Last Updated Aug 24, 2009 2:38 PM EDT Today's breaking news from the U.S. Department of Housing and Urban Development (HUD): This morning HUD Secretary Shaun Donovan announced a new program that will allow first-time buyers to "monetize" (that's his word) their $8,000 tax credit and use it toward paying FHA loan costs. The announcement came in a speech this morning to the National Association of Home Builders (NAHB). It's a redo of a plan that came out a couple of weeks ago (and was rescinded in days), allowing first-time buyers to "monetize" their $8,000 tax credit and use it toward a down payment on their home. But that decision turned out to be a political hot potato, as folks weighed in saying that if first-time buyers didn't have the cash available for a down payment, what the heck were they doing buying a house to begin with? Great question. (I've asked that same question myself.) So, HUD retooled and came up a new plan that requires first-time buyers to come up with the cash … [Read more...] about Uncle Sam Says: Go Buy a House with Your $8,000 Tax Credit
Buying s house
Last Updated Oct 19, 2009 2:59 PM EDT Is the U.S. housing market ready to stand on its own? Let's see:According to its latest monthly survey, John Burns Real Estate Consulting reports that 59 percent of new home buyers rely on low-down payment government-backed mortgages, including FHA, VA, or USDA financing with 96.5 to 100 percent home loan-to-value (LTV) ratios. The good news is that average unsold finished inventory per community shrunk from 3.7 to 2.7 units. On the other hand, the average net sales per community dropped from 2.0 to 1.6, returning to levels last seen in July. Government-run Fannie Mae and Freddie Mac plus FHA currently account for more than 85 percent of all loans provided to all buyers. The federal government is spending more than a trillion (that's $1,000,000,000,000) to buy U.S. housing-backed securities in an effort to drive down interest rates. Some economists and housing experts estimate that if the U.S. housing market wanted to attract international buyers … [Read more...] about Is The U.S. Housing Market Ready To Stand On Its Own?
Last Updated Nov 11, 2009 9:17 PM EST I've been speaking with real estate professionals around the country about the extension and expansion of the home buyer tax credit. Most are thrilled that they will have this incentive to lure prospective home buyers for another six months or so. Those who are working with home buyers who qualify for either the $8,000 first-time home buyer tax credit or the $6,500 trade-up buyer tax credit are happy their buyers don't have to wait for December 1 to take advantage of the tax credit. They can't wait to close and move onto the next buyer. Those who don't qualify for one reason or another are angry and frustrated. One buyer who closed on November 5 isn't too thrilled he missed getting $6,500 by a few hours and wanted to know if he could undo his deal and schedule a new closing. A few are worried. They figure a bunch of the buyers who might have bought homes next year or the year after are pushing forward their transactions in order to pocket the … [Read more...] about Buying A House Next Year? Don’t Worry About The Competition.
Last Updated Apr 29, 2010 1:11 PM EDT Many prognosticators believe the next few years will see tepid returns in the stock and bond markets — but what's in store for the post-crash real estate market? For anyone shopping for a house, the news could be good. Indeed, if there's a ray of sunshine anywhere in the "new normal" economic outlook — slow economic growth, unemployment hovering above 8 percent, more regulation, less borrowing — it is shining on homebuyers. Given record inventories and continued high foreclosure levels, home prices will bounce along the bottom for a while, at least according to the crystal ball wielded by David Berson, chief economist with mortgage insurers PMI Group. And Berson sees little indication that you’ll have to pay more than 5.5 percent for a mortgage this year, maybe 6 percent in 2011. All of which means real estate is a solid buyer’s market. You can get the house you want at a good price, and you can take your time … [Read more...] about Real Estate: The New Rules for Buying a House
Updated at 3:46 p.m. ET (MoneyWatch) Buying a house isn't a bad thing to do with your money, if you're ready to be a homeowner and you understand what you're getting into. But if you're justifying the purchase with the well-worn: "I just want to stop throwing away rent money," you are about to engage in a dumb money move that only sounds smart because no one has worked out the math. How could I possibly question the clear logic of this age-old wisdom? After all, you build up equity in a house. You don't build equity by renting, right? Absolutely. But to inject a tiny bit of reality into this dubious wisdom, let's look at the numbers. To make the comparison simple, let's say you bought a $240,000 home, putting $40,000 into a down payment. That leaves you with a $200,000 loan at 4.5 percent (assuming you have great credit and interest rates don't rise). Your mortgage payment on that loan would be $1,014. Again, just to make this simple, we'll assume that's roughly the same amount you'd … [Read more...] about Dumb moves that sound smart: Buying a house