Real Estate Home Loans in Boise Idaho, Benchmark Mortgage - Prime Equity Group

Existing Home Sales continued their upward climb in January.  This is the fourth month in a row where we have seen month-over-month gains in the number of units sold.  The National Association of Realtors reported that sales rose 2.7% from December.  Also, the inventory levels decreased again:

The number one reason that the housing market tanked was due to over supply.  So, with home sales increasing and inventory levels decreasing, this is certainly a trend with some momentum.  All cash sales and distressed sales did increase last period.  But any way that the excess inventory is gobbled up is good.  It certainly shows that the demand is there and that investors are snapping up properties before prices rise.  Maybe you should too?

As a lending professional, I have an opportunity to meet lots of Realtors®.  The NAR® report says 70% of buyers work with the first Realtor® they meet.  I am not sure that is the best situation.  Now I know several Realtors® that if that were to happen, the consumer would be really well taken care of.  One of the Realtors® I work with has been a Realtor® for sixteen years, has helped 1,000 families to buy or sell their homes, was a real estate appraiser for four years and was a lender, like me, for nine years.  Now that Realtor® knows what he is talking about and would be a good first choice for a buyer or seller.

On the other hand we have over 3,200 Realtors® in the Ada County Association of Realtors® now, and a significant percentage didn't sell a single house last year.  (Yes, things are really tough out there.)  We usually have two Realtors® on every transaction we assist a buyer with their loan.  Usually there is one who represents the seller and one who represents the buyer.  Occasionally, we can have a very experienced person on one side of the transaction and someone who is a little green on the other side. In those cases the more experienced person ends up doing 95% of the work and only gets paid 50%.  From that person's perspective it certainly doesn't seem very fair!

Appraisers have to do a two-year apprenticeship during which a much more experienced supervising appraiser is required to sign-off on all appraisal reports for that period. Has anyone ever considered instituting that type of arrangement in real estate for Realtors®?  I am not saying we shouldn't have new people come into the business, but why not impose an apprenticeship period until a new Realtor® has learned their craft and can be trusted to be out on their own? 

When selecting a Realtor® for your next home sale or purchase, consider working with someone that has been in the industry for awhile, and maybe not go with your neighbor's cousin who was just licensed. Your experience should be fun and exciting, and no the other sort that we see from time-to-time.

If consumer spending is a keystone element in the U.S. economic recovery, a full-on rebound is likely underway.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data surpassed expectations. Last month's retail figures climbed 0.3 percent as total sales receipts reached an all-time high.

It's good news for the economy which is scratching back after a prolonged recession, however as we have discussed in previous postings, if you're looking for a mortgage - rates have been going up since November and are not going to turn around anytime soon. 

Because consumer spending accounts for the majority of the U.S. economy, Retail Sales growth means more economic growth and that growth draws Wall Street's dollars toward riskier investments, including equities, at the expense of safer investments such as mortgage-backed bonds.

On the heels of the Retail Sales report's release, bond prices are falling this morning. As a consequence, mortgage rates are rising. It's the same pattern we've seen since mid-November - "good news" about the economy sparks a stock market frenzy, causing mortgage bonds to rise.

A sampling of other recent good-for-the-economy stories include:

• Corporate earnings are rising quickly (Marketwatch)
• Existing Home Sales up 12% month-over-month (CNN Money)
• The Fed says the economy looks "brighter" (Bloomberg)

The days of 4 percent, 30-year fixed rate mortgages are over. 5 percent is the new mortgage rate benchmark. That is unless the economy continues to keep showing strength; then, that number may rise to six percent.

If you're thinking of buying or refinancing a home, consider how rising rates will impact your budget. You may want to take that next step sooner than you had planned - if only to protect your monthly payments.

If your ARM is due to adjust this spring, your best move may be to allow it. Don't rush to refinance - your rate may be adjusting lower. It's because of how adjusted mortgage rates are calculated.

First, let's look at the lifecycle of a conventional, adjustable rate mortgage:

1. There's a "starter period" of several years in which the interest rate remains fixed.
2. There's an initial adjustment to rate after the starter period. This is called the "first adjustment".
3. There's a subsequent adjustment until the loan's term expires. The adjustment is usually annual.

The starter period will vary from 1 to 10 years, but once that timeframe ends, and the first adjustment occurs, conventional ARMs enter a lifecycle phase that is common among all ARMs - regular rate adjustments based on some pre-set formula until the loan is paid in full, and retired.

