• The Mortgage Debt Relief Act of 2007 expires at the end of the year. It’s this law that allows former homeowners to NOT be taxed on debt that was forgiven through short sale, deed in lieu, or foreclosure.
• The homeownership rate as of March 31st was down to 65.4%, down from 66.4% a year ago says the Census Bureau.
• Bank of America is predicting that the homeownership rate will drop to 62% and then normalize at 63%.
• The number of renter households increased by 5.4 million in 2010 says HUD.
• Wells Fargo closed 33.9% of all mortgages in the first quarter, the most market share ever for one company. They closed $130 billion of loans out of $385 billion nation-wide.
• CoreLogic said home prices nationally dropped .6% in March from a year ago prices.
• But, prices rose .6% from February to March.
• If you exclude distressed sales, prices rose .9% from a year ago.
• The number of people with Fico scores of 700-799 are at their lowest level since 2005.

Fannie Mae released their April National Housing Survey this week and here a few highlights-

• On average, Americans expect home prices to rise 1.3% over the next 12 months.
• On average Americans expect home rental prices to increase by 3.6% over the next year.
• 71% of Americans believe now is a good time to buy.
• 15% of Americans believe that now is a good time to sell a home an increase from 13%.
• Only 12% think their personal financial situation will worsen in the next year.
• 23% saw an increase in their personal income from a year ago.
• 39% say that mortgage rates will rise in the next year.
• 85% believe that owning a home is preferable to renting in the long run.
• 64% of renters plan to buy in the future.

So, Americans believe that rents will rise, home prices will rise, and that mortgage rates will rise; thus NOW IS THE TIME TO BUY!!!

I just received a report based on NAR’s 2011 “Profile of Home Buyers and Sellers” and here are several interesting things I learned-

• First time home buyers (FTHB) bought just 37% of all homes last year, down from 51% in 2010 when we had the tax credit.
• 92% of FTHBs searched the internet for homes
• 88% of FTHBs searched the internet for an Agent. 53% looked for an Agent through yard signs and another 40% looked for an Agent through Open Houses. A combined 50% of FTHBs looked for an agent through Old-School methods such as newspaper ads, home magazines, and TV/Radio ads.
• 77% of FTHBs rented before buying and almost all of them were in apartment complexes.
• 54% of FTHBs were married last year.
• Their average income varied from $46,300 for single females to $73,200 for married couples for FTHBs.
• Their average moving distance was just 12 miles.
• Home buyers who used the internet on average were 42 years old and had average income of $83,700. Whereas, a buyer who did not use the interest were on average 60 years old and had an average income of just $60,300.
• 54% of FTHBs bought their home with a FHA loan. OUCH! I would estimate that these home buyers are paying an extra $1000 a year or more for their home than they need to. FHA is NO LONGER always the best solution for them.
• 79% of FTHBs saved their money for the down payment. Only 21% used gift money.

The Colorado Division of Housing released their April foreclosure report this week and here are the facts-

• Foreclosure filings in our metropolitan counties were down 1% for the first 4 months of this year compared to last year. There were 8,395 filings so far this year.
• Foreclosure sales in our metropolitan counties were down a whopping 29% in the first 4 months of this year to 4,387.
• Foreclosure filings did increase 7.3% from April 2011 to April 2012 while sales dropped 36.2% during the last year.
• From March to April filings fell 10.8% while sales rose 6.1%.
• Ryan McMaken the Division of Housing’s Spokesman said, “March and April tend to be the high points for the year when it comes to foreclosure filings.”
• Further, Ryan said, “The overall trend is clearly down for now, but we’re still going to see some ups and downs.”

In Colorado new business registrations rose 7.4% from the first quarter of 2011 and this is a sign of more people being hired in the future.

In the last week a total of 5 PURCHASE LOANS WERE FULLY APPROVED EARLY. How early? One loan is closing a week early. A second loan was approved 8 days before closing, a third loan was approved 15 days before closing, a 4th loan was approved 24 days before closing, and the 5th one was approved a whopping 28 days before we close!!!

I am curious do you know any other lenders getting loans approved this early before closing? I bet you don’t.

Then, I read a story this week in the Denver Post titled “Prepare Yourself for a Slow Mortgage Closing”. This story was a reprint I believe from the NY Times, but it said, “many lenders are taking 90 days to approve loans.” Further the article said try to find a lender who can manage to close your loan in just 45-60 days. I say “HOGWASH” as we are closing loans in 30 days or less right now!

