Metro Orlando’s annualized pace of new-home construction was up 14 percent as of June 30, compared with the same 12 months a year ago, according to a second-quarter report by Metrostudy, which counts new-home units within its markets.

Single-family starts totaled 1,116 units in the second quarter, up 39 percent from the first quarter. Sales have slowed since April 30, the deadline for a federal home-buying tax credit, and that will likely reduce demand in the current quarter as well. Second-quarter closings totaled 1,216 units, down 4 percent from the same 2009 quarter.

The inventory of single-family homes stood at 3,757, or a nine-month supply. Metrostudy considers six to seven months of supply to be healthy. Finished-but-vacant units accounted for nearly 70 percent of inventory, when 25 percent to 30 percent is considered healthy.

“Buyers will want to see evidence of a sustained recovery (including job growth) before confidence returns and they are willing to invest in a real estate market,” wrote Anthony Crocco, Metrostudy’s Central Florida director.

RISMEDIA, August 24, 2010—Bolstered by favorable interest rates and low house prices, housing affordability remained near its highest level nationwide for the sixth consecutive month since the series was first compiled nearly two decades ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).

The HOI indicated that 72.3% of all new and existing homes sold in the second quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the second quarter was slightly more affordable than the previous quarter and almost equaled the record-high 72.5% set during the first quarter of 2009. Until 2009, the HOI rarely topped 67% and never reached 70%.

“Homeownership is within reach of more households than it has been for almost a generation,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery.”

Syracuse, N.Y., was the most affordable major housing market in the country, edging out Indianapolis-Carmel, Ind., which had held the top ranking for nearly five years. In Syracuse, 97.2% of all homes sold were affordable to households earning the area’s median family income of $64,300.

Also near the top of the list of the most affordable major metro housing markets were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; and Buffalo-Niagara Falls, N.Y.

Among smaller housing markets, the most affordable was Springfield, Ohio, where 96.6% of homes sold during the second quarter of 2010 were affordable to families earning a median-income of $56,800. Other smaller housing markets near the top of the index included Mansfield, Ohio; Bay City, Mich.; Monroe, Mich.; and Lansing-East Lansing, Mich., respectively.

New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation as its least affordable major housing market during the second quarter of 2010. There, 19.9% of all homes sold during the quarter were affordable to those earning the New York area’s median income of $65,600. This was the ninth consecutive quarter that the New York metropolitan division has occupied this position.

The other major metro areas near the bottom of the affordability scale included San Francisco-San Mateo-Redwood City; Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; and Honolulu, all metro areas that have lingered among the bottom rankings for several quarters.

San Luis Obispo-Paso Robles, Calif., was the least affordable of the smaller metro housing markets in the country during the second quarter. Others near the bottom included Santa Cruz-Watsonville, Calif.; Ocean City, N.J; Santa Barbara-Santa Maria-Goleta, Calif.; and Napa, Calif.

The Vue at Lake Eola was recently purchased by a new developer, Condo Developer, LLC, a Delaware based Development entity. The new owner consists of  a consortium of several foreign investors who have a significant track record in purchasing large distressed residential assets and returning them to market at a significant increase in value. “We feel that if you define luxury, consumers will see the value and invest.”, said Cristian Michaels, President of Condo Developer, LLC.

           The Vue at Lake Eola is no exception, the owner has spent the last 60 days isolating items which make this luxury tower unique to the market, and returning the product to its original vision of being the best downtown Orlando has to offer. With owner/visitor valet parking, state of the art fitness facilties, and much more, the Vue at Lake Eola redefines luxury. 

         If you haven’t been to the property to see the sales gallery recently, it is definitely worth another visit. They are open daily from 10am-6pm, and 1pm to 6pm on Sunday. They can be reached directly at 407-244-0089, or visit the website at www.VueOrlando.com.

RISMEDIA, August 19, 2010—(MCT)—As director of the Joint Center for Housing Studies at Harvard, Nicolas Retsinas has had a front-row seat for the real estate market’s dramatic boom and bust. After 12 years at the center, Retsinas left the director’s job to teach housing finance at Harvard Business School. He spoke recently with New Jersey’s The Record about why buyers got mortgages they couldn’t afford, and why real estate matters so much.

Were you surprised by the magnitude of the housing bust and how long it has lasted?
Nicolas Retsinas: Yes, by the severity of the housing bust but even more so, how credit just seized up.

