Jul. 27, 2008 - Existing-Home Sales Down Slightly in June

According to a late-July report from the National Association of Realtors (NAR), existing-home sales fell 2.6 percent to a seasonally adjusted annual rate of 4.86 million units in June from a pace of 4.99 million in May.

“A recent online survey of Realtors® shows nearly a quarter of potential home buyers are waiting on the sidelines,” said NAR President Richard F. Gaylord, adding there is something of a quandary in the current market. “However, timing the market can be very tricky, which is why home buyers should always have a long-term view to build wealth.”

Total housing inventory at the end of June rose 0.2 percent to 4.49 million existing homes available for sale, which represents an 11.1-month supply at the current sales pace, up from a 10.8-month supply in May.

“About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up,” said NAR Chief Economist Lawrence Yun, emphasizing the critical role first-time home buyers have on the health of the housing market. “With many potential first-time home buyers on the sidelines, a first-time buyer tax credit would have a significant positive impact on both housing and the economy. Combined with permanent increases to mortgage loan limits and enhancing the FHA loan program, the housing stimulus package working its way through Congress would go a long way toward helping consumers and boosting the overall economy.”

The national median existing-home price for all housing types was $215,100 in June, down 6.1 percent from a year ago when the median was $229,000, the report said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.32 percent in June from 6.04 percent in May; the rate was 6.66 percent in June 2007.
 

Jul. 27, 2008 - Be careful before you co-sign for a mortgage loan.

With home loans getting more difficult to obtain in many cases, you may be asked by a family member or friend to co-sign a loan. But, before you co-sign, keep these points in mind.

* Your liability for the loan may keep you from getting other credit (or loans) because creditors will consider the co-signed loan as one of your financial obligations.
* Make sure you can afford to re-pay the loan or make the payments. If you become responsible for the loan and can't make the payments, you will likely be sued and your credit will be damaged.
* Before you pledge property (real estate, RV, boat, auto) to secure the loan, make sure you understand the consequences. If the borrower defaults, you could lose the pledged property.
* Try negotiating the specific terms of your obligation. For example, you may want to limit your liability to only the principal, and not include late fees or administration costs. Get it in writing.
* Get the lender to agree to notify you immediately if the borrower misses any payments. This will give you time to deal with the situation before it becomes a major problem. Once again, get it in writing.
* Check your state law for additional co-signer rights and responsibilities.
* Get copies of all documents.