Home Mortgage News for Boise Idaho Benchmark Mortgage Prime Equity Group

Ada County December Real Estate Market Report is in…and it looks pretty darn good

Dean Tucker Benchmark Mortgage - Prime Equity Group — Wed, 18 Jan 2012 15:52:55 -0800

By: Marc Lebowitz, Executive Officer, ACAR (Ada County (Idaho) Association of Realtors)

2011 December sales were 477 in Ada County, a decrease of 9% over December 2010.

Total sales for 2011 are 6,299; up 7% over 2010. In July of 2011, we exceeded YTD 2010 sales for the first time in 2011. This is our first year-over-year increase, without influence of the home buyer tax credit, in a few years. This is our first time crossing the 6,000 homes sold threshold since 2007…how long ago that seems!

December sales decreased 3% from November’s 487. Historically, December sales decrease from November.

Of our total sales in December… 48% were distressed….up 1% from November 2011. In January 2011, 57% of our sales were distressed. We have seen a mild overall increase in the percentage of sales in distress. In July we were down to 42% overall and have seen the amount increase one to two points each month.

For homes sold in December, the average number of “Days on Market” was 86. This is essentially unchanged from last month. Down from 90 days last year this time and down from 93 days in January 2011.

Pending sales at the end of December were 691; a decrease of 7.5% from the end of November. This represents the smallest number of pendings in 2011. That is fairly consistent with historical data. The percentage of pending sales in distress increased 1% from November, totaling 49% overall. This is the highest number of pending sales in distress we’ve had since early spring. Even so, we are now at eight consecutive months below 50%.

At the end of December, we had 20% more sales pending than at the end of December 2010.

December median home price held at November levels. Overall median price was $149,300; up 1.2% from December 2010. For all of 2011 our median was down 6.97%. That is a significant improvement from where we were in January 2011: down 20%.

New Homes median price for December 2011 was $223,739; an 24% increase from December 2010. Year-to-date new homes median is up 15% over 2010 to $237,500.

The number of houses available continues to decrease. At the end of December our total active inventory was 1,991 homes. This is down 9% from November and 25% less than last year at this time. Our inventory has fallen below where we would call the market “in equilibrium”. We are now in a “shortage”.

At the same time, the percentage of distressed active inventory held steady at 36%. We have been hovering between 33% and 36% since May. We remain well below the 40% levels set last spring….when we were on the increase.

In Ada County we have 4.2 months of inventory on hand…historically this number defines a strong “seller’s market”. The price category in shortest supply is <$119,000 with 2.5 months. In the range of $120,000 to $159,999 we have 3.9 months. All price points up to $400,000 have less than 5 moths supply. We have benefited all year from inventory levels much lower than national average. now, however, we are starting to see some slowdown in sales as the inventory continues to fall.

Based on December sold data, our most desirable price point is $120,000 to $160,000 which made up more than 20% of total sales.

There is no longer any doubt that, in AdaCounty, we have passed our “low water” point.

The challenge to our continued recovery is available product.

Talking with our 2012 President, Kit Fitzgerald, we don’t see new homes construction being able to keep up with the demand, especially as we move toward Spring.

Financing for builders is still extremely difficult to come by. In Kits words: “Without sticks in the ground, there is no excitement. Without excitement there is no sales growth.”

Sure, we will see median price increase over the next months, but when we get to April and the pent up demand comes roaring out of winter hibernation…then what?

Another thing I learned from Kit…the desires of new home buyers have changed…about the lots they want to build on. Gone are the days when .13 acre was an acceptable lot size. Buyers now want .25 or more….and there’s very few of those anywhere inAdaCounty.

Its going to be an interesting Spring.

If I was listing and selling I’d be brushing up on my multiple offer negotiation skills and brush off those old escalation clauses….who would’ve thought?

(Reposted with permission.)

Call us with any questions you have relating to residential mortgages (208) 287-1717, we are always very happy to help. We specialize in home loans for first time home buyers, move up buyers, second home purchases, and resort lending. The loan products available to my clients include FHA, IHFA, VA, Conforming Conventional, Jumbo and Super Jumbo Portfolio.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Big changes to Home Affordable Refinance Program (HARP)

Dean Tucker Benchmark Mortgage - Prime Equity Group — Fri, 28 Oct 2011 19:12:31 -0700

The Federal Home Finance Agency announced big changes to its Home Affordable Refinance Program Monday. More commonly called HARP, the Home Affordable Refinance Program is meant to give "underwater homeowners" opportunity to refinance.

With average, 30-year fixed rate mortgages still hovering near 4.000 percent, there are more than a million homeowners in Meridian and nationwidRee who stand to benefit from the program overhaul.

To qualify for the re-released HARP program, you must meet 4 basic criteria:

Your existing home loan must be guaranteed by Fannie Mae or Freddie Mac
Your home must be a 1- to 4-unit property
You must have a perfect mortgage payment history going back 6 months
You may not have had more than one 30-day late payment on your mortgage going back 12 months

Most notable about the new HARP refinance program, though, is that the government is waiving loan-to-value requirements on a HARP loans. Homeowners' participation in the program are no longer restricted by their home's appraised value. In fact, the new HARP doesn't even require an appraisal, in most instances.

