Case-Shiller Shows Uneven Recovery For U.S. Housing

The Home inspector in Atlanta has seen a surge in home sales and Atlanta home inspections as well.  Recent data suggests that the U.S. housing market is in recovery. However, the data also shows this to be an uneven recovery.

According to the monthly S&P/Case-Shiller Index, for example, home values rose in three of 20 tracked markets between December 2011 and January 2012. 17 tracked markets showed home prices still in decline.

It’s easy to point to the Case-Shiller Index as evidence that the housing market in Georgia has yet to bottom, but we have to consider the Case-Shiller Index’s shortcomings — specifically in a recovering economy.

For example, the Case-Shiller Index is based on changes in home prices of a single home, through successive sales. This means that to calculate its home price index, the Case-Shiller searches for sales of the same home over a period of time and calculates the difference in contract price.

This methodology can distort the home price tracker downward during times of weak economy because there is no distinction made for homes sold in foreclosure or as a short sale.

35% of all homes sold in January were “distressed”, says the National Association of REALTORS®.

Another distortion in the Case-Shiller Index is that the model neglects all home types that are not of type “single-family residence”. This means that multi-unit homes and condominiums are excluded from the Case-Shiller Index model.

In some markets, such as Chicago and New York City, condominiums account for a large percentage of overall sales.

Lastly, the Case-Shiller Index is published with a “lag”, which renders it useless to buyers and sellers of Woodstock in search of real-time, relevant data. The most recent Case-Shiller Index is published with a 60-day delay, and accounts for home purchase contracts written between October and December 2011.

Since October, the U.S. economy has added more than 1 million jobs and the economy has moved into “moderate expansion”, according to the Federal Reserve. Data that’s two seasons old does little to help us today.

Making sound real estate decisions is about having timely, relevant data at-hand when it’s needed. The Case-Shiller Index fails in that respect. It’s good for highlighting the U.S. housing market on the whole, as it existed in the past. For real-time market data, though, you’ll want to talk with an active real estate agent.

Find other Atlanta home inspection and Atlanta home sales news.

Do us a favor if you or someone you know is about to buy that perfect home, please recommend us to them. When you find your dream home, make sure that you get a thorough home inspection in Atlanta, GA from the home inspector Atlanta, GA, David Lelak of IHI Home Inspections, they serve Atlanta and all of North Georgia. Call us today at 404-788-2581 for a thorough home inspection in Atlanta. We won’t let you buy the money pit.  You can also schedule your Atlanta home inspection today online.  We create Peace of Mind One Atlanta home inspection at a time.  Be sure to check out all the other reasons other customers chose IHI Home Inspections at our original website. 

Mortgage Rates Influenced, But Not Set by the Federal Open Market Committee

Comparing the 30-year fixed versus the Fed Funds Rate

 

The Federal Open Market Committee  can influence mortgage rates but not set them. Mortgage rates are set by Wall Street.

Meeting today, the Federal Open Market Committee will vote on monetary policies that will affect Atlanta home buyers, Atlanta mortgage lenders, and Atlanta home inspectors. Most likely, mortgage rates are going to change.

The 12-person sub-committee within the Federal Reserve votes on the nation’s monetary policy. Led by Federal Reserve Chairman Ben Bernanke, the FOMC’s most prominent role is as steward for the Fed Funds Rate.

The Fed has said repeatedly that it intends to keep the Fed Funds Rate near 0.000. Unfortunately, this doesn’t mean that Atlanta mortgage rates will remain low as well. That all depends on Wall Street.

As proof that the Fed Funds Rate is distinct from mortgage rates, consider that, since 2000, the difference between the Fed Funds Rate and the average, 30-year fixed rate mortgage rate has been as wide as 5.25% and as narrow at 0.50%.

If the Fed Funds Rate was tied to mortgage rates, the chart at right would be linear.

After its meetings, the FOMC issues a standard press release to the public which reflects the group’s overall economic outlook. When the FOMC statement is generally “positive”, mortgage rates tend to rise in response. This is because investors often assume more risk in an improving economy and this can harm bond market prices — including those for mortgage-backed bonds.

Conversely, when the Fed is generally negative in its statement, mortgage rates can improve.

Since the FOMC’s last meeting, there has been little about which to be negative with the U.S. economy. Housing and manufacturing are improving; employment is higher; and global markets are regaining their respective footing. The Fed may make note of it. Or, it may not.

Regardless, mortgage rates are expected to move so consider locking your mortgage rate ahead of today’s 2:15 PM ET statement.

Do us a favor if you or someone you know is about to buy that perfect home, please recommend us to them. When you find your dream home, make sure that you get a thorough home inspection in Atlanta, GA from the home inspector Atlanta, GA, David Lelak of IHI Home Inspections, they serve Atlanta and all of North Georgia. Call us today at 404-788-2581 for a thorough home inspection in Atlanta. We won’t let you buy the money pit.  You can also schedule your Atlanta home inspection today online.  We create Peace of Mind One Atlanta home inspection at a time.  Be sure to check out all the other reasons other customers chose IHI Home Inspections at our original website. 

