Real Estate Market

For the first time in five years, existing home sales have increased for four months in a row, according to an August report by the The National Association of Realtors® (NAR). Existing home sales - including single-family, townhomes, condominiums, and co-ops - increased 7.2 percent in July, which is the largest monthly sales gain recorded since 1999. Analysts are projecting an increase in 2009 of existing home sales to a seasonally adjusted annual rate of 5.24 million units, which is 5 percent above the 4.99 million-unit pace set in July 2008.

"The housing market has decisively turned for the better," said Lawrence Yun, chief NAR economist. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."

Freddie Mac reported that the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 5.22 percent in July from 5.42 percent in June. This is a dramatic rate reduction compared to the 6.43 percent rate available in July 2008. According to a survey by NAR, first-time buyers accounted for 30 percent of homes purchased in July, while distressed homes accounted for 31 percent of transactions.

Home buyers can claim a special tax credit worth up to $8,000. The American Recovery and Reinvestment Act offers qualifying home buyers a tax credit equal to 10 percent of a home's purchase price, up to a maximum of $8,000. The tax credit is offered to first time buyers, and those who have not owned a principle residence in the past three years. To be eligible for the tax credit, buyers must meet general income requirements and close on their purchase before December 1, 2009.

Under new rules introduced recently by the Department of Housing and Urban Development, qualifying buyers can apply the $8,000 tax credit toward the purchase of a home. To facilitate the process, the Federal Housing Administration is permitting its lenders to extend short term bridge loans, which will enable qualifying buyers to apply their tax credit toward closing costs, buying down their interest rate, or increasing their down payment above the FHA required 3.5 percent.

Please contact us today for more details on this once-in-a-lifetime program.