Third Strongest Year on Record for Existing Home Sales

Total Existing Home Sales
Seasonally-Adjusted Annual Rate: 6.22 million units

One Month Change: Down 0.8%
One Year Change: Down 7.9%





The National Association of Realtors (NAR) reported 6,480,000 existing-home sales in all of 2006, down 8.4% from a record 7,075,000 in 2005.

The 6,779,000 reported in 2004 was the second highest total since NAR began tracking home sales in 1968.

“Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing-home sales,” said NAR chief economist David Lereah.

“It looks like we’re moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices.”

NAR President Pat Vredevoogd Combs added, “We expect home sales to rise modestly over the course of this year.”

“Although local markets vary, price appreciation will be below normal in most of the country this year, but we’re looking for slow, steady gains in both home sales and prices through 2008.”

Single-family home sales slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in December from 5.51 million in November, and were 7.2% lower than the 5.86 million-unit pace in December 2005.

In all of 2006, single-family sales declined 8.1% to 5.68 million, the third strongest total on record.

The median existing single-family home price was $221,600 in December, which was unchanged from a year ago.

For all of 2006, the median single-family price was $222,000, up 1.4% from 2005.

Existing condominium and cooperative housing sales rose 2.1% to a seasonally adjusted annual rate of 777,000 units in December from an upwardly revised level of 761,000 in November.

Last month’s sales activity was 12.2% lower than the 885,000-unit pace in December 2005. After setting 10 consecutive annual records, condo sales for all of 2006 fell 10.4% to 803,000 units, the third highest year on record.

The median existing condo price was $227,000 in December, which was 0.3% above a year ago. In all of 2006, the median condo price was $221,800, down 0.9% from 2005.

Regionally, existing-home sales in the Midwest rose 4.3% in December to a level of 1.47 million, but were 5.8% lower than December 2005. The median price in the Midwest was $167,000, which is 2.9% below a year ago.

Existing-home sales in the South increased 0.8% to an annual sales rate of 2.49 million in December, but were 7.1% below a year ago. The median price in the South was $182,000, unchanged from December 2005.

Existing-home sales in the Northeast declined 2.8% to a level of 1.04 million in December, and were 5.5% below December 2005. The median existing-home price in the Northeast was $283,000, up 3.7% from a year earlier.

Existing-home sales in the West fell 9.1% to an annual pace of 1.20 million in December and were 15.5% lower than a year ago. The median price in the West was $349,000, up 1.5% from December 2005.

Be More Productive in 2007

Clutter is a drain on productivity. One report estimates that, as a group, Americans waste an average of nine million hours each year simply looking for misplaced items. For Personal Productivity Expert, David Allen, disorganization is the result of an internal phenomenon called "incompletes" or "open loops", referring to the big and small commitments we can't help but feel responsible to "change, finish, handle, or do something about." Allen suggests that organization is a matter of time and commitment management, which can be achieved through the implementation of three basic steps:

Ideas, tasks, and commitments must be "captured", on a notepad, in a handheld device, or by some other means.

A decision must be made regarding the next steps required to complete each item.

Reminders of each action must be maintained in a system for regular review.

In his best-selling book, Getting Things Done, David Allen outlines his amazing system for gaining control over the clutter. If you'd like to receive a Gift of Knowledge Interview with David Allen, visit www.Davidco.com to learn more about how to get organized in 2007.

Tax Saving Tips for Your 2006 Return

Retirement Accounts: The deadline to contribute to IRA accounts for your 2006 tax return is April 16, 2007. For traditional IRAs, qualified contributions are typically tax deductible, which can help lower your gross income and save on your overall tax bill. For Roth IRAs, contributions are not deductible but can lead to significant tax savings down the road, when distributions begin.

Itemize: According to the IRS, the largest itemized deduction claimed by most Americans is their mortgage interest. Talk to your Tax Professional to learn more about this and other potential deductions which may help to lower your tax bill. Examples include medical and dental care, charitable contributions, business expenses, tax preparation services, and casualty losses as a result of property theft or destruction. Certain tax ex

New Law Makes PMI Tax Deductible

On January 1st, 2007, a new law went into effect making Private Mortgage Insurance (PMI) tax-deductible for new borrowers whose personal adjusted gross income is $100,000 or less. Designed to protect the lender from default and foreclosure, PMI was viewed as a double-edged sword by consumers for many years. On the one hand, PMI was a requirement for loans exceeding 80% of a home's value or sales price. On the other hand, many consumers could not afford or even qualify to purchase a home without PMI. The new law makes PMI more beneficial, creating an opportunity to finance a more expensive home or to potentially obtain lower payments for the same-priced home, while reducing income taxes.

