May, 2010

The national median price for an existing home in April was 173-thousand dollars, up four percent from April of last year.

Many analysts are predicting the end of the federal home buyer tax credit could lead to a significant slowdown in the recovery of the nation’s housing market. But bad news from overseas could actually bring another spark of life to home sales here in the US.

Financial turmoil in Europe has prompted international investors to back mortgage securities here in the US, and that flood of money has driven mortgage rates to near 50-year lows. In fact, instead of rising to near 6 percent as some economists have been predicting, rates could actually settle to as low as 4 and a half later this summer.

The Oil Spill
The traditional start of the summer season is getting off to a rather nervous start all along the gulf coast, as the owners of investment properties all along the shoreline fret over the perception that the massive oil spill is ruining traveler’s favorite vacation spots.

The oil spill arrived just as sales began to pick up steam again after the recession. REALTORS® tell the Birmingham News that some closings were delayed in the first couple of weeks after the spill began, but that interest from buyers has resumed as the oil has remained off-shore.

America On-Line’s Housing Watch is reporting that renters are bailing on vacation homes on Florida’s piece of the gulf, but Florida’s loss may be Texas’ gain, as several companies there are reporting a late rise in rental requests for this summer.

Northeast
The Northeast set the pace for the nation in April, with home sales rising 21 percent compared to March, and up 41-point-six percent year to year. The 243-thousand dollar median is 2 percent higher than a year ago.

Midwest
Midwest sales climbed 10 percent month-to-month in the Midwest, and were up 29 percent compared to April of 2009. Median prices were up as well – 146-thousand dollars, a 5-point-8 percent hike over last April.

South
Home sales were up 8-point- 6 percent in the south, and enjoyed a year-to-year bounce of 23 percent, as the median price rose just over one percent, to 150-thousand dollars.

West
Sales out west actually slumped 6 percent compared to March, but we can explain that. California has its own state tax credit that gave buyers an incentive to wait until May to close their deals, so that explains the slump. And besides, sales were still up 5 percent compared to last year. Prices were also up out west – nearly 4 percent over April of 2009.

We’ll have more valuable information from this report for you next week.

The work of defending America demands a great deal of sacrifice by members of our armed forces, and many career soldiers are required to make frequent moves with their families. However, that doesn’t mean military personnel are denied the many benefits of home ownership. In fact, the government has gone to great lengths to make home buying even more attractive to our men and women in uniform.

One substantial benefit of course, is the ability to finance your home through the U.S. Department of Veteran Affairs. There are, actually, many benefits to VA loans, including the fact that you can buy your home with no money down, and we’ll have much more to discuss on that topic in the next hour of our show today.

Another benefit military members receive is a basic housing allowance, which varies based on the cost of living in the area where the member is serving. This allowance is tax-free, and it’s really like a double bonus, because it can be used to pay a mortgage which has interest that is, itself, 100 percent tax deductible.

Of course, if you’re in the military, it’s sometimes hard to predict how long you’ll be able to put down roots in any particular community, and that’s why the government has gone to great lengths to protect the investments of military personnel. Several programs have been established that will essentially reimburse service members if they are forced to sell their homes at a substantial loss.

The Homeowners Assistance Program, which is run by the Army Corps of Engineers, but open to all branches of the military, offers relief to those who are forced to sell their homes because of a mandatory transfer.

If homes are selling at lower prices than they were when the service member purchased his home, the program will reimburse the home seller up to 95 percent of the amount lost on the sale. Now, the seller will have to make a reasonable effort to sell the home at the current market value, and also document how the value of the home had fallen since its original purchase, but it does offer a degree of comfort for members of the military who want to enjoy the same benefits of ownership that the rest of us take for granted.

The Homeowner Assistance Program is open to not only active service members, but also those who were injured, wounded or became ill while on active duty any time after September 11th, 2001, and who are moving to seek further medical treatment elsewhere. The spouses of those killed in the line of duty are also eligible, and so are owners whose home prices were negatively impacted by the major base closings effort in 2005.

Those of you in uniform – the men and women who stand in harm’s way – are not only defending us – you’re defending the American dream – the dream we all share of owning our own homes. It only stands to reason that you have a fighting chance of sharing in that dream. And your REALTOR® is standing by to help you make that dream a reality!

And again, the government backing allows borrowers to be eligible for much larger loans through the VA than they would through the traditional conforming route – up to 41 percent of the family’s income, compared to the typical 28 percent for civilians.

Mortgage rates for VA loans are generally lower than for conventional loans, and in most cases, closing costs are much lower as well, because the VA allows the seller to pay those costs. There are some small funding fees associated with VA loans, but these are generally added to the loan amount so borrowers don’t have to pay them out of pocket.

Those fees are waived for most disabled veterans, and veterans with permanent disabilities are also eligible for grants worth up to 50-thousand dollars to adapt their new homes to accommodate their needs.

So, who’s eligible to receive VA loans? Well, the length of service time varies, depending on when you served, and whether that service was during a time of war or peace, but essentially, at a minimum, any veteran who has 2 years of active duty in the military is qualified, as long as he or she was not dishonorably discharged from service.

Active duty personnel are also eligible, as are spouses of service members killed in duty, as long as they don’t remarry. And members of the Reserves and of the National Guard who have at least 6 years of service may also qualify for VA loans.

VA loans are backed by the government, but they are sold by regular mortgage lenders, and your REALTOR® will be not only happy, but honored, to refer you to a qualified professional to help your piece of the American dream come true.

Again, the opportunities we have to enjoy the quality of life that home ownership brings are only possible because of the efforts of the men and women who defend our country. Thank you again for all you do.