A note from Brendan Reilly

Greetings!  My newsletter covers local and national real estate trends to keep you abreast of current conditions.  If you or anyone you know is looking to buy or sell a property in Suburban Philadelphia, I would love to help!

National News 

Pending Home Sales Up
WASHINGTON (February 27, 2013) - Pending home sales rose in January, and have been above year-ago levels for the past 21 months, according to the National Association of Realtors®. There were healthy monthly gains in all regions but the West, which is constrained by limited inventory but was slightly improved.  NAR Chief Economist Lawrence Yun explains: "Favorable affordability conditions and job growth have unleashed a pent-up demand. Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country. It's also why we're experiencing the strongest price growth in more than seven years.


Freddie Mac’s projections for the real estate market in 2013

Frank Nothaft, Freddie Mac vice president and chief economist, explains:
“Across the nation, most local housing markets have room for sustainable growth, particularly in home construction and sales. As the broader economy heals, expect to see more good news with house prices continuing their recent upward trend, and home sales and housing starts continuing to post strong growth rates.”  The report also offered projections on sales and prices.
 Housing Starts and Sales

• Projecting housing starts in 2013 will increase to 950,000 units or about 22 percent higher than 2012 levels.
• Existing home sales are expected to pick-up as the house price recovery allows homeowners who have been forced on the sidelines by negative equity to get back into the market.

House Prices

• While most metro areas saw substantial run-ups in prices during the boom, well above income growth, the subsequent market correction was in many cases more severe.
• The level of affordability in most markets suggests a continued improvement in home prices, and strong growth in sales and construction.

FHA Loans- More Expensive Than Expected
The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners. The staggering increase will occur on 6/3/2013 when FHA’s policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term. Below is an example with a purchase price of $175,000 with 3.5% down payment at 4% mortgage rate on 30 year term.

Timeline: US Housing Market Recovery March 12 (Reuters) - The U.S. housing market began its recovery last year after a downturn that led to the country's worst recession since the Great Depression. Prices for new homes have risen every month since February 2012. Housing starts for single-family homes and permits for future construction touched 4-1/2-year highs in January 2013.Following is a summary of key developments in the sector since January 2012 US Housing Market Recovery