With the new HARP program, underwater mortgages can be refinanced without LTV limit or penalty.

According to the government's press release, pricing considerations for the new HARP program will be released on or before November 15, 2011; and lenders are expected to be offering the program as of December 1, 2011.

If you think you may be eligible, first confirm that either Fannie Mae or Freddie Mac is backing your loan. Both groups provide a simple, online lookup.

Fannie Mae loan lookup : http://www.fanniemae.com/loanlookup/
Freddie Mac loan lookup : https://ww3.freddiemac.com/corporate/

If your loan cannot be located on either of these two sites, your current mortgage is not backed by Fannie Mae or Freddie Mac, and is not HARP-eligible.

The FHFA's official press release contains an FAQ section. In it, you'll find minimum qualification standards, as well as information related to condominiums and to mortgage insurance.

The HARP program is meant to help a wide group of homeowners, but each applicant's situation is unique. For specific HARP questions, be sure to call me (208) 287-1717..

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Housing Picture Continues to Brighten

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 28 Feb 2011 13:38:06 -0800

Existing Home Sales continued their upward climb in January. This is the fourth month in a row where we have seen month-over-month gains in the number of units sold. The National Association of Realtors reported that sales rose 2.7% from December. Also, the inventory levels decreased again:

The number one reason that the housing market tanked was due to over supply. So, with home sales increasing and inventory levels decreasing, this is certainly a trend with some momentum. All cash sales and distressed sales did increase last period. But any way that the excess inventory is gobbled up is good. It certainly shows that the demand is there and that investors are snapping up properties before prices rise. Maybe you should too?

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

NAR® Report says 70% of buyers work with the first Realtor® they meet, Is that a good idea?

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 21 Feb 2011 19:12:00 -0800

As a lending professional, I have an opportunity to meet lots of Realtors®. The NAR® report says 70% of buyers work with the first Realtor® they meet. I am not sure that is the best situation. Now I know several Realtors® that if that were to happen, the consumer would be really well taken care of. One of the Realtors® I work with has been a Realtor® for sixteen years, has helped 1,000 families to buy or sell their homes, was a real estate appraiser for four years and was a lender, like me, for nine years. Now that Realtor® knows what he is talking about and would be a good first choice for a buyer or seller.

On the other hand we have over 3,200 Realtors® in the Ada County Association of Realtors® now, and a significant percentage didn't sell a single house last year. (Yes, things are really tough out there.) We usually have two Realtors® on every transaction we assist a buyer with their loan. Usually there is one who represents the seller and one who represents the buyer. Occasionally, we can have a very experienced person on one side of the transaction and someone who is a little green on the other side. In those cases the more experienced person ends up doing 95% of the work and only gets paid 50%. From that person's perspective it certainly doesn't seem very fair!

Appraisers have to do a two-year apprenticeship during which a much more experienced supervising appraiser is required to sign-off on all appraisal reports for that period. Has anyone ever considered instituting that type of arrangement in real estate for Realtors®? I am not saying we shouldn't have new people come into the business, but why not impose an apprenticeship period until a new Realtor® has learned their craft and can be trusted to be out on their own?

When selecting a Realtor® for your next home sale or purchase, consider working with someone that has been in the industry for awhile, and maybe not go with your neighbor's cousin who was just licensed. Your experience should be fun and exciting, and no the other sort that we see from time-to-time.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

If consumer spending is a keystone element in the U.S. economic recovery, a full-on rebound is likely underway.

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 15 Feb 2011 11:52:34 -0800

If consumer spending is a keystone element in the U.S. economic recovery, a full-on rebound is likely underway.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data surpassed expectations. Last month's retail figures climbed 0.3 percent as total sales receipts reached an all-time high.

It's good news for the economy which is scratching back after a prolonged recession, however as we have discussed in previous postings, if you're looking for a mortgage - rates have been going up since November and are not going to turn around anytime soon.

Because consumer spending accounts for the majority of the U.S. economy, Retail Sales growth means more economic growth and that growth draws Wall Street's dollars toward riskier investments, including equities, at the expense of safer investments such as mortgage-backed bonds.

On the heels of the Retail Sales report's release, bond prices are falling this morning. As a consequence, mortgage rates are rising. It's the same pattern we've seen since mid-November - "good news" about the economy sparks a stock market frenzy, causing mortgage bonds to rise.

A sampling of other recent good-for-the-economy stories include:

Corporate earnings are rising quickly (Marketwatch)
Existing Home Sales up 12% month-over-month (CNN Money)
The Fed says the economy looks "brighter" (Bloomberg)

The days of 4 percent, 30-year fixed rate mortgages are over. 5 percent is the new mortgage rate benchmark. That is unless the economy continues to keep showing strength; then, that number may rise to six percent.

If you're thinking of buying or refinancing a home, consider how rising rates will impact your budget. You may want to take that next step sooner than you had planned - if only to protect your monthly payments.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Adjustable Rate Mortgages Adjusting To 3.000 Percent Right Now… Perhaps!

