Despite continued welcome growth in employment, manufacturing, and a host of other economic indicators, new home sales and pending home sales actually fell between January and February 2012 – the second consecutive month with a decrease.

According to CNN:

New home sales fell in February, dashing construction industry hopes that the long-overdue housing recovery may be finally arriving. The Census Bureau reported Friday that new homes sold at an annualized pace of 313,000 during the month, adjusted for seasonal factors. That was a 1.6% decline compared with January’s 318,000 sales but 11.4% above last February’s 281,000. Sales fell short of the 323,000 that analysts had expected. There was a bit of good news for home builders in the report. The median price of new houses sold jumped to $233,700, well above the $217,000 median recorded in January.

It’s unclear why this is, but it demonstrates how we’ve still got a long way to go until housing is back to normal. Most economists have long predicted that a housing recovery would both lag behind – and hinder – a broader economic recovery. In fact, guessing when housing will (or did) hit bottom seems to becoming a favorite topic to debate in economic circles (check out this Planet Money story about a 14-year-old girl in Florida who bought a home for $12,000)

Furthermore, one of the big problems – the huge glut of available homes on the market – actually appears to be disappearing. This is good news for construction workers and homebuilders, as new home construction should be in demand again soon (indeed, although new home starts also dropped in February, new permits increased). But it also means the unprecedented buyer’s market we’ve seen over the past few years might be beginning to close a bit. Add on new and expected mortgage fees coming out of Washington D.C., and it means it’s not going to stay quite so cheap to buy a new home.

However, as long as home prices stay low, interest rates are likely to stay low as well, meaning that the window isn’t closing quite yet – or at least no rapidly. So if the time is right for your family to consider buying, we encourage you to do so soon. Here at TexasLending.com, we’re proud to offer some of the lowest home mortgage rates and most affordable home refinance loans and home equity loans.

About Kevin Miller

Kevin Miller, Owner & CEO of TexasLending.com. TexasLending.com provides expert service in the field of residential mortgages.

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Headlines this week were dominated by yet another encouraging nationwide employment report. According to the Labor Department, the economy added approximately 227,000 jobs in February, and an 61,000 more jobs in January than was previously thought (each month’s report features revised numbers from previous months as the picture clears).

But recoveries are messy things, and there’s no reason to expect a smooth return to full economic health without ups and downs.

For example, here in Dallas, new statistics show that the number of Dallas-area homeowners who are underwater on their home mortgages — i.e. folks who owe more on their homes than their homes are actually worth — actually rose in 2011.

According to the Dallas Morning News:

By the end of 2011, about 93,000 Dallas-area homeowners were upside down on their mortgages, according to CoreLogic. This is up one-tenth of a percent from fourth quarter 2010, when the negative equity rate was 12.2 percent.

Despite the increase, the negative equity share is better than in 2009, when nearly 30 percent of Dallas-area homes were not worth the remaining mortgage balance. Dallas is faring better than other parts of the country. Nationally, 22.8 percent of homes with a mortgage were in negative equity by the end of 2011, or about 10.7 million properties.

Statewide, Texas has the tenth lowest negative equity rate, with 10.2 percent of homes valued less than their mortgages. At 61 percent, Nevada had the highest negative equity rate, followed by Arizona (48 percent) and Florida (44 percent).

This isn’t entirely incongruous with the improving numbers elsewhere in the economy. As we’ve mentioned several times here at Texas Lending Today, housing is still the primary drag on the economy. With enormous numbers of unsold homes on the market, home values aren’t going to rise quickly – which means that many families might find themselves underwater for the first time even while overall economic numbers are improving. There’s no way around it – housing is just going to take a long time to sort out.

“Due to the government increasing regulations on housing, tightening credit on housing, and increasing taxes on housing (which by the way will be paid by the homeowner),while spending more money on their end this will cause home values to continue to fall for years to come. The good news is that will cause the economy to continue to struggle so rates may stay low for a while” commented our CEO Kevin  Miller.

And – as the Dallas Morning News story points out – Texas cities like Dallas, Houston and Austin are doing much better than many parts of the country. So for many folks, now is a great time to consider a Dallas home loan, Austin home loan, or Houston home loan. For other folks, frustrating times still might be ahead.

Either way, contact us with any questions about home loan options and home refinance options in these chaotic times. We’re here to help.

About Kevin Miller

Kevin Miller, Owner & CEO of TexasLending.com. TexasLending.com provides expert service in the field of residential mortgages.

