Sales of existing homes skyrocketed

Sales of existing homes skyrocketed a whopping 11.8 percent in February compared with January, according to the National Association of Realtors. That is the largest monthly jump ever, with the exception of a change in mortgage policy in 2015 that temporarily skewed the data.

Realtors pointed squarely to dropping mortgage rates and home prices for the increase in demand.

“Consumers are very sensitive to mortgage rates, at least that’s what we are finding out. So as mortgage rate began to drop, there was evidently a strong pent-up demand,” said Lawrence Yun, chief economist for the Realtors.

At the start of last year, housing demand was robust and rates relatively low, with the average rate on the popular 30-year fixed right around 4 percent, according to Mortgage News Daily. That caused a frenzy in buying through the spring. But with supply remaining tight, prices overheated.

By summer, those prices were moving out of reach, especially as interest rates began rising. By November, the average rate on the 30-year fixed had spiked over 5 percent, and home sales plummeted.

Mortgage rates then began falling in December and moved decidedly lower in January to around 4.5 percent, causing the renewed interest in buyer demand. More consumers now believe it is a good time to buy a home and more believe the economy is improving, according to a sentiment survey by the Realtors in the first quarter of this year.

KEY POINTS

  • Sales of existing homes skyrocketed a whopping 11.8 percent in February compared with January, according to the National Association of Realtors. 
  • That is the largest monthly jump ever, with the exception of a change in mortgage policy in 2015 that artificially pushed one month’s sales into the next month.
  • Home prices have been moderating for months and were up just 3.2 percent in February, the smallest annual gain in a few year.

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By Diana Olick Full Article CNBC

Mortgage Crisis 2.0

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the impending second wave of the lastest mortgage crisis, this time due to Helocs (Home equity lines of credit) and HAMP (Home Affordable Modification Program) interest rate resets. In the second half, Max interviews Aaron Krowne on the true state of the housing market across America – from home ownership rates to mortgage arrears.

In 2008, the nation entered into a financial crisis widely believed to have been caused by excesses in the residential mortgage industry. By 2010, the nation thought it had put in place a series of measures that not only would resolve the crisis but would insure that it never happened again. Yet, here we are in 2015 looking at another potential mortgage crisis. Only this time it is different. In 2008, funds flowed in waves into the mortgage industry. In 2015, it appears the funds are drying up.

BKFSFeb2015
Gold Spot Price

If we remember what the price of gold was back to 2001, US$271 per oz, to the end of the the best world economic era, (2008) the gold price went up to US$872 for the same ounce. If we are in the middle of another mortgage crisis, what do you have to do?  Learn more [Should you buying gold?]

gold-spot-price-2001-2013

What are you going to do?

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