Your Certified Mortgage Planner — Michael Eiden, Mortgage Blogger

Existing-home sales fell in January but are above year-ago levels, according to the National Association of Realtors®

Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate  of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.

In looking at the annualized, adjusted Existing Home Sales data, we find:

1. Sales volume is at its lowest levels since June 2009
2. Sales volume fell below its 12-month rolling average
3. Home supplies are at a 5-month high

I wouldn’t read too much into these number though. The market is cyclical and the weather this winter definitely impeded activity. Plus, we are still adjusting from last November’s flurry of activity after the first First Time Home Buyer Tax Credit. By the way, the extension of the credit is running out soon, make sure you are in contract to buy by April 30th of this year and complete the transaction by June 30th of this year to qualify.

It would appear that we are set for a good February and March and numbers are in line with expectations. The Good news from all this is buyers are finding better deals and sellers are more willing to negotiate!

As always of if need some help getting financing together for you next home purchase or refinance, give me a call or shoot me an email.

Enjoy your day!

Reporting on a two-month lag, the government said home values rose 0.7 percent in November. 

National home prices are at their highest point since February 2009.

But before we look too much into the FHFA’s Home Price Index, it’s important that we’re cognizant of its shortcomings; the most important of which is its lack of real-time reporting.

According to the National Association of Realtors™, 80% of purchases close within 60 days. As a result, because of its two-month delay, the Home Price Index report actually trails today’s market data by an entire sales cycle.

This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month.  The home valuation report is using data from November; the sales reports are using data from December.

The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.

The same is true for the Case-Shiller Index. It, too, operates on a 2-month lag.

All of that said, however, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months.  In many markets, home sales are up, home supplies are down, and values have increased.  This trend should continue into the early part of 2010, at least.

If you’re wondering whether now is a good time to buy a home , consider low prices, cheap mortgages and an available tax credit as three good incentives.  By May, none of them will likely be available.