Cited: Reuters
Housing Market
The median forecast is for the S&P composite index of 20 metropolitan areas to be unchanged in December from November, non-seasonally adjusted, and down 3.2% from December 2008. This would follow a 0.2% November monthly decline and my .3% annual drop.
The median forecast is for a rise of about 5.3% in January new home sales to 360,000 annual units, following a 7.6% drop to 342,000 units in December.
The median forecast is for a 1% rise in January existing home sales to 5.50 million units, after a 16.7% plunge in December.
FACTORS TO WATCH
U.S. home prices probably stagnated in December, with the S&P/Case-Shiller 20-city index showing no change after a 0.2% November decline and a total average price plunge of about 30% from 2006 peaks.
The rate of annual decline also continued to improve, based on the median forecast in a Reuters poll, with a 3.2% drop expected to follow the 5.3% downturn in November.
Economists in a separate Reuters housing poll last week said the bottom had probably been reached but prices were unlikely to gain this year. The 20-city index would be unchanged in 2010 before rising 2% next year, the poll found.
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But even stability is welcome after prices tumbled for more than three years, helping send the U.S. housing market into freefall and the economy into recession.
Housing is gaining some traction on the back of massive government aid, including buyer tax incentives that are
set to end this spring.
After harsh December weather kept many buyers inactive, sales of both new and existing homes rose modestly in January, economists said. Home shoppers aimed to take advantage of near record-low mortgage rates and the tax credits before they disappear.
Qualified borrowers need to sign contracts by April 30 and close loans by June 30 to get the $8,000 first-time buyer credit or $6,500 move-up credit.
Sales of new homes rose about 5.3% to 360,000 annual units after slumping 7.6% in December, and sales of existing homes climbed 1% to 5.50 million units after a 16.7% December plunge, based on Reuter’s surveys.
No. 2 U.S. home improvement chain Lowe’s Companies (LOW.N) reported better-than-expected fourth-quarter results and predicted improved sales this year, saying that the worst of the economic cycle has probably passed.
Home Depot, the largest home improvement chain, is set to report its quarterly results on Tuesday and is seen outperforming Lowe’s. Sales had been lackluster at both companies with customers delaying major home renovations during the housing and economic downturns.
Also, new homebuilding rose to a six-month high in January, surpassing forecasts and pointing to stabilization.
Thirty-year mortgage rates averaged 5.03% in January; virtually the same as the average for all of 2009, according to home funding company Freddie Mac. The rate got as low as 4.71% in December, the lowest since Freddie Mac started tracking rates weekly in 1971.
Home loan rates are seen rising through the year, however, as another key government intervention ends. The Federal Reserve by March 31 will have completed purchases of more than $1.4 trillion in mortgage-related securities aimed at lowering borrowing costs to revive housing and the economy.
Most economists agree that rising borrowing costs along with the looming flood of repossessed properties that have yet to be put on the market by banks may prevent much of a near-term housing recovery.
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My Take: I hope it stays steady for a while, at least until I get my new house! Well, it’s not “new” house, it’s a pre-owned house. But it will be new to me! I know I’m going to be cutting it close with a $8000 tax credit, but I keep trying. I have been shopping around and looking at insurance rates for homes. The real estate agent told me to compare insurance rate with more than five companies. Is that I get a better rate that way.
I didn’t realize there were so many insurance companies for so many different types of insurance. I didn’t know that you could compare health insurance quotes just like you can for a car. I felt like a dunce when I found that out. I comparison-shop every day and I never thought to do it with insurance in general.
I can’t wait to get my own house! I plan on putting in a garden in the backyard, if it’s big enough. I want to get some of those grow lights that help plants grow faster. They’re basically lightbulbs for plants.
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