at the end of the newsletter.
+++++++++++ January 1, 2012 +++++++++++++++++++
CONTENTS:
Introduction: Both Existing and New Home Sales Rise
Mortgage Rate Update: Rates Decline in December
This Month's Tip: Be Budget Wise
++++++++++++++++++++++++++++++++++++++++++++
Introduction: Both Existing and New Home Sales Rise
Welcome to the January edition of the Home Buyer's Newsletter. A very
Happy New Year to all and wishes for a wonderful 2012.
Existing-home sales rose again in November and remain above a year ago,
according to the National Association of Realtors®. Also released on December
21st were periodic benchmark revisions with downward adjustments to sales and
inventory data since 2007, led by a decline in for-sale-by-owners.
Although rebenchmarking resulted in lower adjustments to several years of home
sales data, the month-to-month characterization of market conditions did not change.
There are no changes to home prices or month's supply.
The latest monthly data shows total existing-home sales, which are completed
transactions that include single-family, townhomes, condominiums and co-ops,
increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in
November from 4.25 million in October, and are 12.2 percent above the 3.94
million-unit pace in November 2010.
Lawrence Yun, NAR chief economist, said more people are taking advantage of
the buyer's market. "Sales reached the highest mark in 10 months and are 34
percent above the cyclical low point in mid-2010 – a genuine sustained sales
recovery appears to be developing," he said. "We've seen healthy gains in
contract activity, so it looks like more people are realizing the great
opportunity that exists in today's market for buyers with long-term plans."
On the new home side, sales of new single-family houses in November 2011 were
at a seasonally adjusted annual rate of 315,000, according to estimates released
jointly on December 23rd by the U.S. Census Bureau and the Department of Housing
and Urban Development. This is 1.6 percent (±12.2%) above the revised October rate
of 310,000 and is 9.8 percent (±19.5%)* above the November 2010 estimate of 287,000.
The median sales price of new houses sold in November 2011 was $214,100; the average
sales price was $242,900. The seasonally adjusted estimate of new houses for sale at
the end of November was 158,000. This represents a supply of 6.0
months at the current sales rate.
+++++++++++++++++++++++++++++++++++++++++++++
Mortgage Rate Update: Rates Decline in December
December saw a continuation of easing in long-term interest rates, although these
rates continue in the same general range we have seen since the month of October.
For 30-year fixed-rate mortgages, the average rate declined from 4.00% at the
beginning of the month to 3.91% at the end, according to mortgage company Freddie
Mac. 15-year fixed-rate averages were at 3.21% at the end of the month after
beginning the period with an average of 3.30%.
Although there have been some minor fluctuations, these averages have not varied
a great deal in the last 90 days, which may indicate that we are bouncing around
the bottom range of rates. Barring some huge economic issue, we would not expect
to see large scale reductions from this point onward.
For current average mortgage rates, see:
<A HREF="http://www.ourfamilyplace.com/homebuyer/rates.html">Mortgage Rates</A>
For an extensive discussion of all aspects of mortgages, see the section on the
site devoted to this subject. <A HREF="http://www.ourfamilyplace.com/homebuyer/mortgage.html">Mortgages</A>
++++++++++++++++++++++++++++++++++++++++++++++
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The most important part of your team for buying a home should be
your real estate Agent. Want to anonymously (and without obligation)
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much more at HomeGain.com.
<A HREF="http://www.homegain.com/sp/ae_intro.html?entryid=2267&ht=houseclicksAE">Compare Agents</A>
++++++++++++++++++++++++++++++++++++++++++++++
This Month's Tip: Be Budget Wise
Frequently, the approach to buying a home is a backward one:
Potential buyers spend loads of time looking at specific
homes, furnishing them in their minds, having friends and
family over for virtual parties. Unfortunately, they miss
the very first step, which is taking the time necessary to
get a firm grip on their current (and future) budget. If you
are just entering the home buying market, getting the budget
piece in order first will smooth the way through the entire process.
Not only will it help you to afford your home, those with their
budgets in check generally live less stressful lives and,
by efficiently handling their finances, have more funds
available for the things that they truly need and want.
Getting control of your financial situation generally involves
one or two big steps and, frequently, a number of smaller ones.
The combination of the moves you make to get your budget in
line can make a huge difference in your overall financial
posture. It can make the difference between affording--or
not being able to afford--a home. It can mean a comfortable
homeownership experience, or a harried and distasteful one.
Taking Control
The very first step in taking control of your finances--and
your budget--is developing a minset that says you CAN be in
control, that you CAN become budget minded. If you've spent
years as a spendthrift, this may take some getting used to.
Instead of "I deserve it," you may need to begin saying "I
really don't need it." You may need to put a leash on some
of your expenditures. The easiest way of doing this is to
understand that there is a big difference between what you
WANT and what you NEED. For example, you may WANT a big
gas-guzzling SUV, but what you NEED is probably just a vehicle
that will get you back and forth to work reliably.
Compare
One of the most important steps in getting your budget in
line is to begin the process of comparison shopping for
virtually everything you buy. If you currently make
purchases for convenience rather than price, this new
approach may take some getting used to, but eventually
it will become second-nature.
+ Learn which grocery stores have the lowest overall
price and do the bulk of your shopping there.
+ Watch for sale prices in ads and circulars--buying
like this can reap big savings over time.
+ Use the Internet to make comparisons. There are
numerous sites that will do the actual price comparisons--
including shipping--for products you need to buy. This
is an especially effective tactic in the purchase of
higher-ticket items.
Large or small--It all adds up
Although keeping tabs on the big expenditures (cars,
furniture, appliances and the like) show the quickest
rewards, your total spending for smaller items (groceries,
fuel, supplies and services are some examples) can also
have a big effect on your bottom line. For example, do you
stock up on items when they are on sale or do you pay full
price when the whim hits you? Do you use generic or store
brands, which are often 25-40% less than name brands? If
you insist on name brands, do you clip coupons (and use the
coupons at stores that double or triple their value)? Are
you paying for cellular minutes that you rarely or never
use? How about premium cable or satellite packages with
stations that you almost never watch? How often do you
buy trinkets and "toys" that you never use or even look
at much less use?
Saving money here--on these smaller items--really does add
up. Just a few slight adjustments in buying approaches
and habits can often save $30-40 per month in your grocery
bill, for example. Eliminating an "upper tier" on cable or
satellite may equate to another $25 per month or more. Buying
less "junk" that you don't use can show considerable savings,
depending on how much a "junk" shopper you are. Unless you
are currently a "bare bones" spender, it is not unusual to
be able to cut $100, $200, $300 or more from your current
monthly spending patterns. And that adds up to big money,
even before you factor in the interest that you can gain on
the money you put away. Don't forget to shop for the best
interest rate, too, since on a money market (where you can
have near-immediate access to your cash) interest rates can
vary from less than a quarter percent to over 5%--more than
20 times more interest!
Summing Up
The real estate market has changed dramatically in the last
several years, altering the playing field extensively.
This means that you will need to be much more conscious of
budget considerations than you would have needed to be just
a few short years ago. Having a handle on your budget and
finances may be the difference between being able to afford
a home and not affording one--especially if credit availability
and standards tighten.
Next Month's Tip: All About Homeowners' Associations
++++++++++++++++++++++++++++++++++++++++++++++
The Home Buying Checklist
Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched. You can find the checklist
here: <A HREF="http://www.ourfamilyplace.com/homebuyer/checklist.html">Home Buyer's Checklist</A>
A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.
Have a great month and good luck in all your endeavors!
The Team at the Home Buyer's Information Center
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