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 08 Feb 2011 13:40:56 -0800

If your ARM is due to adjust this spring, your best move may be to allow it. Don't rush to refinance - your rate may be adjusting lower. It's because of how adjusted mortgage rates are calculated.

First, let's look at the lifecycle of a conventional, adjustable rate mortgage:

There's a "starter period" of several years in which the interest rate remains fixed.
There's an initial adjustment to rate after the starter period. This is called the "first adjustment".
There's a subsequent adjustment until the loan's term expires. The adjustment is usually annual.

The starter period will vary from 1 to 10 years, but once that timeframe ends, and the first adjustment occurs, conventional ARMs enter a lifecycle phase that is common among all ARMs - regular rate adjustments based on some pre-set formula until the loan is paid in full, and retired.

For conventional ARMs adjusting in 2011, an example of that formula is most commonly defined as:

(Index = 12-Month LIBOR) + (Margin = 2.250 Percent) = (New Adjusted Mortgage Rate)

LIBOR is an acronym for London Interbank Offered Rate. It's the rate at which banks borrow money from each other. It's also the variable portion of the adjustable mortgage rate equation, or the Index. The corresponding constant is typically 2.25%, or the Margin.

Since March 2010, LIBOR has been low and, as a result, adjusting mortgage rates have been low, too. In 2009, 5-year ARMs adjusted to 6 percent or higher. Today, they're adjusting near 3.000 percent. That's a big shift.

Therefore, strictly based on mathematics, letting your ARM adjust this year could be smarter than refinancing it. You may get yourself a lower rate.

Either way, give us a call (208) 287-1717. With mortgage rates still near historical lows, Eagle homeowners have interesting options. Just don't wait too long. LIBOR - and mortgage rates in general - are known to change quickly.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Pending Home Sales At The Highest Levels Since April 2010

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 01 Feb 2011 14:17:32 -0800

Another day, another strong report for housing.

The Pending Home Sales Index climbed 2 percent in December, according to the National Association of REALTORS®. A "pending home sale" is an existing home under contract to sell, but not yet closed.

The Nationwide Pending Home Sales figures are up for the fifth time in 6 months. The December reading is now its highest since the federal home buyer tax credit's April 2010 contract deadline, and the figure is well north of the Pending Home Sales Index 3-year average.

Coupling this data with December's strong Existing Homes Sales report (+12%) and its strong New Home Sales report (+17%), it's clear that the housing market has past its trough and is in Recovery Mode.

Even consumer confidence is at an 8-month high.

On a regional basis, December's Pending Home Sales Index varied as compared against November. The South region led the way, and the West region lagged.

Northeast Region: +1.8%
Midwest Region : +8.0%
South Region : +11.5%
West Region : -13.2% (Don't look at the Western Region figures as a negative sign, the economy has turned - the time to buy a home is RIGHT NOW!)

Home buyers in Idaho would do well to study last month's Pending Home Sales Index. It offers clues of what to expect during the spring buying season. For example, according to the National Association of REALTORS®, 80 percent of homes under contract close within 60 days.

Therefore, we can look at the December Pending Home Sales Index and project, with a high level of confidence, that home sales will be higher throughout February and March on a units-basis.

Furthermore, because the Existing Home Sales and New Home Sales reports show that housing stock is falling nationwide, spring buyers in Boise will notice find more competition for the available housing stock. As the Supply-and-Demand curve shifts towards sellers, home prices rise.

In other words, as the year progresses, home prices are expected to rise, as are mortgage rates. This one-two combination will impact home affordability negatively. And the higher that mortgage rates go, the worse the damage.

Your home-buying dollar won't go as far in in the second half of 2011 as it will right now. So if you have plans to buy a home in 2011, consider moving up your time-frame.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Fantastic!! New Home Sales Reach 8-Month High

Dean Tucker Benchmark Mortgage - Prime Equity Group — Fri, 28 Jan 2011 12:54:00 -0800

Sales of new homes rose sharply in December, posting a 17.5 percent gain from the month prior.

According to the Department of Housing and Urban Development, New Home Sales climbed to 329,000 in December, besting November by close to 50,000 units on a seasonally-adjusted annual basis.

Last month's reading is an 8-month high for New Home Sales, and the latest in a series of signals that housing is improving in Meridian and around the country.

Note that December's Existing Homes Sales and Building Permits reports also showed marked gains last month, climbing 12 percent and 6 percent, respectively.

Furthermore, an interesting pattern is emerging in the price points of home sales. The highest levels of relative growth are occurring within the "move-up buyer" segments. Entry-level price points are lagging the market, as a whole.

December's New Home Sales data breaks down by price point as follows:

Homes under $200,000 : 36% of the market (-9% from November)
Homes between $200,000-$299,999 : 32% of the market (+7% from November)
Homes between $300,000-$499,999 : 27% of the market (+7% from November)

Luxury homes accounted for less than 5% of the newly-built home market, suggesting that Idaho homeowners are either not "buying new" as frequently, or are choosing to renovate their existing properties instead.

