Housing Construction up 2.8% in January

18 02 2010

Housing construction posted a better-than-expected increase in January, which pushed activity to the highest level in six months. The solid gain raised hopes that the construction industry is beginning to mount a sustained rebound from its worst slump in decades.

The Commerce Department said Wednesday that construction of new homes and apartments rose 2.8 percent last month to a seasonally adjusted annual rate of 591,000 units. That was better than the 580,000 annual pace that economists were forecasting.

Applications for building permits, considered a good barometer of future activity, fell 4.9 percent to a rate of 621,000, but that was after two months of large increases.

In another sign of strength, Wednesday’s report revised activity upwards in December to show builders were starting construction at an annual pace of 575,000 units during that month, much stronger than the 557,000 originally reported. Even with the upward revision, activity fell a slight 0.7 percent in December, a dip that was blamed on severe weather in many parts of the country that depressed construction activity.

Economists are hoping that housing is beginning to recover and a rebound in this area will help support the economy as it struggles to mount a sustained recovery from the deepest recession since the 1930s.

The strength last month was led by a 10 percent jump in activity in the Northeast and an 8.9 percent increase in the West. Construction was up a smaller 1 percent in the South and 3.2 percent in the Midwest.

The strength in January pushed construction activity up by 21.1 percent from the pace in January 2009. Last month’s building rate was the fastest pace since July.

Construction of single-family homes rose by 1.5 percent to a seasonally adjusted annual rate of 484,000 units while construction of multi-family units increased 9.2 percent to an annual rate of 107,000 units.

The National Association of Home Builders said Tuesday that its housing market index rose by two points to 17 in February after having fallen for two consecutive months.

That increase in sentiment was likely influenced by a number of favorable developments including a report earlier this month that the nation’s unemployment rate fell in January to 9.7 percent – still high, but lower than the 10 percent of the previous month.

In other favorable developments, mortgage rates are hovering around 5 percent, pushed down by a Federal Reserve program to buy mortgage-backed securities. And builders say they are also seeing a boost in the demand for homes coming from a government stimulus program. That program provides tax credits of up to $8,000 for first-time homebuyers and up to $6,500 for current homeowners who decide to move.

Bob Jones, chairman of the home builders, said builders were “slightly more optimistic that the housing recovery is finally beginning to take root.”

Source: The Associated Press





Median Home Prices Show Signs of Stability

18 02 2010

Home prices rose in more than 40 percent of U.S. cities in the fourth quarter of last year, as massive federal spending helped the housing market show signs of stability.

The National Association of Realtors said that the median sales price for previously occupied homes rose in 67 out of 151 metropolitan areas in the October-December quarter versus a year ago. That’s a sharp improvement from the third quarter, when prices rose in only 20 percent of cities.

The national median price was $172,900, or 4.1 percent below the fourth quarter last year. That was the smallest year-over-year price decline in more than two years.

Home sales surged in the quarter, outpacing the third quarter and the previous year’s figures. A federal tax credit of up to $8,000 for first-time homebuyers that was originally due to expire Nov. 30 but was extended through April provided much of the fuel. Sales for the quarter hit a seasonally adjusted annual rate of 6 million, up 27 percent from a year earlier.

The big question hanging over the housing market this year is whether the tentative recovery will stumble after the government pulls back support. The Federal Reserve’s $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March. A month later, the newly extended tax credit for first-time homebuyers runs out.

Economists are also concerned about a huge backlog of homeowners facing foreclosure. If those homes go up for sale at deeply discounted prices, median prices could turn downward again. Indeed, prices in some severely depressed areas are still falling.

The largest price decline by percentage in the fourth quarter was in Ocala, Fla., where the median sale price plunged 23.4 percent to $93,000. Foreclosure-plagued Las Vegas saw its median price tumble 23.3 percent to $139,400 versus a year ago.

The largest price gain was in Saginaw, Mich., where prices rose more than 50 percent to a median of $67,400. Cleveland followed with an increase of 25 percent to $110,000.

Source: Associated Press





Countrywide Settlement Pays $16.9 Million to Florida Homeowners

18 02 2010

More than 2,700 people will receive checks from a 2008 settlement Florida negotiated with Countrywide Financial Corporation. As part of the settlement, Countrywide is offering foreclosure relief payments to eligible borrowers who returned valid and timely claim forms and releases under a program administered by the Countrywide settlement administrator.

More than $16.9 million will be distributed this week, and each check will be written for just over $6,000.

In July 2008, Attorney General Bill McCollum filed a lawsuit against Countrywide, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade practices. The lawsuit claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading. That lawsuit was resolved in October 2008, and the settlement agreement included a foreclosure relief payment program for Florida homeowners with qualifying Countrywide mortgages.

Eligible homeowners should consider the following:

• Important information: The checks must be cashed on or before May 13, 2010.

• A payment under this settlement may be taxable, and recipients should consult a tax advisor if they have any questions concerning possible tax liabilities.

• Recipients with any questions should contact the settlement administrator, Rust Consulting, toll free at (866) 411‐6987, or http://www.countrywidesettlementinfo.com.

The settlement also includes $4 million to fund a foreclosure defense assistance program. The money will be provided to organizations over the course of two years, and the first funds were distributed in late 2009. The organizations that receive the grants agree to provide free legal assistance to eligible homeowners who face foreclosure but cannot afford an attorney to review their case.

“These resources, both the checks to homeowners and the grants to fund pro bono foreclosure defense assistance, are substantial assets to Floridians,” says Heather Rodriguez of Holland & Knight law firm and president of the Legal Aid Society of the Orange County Bar Association, one of the organizations that received grant funding and has an attorney dedicated to foreclosure defense assistance. “Orange and Osceola counties are both high in foreclosures, and homeowners are struggling.”

Countrywide Chief Executive Angelo Mozilo was also named in the Countrywide lawsuit and the civil case against him is still pending in Broward County Circuit Court. McCollum has also called on Bank of America, the company that acquired Countrywide after the lawsuit was filed, to be more responsive to consumers trying to modify loans and save their home from foreclosure.

Source: Florida Realtors








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