ousing and Urban Development Secretary Shaun Donovan said in response to a reporter’s question about a possible tax credit renewal.

Donovan on Sunday fueled speculation the administration might push for an extension when he told CNN it was too early to make a decision about renewing the tax credit. Congress would have to approve any renewal.

Sales of previously owned U.S. homes took a record plunge in July to their slowest pace in 15 years, underlining the housing market’s struggle to find its footing without government aid.

Full story is available on Reuters

The Obama administration has not decided whether it should resurrect a popular tax credit for first-time homebuyers, U.S. Housing and Urban Development Secretary Shaun Donovan said on Sunday.

“It’s too early to say whether the tax credit will be revived,” Donovan said in an interview on CNN’s “State of the Union” program. He said the administration would “do everything we can” to stabilize the shaky U.S. housing market.

A federal $8,000 homebuyer tax credit, which expired several months ago, had boosted home sales, helping to revive a flagging housing market that had been a key factor in driving the United States into recession.

It followed a $6,500 credit for those purchasing a new primary residence, which also has expired.

But an unexpectedly large drop in U.S. home sales in July — sales of existing homes in the period fell to their slowest pace in 15 years — has spurred fears that the nation could be on the cusp of another sharp drop in housing.

Full story is available on Reuters

Tom Hetmanek paid $325,000 in June for an upscale townhome in the Tierra Hermosa subdivision of Palm Springs.

“Four years ago, it would have cost me around $700,000,” said Hetmanek, who rented for a year and a half before deciding it was the right time to buy.

Like many buyers, Hetmanek is taking advantage of the new affordability of homes in the Coachella Valley, where prices in some neighborhoods have tumbled to levels last seen in the early 1990s.

While plummeting home values are a nightmare for those who bought during the boom, they are providing opportunities for those who have been priced out of Southern California’s notoriously expensive housing market.

Full story is available on mydesert.com

Buying a home is far different today from how it was before the economic collapse. The Federal Reserve has introduced a variety of changes to help ensure that another financial crisis will not occur. Amongst these changes are provisions that require income to be a factor in any home loan approval and, most recently, to ban yield spread premiums, or YSPs.

Yield spread premiums were largely responsible for the housing boom and the subsequent market crash. This controversial lending practice, now banned, allowed lenders to generate additional profits from loans by charging borrowers interest rates that were higher than market. In essence, they are something like a kickback.

Here is how they work:

A mortgage lender issues a loan for a specific interest rate (e.g. 6%); the mortgage broker then attaches an additional percentage to that sum (usually between 0.5% and 2%). For example, an addition of 0.5% will, on average, create a profit of 2% of your loan amount that would be paid to the broker (i.e. $2,000 for every $100,000 financed).

This additional sum was in addition loan origination fees (usually 1%), broker fees, and discount fees. What made them particularly ominous was that many borrowers were unaware this was costing them money; in fact, more than 90% of all loans were closed with a rate at least 0.5% higher than it needed to be prior to the changes introduced by the Federal Reserve. Yield spread premiums had cost consumers an estimated $16 billion every year.

Full story is available on Credit Loan

Tuesday’s dramatic plunge in home resales for July begs the question: Were the tax credits worth up to $8,000 for home purchases bad policy?

Sales of previously-owned homes, after a good run in March and April, slid in June before crashing in July. Sales last month were down 26% from one year earlier and 27% from June.

Clearly, temporary tax credits succeeded in getting buyers to change their behavior. But once the tax credits disappeared, so did the buyers. “Why would you have signed a contract in May and not in April when you could have gotten an $8,000 tax credit?” says John Burns, a housing consultant based in Irvine, Calif.

What’s less clear is whether stimulus has done anything else to change demand. While mortgage rates continue to fall every week into record territory, the expiration of tax credits shows that housing demand is not much better than it was 18 months ago, when the market was in freefall.

Full story is available on The Wall Street Journal

A lifelong Bayonne resident, who has rented since he left home at 18, became the first homebuyer in the city to purchase a house under the New Jersey’s Live Where You Work program, as reported in today’s Jersey Journal. The program helps people become homeowners in cities where they work.

The state-sponsored program helped the 50-year-old Bayonne union worker, Stephen Cylek, Jr., cover his down payment and closing costs.

Cylek recently moved into his new four-bedroom house on Zabriskie Avenue. The $300,000 house comes with a large garage in which he can store his “toys,” which include motorcycles and cars.

Full story is available on NJ.com

It used to be, you’d get married, then you’d buy a home.

Notice we said, “It used to be.”

Many young lovers are putting off their weddings and taking the plunge into real estate.

“People just want to take advantage of this moment,” says Kimberly Palmer with U.S. News and World Report.

Palmer is speaking of the current period of low housing prices, low mortgage rates, and for many couples, a first-time homebuyer tax credit.

Full story is available on wtop.com

Home buyers fall into one of three categories regarding swimming pools. Some will not consider a home without a pool. Those who do not want a pool and those that are ambivalent about having their own pool.

One thing to consider when purchasing a home with a pool, is to plan to take care of it. Proper pool care is essential to maintain the value of your home. Different types of pools require different levels of maintenance.

Home Buyers Who Want Swimming Pools

Many home buyers in states that are warm year round feel that a private pool is essential for their lifestyle. People who host outdoor parties regard their pools as an entertainment feature, especially if they have kids. Pools also provide a way to cool down on hot days.
Some individuals need a swimming pool for in-water exercises for health benefits. Some people feel pools improve the aesthetics of their backyard. In hot climates, swimming pools increase value at resale, especially in wealthier neighborhoods.

Full story is available on Stock Markets Review

Buying a house requires having at least somewhat good credit and, the better your credit, the better terms you will receive. However, many people make a series of fatal errors that can prevent, preclude, or exclude access to credit, or at least decent credit terms for their mortgage. More often than not, these mistakes are made by not keeping the following three things in mind when buying a house.

1. Fannie Mae and Freddie Mac set the pace: Almost three-fourths of all mortgages issued in the U.S. are subsidized or supported by Fannie Mae or Freddie Mac. In the past, when the economy was booming and mortgages were being handed out like free samples, you could go to a different lender if you were turned down or did not like the terms you received. Today, however, you have to play the “FM” game. This means that you will have specific insurance, deposit, and income requirements, but it also means “extenuating circumstances,” a provision FM allows for, can be used to your benefit. That said, if you cannot meet FM’s minimum requirements for a mortgage, you should wait until you do.

Full story is available on Credit Loan

As we know, a home is an appreciating asset–it’s worth increasingly more the longer you have it. That has been the case for years, but it looks like it might be changing. Where a home used to be considered an investment as well a place to lay your head, economists are moving away from that perspective.

The Bubble Popped, And Has Yet To Be Repaired.

The New York Times reports that the housing bubble that expanded from the 1970s to the 1990s is unlikely to be replicated in the near future, and that recovering from the loss of housing value–about $6 trillion–will take at least 20 years. Economists estimate that homes purchased in the present and future will appreciate enough to keep up with inflation, but that they won’t turn the massive profit seen in recent years.

Full story is available on seattlepi.com