The 2010 housing market finished on a tear, and that momentum is carrying forward into 2011. Expect the spring season to show strongly, putting pressure on home prices to rise.

Coupled with rising mortgage rates, the long-term cost of homeownership is unlikely to be as low as it is today.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Building Permits Surge In December; Signals A Strong Spring Housing Market

Dean Tucker Benchmark Mortgage - Prime Equity Group — Thu, 20 Jan 2011 13:45:40 -0800

Each month, in conjunction with the Department of Housing and Urban Development, the Census Bureau releases its New Residential Construction report. The report is comprised of several sections, one of which counts the number of homes that have "broken ground" in Idaho and nationwide.

They're called "Housing Starts" and, by most measures, they faded quickly as 2010 came to a close.

According to the Census Bureau's report, Housing Starts of single-family homes fell to 417,000 units on a seasonally-adjusted, annual basis. The figure marks a 9 percent drop-off from November, and is the lowest reading since May 2009.

Not surprisingly, the press went bearish on housing post-release:

U.S. Home Building Stuck Near 50-Year Lows (AFP)
Housing Starts Slowed Sharply In December (New York Times)
Housing Starts Fall In December To One-Year Low (Bloomberg)

Despite being truthful, these headlines are somewhat misleading. They each ignore a key element of December's New Residential Construction report - Building Permits. Building Permits rose 6 percent to an 8-month high last month.

A building permit is a local-government certification that authorizes home construction.

Permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. More permits in December, therefore, should lead to more Housing Starts in January and February.

It's unclear whether permits were up because the economy was improving, or because builders raced to beat new building code for 2011. Regardless, expect additional "new home" supplies this spring which would ordinarily help home prices drop if not for the normal surge in spring buyers to gobble those new homes up.

Look for home prices to stay flat, but with rising mortgage rates contributing to higher costs of homeownership overall.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Mortgage Rates Dip, Retail Sales Weak In December

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 17 Jan 2011 15:06:56 -0800

Consumers keep spending, the economy keeps growing.

Mortgage rates are improving this morning on just-released, slightly worse-than-expected Retail Sales data from December 2010.

Excluding motor vehicles and auto parts, December's sales receipts were $1.5 billion higher from November. Analysts had expected a number north of $2 billion.

Despite falling short of estimates, however, December's reading is the highest in Retail Sales history, surpassing the previous record set in July 2008, set during the recession. In addition, December's strong numbers helped 2010's year-over-year numbers go positive for the first time in 3 years.

Although the data is a mixed bag for Wall Street, home affordability in Eagle is improving today.

The link between Retail Sales and home affordability may not be up-front obvious, but in a post-recession economy like ours, it's often tight. Retail Sales is another name for "consumer spending" and consumer spending makes up more that 70% of the U.S. economy.

As spending grows, the economy tends to, too.

Investors recognize this and start chasing "risk". It becomes a boost for the stock market, but those gains are made at the expense of "safe" asset classes which include mortgage-backed bonds. Mortgage-backed bonds are the basis for conforming and FHA mortgage rates so, as bond markets sell off, asset prices fall and rates move up.

Thankfully, rate shoppers will avoid that scenario today -- at least for today. December's Retail Sales results are a factor in the bond market's early-day improvement. Conforming and FHA mortgage rates across the state of Idaho should be lower today.

Despite the good news, if you're shopping for a mortgage, consider locking your rate as soon as possible. Mortgage rates are coming off a 2-week rally and look poised to reverse appear -- especially with a full docket of data due for next week. As mortgage rates rise, purchasing power falls.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Mortgage Rates Dip, Retail Sales Weak In December

Dean Tucker Benchmark Mortgage - Prime Equity Group — Fri, 14 Jan 2011 18:25:09 -0800

Consumers keep spending, the economy keeps growing.

Mortgage rates are improving this morning on just-released, slightly worse-than-expected Retail Sales data from December 2010.

Excluding motor vehicles and auto parts, December's sales receipts were $1.5 billion higher from November. Analysts had expected a number north of $2 billion.

Despite falling short of estimates, however, December's reading is the highest in Retail Sales history, surpassing the previous record set in July 2008, set during the recession. In addition, December's strong numbers helped 2010′s year-over-year numbers go positive for the first time in 3 years.

Although the data is a mixed bag for Wall Street, home affordability in Eagle is improving today.

As spending grows, the economy tends to, too.

Thankfully, rate shoppers will avoid that scenario today - at least for today. December's Retail Sales results are a factor in the bond market's early-day improvement. Conforming and FHA mortgage rates across the state of Idaho should be lower today.

Despite the good news, if you're shopping for a mortgage, consider locking your rate as soon as possible. Mortgage rates are coming off a 2-week rally and look poised to reverse appear - especially with a full docket of data due for next week. As mortgage rates rise, purchasing power falls.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Yes Virginia...there is a Santa Claus...and other reasons to give thanks.

