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THE TAX CREDIT IS OVER. NOW WHAT?

June 19th, 2010 2:00 PM

The tax credit of $8,000 for first time buyers and $6,500 for repeat buyers is over. In order to qualify for the credit, a buyer had to have a purchase and sale agreement signed by all parties in place by April 30. The month of April brought a significant increase in the number of new pending sales. New pending sales have dropped in May and June as would be expected. Many of the sales that otherwise would have taken place in May and June were compressed into April. Inventories in most towns in North Central CT are on the rise which will most likely lead to a continued decline in prices. Interest rates are at or near historic lows making now a great time to be a buyer. Even if prices are slightly lower a year from now, it is entirely possible that rates will be higher offsetting any gain a buyer may get do to the lower price. If you are a buyer and you see a home that is fairly priced and it is a match with what you are looking for, you should buy it without hesitation. Ten years from now people will look back at this wonderful buying opportunity and will either say “I am so glad that I bought back in 2010 when prices and interest rates were much lower than they are today” or “I should have bought back in 2010 when I had the chance”.

Posted by Brian Banak on June 19th, 2010 2:00 PMPost a Comment (0)

FIRST TIME BUYER TAX CREDIT

November 6th, 2009 10:02 AM

In case you didn't hear the news, the Senate and House voted in favor of extending the first-time homebuyer tax credit. The legislation extends, through April 30, an $8,000 first-time homebuyer tax credit and creates a new $6,500 credit for homebuyers who have been in their current residence for the last five years or more.

The Senate unanimously voted Wednesday night (98-0) and the House just passed the bill on Thursday afternoon (403-12).

President Obama is expected to sign the legislation on Friday, November 6.

For more information about legislation, click on the link below: http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf

It is my personal opinion that the $8,000 should have been extended. It was a mistake to have the orginal credit expire on 11/30, just as the real estate market enters a traditional slow period. However, I don't think that the second credit of $6,500 was necessary. The $8,000 credit seemed to be working quite nicely. Eventually, all of this money will have to be paid back.

Posted by Brian Banak on November 6th, 2009 10:02 AMPost a Comment (0)

The $8,000 first-time home buyer tax credit

September 16th, 2009 12:41 PM

The $8,000 first-time home buyer tax credit is bringing the dream of homeownership within reach for many.

As part of its plan to stimulate the U.S. housing market, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers. Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies?

First-time buyers who purchase homes between January 1, 2009 and December 1, 2009. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos and townhouses.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home – the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income – single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 – may receive the maximum tax credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Has the tax credit been working to stimulate the housing market?

Yes. In many markets the number of sales is up substantially over 2008. Each sale to a first-time buyer often leads to many more sales. The seller who sells a home for $200,000 to a first-time buyer will often “move up” and purchase a home for $300,000. The seller of the $300,000 home is now free to purchase a $400,000 home etc. I was recently at a closing that was number 3 in a chain of 5 sales that started with the first-time home buyer who was taking advantage of the tax credit.

Many professionals get paid with each sale including realtors, attorneys, appraisers, home inspectors, plumbers, painters, electricians etc. In addition, both the State and Town receive conveyance tax revenue with each transaction. Hopefully, Congress will elect to extend the tax credit until sometime in 2010.

Posted by Brian Banak on September 16th, 2009 12:41 PMPost a Comment (0)

The Truth about the Real Estate Market

June 5th, 2009 2:47 PM

You hear bad news about the real estate market everywhere you turn. It's on television, on the internet, on the radio and in print. What you rarely hear is the good news about the real estate market.

Bad news sells newspapers and gets high ratings for television. Therefore, the media has on incentive to report any good news about the market.

Did you know that approximately 30% of all homeowners own their homes free and clear with no mortgage?

The current market affords some great opportunities for first time buyers. There is a large selection of available homes and interest rates are very attractive. In addition, many first time homebuyers may qualify for an $8,000 tax credit.

Many first time buyers are using FHA loans for the financing. An FHA loan requires only a 3.5% down payment. On a $200,000 home, that would be $7,000. With an FHA loan the seller can pay up to 6% of the purchase price in closing costs on behalf of the buyer.

Give me a call if you want to hear more good news about today's real estate market.

Posted by Brian Banak on June 5th, 2009 2:47 PMPost a Comment (0)

First time buyers want to buy now.

March 31st, 2009 6:56 PM

More than three-quarters (78 percent) of potential first-time homebuyers say that now is a good time to buy a home, despite widespread concern about the economy, according to a Century 21 First-time Homebuyer Survey. Out of the 1,000 prospective U.S. first-time homebuyers surveyed in early March, 68 percent think now is a better time to buy than six months ago.

Prices are the driving motivation for potential first-time homebuyers with more than eight of ten first-time home buyers (85 percent) saying they consider current home prices affordable and 73 percent citing that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between "being willing to consider an offer now" (42 percent) and "waiting for prices to go down before they seriously consider making a purchase" (48 percent).

Posted by Brian Banak on March 31st, 2009 6:56 PMPost a Comment (0)

NAR reports that home sales are up and inventory is down.

