The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for August 2013:

Building Permits
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 918,000. This is 3.8 percent (±1.3 percent) below the revised July rate of 954,000, but is 11.0 percent (±1.8 percent) above the August 2012 estimate of 827,000. Single-family authorizations in August were at a rate of 627,000; this is 3.0 percent (±0.9 percent) above the revised July figure of 609,000. Authorizations of units in buildings with five units or more were at a rate of 268,000 in August.

Housing starts
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 891,000. This is 0.9 percent (±13.0 percent) above the revised July estimate of 883,000 and is 19.0 percent (±11.1 percent) above the August 2012 rate of 749,000. Single-family housing starts in August were at a rate of 628,000; this is 7.0 percent (±13.9 percent) above the revised July figure of 587,000. The August rate for units in buildings with five units or more was 252,000.

The real estate industry is facing a number of stops and starts, particularly as certain sectors in the market rebound quickly - such as the residential market - while other areas remain stagnant. Although market forces, business operations, errors and omissions claims and fluctuating supply and demand are critical factors agents are facing, the majority of industry leaders cite their challenges in recruiting young, new talent as their most pressing concern.

Imprev Marketing Technologies recently released the results of its 2013 Thought Leader Survey, which revealed that top executives and companies are struggling to attract new talent to their ranks, a scenario that could become burdensome as real estate demand climbs and the industry's aging workforce begins to retire. When asked to list their top concerns - especially those that impact their revenue and profitability - 42 percent said finding young talent was their biggest problem. Citing data from the National Association of REALTORS®, the study notes that the average real estate agent is 57 years old. However, the average American worker is 41 years old and the typical age of a first-time buyer is 31, the report published.

"Over the last five years the average age of real estate agents has almost moved in lock-step with the calendar," says Renwick Congdon, chief executive officer of Imprev, a fact that is also supported by NAR research.

In July, U.S home prices continued to increase, according to the latest S&P/Case-Shiller Home Price Index. On a year-over-year basis, home prices grew by 12.4 percent in July, the fastest annual pace since February 2006, at the height of the housing bubble. While this is good news for housing, a closer look reveals that while prices are still accelerating, the rate is decelerating; the July increase was a modest 1.8 percent, the smallest monthly gain since March.

A decelerated growth was seen in 15 out of the 20 cities tracked. The 20-city composite grew a shy 0.6 percent from a month earlier, a notable difference from the 0.9 percent gained in June and the 1 percent gained in May.

“Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined,” said S&P Dow Jones Index Committee Chairman David Blitzer, in a recent release. Blitzer continued by stating that "the rate of increase may have peaked.”

Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaid balance goes down with each amortized payment made, the equity grows from two directions.

This dynamic leads to increasing a person’s net worth much faster than many other investments.

A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.

Mortgage management is something that the homeowner does have control. Making the decision to select a shorter term mortgage at a lower interest rate can have an impact on equity build-up. Lower interest rates amortize faster than higher interest rates which will also affect equity growth. Currently, it is possible to get a 1% lower rate on a 15 year mortgage than a 30 year mortgage.

Compare two alternatives of a 30-year and a 15-year mortgage. The payments will definitely be higher on the shorter term because it pays off quicker. However, if a person can afford the higher payments of $362.53 more per month in this example, the equity will be greater. Even after you take into consideration the higher payments, the increased equity is $17,236 at the end of the seven year holding period.

Another decision that can affect equity build-up is making additional principal contributions along with the regular payments. Whether you’re making an occasional lump sum payment toward principal or regular monthly contributions, it will save interest, build equity and shorten the term on a fixed rate mortgage. Estimate your personal savings with this Equity Accelerator.

While the sources of finance for new home sales have changed noticeably since the start of the Great Recession, cash sales remain more common for existing homes compared to new construction.

According to data from the Census Bureau’s Quarterly Sales by Price and Financing, the onset of the housing crisis in 2007 led to a decline in the share of new home sales due to conventional mortgage financing and increases in the shares due to mortgages backed by the Federal Housing Administration (FHA) and the Department of Veteran’s Affairs (VA), as well as cash purchases.

For the second quarter of 2013, the share of cash purchases rose slightly to 7.4 percent. The high point for cash purchases occurred in the third quarter of 2011 when the market share was a somewhat larger 7.9 percent. In contrast, for August existing home sales, cash purchases totaled 32 percent, compared to 27 percent in August 2012. The cash share for new homes is smaller because cash buyers in the existing home market are looking for bargains for rental purposes, while for-sale new construction is dominated by owner-occupiers.