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After years of seemingly relentless bad news, we’ve enjoyed the string of recent headlines touting positive economic indicators across the country: Jobs are up. Personal debt is down. Home construction is up. And, perhaps most relevant to housing prices, the “shadow market” of unsold and foreclosed-upon homes on the market is finally beginning to melt away.

According to Time:

Most housing experts agree: prices won’t rise until all distressed inventory (a.k.a. foreclosures and short sales) is moved through the market. Distressed sales keep prices low because banks want to get rid of such properties asap, and they’re willing to sell at a loss so long as the homes are out of their hands.

Exactly how many foreclosures need to be cleared out of the system is somewhat unknown, however. While about 3.5 million homes are officially for sale at any particular time, millions of homes that otherwise would be for sale are currently off the market. It’s these properties that are known as “shadow inventory.”

The shadow market is key for several reasons: Surplus supply prevents prices from fully recovering, which means that folks who need to sell their homes cannot do so except at a loss. This keeps families in debt and makes it harder for some to move for new job opportunities. In other words, the shadow market keeps families trapped in homes they can’t afford. Furthermore, since it’s not easy to figure out exactly how large the shadow market is, this environment creates an uncertainty that keeps market forces from working as they normally would.

Thankfully, the shadow market appears to be shrinking. Data released in February showed that inventories are as low as they’ve been since 2006.

So conditions are ripe for a robust housing recovery, right? Not so fast. There’s still two big problems:

“Higher gas prices and the higher mortgage insurance premiums will cause home values to continue to fall and further drag on the US economy,” says our CEO, Kevin C. Miller, adding “however, higher oil prices actually help home values in Texas due to the number of people employed in the industry.  While the rest of the country languishes we should continue to see stable home values in Texas.”

In the past 18 months, U.S. Department of Housing and Urban Development (HUD) has raised the yearly mortgage insurance by 0.7 percent. Then, last week, HUD announced that it would also be increasing the upfront charge to the consumer by .75 percent. Combined with the recent expiration of mortgage insurance tax deductions, this makes homebuying more expensive than it has been at any time since 2008. More expensive homebuying leads to lower purchase prices and lower home values.

Furthermore, ballooning gas prices means that families will be spending more and more money at the pump, leaving them less to spend on a new home. Higher gas prices also makes homebuilding materials more expensive. And it makes the long commutes that are often necessary to live in less expensive suburbs less cost-effective.

So while there’s plenty of good news out there — and it’s an excellent time to be considering a home purchase loan in Texas — we’re not out of the woods yet.

About Kevin Miller

Kevin Miller, Owner & CEO of TexasLending.com. TexasLending.com provides expert service in the field of residential mortgages.

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All in all, the housing the market has gotten off to a pretty incredible start in 2012. Let’s take a look at the numbers:

Unemployment has slowly ticked down to around 8.3 percent — the lowest since 2009. And the rebounding economy could be leading to a resurgence in home-buying as well: According to HousingTracker.net, the overall number of home listings has declined 21 percent since this time last year.

Still, a surge in economic activity would normally lead to a simultaneous surge in home prices. But, in fact, the biggest drag on the economic recovery is still the huge inventories of unsold homes, foreclosed-upon homes, and homes whose owners are underwater on their payments. So even if home listings are down, home prices are still pretty low as well.

Similarly, home-builder confidence is beginning to rebound as well, which means builders are expecting the unsold inventories to sell off and for there to be increased demand for new houses again.

According to Slate:

The National Association of Homebuilders is announcing a surge in builder confidence: “Home builder confidence in the market for new single-family homes increased for the fifth consecutive month in February, rising from 25 to 29 on the NAHB/Wells Fargo Housing Market Index (HMI) released today. It is the highest level the index has reached in more than four years.”

To top it off, mortgage rates have decreased over the past few weeks, returning to the 3.75 percent range.

“We’ve had a nice rebound in interest rates as mortgage rates have fallen back to the lows from a couple of weeks ago” said Kevin Miller, our founder and CEO said on his weekly radio program, “TexasLending.com Mortgage Hour,” on AM 570 KLIF (heard in Dallas-Ft. Worth each Saturday from 1 p.m. to 2 p.m).

So it’s the best of both worlds — job growth, but not the home interest rate growth or home price growth that usually comes with it. In other words, we’re back smack dab in the middle of a historic buyer’s market. Home prices are low. Home interest rates are low (it’s also an excellent time for, say, a Houston home refinance loan or a Dallas home equity loan).

And here at TexasLending.com, we’re proud to consistently offer among the lowest home interest rates in Texas.

About Kevin Miller

Kevin Miller, Owner & CEO of TexasLending.com. TexasLending.com provides expert service in the field of residential mortgages.

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