Long Island, NY Real Estate and Homes For Sale

Mortgage Applications Up for Second Consecutive Week

Mortgage aplications in the U.S. rose for a second straight week, a sign that falling home prices are attracting some buyers. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan gained 7.5 percent in the week ended July 4. The group’s purchase index increased 6.7 percent and its refinancing gauge climbed 8.7 percent. 

– “U.S. MBA’s Mortgage Applications Index Increased 7.5% Last Week,” by Shobhana Chandra, Bloomberg News, July 9, 2008.

First-Time Buyers Impacting Housing Market 

First-time buyers dominated second quarter sales activity in many U.S. housing markets by accounting for an estimated 54% of existing home purchases, according to HouseHunt’s latest Current Market Conditions national survey of about 2,000 member-agents. This is an increase of 15 percentage points in the past six months.

– “First-Time Buyers Dominated Second Quarter Sales Activity in Many Markets,” RISMedia, July 9, 2008.

The key player in any recovery scenario is the first-time buyer. The housing market operates with a pronounced laddering or ripple effect. When entry-level buyers flood the market, they not only stimulate production of new homes, they purchase existing homes. Those purchases, in turn, allaw the sellers to move up to bigger houses.

– “On the Path to a Housing Rebound,” by Shawn Tully, Fortune, June 24, 2008.

Some Markets Showing Price Gain

One bright spot in the (S&P/Case-Shiller) report was that more cities showed a gain in prices in April compared with the previous month. Houses in eight areas rose in value, compared with just two in March. Month-over-month gains were led by Cleveland and Dallas.  There may be “some surprises in the next few months that would indicate we are at or near a bottom in probably one-third to one-half of the country.”

– Karl Case, an economics professor at Wellesley College, “S&P/Case-Shiller Home Prices Fell 15.3% in April,” (video) by Shobhana Chandra, Bloomberg News, June 24, 2008.

Great Time to Buy for Retirees

This might be the right time to find a bargain, especially for buyers approaching their retirement years who can afford to take their time. Of course, anyone looking to buy can also find good reasons to take a wait-and-see attitude, like the fact that good deals may not exist in every location, and no one really knows if prices will continue to decline. “It’s like missing the top of the market - it’s the same thing with the bottom. Generally you know it’s happened because you’re looking in the rearview mirror and it’s passed you by.”

– Maurice Veissi, president of a Miami agency, “Retirees Find the Time May Be Right to Buy,” by Susan Stellen, The New York Times (registration required), June 27, 2008.

Falling Housing Starts a Positive Sign for Recovery

The news that housing starts have fallen to their lowest level in 17 years sounds like one more reason to be depressed about the shrinking value of your home. In fact, it’s an almost certain sign that the path to a housing recovery is finally in sight. If prices are going to stabilize, let alone rebound, the United States needs to produce far more first-time home buyers than new houses. “For the recovery to begin, builders need to eliminate the standing inventory of finished, unoccupied new homes.”

– Mike Castleman, founder of Metrostudy, “On the Path to a Housing Rebound,” by Shawn Tully, Fortune, June 24, 2008.