And, while those who financed their home prior to 2007 cannot take the deduction, more options are available under the new law when it comes buying or upgrading to a new home with a minimal down payment, or refinancing and pulling cash out for other investments. Either way, talk to your Mortgage Professional to learn more about this incredible gift from Congress.

3 Things To Avoid When Applying For Home Loan

If applying for a mortgage loan with poor credit, there are steps you can take to help get a better rate. Granted, if your credit score is low, the likelihood of getting a prime rate is slim. Still, reasonable rate bad credit mortgage loans are available. As a homebuyer, you must be willing to research various lenders and compare different loan programs. Moreover, homebuyers should avoid maneuvers which could hurt their chances of approval.

Avoid Late Payments When Applying for a Mortgage

Even if your credit score is good, the occasional late payment is common. If planning on buying a home, it is important to establish a good payment history with creditors - before applying for a home loan. Mortgage lenders understand that situations occur which make it difficult to pay bills on time. However, if hoping to buy a home, it is important to begin creating good credit habits.

Many lenders approve mortgage loans to people with several late payments. Yet, these persons pay higher rates. To avoid an increase in mortgage rate, attempt to submit all credit card and loan payments on time. If possible, adopt new payment habits at least twelve to six months before applying for a home loan.

Limit the Number of Credit Inquiries

A common mistake made by some homebuyers is allowing several mortgage lenders to pull their credit. Shopping around for a home loan is smart. However, if comparing three or four individual lenders, do not consent to having your credit checked. Instead, request no-obligation quotes from lenders.

Quotes do not involve credit checks. However, buyers must provide an accurate credit description. To do so, it helps to obtain a copy of your personal report online, which does not count as a credit inquiry. Once the lenders remit a quote, compare the different offers and choose the loan with the best rates and terms. Next, complete a mortgage loan application. To finalize the loan approval, the chosen lender will pull your credit.

Avoid Opening New Credit Accounts

When applying for a mortgage loan, it is important to maintain a low debt to income ratio. Obtaining new credit lines and applying for a mortgage is a bad idea. For example, if you buy a car before your mortgage loan is finalized, this will increase your debt to income ratio. This could affect whether you still qualify for the approved loan amount. To avoid the hassle of having to re-qualify for a mortgage loan, postpone opening new credit accounts until the loan closes.

Save Thousands By Prepaying Your Mortgage

If you’re determined to cancel your home loan as soon as possible this is not a bad idea, you can put extra money towards the loan but there are some things you need to be aware of.

Depending on the amount of money you destine every month towards your home loan you could reduce the length of it from months to years and of course you would be paying less interest on the principal as you would be reducing it systematically.

Interest or Principal

However, there are some home loans in which you pay first the interest and then the principal so if you put more money towards the loan you would just be giving the lending institution an advance which is pointless.

Prepayment penalties

There also some loans that have prepayment penalties. Since the lending company earns money from interest they want to make sure you won’t pay off the loan in advance and thus reduce what otherwise they would be gaining, thus, they charge a percentage on the outstanding amount. If this is the case you will need to consider whether you would benefit from paying off the home loan sooner. Perhaps it would be wiser to just carry on with the scheduled repayment program.

Building Equity while reducing debt

If you’ve read the small print and there are no prepayment penalties and the interest rate and principal are balanced, then you can put more money towards paying the loan sooner and benefit from reduced interests and a reduction on the length of the loan also.

And as the remaining debt decreases you’ll be building equity on your home which will let you get extra money from your house to make repairs, go on vacations, buy a car or any other purpose.

Other options: Financial Advice, Refinance

If you’re not sure about your decision, don’t hesitate to contact a financial advisor, there are also many online sites offering advice on mortgage and mortgage refinance. You can always contact them if your current lender won’t give you a solution to your needs.

You can always refinance your home with better terms if the current market situation is better than it was when you acquired your loan or if your financial situation and income have improved.