Finally the article stated, “Mortgages are commodities”. I say B.S. They apparently don’t know how tough it is to close a mortgage today. Do you think mortgages are a commodity?

Trulia reported this week that in Denver our home asking prices have increased 6.3% from last April, good for 8th highest in the country. Our asking rents rose even more at 9.8% increase in the last 12 months, good for 7th fastest increase in the country. To read the whole story, please click on this link

• The Core PCE, the Fed’s favorite inflation report, showed prices rose .2% in March and that prices are up 2% since March 2011.
• Personal income rose .4% in March and our spending rose .3%.
• The ISM Manufacturing Idex rose to 54.8 from 53.4.
• The ISM Services Index dropped to 53.5 from 56.
• The Eurozone unemployment rate hit a new record high of 10.9% in March.
• The European Central Bank left rates unchanged at 1%, citing “tentative stabilization” in the economy. HUH? Your unemployment rate is rising and manufacturing is shrinking and that is stabilization?

April’s housing report was released on Friday and I think this metaphor really makes sense when you look at the data. It’s 4 A.M. on the day after Thanksgiving and you really want that 50 inch TV for $599 at Wal-Mart, what will you do to get that TV? That’s how a majority of home buyers in Denver need to be thinking and strategizing about currently.

Home buyers need to know exactly what they are looking for in a home and where. Second, they need to know what they can truly afford in a total house payment and commit to staying at that payment or lower. Next, they need their credit card (strong pre-approval letter) or cash in hand. Fourth, they must move quickly when a new home comes up for sale. Finally, they have to make a decision quickly.

• Home inventory levels are down 42.5% from April 2011 to just 10,254 unsold homes on the market, down from nearly 18,000 a year ago!
• Inventory dropped .7% from March’s already super low levels.
• 5,681 homes were placed under contract in April, a 19.6% increase from  a year ago and a 6.6% increase from March.
• In other words 55.4% of homes on the market were under contract, NOT including short sales that are considered pending which is averaging another 15%-20% of all homes.
• 3,891 homes sold in April, a 13.5% increase from last April and a 12% increase from March.
• This puts months of inventory at 2.64 months!!!
• The average price of a single-family home rose a whopping 9.8% from a year ago and 5.2% increase from March. The average price was $298,712.
• The median price of a single-family home is up 12.6% from a year ago to $249,900, which is an 7.5% increase from March.

We received the second consecutive disappointing Jobs Report on Friday with these details-

• 115k jobs were created last month.
• The household survey revealed that we lost 169k jobs in April.
• An additional 53k jobs were created in February and March.
• The unemployment rate dropped .1% to 8.1%. Why? Because 342k people LEFT the workforce. That is never ever good news as it typically happens because people have given up looking for work.
• The U6 unemployment rate held steady at 14.5%.
• The Labor Force Participation Rate dropped .2% last month to 63.6%, the lowest since December 1981. This rate has DROPPED 2.1% since the “recession” ended!!! Without this drop the unemployment rate would be OVER 11%!!!
• Since December 2007 our adult civilian population has increased by 9.6 million people; but our labor force has only increased by 447k people! In other words, just 5% of the increase in the adult population has found a job! The other 95% are NOT in the labor force. This is STUNNING!
• The average work week was flat at 34.5 hours and average hourly earnings did not change.
• Average hourly earnings are up just 1.8% in the last 12 months which is below the rate of inflation.

• I read that 70% of job gains in April were from restaurants & bars, temp firms, and retail; not exactly high paying jobs typically.

Next, Fox News ran a story titled “Lies, Damned Lies and Government Jobs Data” and I will share what I learned here-

• For 59 out of the last 60 weeks the weekly jobless numbers been revised, after the fact, ALWAYS in the same direction, UP! This makes the initial report look better than it really is as the revisions are basically ignored.
• 6.3 million people have given up looking for work, but want jobs. These people are not counted as unemployed.
• 80% of the reduction in the unemployment rate since its peak in October 2009 is attributed to adults leaving the work force says economist Peter Morici.
• Mr. Morici says the unemployment rate would be 14.5% if you include the 6.3 million people who have left the work force plus those people working part-time who want a full-time job.
• Peter further says we need to 13 million new net jobs over the next 3 years  to bring the unemployment rate down to 6%.
• The author of this story, Elizabeth MacDonald ends with this-”Since when does a nation’s labor force SHRINK during a recovery? It should not sink, it should grow in a recovery.”