For conventional ARMs adjusting in 2011, an example of that formula is most commonly defined as:

(Index = 12-Month LIBOR) + (Margin = 2.250 Percent) = (New Adjusted Mortgage Rate)

LIBOR is an acronym for London Interbank Offered Rate. It's the rate at which banks borrow money from each other. It's also the variable portion of the adjustable mortgage rate equation, or the Index. The corresponding constant is typically 2.25%, or the Margin.

Since March 2010, LIBOR has been low and, as a result, adjusting mortgage rates have been low, too. In 2009, 5-year ARMs adjusted to 6 percent or higher. Today, they're adjusting near 3.000 percent. That's a big shift. 

Therefore, strictly based on mathematics, letting your ARM adjust this year could be smarter than refinancing it. You may get yourself a lower rate.

Either way, give us a call (208) 287-1717. With mortgage rates still near historical lows, Eagle homeowners have interesting options. Just don't wait too long. LIBOR - and mortgage rates in general - are known to change quickly.

Another day, another strong report for housing.

The Pending Home Sales Index climbed 2 percent in December, according to the National Association of REALTORS®. A "pending home sale" is an existing home under contract to sell, but not yet closed.

The Nationwide Pending Home Sales figures are up for the fifth time in 6 months. The December reading is now its highest since the federal home buyer tax credit's April 2010 contract deadline, and the figure is well north of the Pending Home Sales Index 3-year average.

Coupling this data with December's strong Existing Homes Sales report (+12%) and its strong New Home Sales report (+17%), it's clear that the housing market has past its trough and is in Recovery Mode.

Even consumer confidence is at an 8-month high.

On a regional basis, December's Pending Home Sales Index varied as compared against November. The South region led the way, and the West region lagged.

• Northeast Region: +1.8%
• Midwest Region : +8.0%
• South Region : +11.5%
• West Region : -13.2% (Don't look at the Western Region figures as a negative sign, the economy has turned - the time to buy a home is RIGHT NOW!)

Home buyers in Idaho would do well to study last month's Pending Home Sales Index. It offers clues of what to expect during the spring buying season. For example, according to the National Association of REALTORS®, 80 percent of homes under contract close within 60 days.

Therefore, we can look at the December Pending Home Sales Index and project, with a high level of confidence, that home sales will be higher throughout February and March on a units-basis.

Furthermore, because the Existing Home Sales and New Home Sales reports show that housing stock is falling nationwide, spring buyers in Boise will notice find more competition for the available housing stock. As the Supply-and-Demand curve shifts towards sellers, home prices rise.

In other words, as the year progresses, home prices are expected to rise, as are mortgage rates. This one-two combination will impact home affordability negatively. And the higher that mortgage rates go, the worse the damage.

Your home-buying dollar won't go as far in in the second half of 2011 as it will right now. So if you have plans to buy a home in 2011, consider moving up your time-frame.

Sales of new homes rose sharply in December, posting a 17.5 percent gain from the month prior.

According to the Department of Housing and Urban Development, New Home Sales climbed to 329,000 in December, besting November by close to 50,000 units on a seasonally-adjusted annual basis.

Last month's reading is an 8-month high for New Home Sales, and the latest in a series of signals that housing is improving in Meridian and around the country.

Note that December's Existing Homes Sales and Building Permits reports also showed marked gains last month, climbing 12 percent and 6 percent, respectively.

Furthermore, an interesting pattern is emerging in the price points of home sales. The highest levels of relative growth are occurring within the "move-up buyer" segments. Entry-level price points are lagging the market, as a whole.

December's New Home Sales data breaks down by price point as follows:

• Homes under $200,000 : 36% of the market (-9% from November)
• Homes between $200,000-$299,999 : 32% of the market (+7% from November)
• Homes between $300,000-$499,999 : 27% of the market (+7% from November)

Luxury homes accounted for less than 5% of the newly-built home market, suggesting that Idaho homeowners are either not "buying new" as frequently, or are choosing to renovate their existing properties instead.

The 2010 housing market finished on a tear, and that momentum is carrying forward into 2011. Expect the spring season to show strongly, putting pressure on home prices to rise.

Coupled with rising mortgage rates, the long-term cost of homeownership is unlikely to be as low as it is today. 

Each week I am providing the Best Real Estate Buys in Boise, Idaho.

