Snapshot of America

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Yun expected an improvement. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” he said. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86 percent in May from a record low 4.81 percent in April; the rate was 6.04 percent in May 2008. Last week, Freddie Mac reported the 30-year fixed at 5.38 percent; data collection began in 1971.

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.

An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago. “This is the time of year when we see large increases in the number of repeat buyers, who are benefitting from sales to entry-level buyers,” Yun said. “Investors appear less active, but are more prevalent in areas with large price corrections.”

First of all, how does someone make the decision to move a house?

OK, about half of the work you do is moving the house vertically. What if someone wants to move location and take their house with them… When does that make sense for a homeowner?

What is involved with that process? It must be difficult to pack up your house only to have to unpack it into the same house after the move?

Gabe Matyko is with Expert House Movers. Find more info on their website.

Several celebrities have been having a tough time selling their home recently, because the market, especially the high end market, has been so sluggish. But before you start feeling sorry for the well to-do, we thought we might break down what some of the asking prices are into more manageable numbers. After all, when you start talking about homes worth millions of dollars, most of us don’t have a clue. We thought some…perspective might be necessary.

So, here’s what we did: we took a few celebrity homes and their asking prices, and we compared them to the median home price in four cities; Sacramento; Grand Rapids, Michigan; Washington, DC; and Jackson, Mississippi.

According to the Chicago Tribune, Richard Gere and his wife Carey Lowell have their New York home in the Hamptons on the market. They were originally asking 8-point-8 million dollars, but have recently dropped that price to 7-point-2 million dollars.

In Sacramento, the median home price for May was 169-thousand, the same as the national median. At that price, you could buy 42-point-6 houses with what the Gere’s are asking for their home. What you’d do with that six tenths of a house is beyond me — maybe make it a dog house or something. In Jackson, the median home price for May was 122-thousand, 600 dollars. With 7-point-2 million, you could buy 58-point-7 homes! That’s half a neighborhood of modest three bedroom, two bath homes!

Even if you took Washington, DC’s median home price of 394-thousand, 950, you could still do pretty well. There you could afford to buy 18 houses, enough to house your family, and their friends, fairly comfortably.

Boston Red Sox pitcher Curt Schilling is having a tough time moving his Medfield, Massachusetts house, as well. The Boston Herald says the hurler originally bought the twenty-five acre estate from former New England quarterback Drew Bledsoe in 2004 for 4 and a half million. Schilling now has the home on the market for 5 million dollars, after shaving three million dollars off his original asking price.

So how much house would that buy you elsewhere?

In Grand Rapids, Michigan the median home price for May was 108-thousand, 99 dollars. If you do the math…that works out to 46 and a quarter houses you could buy with Schilling’s asking price. In Jackson, you could buy 40 point 7 houses.

Actress Melissa Joan Hart from Sabrina the Teenage Witch could use some magic to move her L-A pad. According to the Los Angeles Times she put it on the market back in October for 3-and-a-quarter million dollars.  The five-bedroom Spanish style house includes a solar powered salt water pool, and a city view. She has since slashed the price to 2-point-7 million dollars. Which, if you think about it, is still a lot of cash.

Enough cash to buy 16 houses in Sacramento. Well, 15-point-97. We rounded up on that one. In Jackson, you could get 22 houses. Of course, in DC, where the median home price is higher yo don’t make out quite as well. You can only buy 6-point-8 homes there.

Finally, Rapper 50 Cent has actually given up on selling his Farmington, Connecticut mansion. He bought the place from Mike Tyson for just over 4 million dollars in 2003, and according to the San Franciso Chronicle spent a rumored 6 million dollars renovating it. He then put the house on the market in 2007 for 18-point-5 million dollars. That’s a lot of appreciation in value. Unfortunately, he couldn’t find any takers for the 51-thousand square foot house…so he dropped the price. To a bargain basement 14-million. He still couldn’t find any takers, and now the property is off the market.

But 14 million dollars is still a lot of money.

In Washington, DC you could buy 35-and-a-half homes for that. In Sacramento, you could purchase 82-point-8 houses! Jackson, Mississippi? You can buy 114 houses, which is the size of a small subdivision! And last, how many houses can you buy in Grand Rapids? Keep in mind the median price here is just over 108-thousand dollars.

In Grand Rapids, you could get 129-and-a-half houses for what 50 Cent was asking for his abode. That’s a lot of cents.

So, there’s a little bit of perspective as we take a look today at our Snapshot of America. Yes, things are tough all around, but they are getting better. And if you’re ever worried about selling your home in this economy, remember that at least it doesn’t have a 14 million dollar price tag!

After some rise in the mortgage interest rates, we are beginning to see them creep back down from a high of 5.81% in the second week of June according to Mr. Mullins. He explains that the upward pressures on interest rates came from:

1. Concern about government spending;
2. Concern about inflation;
3. Economic data pointing to a quicker than expected recovery; and
4. A sharp rally in the stock market

These pressures resulted in an increase in the Ten-Year Treasury Yields which are the benchmarks to which mortgage rates are tied.

Mr. Mullins says that in the past week to ten days, Ten Year Treasuries, and mortgage rates in general, have settled down to the mid fives, which is very consequential in the mortgage market industry.

For the home purchase market, these rates are not an impediment to applicants, but they do raise concerns about the refinancing market which plays a large role in the Obama administration’s housing and economic recovery plans. The Mortgage Bankers’ Association notes that currently 50% of all mortgage applications are for refinancing existing home loans, down from 70-80% earlier in the year.

Further, Mr. Mullins states that the jumbo mortgage rates are coming back down to earth over the past 6-8 weeks due to the stabilization of economic data and the rally in the stock market combining to making investors less risk averse.

Mortgage rates are tied to Ten Year Treasury Yields. Lenders’ assessment of risk dictates the premium they add to the Ten Year rates thereby determining your home mortgage interest rate. When times are good and the market is stable, the premiums run from one to one-and-a-half percentage points. When investors are more risk averse, we see that premium increase to two percentage points or more. Mr. Mullins says that that spread is starting to come down as lenders perception of risk lessens.

Lawrence Yun explains how the Federal Government can bring interest rates back down. Click here to listen to the podcast.