Dean Tucker Benchmark Mortgage - Prime Equity Group — Wed, 12 Jan 2011 13:08:19 -0800

By Marc Lebowitz, Executive Director ACAR

December sales in Ada County were 518. That's an increase from December '09 of 19%. This is the first year over year increase since June; and is the highest number of unit sales since the same month! Year-To-Date '10 is now 5,891; an increase of 7.7% over 2009. I told you we could do it!

Just in case you forgot the impact of real estate sales on our economy...through the end of December we are nearly $1.1 billion in total sales. That's $23 million more than we sold in all of 2009; with a 8% decrease in median sales price.

Historically, sales volume in December is less than November...not this time. December was up compared to November '10 by almost 20%! (In case you're counting, that's three exclamation points in two paragraphs.)

Of our total sales in November...61% were distressed....up 9% from last month. (Short sales 21% and REO's 39%). This is as high as it was last spring...clearly the highest levels of distress we've seen this year.

Pending sales dropped 17% to 575 from the 690 we had at the end of November.

The percentage of pending sales in distress rose 2% from November to 54% overall.

The number of houses available at the end of December fell to its lowest levels since early 2006. As of the end of the year there were 2,641 homes available. At the end of the year we had 25% fewer homes available than in January. At the same time, the percentage of active inventory that is distressed, increased 2% from November to 45%.

In Ada County we have 5.6 months of inventory on hand...down one full month from the end of November. The price categories in shortest supply are equally distributed between $100K-$250.

Median home price ended the year at $155,000. Compared to year-end 2009 we are down 8%. We are essentially back to late spring home values.

New Homes median price ended the year at $177,875. This is an increase from the 2009 year-end median of $169,990. Mark my words...2011 will be a good year to be selling new homes.

So now we enter year two of our "official" recovery. I know that you are ready. I an promise you that ACAR is ready to assist you in every professional way, to make 2011 a year that we look back on fondly. Heck...it beats the stuffing out of the last couple.

Looking back at 2010 here's what we've got...

Home sales volume is picking up - lagging the national average, but still on the rise
Inventory continues to fall
Median prices are trying to stabilize
Distressed properties (sold, pending and percentage of inventory) as as igh as they have ever been

What does this tell us?

Contrary to most of the rest of the country, we've already "burned through" the "glut" of inventory. With inventory this low, and not likely to grow that quickly, prices should stabilize.

But, median home price (for existing homes) continues to bounce along the bottom. Its likely the victim of the unusually high levels of distressed properties.

Our state legislature went into session this week. The Governor said in his state of the state address yesterday that we have to look at thing differently (as far as expecting services from government) from here on out.

The same is true for housing. We seem to be at the beginning of a transition in consumer expectations in home purchase. The desirability and availability of new homes (that don't carry the baggage of short sales and REOs) may eclipse the historical consumer preference for existing (used) homes.

This shift in preference could also provide a secondary benefit...more jobs.

Construction increases. Construction jobs start to come back. And...well you know the story goes after that.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Pending Home Sales Rises To 6-Month High

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 04 Jan 2011 14:57:56 -0800

The housing market continues to expand, and surprise. According to the National Association of REALTORS®, November's Pending Home Sales Index gained 3 percent from October. A "pending home sale" is a home under contract but not yet closed. The index is now at its highest point since April 2010's federal tax credit contract expiration deadline.

If the tax credit really did "borrow" sales from the summer months, as has been theorized, housing has rebuilt its foundation.

We know this because, of all the housing data available to Eagle homeowners and home buyers, the Pending Home Sales Index stands apart as a forward-looking report -- its designed purpose as described in its methodology.

Because 80% of all homes under contract close within 60 days, and a statistically significant share of the rest close within months 3 and 4, the Pending Home Sales Index is an excellent predictor of future Existing Home Sales data.

This is in contrast to the New Home Sales data and Case-Shiller Index, as examples, which both describe the real estate market as it existed two months in the past. The Pending Home Sales Index reports on housing as it exists right now. We should expect January's Existing Home Sales report, therefore, to show marked strength, consistent with a housing market recovery.

The downside of the Pending Home Sales Index is that it's a national report and real estate is not sold nationally -- it's sold locally. To get a feel for your home market and how it's faring, talk to a licensed real estate agent with access to local home sale data.

If pending sales data is available, so much the better. Forward-looking figures can be more helpful than data that's already old.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Mortgage Rates for Boise Idaho This Week: January 3, 2011

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 04 Jan 2011 14:29:32 -0800

Mortgage markets improved last week during a snow- and holiday-thinned series of sessions on Wall Street. Mortgage bonds improved on year-end profit-taking, mostly, leading conforming mortgage rates in Idaho lower.

Last week marked the first calendar week in which mortgage rates dropped since early-November, a pleasing development for rate shoppers and home buyers.Falling rates means lower monthly mortgage payments.

But don't expect for rates to improve again this week, however. Last week's gains were the result of extremely low trading volume and a close-out of 2010 mortgage bond positions. With markets re-opened for 2011, and Wall Street back at full volume, mortgage rates may resume rising.

There will be a lot of data and information on which for mortgage bonds to trade, too.