February 2nd, 2009 4:13 PM

The Realtor association reports sales of existing homes were up 6.5 percent in December compared to November, but were still 3.5 percent below the sales pace of December 2007.
     For all of 2008, there were 4,912,000 existing-home sales, 13.1 percent below the 5,652,000 transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
     NAR Economist Lawrence Yun said falling prices significantly impacted sales.
     “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions,” he said. “Buyers will continue to have an edge over sellers for the foreseeable future."
     Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.

Posted by Brian Banak on February 2nd, 2009 4:13 PMPost a Comment (0)

Treasury's new plan - 4.5% mortgage rates

December 5th, 2008 4:28 PM

Homeowners may soon enjoy mortgage rates as low as 4.5 percent if the Treasury Department has its way. According to The Wall Street Journal's on-line addition, the department is discussing a plan that would use Freddie Mac and Fannie Mae to push banks to make mortgages available at more than a full percentage point below the current levels for a 30 year fixed rate mortgage.

The plan under review might lower rates to the 4.5 percent range and would be in addition to a program announced last week wherein the Federal Reserve will purchase up to $600 billion of debt either issued or backed by Freddie Mac, Fannie Mae, Ginnie Mae, and the Federal Home Loan Banks. That program is already having an effect on mortgage rates, which have dropped and caused investors to pay more attention to the stocks of banks and homebuilders.

Probably in response to the earlier new program and the lower rates, mortgage applications jumped a record 112.1 percent as seasonally adjusted over the previous week, according to the Mortgage Bankers Association. The Journal reported that the government would encourage banks to issue new mortgage loans at lower rates by offering to purchase securities backed by the loans at a price equivalent to the 4.5 percent rate, funding the program by issuing Treasury debt at 3 percent.

Source: The Wall Street Journal, Mortgage News Daily

Posted by Brian Banak on December 5th, 2008 4:28 PMPost a Comment (0)

FHA Mortgage applications continue to increase

December 4th, 2008 5:15 PM

Due in part to the higher FHA conforming loan limits and lower credit requirements, the government-insured share of mortgage applications continues to grow relative to conventional mortgage applications, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Of all mortgage applications taken during the month of October 2008, 32.9 percent were for government-insured loans (consisting mainly of FHA loans) compared to 10.3 percent in October 2007.

The government-insured share has increased from 9.4 percent in January 2008 to its current level of 32.9 percent, which is the highest level observed since February 1991. Since the MBA survey's inception in January 1990, the lowest recorded share was 5.8 percent in August 2005 and the highest was 43.8 percent in February 1990.

"This increase in the share of government-insured mortgage applications provides further evidence that there are still loans available to qualified borrowers, particularly through the FHA," said MBA's Chairman David G. Kittle, CMB. "The mortgage market remains fully operational and lenders are working to ensure borrowers with sufficient downpayment and good credit have the opportunity of homeownership."

Data from the U.S. Department of Housing and Urban Development (HUD) show that the level of conventional to FHA refinance applications has increased 89.2 percent on a year over year basis in October. Likewise, the actual level of refinances from conventional loans to FHA insured loans has increased 144.3 percent on a year over year basis. Based on the MBA survey, application volume for government-insured loans was up 113.6 percent in October from a year ago, while application volume for conventional loans was down 49.7 percent, showing that borrowers are still moving from conventional to government-insured mortgages.

Posted by Brian Banak on December 4th, 2008 5:15 PMPost a Comment (0)

Realogy proposes the government buy down mortgage rates

October 31st, 2008 4:19 PM

Realogy Corporation recently approached the U.S. Department of Treasury with a solution to help stimulate the housing market and lead to a broader economic recovery.

Realogy's proposal calls for a short-term government buy-down of mortgage rates to at least 4.5 percent, or lower, for a 30-year fixed rate mortgage. This homebuyer incentive would apply to the purchase of all new and/or existing homes sold up to $1 million in price. There are a number of ways in which the government ultimately could decide to structure and fund this program, which could be addressed as part of the stimulus packages currently being discussed in Washington.

"We think the pent-up consumer demand for housing, if encouraged, is more than sufficient to stabilize housing," says Realogy President and CEO Richard A. Smith. "In our view, substantially lower mortgage rates will stimulate both existing and new home sales, reduce home inventory levels, stabilize home prices and, ultimately, help the overall economy. When home sales increase, housing-related consumer purchasing follows, and we would expect this to help lead our economy to a recovery. We feel strongly mortgage rates must be lowered to stimulate a recovery."

Posted by Brian Banak on October 31st, 2008 4:19 PMPost a Comment (0)

Mortgage Rates Drop Dramatically

September 13th, 2008 1:34 PM

On September 11, 2008, Freddie Mac released the results of its Primary Mortgage Market Survey^® (PMMS^®) and report that the 30-year fixed-rate mortgage (FRM) averaged 5.93% for the week end, down from last week when it averaged 6.35%. Last year at this time, the 30-year FRM averaged 6.31%.

The 15-year FRM this week averaged 5.54% down from last week when it averaged 5.90%. A year ago at this time, the 15-year FRM averaged 5.97%.

Please visit http://www.freddiemac.com/news/mediaroom/ to read the entire press release.

Posted by Brian Banak on September 13th, 2008 1:34 PMPost a Comment (0)