New home sales due to FHA-backed loans stood at 17 percent of the market for the second quarter. This is down from 27.6 percent in the first quarter of 2010 but above the 10 percent 2002-2003 average. The market share of FHA-backed loans was higher during the 2009-2010 period due to the federal homebuyer tax credit.

VA-backed loans were responsible for 7.4 percent of new home sales during the second quarter of 2013.

These sources of financing serve distinct market segments, which is revealed in part by the median new home price allocable to each. For the second quarter, the median new home price due to FHA financing was $197,900. This is relatively unchanged from the average over the last two years of $199,700.

The median price for VA-backed loans was $273,300, higher than the two-year average of $234,100. Conventional mortgage financing had a median of $285,900, higher than the two-year average of $263,700.

Finally, the median price for cash purchases of new home sales rose substantially in the second quarter to $318,000. The two-year average is about $255,000. The rise in the price of the typical cash purchase reflects market mix issues, similar to force that have pushed up the size of a typical newly built single-family home: higher wealth buyers are in the market in greater concentration relative to other buyers, particularly younger, first-time buyers.

View this original post on the NAHB blog, Eye On Housing.

Existing-home sales increased in August and reached the highest level in six-and-a-half years, while the median price shows nine consecutive months of double-digit, year-over-year increases, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and are 13.2 percent higher than the 4.84 million-unit level in August 2012.

Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months.

Lawrence Yun, NAR chief economist, says the market may be experiencing a temporary peak. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he says. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”

Mortgage applications increased 11.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 13, 2013. The previous week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 23 percent compared with the previous week. The Refinance Index increased 18 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier and is close to the same level as two weeks ago, before the holiday. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 1 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 61 percent of total applications from 57 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7 percent of total applications. The HARP share of refinance applications increased to 40 percent, from 38 percent the week before, and is the highest since MBA started tracking this measure in early 2012.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.75 percent from 4.80 percent, with points decreasing to 0.39 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.83 percent from 4.84 percent, with points decreasing to 0.33 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.50 percent from 4.56 percent, with points increasing to 0.41 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.81 percent from 3.83 percent, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.54 percent from 3.59 percent, with points remaining unchanged at 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

For more information, visit www.mba.org.

Freddie Mac (OTCQB: FMCC) recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates relatively unchanged from last week and holding steady near their highs for the year.

"Mortgage rates were little changed this week following a mixed employment report.” says Frank Nothaft, vice president and chief economist, Freddie Mac. “For example, the economy added 169,000 jobs in August, which was below the market consensus forecast, and revisions subtracted another 74,000 from the prior two months. Meanwhile, the unemployment rate fell to 7.3 percent which was the lowest since December 2008."

The 30-year fixed-rate mortgage (FRM) averaged 4.57 percent with an average 0.8 point for the week ending September 12, 2013, unchanged from last week. A year ago at this time, the 30-year FRM averaged 3.55 percent. 


A: This is a tough decision, but the answer will depend on your personal situation, as well as the condition of the local housing market.

If you put your home on the market first, you may have to scramble to find another one before settlement, which could cause you to buy a home that does not meet all your requirements.  If you cannot find another home, you may need to move twice, temporarily staying with relatives or in a hotel.

On the other hand, if you make an offer to buy first, you may be tempted to sell your existing home quickly, even at a lower price.

The advantage of buying first is you can shop carefully for the right home and feel comfortable with your decision before putting the existing home on the market.

Buying a home is an expensive proposition, therefore, it’s crucial that you prepare yourself ahead of time for the amount of money that’s required as you make your way through the process.

Making a list of what your monthly expenses will be is a good first step toward fully understanding your true financial commitment before signing the dotted line.

Here are some of the expenses you can expect.

1. Property Taxes. Taxes can add hundreds of dollars to your monthly mortgage payment and can increase depending on school and town budgets. Remember that a home is normally taxed on its assessed value, an amount equal to a fraction of its appraised value.

2. Homeowner’s Insurance. A necessity with any home purchase, you’ll want to insure the value of your new home against fire, theft and perhaps even flood damage. While flood insurance must be purchased separately, it’s important to shop around for the best price, no matter what type of insurance you’re seeking. Keep in mind that the cost of insurance can go up each year.

3. Private Mortgage Insurance. If you put less than 20 percent down for your mortgage, you’ll have to pay PMI, which protects the lender against your defaulting on the loan. Again, you could be looking at hundreds of dollars each month.