The week starts with a growth report from the U.S. manufacturing sector. The Institute for Supply Management's monthly report has shown improvement over 16 straight months, and Monday's report is expected to show the same. Because manufacturing is key in U.S. economy, a stronger-than-expected value could send stock markets higher, and mortgage rates, too.

Then, Tuesday, the Federal Reserve releases the minutes from its December meeting. There won't be policy changes transcribed in the minutes, but Wall Street will scrutinize its pages for clues on the economy. A bullish bias from the Fed will push rates higher. A bearish bias will drag rates lower.

And lastly, Friday, the government will release its Non-Farm Payrolls report for December. This is a major market-mover because of how closely jobs are tied to the economy overall. Plus, Fed Chairman Ben Bernanke speaks Friday -- another risk to mortgage rates.

The gravity of this week's economic releases and speeches should make shopping for a mortgage difficult. Stay in close touch with your loan officer about mortgage rates and how they're moving. And if you see a rate you like, lock it.

There's no promise rates will ever go lower.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Why You Shouldn't Put Too Much Faith In October's Case-Shiller Index

Dean Tucker Benchmark Mortgage - Prime Equity Group — Thu, 30 Dec 2010 15:24:18 -0800

The Case-Shiller Index posted awful numbers in its most recent reading. Each of the index's 20 tracked markets showed home price deterioration between September's and October's respective report. Some markets fell as much as 2.9 percent.

The drop in values is nothing about which to panic, however. The Case-Shiller Index is just re-reporting what we already knew. It's a common theme with the Case-Shiller Index, actually; a trait traced to the report's methodology.

The Case-Shiller Index is an imperfect housing indicator with 3 inherent flaws.

The first flaw is that the index makes use of a limited data set, tracking values in just 20 cities nationwide. That data set is then projected across the more than 3,100 other municipalities in the United States, including Boise. The "national figures", therefore, aren't really national.

The second flaw is that, even within the tracked 20 cities, not all home sales are included. The Case-Shiller Index only tracks sales of single-family, detached homes, and within that market subset, it only uses homes that are "repeat sales". This specifically excludes sales of condominiums and multi-family homes, and new construction.

The third flaw, Case-Shiller Index's third flaw is its "age". The Case-Shiller Index reports on a 60-day delay, and the values it reports are tied to contracts written even longer ago. Sales contracts from July and August are responsible for October's closings so when we see the Case-Shiller Index as reported in December, some of the data it's reporting is 5 months old already. That's too old to be relevant.

Looking back at 2010, housing was at its weakest between May and August. Therefore, it's no surprise that the most recent Case-Shiller Index shows significant weakness. Looking forward, we should expect the report to improve -- especially because of how strong New Home Sales and Existing Home Sales have been since summer.

The Case-Shiller Index is helpful for economists and policy-makers. It's not much good for individual homeowners, however. For accurate, real-time housing data, talk to a real estate professional instead.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Real Estate and Mortgage Predictions for 2011

Dean Tucker Benchmark Mortgage - Prime Equity Group — Wed, 29 Dec 2010 12:36:54 -0800

With 2010 coming to a close, the "experts" are out in full force, making predictions for next year's housing and mortgage markets on business television and in the papers.

Predictions for 2011 are wide-ranging:

Some say home prices will rise in 2011
Some say home prices will fall in 2011
Some say mortgage rates will rise in 2011
Some say mortgage rates will fall in 2011

The problem with housing and mortgage predictions is that -- like all predictions -- they're just educated guesses about the future. Nobody knows what will really happen with the housing and mortgage markets in 2011. All anyone can do is theorize. As laypersons, though, it can be hard to separate theory from fact.

Television can make that task even more difficult at times.

As an example, when a well-dressed economist goes on CNBC and presents a clear, succinct argument for why home prices will fall on 2011, we're inclined to believe the analysis and conclusion. After all, the outcome seems plausible outcome given the facts. But then, immediately after, a different economist presents an opposite argument -- that home prices will rise in 2011 -- and her analysis seems sound, too.

Even Freddie Mac can't see the future.

Last year, the government group predicted mortgage rates to 6 percent in 2010. That never happened, of course. Instead, conforming mortgage rates dropped over a 7-month period this year to levels best be described as "historic". Freddie Mac couldn't have been more wrong.

So, what's a Boise homeowner to believe?

About the only thing that's certain right now is that mortgage rates remain low by historical standards, and that home prices do, too. Also, that both housing and mortgage markets appear to be riding momentum higher into 2011. This suggests that it will be more expensive to buy and finance a home by the end of 2011.

Until that time, however, predictions are just guesses.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

New Home Sales Rise In November; Hint At Strong Winter 2011

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 28 Dec 2010 13:48:29 -0800

Like most housing data in November, the most recent New Home Sales report showed sales volume increasing last month, and home supplies falling. According to the U.S. Department of Commerce, sales of new, single-family homes increased to 290,000 in November on an annual basis, a figure equal to the New Home Sales 6-month rolling average, and a 6 percent improvement from October.

At the current pace of sales, the national supply of new homes for sale will be exhausted in 8.2 months -- a strong 0.6-month improvement from October.

This data is consistent with the most recent Existing Home Sales report. It showed sales volume rising 6 percent, too, and a similarly-strong inventory drop.