As a former real estate appraiser and a Realtor since March 1, 1995 I try to always watch out for the best interests of my clients.

What I have assembled is a look at all the condominiums, townhomes, and single family homes with exceptional value.  I have limited them to those that have at least a three-bedroom, 2-bath, with at least a 2-car garage for resale.

In Boise, Idaho I have found twenty-seven homes that have a per square foot value of $50.00 or less.  You could not re-build these homes for the prices they are being offered for today.

If you would like a list of these or to see some exceptional values in other nearby communities, please e-mail me at Tim@TimBurroughsGroup.com or call 208-409-7653.

Watch each week for updates to these best real estate buys in Boise, Idaho.

Each month, in conjunction with the Department of Housing and Urban Development, the Census Bureau releases its New Residential Construction report. The report is comprised of several sections, one of which counts the number of homes that have "broken ground" in Idaho and nationwide.

They're called "Housing Starts" and, by most measures, they faded quickly as 2010 came to a close.

According to the Census Bureau's report, Housing Starts of single-family homes fell to 417,000 units on a seasonally-adjusted, annual basis. The figure marks a 9 percent drop-off from November, and is the lowest reading since May 2009.

Not surprisingly, the press went bearish on housing post-release:

• U.S. Home Building Stuck Near 50-Year Lows (AFP)
• Housing Starts Slowed Sharply In December (New York Times)
• Housing Starts Fall In December To One-Year Low (Bloomberg)

Despite being truthful, these headlines are somewhat misleading. They each ignore a key element of December's New Residential Construction report - Building Permits. Building Permits rose 6 percent to an 8-month high last month.

A building permit is a local-government certification that authorizes home construction. 

Permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. More permits in December, therefore, should lead to more Housing Starts in January and February.

It's unclear whether permits were up because the economy was improving, or because builders raced to beat new building code for 2011. Regardless, expect additional "new home" supplies this spring which would ordinarily help home prices drop if not for the normal surge in spring buyers to gobble those new homes up.

Look for home prices to stay flat, but with rising mortgage rates contributing to higher costs of homeownership overall.

Consumers keep spending, the economy keeps growing.

Mortgage rates are improving this morning on just-released, slightly worse-than-expected Retail Sales data from December 2010.

Excluding motor vehicles and auto parts, December's sales receipts were $1.5 billion higher from November. Analysts had expected a number north of $2 billion.

Despite falling short of estimates, however, December's reading is the highest in Retail Sales history, surpassing the previous record set in July 2008, set during the recession. In addition, December's strong numbers helped 2010's year-over-year numbers go positive for the first time in 3 years.

Although the data is a mixed bag for Wall Street, home affordability in Eagle is improving today.

The link between Retail Sales and home affordability may not be up-front obvious, but in a post-recession economy like ours, it's often tight. Retail Sales is another name for "consumer spending" and consumer spending makes up more that 70% of the U.S. economy.

As spending grows, the economy tends to, too.

Investors recognize this and start chasing "risk". It becomes a boost for the stock market, but those gains are made at the expense of "safe" asset classes which include mortgage-backed bonds. Mortgage-backed bonds are the basis for conforming and FHA mortgage rates so, as bond markets sell off, asset prices fall and rates move up.

Thankfully, rate shoppers will avoid that scenario today -- at least for today. December's Retail Sales results are a factor in the bond market's early-day improvement. Conforming and FHA mortgage rates across the state of Idaho should be lower today.

Despite the good news, if you're shopping for a mortgage, consider locking your rate as soon as possible. Mortgage rates are coming off a 2-week rally and look poised to reverse appear -- especially with a full docket of data due for next week. As mortgage rates rise, purchasing power falls.

I set out to find the best buys in Kuna, Idaho this morning.  When you try to find the best buys, do you look for the most square footage for the dollar, or what?  We tried to look at all homes that were listed for less than $50.00 per square foot.

Then, we looked at those homes to see if they were really a good value. 

Then, we looked at the probablity for a quick close as an investor wants to see his/her money turn.

We found five and reduced that number by the ones that were short sales since we don't know when those would close or if they would close for the listed price.

We came up with three homes that are either bank-owned, new construction or in-between resale homes that have exceptional per square foot value.

If you would like a copy of that list for the City of Kuna, simply send me an e-mail to Tim@kw.com and ask for Best Buys in Kuna, Idaho for the week of January 15, 2011.