Changes in Market

Home Prices Decline Nationwide in 4th Quarter of 2008

U.S. home prices posted record declines in the fourth quarter of 2008 according to a Federal Housing Finance Agency's (FHFA's) House Price Index (HPI) report released yesterday. The FHFA seasonally adjusted purchase-only house price index, based on data from home sales, was 3.4 percent lower on a seasonally adjusted basis in the fourth quarter compared with the third quarter. The decrease was greater than the 2 percent decline reported in the third quarter, and the largest in the purchase-only index's 18-year history. Over the past year, seasonally adjusted prices fell 8.2 percent from the fourth quarter of 2007 compared with the fourth quarter of 2008.

Homeowner Affordability and Stability Plan

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. In addition, the plan includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac. Many of the plan’s details are still being worked out and will not be announced until March 4.

Increases in FHA Loan Limits

Federal Housing Administration (FHA) single-family loan limits have been revised as a result of the American Recovery and Reinvestment Act of 2009 (ARRA) and are now available online. The new loan limits, reflecting an increase from $625,500 to a maximum of $729,750, are effective for those loans for which credit is approved in 2009 and will remain in effect until Dec. 31.Federal Housing Administration (FHA) single-family loan limits have been revised as a result of the American Recovery and Reinvestment Act of 2009 (ARRA) and are now available online. The new loan limits, reflecting an increase from $625,500 to a maximum of $729,750, are effective for those loans for which credit is approved in 2009 and will remain in effect until Dec. 31. Go to https://entp.hud.gov/idapp/html/hicost1.cfm. for more information.

My 2 Cents - I see lots of movement even with all the "doom and gloom". With all the support going on looking for solutions, I think there will be more real estate activity in 2009 then there was in 2008. People are still cautious, as they should be, but want (and sometimes need) to make movement in their lives.