Last night in my New Investor Webinar I shared with my clients all the key indicators showing how housing is not only stabilizing, but improving in many areas. (You can get the replay by calling 800-310-7730 x2 and signup for next months webinar here.) Just today the Pending home sales show a sustained uptrend, rising for the fourth month in a row, from our very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.
The Pending Home Sales Index based on contracts signed in May, increased 0.1 percent from an upwardly revised reading in April, and is 6.7 percent higher than May 2008. The last time there were four consecutive monthly gains was in October 2004. Wow, this market is really heating up. And if you haven't already jumped in to get your deals, you need to do that NOW. And I will show you how…. read on to the end…
Regional Breakdown:
Northeast rose 3.1 percent May over April and is 6.8 percent above May 2008.
Midwest slipped 1.3 percent May over April, but is 11.4 percent above May 2008.
South declined 1.7 percent May over April, but is 7.9 percent higher than May 2008.
West rose 2.2 percent May over Apri, and is 0.7 percent above May 2008.
NAR’s Housing Affordability Index remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.
A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.
The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.
Pending home sales is a forward looking report. Therefore you should see existing-home sales continue to trend up through the rest of the year. Even with all the new foreclosures hitting the market, with builders not building, supply is shrinking. In some parts of the country, like California, housing supply is less than a 4 month supply. That is great news for us, as you will see multiple offers when you price your houses right on the resale. And at the same time, there is a ton of inventory from the banks that has NOT hit the market, but they own it and need to sell it. That is what we call "phantom inventory" and you absolutely want to work those leads for bottom picking deals.
The best way to find those deals, and buy them right, is by following my 7 step instructions as outlined here. Then attend my next Mastering Mini Lab Webinar on July 14th to learn "How to Find the Money for Your Deals" as outlined here. Call Jim or Andy and they can help you out… 800-310-7730 x2
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