Real Estate

Investors buying homes to rent or sell accounted for only 15 percent of the housing market last month as they competed with large numbers of first-time homebuyers flooding the market to buy in time to qualify for the first-time homebuyer credit. The percentage of first-time buyers closing on homes rose from 42 to 47 percent of all home sales in October, according to an Inside Mortgage Finance/Campbell Communications survey released today.

The U.S. Census Bureau reported yesterday that new residential construction (housing starts) fell by 10.6 percent in October to 529,000 annualized units compared to 592,000 annualized units a month earlier. Single-family and multi-family starts fell by 7 percent and 35 percent, respectively. Housing starts are down 31 percent compared to a year ago. Housing permits fell 4 percent to 552,000 in October from September.

When key senators struck a deal on October 30 that allowed not just the extension but also the expansion of the homebuyer tax credit to include existing owners, one important part of the deal was not widely reported.

In Dakota County, Minnesota, where there never used to be any foreclosures, the backlog of vacant, unwanted foreclosed houses sets a new record every month, overwhelming the resources of local government to address the health and safety problems they pose. Though August, the county held September 1,349 sheriff's sales. In 2008 the total was 2,063.

A Sacramento insurance agent who looted the life savings of dozens of investors to bankroll his lavish lifestyle and prop up a multi-million dollar Ponzi scheme was arrested at his residence on a total of 100 counts that include grand theft and first-degree burglary. If convicted, he faces up to 52 years in prison.

Six months ago, Jeff Franson refinanced his mortgage, switching lenders. Last month a process server drove up to his Mokena, Ill. home and handed Franson papers notifying him he owed his old lender $93,702.51 and they were foreclosing on his home.

The National Association of Home Builders' (NAHB) 55+ Single-Family Housing Market Index, based on a survey of builders who produce housing designed to meet the needs of mature consumers, showed a six-point increase in the third quarter of 2009, to a seasonally-adjusted level of 21. That is the highest level recorded since the inception of the series in the fourth quarter of 2008, though still considered a fairly weak number.

The Federal Housing Administration, which finances nearly 30 percent of all home purchases, has enough cash reserves on hand to weather any anticipated economic reversals in the near future short of a second severe recession or depression, according to an independent actuarial study of the agency released today.

The average 30-year fixed mortgage rate fell to a seven-month low of 5.19 percent last week according to Bankrate.com's weekly national survey. The drop is due to the weak job market and investors repositioning ahead of large government debt auctions. Investors often lighten up on government bonds prior to an auction, and increase exposure to higher-yielding mortgage-backed bonds.

Affordable prices, foreclosures priced at a discount and expectations of healthy appreciation rates over five years are bringing investors back to the housing markets in droves.

The misfortunes of hundreds of thousands of former homeowners are making auction companies rich as record number of homes are auctioned off to investors and new owners.

The relentless upsurge in homeowners' negative equity—mortgage debt that exceeds the value of their homes—halted and even slightly improved in the third quarter as home values stabilized in many markets and record foreclosures weeded out thousands of underwater owners.

Today one out of every eight American homeowners with a mortgage (12.5 percent) is either in foreclosure or delinquent in their payments.

Three years after the subprime loan meltdown touched off the housing recession, one out of every four banks continued to tighten lending standards and terms for prime mortgages in the third quarter, making it more difficult for buyers to qualify for and close on financing.

The first wavelets of a long-dreaded tsunami of new defaults are washing up on the shores of California, Florida and other markets where prices soared during the housing boom, bringing the nightmare of foreclosure to higher end neighborhoods that rarely see "bank-owned" yard signs.