FHA Mortgage Guide

The National Association of Realtors is out with its pending home sale information and the numbers are up!

According to NAR, “the Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.

“Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. ‘The vacillation of data from one month to the next indicates a housing market in transition,’ he said. ‘The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.’”

Well, yes, you do have to have more sale agreements before you can have more sales. And that’s certainly a good thing. But as to the idea of increased home sales this year or next, whaddya mean?

Home sales are certainly not going to increase anytime soon for subprime and ALT-A borrowers — there are few investors willing to buy such mortgages, thus there are few such borrowers who can get financing.

And prime loans? Ugh. The worst is yet to come. Jaime Dimon, Chairman and Chief Executive Officer at JPMorgan Chase recently told analysts that “prime looks terrible.”

The FHA mortgage program is doing great — but lots of people don’t qualify to buy and lots of properties have lost so much value they cannot be refinanced under the FHA program.

You have to wonder: Just how many of those pending sales will fall through given the lack of financing which is increasingly impacting the marketplace?

Check out these FHA resources for more information

This entry was posted on Friday, August 8th, 2008 at 3:30 am and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.