings. Regions reporting significant declines in inventory per community since last month include Southern California, the Northwest and Southern Florida.
-Average net sales per community dropped from 2.0 to 1.6 nationally, returning to levels last seen in June and July. The net sales rate declined in seven regions compared to only one during the prior month. While significantly better affordability, low conventional mortgage rates, and the federal tax credit continue to support new home sales, builders across the country are reporting declines in traffic and sales rates in September and into October. Some builders lacking entry level inventory to close by November 30th are losing sales to competitors. Seasonality is also contributing to declining sales.
-Last month’s reports of price increases in California softened this month. Pricing in Southern California is now rated flat, while Northern California pricing is decreasing. This month, Southern Florida builders rated pricing as increasing. The direction of new home prices was unchanged nationally this month, and remains hovering near flat, as builders reporting further decreases in prices offset those builders seeing flat or increasing prices.
-Builders started more homes in 4 of 10 regions, and trimmed starts in 3 regions. The Northeast, Southeast and Northwest regions are all reporting increased starts in the 8% to 9% range. The Southern Florida region reported the largest increase in starts this month. Notable declines in start rates were reported in the Midwest, Southern California and Northern Florida.
For more information, visit www.realestateconsulting.com.
________________________________________
RISMEDIA, October 21, 2009—
The new home market is cooling down and government intervention has been a key driver to new home sales, according to a recent monthly survey of home builders, just released by John Burns Real Estate Consulting.
In addition to the tax credit that expires Nov. 30, government mortgage programs have been critical in 2009. The survey reveals that 59% of this year’s sales have been dependent on FHA, VA or USDA financing programs with 96.5% to 100% LTV.
What percentage of your home buyers this year used this type of financing?
Region Cash FHA Jumbo Other Conforming USDA VA Don’t
Insured Loans Loans Loans Know
Midwest 3% 59% 1% 18% 3% 3% 13%
Northeast 7% 41% 8% 28% 2% 6% 8%
Northwest 5% 34% 13% 31% 6% 11% 1%
Northern CA
Region 4% 68% 0% 16% 0% 8% 3%
Northern
Florida 6% 47% 2% 15% 16% 9% 5%
Southeast 7% 48% 6% 18% 3% 11% 7%
Southern
California 6% 48% 15% 19% 0% 8% 3%
Southern
Florida 22% 59% 4% 13% 0% 3% 0%
The highest use of FHA financing was reported by Northern California builders, while Southern Florida builders reported the highest percentage of cash purchases. “The cash sales are most likely due to investor purchases of attached homes,” said Jody Kahn, a vice president with the firm.
Not surprisingly, Southern California reported the largest use of jumbo mortgages. “The tough underwriting and higher pricing of jumbos has constrained sales of move-up homes,” said Kahn.
This month’s survey consists of 262 home building industry executives from public and private companies. In total, their insight is reflective of on-the-ground conditions in 86 MSAs and 1,741 communities.
“The good news for builders is that there seems to be momentum behind the effort to extend the federal tax credit and that the FHA is going to become more conservative, but not significantly curtail operations,” said CEO John Burns. “Political winds can change quickly though, so stay tuned.”
Survey Highlights:
-The average unsold, finished inventory per community decreased nationally to 2.7 from 3.7 last month. This significant decline in inventory indicates the speculative starts from the summer are being converted to closings. Regions reporting significant declines in inventory per community since last month include Southern California, the Northwest and Southern Florida.
-Average net sales per community dropped from 2.0 to 1.6 nationally, returning to levels last seen in June and July. The net sales rate declined in seven regions compared to only one during the prior month. While significantly better affordability, low conventional mortgage rates, and the federal tax credit continue to support new home sales, builders across the country are reporting declines in traffic and sales rates in September and into October. Some builders lacking entry level inventory to close by November 30th are losing sales to competitors. Seasonality is also contributing to declining sales.
-Last month’s reports of price increases in California softened this month. Pricing in Southern California is now rated flat, while Northern California pricing is decreasing. This month, Southern Florida builders rated pricing as increasing. The direction of new home prices was unchanged nationally this month, and remains hovering near flat, as builders reporting further decreases in prices offset those builders seeing flat or increasing prices.
-Builders started more homes in 4 of 10 regions, and trimmed starts in 3 regions. The Northeast, Southeast and Northwest regions are all reporting increased starts in the 8% to 9% range. The Southern Florida region reported the largest increase in starts this month. Notable declines in start rates were reported in the Midwest, Southern California and Northern Florida.
For more information, visit www.realestateconsulting.com.
Wednesday, October 14, 2009
The $8,000 Tax Credit deadline is approaching FAST!!!
Just a subtle little reminder that time is slipping away to ensnare the $8,000 tax credit! Yes, there are a lot of rumors out there about the Tax Credit being extended and up to $162.783, but don't believe all you read or hear, especially on FOX News.
Just a couple of things...the home purchase must be CLOSED by the end of November and the term First Time Home Buyer is dangeroyus and misleading!!!
Read on...
1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home ”new or resale” are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases.
2. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
3. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
4. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Just a couple of things...the home purchase must be CLOSED by the end of November and the term First Time Home Buyer is dangeroyus and misleading!!!
Read on...
1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home ”new or resale” are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases.
2. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
3. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
4. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Sunday, October 4, 2009
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