Real Estate Market

Markets Stable Nationally

According to the National Association of REALTORS® (NAR), sales of existing homes remained essentially unchanged through July. While increases were seen in the West and Northwest regions, these gains were offset by a decline in the Midwest. The overall national market for existing homes slowed 0.2 percent in July. NAR still anticipates close to 5.75 million units to be sold in 2007.

Average Sales Price of Existing Homes by Region

Date	U.S.	Northeast	Midwest	South	West
2004	$244,400	$273,600	$189,400	$215,600	$324,300
2005	266,600	297,000	203,800	231,700	363,800
2006	268,200	299,700	205,300	230,000	371,300

04/07	268,100	308,500	200,100	226,700	373,100
05/07	270,600	313,200	204,300	229,700	372,000
06/07	276,500	318,900	210,600	237,500	375,200
07/07	276,000	316,100	214,800	233,500	376,400

Statistics from the National Association of REALTORS®

The Wall Street Journal reported that the thirty year conventional, fixed rate mortgage was averaging 6.09% on August 31, which is down from 6.25% earlier in the month. NAR president Pat Combs explains that today's buyer still has some great financing options available. "For buyers able to qualify for conventional financing, there are ample opportunities in the current market" she said. “Availability and pricing of conventional loans are reasonable, and FHA-insured mortgage applications have been rising as low- and moderate-income buyers seek alternatives to subprime loans. If buyers are in it for the long haul, now can be a good time to get into your home."

July statistics for existing homes were mixed regionally. Sales for the Northeast region rose 1.0 percent, while the West region saw an increase of 1.8 percent. Existing home sales in the South remained unchanged from the previous month, whereas sales in the Midwest decreased 2.2 percent.

FHA Mortgage Insurance Programs on the Rise!

President Bush has pledged his support to homeowners struggling in the aftermath of the recent mortgage market liquidity crisis. Among a handful of initiatives, the president is calling for changes in the Federal Housing Administration mortgage-insurance program to let more people refinance with FHA insurance if they fall behind on their adjustable-rate loans.

Federal Reserve Chairman Ben Bernake echoed the president's concern for the well-being of consumers and our economy when he said the central bank was ready to take additional action if needed. Despite the recent half-point decrease in the discount rate, the Fed is clearly concerned about balancing the short term benefits of liquidity with the long-term challenge of inflation.

How Bridge Loans Help Buyers Over The Gap

Nobody wants to carry two mortgages on two homes at the same time. Sometimes, however, an overlap occurs between buying a new home and selling the old one. Here’s where a bridge (or "gap," or "swing") loan can take the pressure off the monthly budget and provide down payment money.

Take a short-term loan.

A bridge loan is a short-term loan for which the equity in your old home (and sometimes in your new one) serves as collateral. Various lenders charge different interest rates – often 1 or 2 percentage points above the current prime rate, or a bit higher than the current regular mortgage rate. Depending on the lenders’ requirements (appraisal, title search, etc.), closing costs can be anywhere from 0.5% to 1.5% of the loan amount.

Pay off as you choose.

You may pay the loan off when you sell your home, or in monthly or quarterly installments. If your home does not sell within the specified term (often 6 months or a year), the loan is usually renewable. As real estate professionals, we have experience in all aspects of home purchasing. E-mail us to take advantage of our knowledge of the kinds of financial assistance that are available.

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