January Homesales Come In With a 15% Increase

New home sales in January jumped to a seasonally adjusted annual rate of 437,000, a 15.6 percent increase over the December number of 378,000 and a 28.9 percent increase compared to January 2012 when sales were at a rate of 339,000. 

According to the new home sales report issued this morning by the Census Bureau and the Department of Housing and Urban Development, sales rose on both a monthly and an annual basis in all four regions. The monthly and yearly increases were 27.6 percent and 54.2 percent in the Northeast; 11.1 percent and 13.6 percent in the Midwest; 3.2 percent and 16.6 percent in the South and 45.3 percent and 60.3 percent in the West. WOW!

The median sales price of new houses sold in January was $226,400 compared to $221.700 a year earlier. The average price was $286,300, up from $265,700 in January 2012.
At the end of the reporting period there were 150,000 new homes for sale. This represents a supply of 4.1 months at the current rate of sales. In January 2012 there were 149,000 new homes on the market, a 5.3 month supply. 
John Tashjian, Principal, Centurion Real Estate Partners in NYC said of the report, "January's new home sales data is continued evidence that market is on a positive trajectory. While we believe that we are still in the second inning of a nine inning game, increased new home sales are a strong indicator of increasing consumer confidence in the overall US housing market. As interest rates remain at all-time low levels and access to capital becomes more readily available to the homebuyer, we will expect to see new home sales continue to increase. 

PICK YOUR PARENTS WISELY

A study by the Brookings Institution of the largest 100 metropolitan areas quantifies what Realtors have intuitively known forever: housing costs an average of 2.4x more near a high scoring public school than a low scoring school (about $11,000 more per year). In addition, home values are $205,000 higher on average in the neighborhoods of high scoring versus low scoring schools and those homes have 1.5 more rooms. Finally, the study found 60% of high school dropouts came from the bottom 20% of families by income and 70% of students enrolled at the most competitive universities in the country came from the top quintile of parental socio-economic status. The moral: pick your parents wisely!

CAN OBAMA FORCE BANKS TO HELP HOMEOWNERS

THERE IS ALOT OF TALK FROM OBAMA ABOUT FORCING BANKS TO REFINANCE CUSTOMERS UNDERWATER WITH NON-AGENCY LOANS. http://lnkd.in/MhC2nq

"Cash is King"

Record One-third of Home Sales in California were All-Cash

 

                                               

More than one-third of the houses purchased in California in 2012 were all-cash sales, a record for such transactions. DataQuick said today that there were 145,797 condos and houses purchased in the state without benefit of a mortgage, 32.4 percent of all sales. In 2011, which was also a record year, there were 125,812 such sales or 30.4 percent of the total. Cash sales have represented an average of 15.6 percent of sales each year since 1991 when DataQuick began collecting data. DataQuick attributed the sales to high investor interest, a difficult mortgage environment, and perceived higher returns on investments.

Mortgage Rates Are Rising - Better Lock in Quick

THE DOW IS UP 2% For The YEAR

Off to a flying start: Domestic equities soared after Congress struck a fiscal cliff deal in the wee hours of the new year, and those who believe that January suggests something about the rest of 2013 were rejoicing. The Dow industrials haven't seen a January this good since 1989; the index is now just over 2% away from its pre-2008 high. The S&P500 had its best January since 1997, and is roughly 4% from achieving a similar milestone. The Nasdaq was hampered in part by Apple's fall from favor but still had its best month since last August, while the small-cap Russell 2000 handily beat the large caps. And the Global Dow gained in a single month more than half of the 10.8% it earned in all of 2012.

The renewed interest in equities cut into bond demand; the 10-year Treasury yield rose above 2% for the first time since last April. Oil prices rose almost 5% to more than $97 a barrel during the month, while the dollar lost roughly 1.5% against a basket of six foreign currencies. Despite some volatility, gold ended January at roughly $1,680, only slightly higher than it started.

December Home Prices Post Largest Annual Increase in 7 Years

Home prices in December posted the largest annual increase in nearly seven years according to CoreLogic's Home Price Index (HPI) report. December was also the 10th consecutive month in which home prices increased nationally.
The index that included distressed sales (sales of owned real estate and short sales) increased by 8.3 percent compared to December 2011, the largest increase since May 2006. With distressed sales excluded the HPI increased 7.5 percent year over year. Prices were up 0.4 percent including distressed sales and 0.9 percent excluding distressed sales compared to November.

http://www.mortgagenewsdaily.com/02052013_home_prices_corelogic_hpi.asp

Only 16% of Homeowners Refi to a Higher Balance

Freddie Mac reported that 84% of homeowners who refinanced their first-lien home mortgage either maintained the same loan amount or lowered their principal balance by paying in additional money at the closing table, just shy of the record 85% during the fourth quarter of 2011. Of these borrowers, 46% maintained about the same loan amount, while 39% reduced their principal balance in the latest period.

Freddie Mac said the average interest rate reduction was about 1.8 percentage points, or 33%, the largest percent reduction recorded in the company’s 27 years of analysis.

http://blogs.wsj.com/economics/2013/02/04/just-16-of-refinancers-increase-their-mortgage-debt/?mod=wsj_valettop_email

WHY ARE INTEREST RATES RISING?

The sustained rise in long-term rates in January has stabilized for the moment, and its causes are becoming clear.
Mortgages have risen from 3.50 percent or below in the prior five months to roughly 3.75 percent, and the almighty 10-year T-note from a centerline near 1.75 percent to almost 2 percent.
The rise has been puzzling.
The Fed committed just last fall to buy $40 billion a month in mortgage-backed securities to keep mortgage rates down. Then in December, the Fed announced it would continue buying $45 billion in long-term Treasurys each month.
The stated purpose of both programs -- which together are increasing the Fed's holdings of long-term securities by $85 billion a month -- was to hold rates down until our economy turns sharply better. Which it hasn't.
Today's employment report had its usual ambiguities. Optimists and the White House are pleased at 157,000 new "non-farm payroll" jobs, and the November-December upward revision of another 127,000.