 

 

 

The Atlanta Home Inspector Missed The Today Show~ Here is What He Missed!

We have all heard the commercials about having bad credit or no credit, and what the company paying for the advertisement will do for someone with said credit woes. What the advertisements fail to mention are that these acts of “kindness” will be at a very high interest rate. The Atlanta Home Inspector is not a mortgage expert, so the complete structure and ins an outs of rates will be left to those who work with the numbers everyday, but the Atlanta Home Inspections team would like to share this information for anyone curious about rebuilding their credit.

Mortgage rates are at an all-time low in Atlanta, GA. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting “the best rates” from your lender, and getting something worse.

The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, (which the Atlanta Home Inspector rarely gets a chance to view anymore, since there are so many home inspections in atlanta and surrounding cities) ,you’ll learn the basics :

  • Why you shouldn’t close a credit card after you pay off a large debt
  • What is the maximize balance to leave on your credit cards, relative to your credit limit
  • What types of credit checks harm your credit scores, and which ones don’t

You’ll also learn how to shop for a mortgage with multiple lenders without having your credit score “dinged”, as well as several proven methods to raise your credit score quickly.

In the end, good credit scores are the result of paying bills on time and staying with your means. Those with the best scores, get the best rates.

Credit scores play a huge role in today’s mortgage market — larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.

Explanation Of The Federal Reserve Statement (January 25, 2012)

Putting the FOMC statement in plain EnglishWednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The Fed Funds Rate has been near zero percent since December 2008.

For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.

In its press release, the Federal Reserve noted that the the U.S. economy has “expanding moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.

The Federal Reserve expects moderate economic expansion through the next few quarters but is wary of “strains” from global financial markets, and these three threats to the U.S. economy :  

  1. The housing sector remains “depressed”
  2. The unemployment rate remains “elevated”
  3. Fixed business investment has “slowed”

On the positive side, the FOMC said that household spending is rising and inflation remains in-check. The group also believes that employment will gradually improve nationwide going forward.

The Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs.

Immediately following the FOMC’s statement, mortgage markets rallied, pressuring mortgage rates to fall in and around Canton. 

Mortgage rates remain near all-time lows and, for homeowners willing to pay points plus closing costs, conventional, 30-year fixed rate mortgages can be locked at below 4 percent. If you’re in the process of buying or refinancing a home in GA , it’s a good time to lock a mortgage rate with your lender.

The FOMC’s next scheduled meeting is a one-day event slated for March 13, 2012.

Do us a favor if you or someone you know is about to buy that perfect home, please recommend us to them. When you find your dream home, make sure that you get a thorough home inspection in Atlanta, GA from the home inspector Atlanta, GA, David & Bonnie Lelak of IHI Home Inspections, they serve Atlanta and all of North Georgia. Call us today at 404-788-2581 for a thorough home inspection in Atlanta. We won’t let you buy the money pit.  You can also schedule your Atlanta home inspection today online.  We create Peace of Mind One Atlanta home inspection at a time.  Be sure to check out all the other reasons other customers chose IHI Home Inspections at our original website. 

Adjustable Rate Mortgage – Is it right for me?

   Buying a home is a common rite of passage for most people. Settling down, creating stability, establishing a sense of community and responsibility are a just a few of the benefits of owning versus renting.  Another benefit is the investment, and the equity that a home can provide.  However, when it comes to the financing options – what should you do? When considering mortgage options, which can aid you as the buyer, here are a few questions to ask yourself:

  • Am I interested in a low payment?
  • Do I intend to live in this house for more than 5 years?
  • Is a 30 year commitment unrealistic?

Electing to take an adjustable rate mortgage (ARM) over a fixed rate loan is one of the financing options that you will be presented.  ARMs tend to carry lower mortgage rates up- front and, therefore, lower monthly mortgage payments. However, the word adjustable is in the very title, so it stands to reason that the mortgage payment will fluctuate as the rate adjusts over time.  While this might seem a bit scary, since you aren’t sure what the stock market will do tomorrow, it could still be a feasible option if you are not expecting to commit to your current home for more than 5 years. In other words, why pay a higher, set rate, when you know that you are vacating the home in 5 years or less.  However, as the loan adjusts, be prepared for the possibility of a much higher rate down the road.

On the other hand, if you plan on making a lifelong commitment to your property, and are more comfortable knowing what each monthly installment will cost you ahead of time and without variance,  then a conventional fixed rate mortgage is most likely what you will feel more at ease with.  While the initial rate may be slightly higher than the initial rate on an adjustable mortgage, the comfort of knowing is sometimes the best decision in a hectic life where most things are always changing. 

As in any financial decision, it is best to consult an authority on mortgage lending. Find a mortgage loan expert who can explain the different options available, any risk factors involved, and the best solutions for you.