For months I’ve been sharing that this is one of the best times to purchase a home in decades. Well this week the National Association of Realtors underscored that fact with the release that nationwide housing affordability jumped 10 percentage points during the first quarter of 2009 to its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 72.5% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000, up from 62.4% during the previous quarter and up from 53.8% during the first quarter of 2008.
Locally, the story is similar. In the Sacramento area, 76% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the area’s median income of $72,800. That’s up 1% from the previous quarter and up about the same from the same period a year ago.
For complete details on the report, click here: http://www.nahb.org/page.aspx/category/sectionID=135
I’d also like to share a couple of other stories of interest from the week:
- http://rismedia.com/2009-05-20/buyer-interest-in-foreclosures-spikes-says-survey/
- http://www.nytimes.com/aponline/2009/05/19/us/politics/AP-US-Economy.html?_r=2&scp=17&sq=housing&st=nyt
- http://rismedia.com/2009-05-18/distressed-properties-and-first-time-home-buyers-the-recipe-for-real-estate-recovery/
Finally, many of you have asked me questions about the potential changes in the $8,000 tax credit (http://www.realtor.org/RMODaily.nsf/pages/News2009051202?OpenDocument). Essentially the U.S. Department of Housing and Urban development announced that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 first-time homebuyer tax credit as a down payment. FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible buyers to access the funds immediately at the closing table. Here is a CNN Money article which explains some of the details: http://money.cnn.com/2009/05/18/real_estate/tax_credit_as_downpayment/index.htm?postversion=2009051912
While it is an exciting turn of events I would caution you that the execution of this is quite complicated and it may take some time before it becomes a reality. HUD will authorize lenders, non-profits and certain agencies to provide a bridge loan which will then be reimbursed at the time of tax refund. These players are not yet identified. Again, an exciting turn of events but the execution and timing of it have yet to be fully outlined. Watch for more to come.
You’ll note that this week’s edition of Weekly Market Watch does not include the office data and anecdotes. We’ll return next week with a robust edition.
As we head into this long, three day weekend I’d like to wish everyone a very happy Memorial Day weekend. Enjoy your time with BBQs, sunshine, maybe a little swimming and (hopefully) a home sale or two.
Until next week,
Make it a great one,
Bob Bronswick
President
Coldwell Banker Residential Brokerage Sacramento/Tahoe
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