For the housing market in Idaho, it's another step in the right direction. Since May's post-tax credit plunge, home prices have stabilized and a foundation for growth has been built. Home builder confidence data highlights this point.

Also interesting in the November New Home Sales report is the volume breakdown by price point. Less expensive homes powered the market:

Homes under $200,000 : 47 percent of all sales
Homes between $200,000-$299,999 : 29 percent of all sales
Homes between $300,000-$399,999 : 14 percent of all sales

Luxury homes accounted for less than 2 percent of sales last month suggesting that builders count first-time and move-up buyers as their core market.

As 2010 comes to a close, housing looks poised for a rebound. Sales in all categories are improving, relative to 6 months ago, and the economy is improving. In conjunction with rising mortgage rates, the best time to buy a new home may be now.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Boost Your 2010 Tax Deductions By Making Your January Mortgage Payment A Little Bit Early

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 13 Dec 2010 13:20:18 -0800

Looking for an extra 2010 tax deduction? Consider making your January mortgage payment a few days early.

It's a simple strategy that works because of how mortgage interest works.

Unlike rent which is paid in advance at the start of a month, mortgage interest is only paid after it's been borrowed. Your January mortgage payment, therefore, accounts for the interest that accrued in December.

And for a lot of Idaho homeowners, that mortgage interest is tax-deductible.

By making January's mortgage payment in December, eligible homeowners can apply the interest paid to 2010′s tax returns instead of waiting to claim the same deduction against 2011. Don't cut it close, though. It's best to remit payment prior to the last week of the month, leaving your servicer ample time to receive and process your paperwork.

Most importantly, though, before prepaying on your mortgage, talk to your tax professional.

Not every homeowner is eligible for mortgage interest tax deductions, nor should every homeowner itemize their respective tax deductions. The "pay early" plan could be a wasted effort for you, ultimately, depending on your taxpayer profile.

If you don't have an accountant that you trust, call or email me anytime; I'm happy to make a recommendation to you.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Mortgage Interest Deduction Pays Dividends for Home Owners

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 06 Dec 2010 18:36:00 -0800

Although recent reports of plans to eliminate or modify the mortgage interest deduction are widely exaggerated, the National Association of Realtors® will remain actively engaged to ensure that the nation's 75 million home owners will continue to receive this important benefit.

The Deficit Reduction Commission has released its recommendations toward reducing the U.S. deficit, which include modifying a number of popular tax breaks, including the mortgage interest deduction. President Obama created the 18-member, bipartisan commission earlier this year to identify ways to balance the budget by 2015. The commission does not have any legislative power, and Ada County Association of REALTORS says that the commission's report is just the first step of a lengthy process.

The MID allows an individual to deduct mortgage interest paid on mortgage debt of up to $1 million. The deduction is available for interest on mortgages for a principal residence and one additional property. Individuals claiming the MID also must itemize their taxes.

The ability to deduct the interest paid on a mortgage can translate into significant savings at tax time. For example, a family who bought a home this year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file next year.

According to the most recent IRS tax return data available, 65 percent of families who claim the MID earn less than $100,000 per year. "Home owners already pay 80 percent to 90 percent of U.S. federal income tax, and among those who claim the MID, almost two-thirds are middle-income earners," said NAR's Chief Economist Lawrence Yun. "If the tax break is modified or eliminated, home values could fall 15 percent nationwide, as buyers discount the value of the MID in their purchase offers."

ACAR said the MID saves the average home owner thousands of dollars at tax time and helps American home buyers get into their first house.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Mortgage Rates for Boise Idaho This Week : November 15, 2010

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 15 Nov 2010 13:27:31 -0800

November 15, 2010 by Dean Tucker of Waterstone Mortgage

In a holiday-shortened trading week, mortgage markets tanked last week, casting doubt on whether the bond market's 7-month bull run will continue. Fears of inflation caused conforming mortgage rates to rise in Idaho. Last week marked the first sizable mortgage rate increase over the course of 7 days since April.

The biggest reason why rates rose last week was because of concerns that the Federal Reserve's latest round of stimulus will devalue the U.S. dollar. The Fed pledged an additional $600 billion to the bond markets two weeks ago and, to meet this obligation, the group will have to, quite literally, print new money.

It's Supply and Demand. With more dollars in circulation, every existing dollar is worth less. It's also inflationary.

As the Fed's pledge ties back to mortgage rates, remember that mortgage bondholders are paid in U.S. dollars. So, if those dollars are expected to be worth less in the future, we would expect mortgage bond demand to fall. And that's exactly what happened last week - investors rarely clamor for assets whose value drops over time.

The falling demand dropped down prices, and pushed up yields. Mortgage rates spiked.

This week, the trend could continue. There's a lot of inflation-signaling data on tap:

Monday : Retail Sales
Tuesday : Producer Price Index; Consumer Confidence; Housing Market Index
Wednesday : Consumer Price Index; Housing Starts
Thursday : Initial and Continuing Jobless Claims

Analysts are calling for lukewarm data this week; none of the releases is expected to show strong growth. If the analysts are wrong, look for rates to rise again.