Reasons To Refinance When Rates Are Moving Up

Interest rates have enjoyed record lows during the last few years allowing many people to refinance and enjoy lower mortgage payments. Now, interest rates are moving in the other direction. The average 30 year fixed rate, according to mortgage giant, Freddie Mac, was 6.31% last week. Still, during this same period, refinancing accounted for 43.6% of mortgage applications.

Why would anyone refinance when rates are going up? With cash-out refinancing, you refinance your mortgage for more than you owe and keep the difference. Freddie Mac is predicting, by year end, homeowners will convert $204 billion of home equity into cash, up from $142 billion in 2004.

1. Pay off home equity credit lines. The average rate for a HELOC (Home Equity Line of Credit) rose to 6.97% last week, up from 5.09% from a year ago. Most HELOC loans have variable rates that go up when the Federal Reserve raises short term interest rates. Recently, the Federal Reserve announced its12th consecutive rate increase and they sent out a strong message they will continue the short term interest rate increase. Using a refinance to pay off a HELOC not only will lower your existing HELOC interest rate, but you can stop worrying about the Fed …for your second mortgage at least.

2. Consolidate your mortgages. Unless you put 20% or more down on your home, there is a good chance you did a combination (or piggyback second mortgage) loan to avoid PMI (Private Mortgage Insurance) which is required on loans with less than a 20% down payment. Second mortgages typically carry higher interest rates and a cash-out refinance may allow you to consolidate these loans into one lower monthly payment.

3. Secure A Fixed Rate Mortgage. Rates for adjustable mortgages, which are sensitive to Fed moves, have been rising faster than fixed rate mortgages. Borrowers with loans close to a rate adjustment are facing an increase in monthly payments and the possibility of even higher rates down the road. Many borrowers who plan to stay in their homes are fending off the higher rates and potential future increases by refinancing into fixed rate mortgages.

4. Improve Your Home. Home Equity Lines of Credit and fixed rate second mortgage rates have been rising. A cash-out refinance can prove to be a cheaper way to finance your home improvement, especially as the cost of the improvement increases. Properties refinanced during the 3rd quarter of 2005(?) saw 23% appreciation since the original loan was taken out. Improvements made after the refinance may lead to even greater increases.

While many people will no longer be interested in refinancing for a lower rate, there are many reasons to consider refinancing even as interest rates increase.

If you have an existing second mortgage, need cash to consolidate credit card debt, or want to do some home improvements, refinancing your current home mortgage may be the best financial move for you. For more information regarding current rates, you can visit our website at http://www.1stmortgages.com/.

Why You Should Consider Using A Mortgage Broker

Mortgage rates and fees vary from lender to lender, and it's not always easy to compare all the details to find the best deal. Mortgage brokers help consumers sort through all those details and find the best mortgage solution possible, often through resources and connections that an ordinary consumer does not have access to.

Using a broker can save both time and money. The broker is very familiar with the industry, and can be a valuable asset to a home buyer looking for a good deal on a mortgage. In addition to having substantial connections, the broker will have good insight into the process and how best to qualify. The broker will often have close connections with lenders, who view a good broker as a valuable customer and will sometimes make special rates or discounts available to brokers that are not available to the general public because of this leverage.

Because mortgage brokers make the process simpler for their customers, many loans in Australia are initiated by brokers. There are many reputable brokers in every state. Choose one with a good reputation and that is in good standing.

Look for an independent and unbiased broker. Of course, one expects a broker to receive a commission for their services, but some brokers attempt to sell mortgages with high fees that are not in the consumer's best interest, in order to receive higher commissions. It is recommended that if a consumer plans to use the services of a broker, to first look around to get an idea of existing rates, to be informed enough to know if they are receiving a good deal.

In the past, there has been some reluctance to use mortgage broking services because of the lack of regulation. Financial services of all types tend to be heavily regulated, and for good reason. Consumers must be protected against unscrupulous and predatory operators. And make no mistake, there are predatory mortgage brokers, just as there are predatory members of every segment of the financial community.

Nonetheless, most are honest and provide a useful service. And more recently, there has been significant attention on the mortgage broking industry, and Australia is in the midst of a regulatory overhaul designed to keep mortgage brokers on an even keel.

Presently, the mortgage broking industry is regulated by individual states. Check with your local government regulatory agency to determine qualifications, and check on your broker's status. In the current regulatory environment, brokers are even more aware of their need to operate above-board and honestly.