The Home Buyer Tax Credit Extension Has Not Been Passed Into Law (Yet)

As its June 30, 2010 closing deadline approaches, the federal home buyer tax credit is back in the news.
Unfortunately, the headlines are misleading.
Contrary to what you may have read (or heard), the federal home buyer tax credit has not been extended past June 30, 2010. At least not yet. And here's why there's confusion.
Look at these headlines from earlier this week:

• Senate Extends Date On Home-Buying Tax Credit (Philadelphia Inquirer)
• U.S. Senate Approves Extension Of Home Buyer Tax Credit (NASDAQ)
• Senate Approves Home Tax Credit Extension (Reuters)

Nothing above is factually incorrect, but each neglects a key piece of the country's law-making process -- it takes more than the Senate to pass a law. For a bill to become a law, it must pass the Senate and the House of Representatives and then it must be ratified by the President.
To date, we've only cleared just one of those 3 steps.
This means that the federal home buyer tax credit has not been formally extended. As of now, it's still in discussion.  Ultimately, though, if the extension does pass, it's expected to extend the closing date deadline for Henderson and Denver home buyers beyond the original June 30, 2010 date into September 2010.
Homeowners must still have been in contract as of April 30, 2010 to claim up to $8,000 in federal tax credits.

Good News For Sellers : Housing Starts Fall To 1-Year Low In May 2010

Single-family housing starts plummeted to a one-year low in May, just 30 days after soaring to a 20-month high.  It's no wonder home builders are confused.
Against a revised April figure, Housing Starts fell 97,000 units in May, a figure representing almost one-fifth of the total market size.
It's the worst showing for Housing Starts since May 2009, a surprise to builders and economists alike.
Furthermore, single-family Building Permits plunged in May, too -- down 10 percent from April. A permit is a certification from local government that authorizes home construction.
Housing permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.
For home buyers in Henderson , this should create a sense of urgency.
Home prices are based on supply and demand and supply appears to be falling about the same time that economists predict a surge in home demand.  It could spell rising home prices and a complete loss of negotiation power with home sellers.
For now, though, home affordability remains high with properties cheap and mortgage rates near all-time lows. If you plan to buy a home later this year, the May 2010 Housing Starts data may be a reason to move up your timeframe a bit.

Shopping And Paying Bills Online? Here are Methods To Protect Your Online Financial Identity

In May 2010, Retail Sales at non-store retailers topped $29 billion, up 16 percent from May 2009. Clearly, Americans are doing an increasing amount of shopping online.  And we're paying our bills online, too.
But how well are we protecting our identities?
In this 5-minute piece from NBC's The Today Show, you'll learn the basics of online fraud and methods to minimize the likelihood of identity theft.  Furthermore, the tips go beyond the basic "choose a challenging password".  For example, you'll hear about:

• Why you shouldn't pay bills from a coffee shop
• Who might be hiding behind an unprotected public wifi network
• The dangers of storing credit card numbers with an online retailer

And, although, at one point, the interviewee goes over the top with respect to spyware and anti-phishing prevention, the point being made is a good one -- you can't be too careful with your online financials and common sense goes a long way.

Change Your Air Filters Monthly (But Don't Go Cheap)

As the mercury rises into the summer months, don't forget to change your home's air filters regularly.  It not only extends the life of your HVAC unit, but can help keep your energy costs down, too.
Not all air filters are created alike, however. Don't go cheap.
Your local hardware store carries a variety of air filters ranging in price from less than a dollar to $20 or more per filter. They're all purported to do the same job, but after watching this 1-minute video, you'll see why cheaper isn't necessarily better.
Airborne particles are smaller than most mesh filters. Pleated filters are recommended instead.

Most high-quality air filters start around $11 and can be purchased in bulk at discounts of up to 20 percent.  3M's Filtrete line of products is a popular, well-selling brand and can last up to 3 months.
If your home has shedding pets or is dust-prone, consider changing them monthly.

Bank Reposessions Reach Record Levels For The Second Straight Month

According to foreclosure-tracking firm RealtyTrac.com, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.
As compared to May 2009, all 50 states now show an increase in annual REO activity.
Data like that won't surprise today's active home buyers in Brighton or Denver.  Foreclosed homes are prevalent, available and accounted for one-third of all home resales made in April.
Furthermore, total foreclosure actions -- the sum of REO, default notices, and foreclosure auctions in May -- topped 300,000 for the 15th straight month.
Foreclosures remain a huge influence on the housing market.
However, two interesting trends emerged in the data:

1. 9 of the top 10 metro areas for foreclosure posted annual activity decreases
2. Each of the top 4 states for Foreclosures per Household posted annual activity decreases

We can infer, therefore, that foreclosure activity may be in permanent decline in the areas hardest hit through 2007, 2008, and 2009.  In 2010, the data shows, foreclosures are waning.
This is reason for optimism -- especially as FHA delinquencies slow nationwide. As fewer homeowners go delinquent, the pace of foreclosures will slow further and that should help boost home values on every block in the country.
If you've been considered bank-owned homes for your own purchase, give a look at the RealtyTrac foreclosure report.  It's provides insight on a state-by-state level, and in the nation's largest metropolitan areas.

Then, to complement your research, talk to your real estate about the foreclosure market and what opportunities may exist.   Competition for bank-owned homes can be fierce at times, but there's plenty of "deals" out there.
You just have to know where to look.

Conforming Loan Costs Are Rising, Says Freddie Mac

Mortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A "discount point" is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it.  In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn't do the same for required points.
The press fails to mention discount points entirely.
An increase of 1/10 percent in discount points costs homebuyers and refinancing households in Henderson an extra $100 per $100,000 borrowed.
The hike reminds us that there's more to a mortgage than just its rate -- costs matter, too.  And if you've only been watching the headlines, you would have missed how costs are rising.

Uncharted Territory- the End of the Tax Credit

The end of April marked an historic event.

Think about it.  Never before in American history has there been a homebuyers' tax credit.  On April 30th, it expired.

We are in uncharted territory

If you were planning on buying your first home, or even replacing the home that you had lived in for 5 of the last 8 years, you would get FREE money from the government if you were under contract by the last day of April.  That contract would have to close by the end of this month to qualify for the tax credit.

So, what impact will this have on our market?  No one actually knows.  The first deadline for the credit was scheduled for the end of November, 2009.  Eager first time homebuyers rushed to the closing table to make the November 30 deadline- in spite of the holiday weekend that bumped right into the deadline.

This time, however, the impact seemed slightly less notable.  Many houses went under contract well before the April 30 deadline, and closings were spread out over April, May and June.  There is speculation that some home sales were "borrowed" from the coming months because of the tax credit, and this certainly has some merit.  

Meanwhile, showings of for sale properties dropped.  If you are trying to sell a home, you have seen this effect.  It's time to sit tight and have patience.  

As I said, we are in uncharted territory.