Momentum is moving away from rate shoppers. If you've yet to lock in a rate, consider doing it now.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Explanation of the November 3rd Federal Reserve Statement

Dean Tucker Benchmark Mortgage - Prime Equity Group — Thu, 04 Nov 2010 13:23:18 -0700

The Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged within in its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that, since September's meeting, the pace of economic and job growth "continues to be slow". Housing starts are "depressed", income growth is "modest" and commercial real estate investment is "weak". (Ouch!)

With respect to its prior economic stimuli, the Fed deemed the recovery "disappointingly slow", while, at the same time, noting that growth will come.

The Fed also noted that inflation is running lower that what's optimal, hinting at the potential for deflation.

Lastly, the Fed re-acknowledged its plan to hold the Fed Funds Rate near zero percent "for an extended period", and also announced a new, $600 billion support package for the bond market. In most instances, a move like this would drive mortgage rates lower, but the Fed's stimulus had been widely telegraphed, and $600 billion isn't too far from the initial package estimates.

Mortgage market reaction has been muted thus far. Mortgage rates in Boise are volatile with lots of movement up and down, but mostly unchanged post-FOMC. Now is not a great time to float for the faint-of-heart or weak-kneed.

The FOMC's next scheduled meeting is December 14, 2010 . It's the last scheduled meeting of the year.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

The Federal Reserve is making a BIG announcement tomorrow

Dean Tucker Benchmark Mortgage - Prime Equity Group — Tue, 02 Nov 2010 16:06:31 -0700

(November 2, 2010) The Federal Reserve is announcing on Wednesday its new policy statement for their timetable and purchase amounts for Treasuries. The new program has been compared to an economic B-12 shot.

The new round of government bond purchases is aimed at lowering long-term interest rates and stimulating the stalled economy. It is expected that the Fed will buy between $400 billion to $750 billion in Treasury notes or other assets over the next six to eight months.

The goal: drive up the prices of long-term bonds, which in turn, pulls down rates on mortgages and other loans, spurring consumers to buy homes and cars, and businesses to invest and hire workers.

None of the "experts" want to stick their neck out, but depending on how many Billions and the timeframes involved, some have stated that, "The Fed's policy statement could be the biggest market mover of mortgage rates in 2010".

We'll just have to wait until tomorrow to find out how much and which direction.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

September Existing Home Sales are UP!

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 25 Oct 2010 18:34:15 -0700

The National Association of Realtors® released the Existing-home sales figures for September, and the market is up 10% over last month. I'd say not a bad month for housing and the recovery! We certainly have a ways to go yet, but it sure is nice to keep getting positive market data.

According to today's NAR Press Release, Lawrence Yun, NAR chief economist, said the housing market is in the early stages of recovery. "A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions."

Home affordability is the important topic here. Home prices are about 22% below where they were in 2005, and mortgaged rates are 1.5-2% lower. The median monthly mortgage payment on a home purchased today is several hundred dollars less than in 2005 - and in many cases, less than what new home buyers are currently paying for rent.

Things are looking UP!

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

Construction Activity Index is UP!

Dean Tucker Benchmark Mortgage - Prime Equity Group — Mon, 25 Oct 2010 17:46:06 -0700

One of the widely followed indicators for U.S. construction activity rose last month to its highest level since January 2008. This report suggests that the recovery in the construction sector may have momentum, according to an architect's trade group.

The September Architectures Billings Index was up 2.2 points to 50.4 - marking the fourth consecutive month of increases, the American Institute of Architects said.

The score reflects a rise in demand for design services, as any score above 50 indicates an increase in billings.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).

How Credit Missteps Affect Your FICO Credit Score

Dean Tucker Benchmark Mortgage - Prime Equity Group — Thu, 21 Oct 2010 18:06:51 -0700

The company behind the popular FICO scoring model has published a "What If?" series for common, specific credit missteps. If you've ever wondered how your credit score would be affected by a missed payment or a maxed-out credit card, now you can use a look-up guide to assess the probable damage.

As published by myFICO.com, here's a few common financial difficulties and how they affect FICO scores.

Max-Out A Credit Card

Starting score of 780 : 25-45 point drop
Starting score of 680 : 10-30 point drop

30-Day Delinquency

Starting score of 780 : 90-110 point drop
Starting score of 680 : 60-80 point drop

Foreclosure

Starting score of 780 : 140-160 point drop
Starting score of 680 : 85-105 point drop

Not surprisingly, the higher your starting score, the more each given difficulty can drop your FICO. This is because credit scores are meant to predict the likelihood of a loan default. People with lower FICOs are already reflecting the effects of risky credit behavior.

Also worth noting that the above is just a guide - your scores may fall by more - or less - depending on your individuak credit profile. The number and type of credit accounts you hold, plus their respective payments and balances make up your complete credit history.

Our primary markets are Ada County (Boise, Eagle, Meridian, Kuna, Star), Canyon County (Nampa, Caldwell, Middleton), and Valley County (Cascade, Donnelly. Tamarack, McCall).