When do you see any kind of loosening-up of the credit markets?
NR: I would suspect we’re likely to see the same dominance of the government at least through the balance of this year. One of the big issues facing public policymakers is what to do with Fannie Mae and Freddie Mac. If we want to attract private capital, not only from this country but also global capital, some part of that credit risk has to be borne by the government.

One of the biggest factors in the bust was that credit standards got too easy. Buyers who weren’t qualified got mortgages. Do you have any ideas about why this happened?
NR: In part, people were granted mortgages not on their ability to repay the mortgage, because it was clear that wasn’t going to happen. But there was an expectation that even if they couldn’t pay, the future increase in the value of the property would end up being the collateral for that loan. For a long time, that was a formula that worked. But we reached a point where even with these exotic—what turned out to be toxic—mortgage terms, they just weren’t affordable.

What has been the biggest human cost of the housing bust?
NR: The biggest human cost is the millions of people who have lost their homes. One can look back coldly and say, “Well, maybe a lot of them shouldn’t have bought a home in the first place.” But a lot of people lost their homes the old-fashioned way: they lost their jobs.

Who has benefited from the bust?
NR: Beside the investors who played with different sorts of financial products, I think the key winners probably have been first-time home buyers, who have maybe longed to buy a house but could not afford to. Now we’ve essentially transferred wealth from existing homeowners to new homeowners.

Some observers have been disappointed by the number of homeowners helped by the federal loan modification program.
NR: In defense of the government, when they designed this program 18 months ago, they based it on a premise that the principal problem in the housing market was egregious mortgage terms. And if those mortgage terms could be reset and recalibrated to more typical mortgage terms and could be afforded, through subsidy or whatever means, by the borrower, that would stem the hemorrhage of the defaulted loans and foreclosures.

As we moved into 2009, the problem was less about the subprime loans and more the traditional reason why people have problems making ends meet—which is that they lost their jobs. If you modify the loan so that your monthly payments are only 31% of your income, and your income is zero, that’s probably not going to work. The problem outran the solution.

Will home-price appreciation return anytime soon?
NR: The next couple of months will be an interesting test because we’ve had the withdrawal of the home buyer tax credit. I think we’re likely to have a sort of trawl-along-the-bottom type of recovery, a little bit lumpy for a year or so.

Congress is looking at new financial regulations. What effect are these likely to have on mortgages?
NR: I think it’ll make it more difficult to go back to the Wild, Wild West. There will be a new consumer financial agency, and I think that will be more likely to look at some of these (mortgage) products. I think that’s going to be critical. RE

(c) 2010, North Jersey Media Group Inc.

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Building on the first Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the “HFA Hardest Hit Fund”), the Administration recently announced an expansion of the initiative to target five additional states with high shares of their populations living in local areas of concentrated economic distress. This second HFA Hardest Hit Fund will include up to $600 million in funding for innovative measures to help families stay in their homes or otherwise avoid foreclosure in states that have been hit hard by concentrated economic distress.

Responsible families across the country have found themselves unable to pay their mortgages due to unemployment or underemployment. While the first HFA Hardest Hit Fund targeted five states with home price declines greater than 20%, the second HFA Hardest Hit Fund will target five states with high concentrations of people living in economically distressed areas, defined as counties in which the unemployment rate exceeded 12% in 2009. Less than 15% of the U.S. population lives in such high unemployment rate counties. The five states that will receive allocations based on this criterion are: North Carolina, Ohio, Oregon, Rhode Island and South Carolina.

President Obama announced the first HFA Hardest Hit Fund on February 19, 2010, with up to $1.5 billion in funding for innovative measures to help families. States that were allocated funds under the first HFA Hardest Hit Fund are not eligible for the second HFA Hardest Hit Fund. HFAs in states qualifying for the second Hardest Hit Fund will be required to submit plans to Treasury for review before becoming eligible for funding. Once HFAs have submitted plans to Treasury for review, and Treasury determines that the plans satisfy the requirements under the Emergency Economic Stabilization Act of 2008 (“EESA”), the plans will become eligible for funding up to a predetermined allocation cap.

Expansion of Help for the Hardest Hit Housing Markets

1. $600 Million to Help State Housing Agencies Further Address the Challenges Facing Housing Markets with the Most Concentrated Areas of Economic Distress
-Funding will go to states with the highest share of their population living in counties in which the unemployment rate exceeded 12% in 2009 (excluding states already eligible for Help for the Hardest Hit Housing Markets funds).
-HFAs must submit program designs to Treasury. Approaches that respond to problems caused by concentrated economic distress will be particularly welcomed.
-To receive funding, HFAs’ plans must satisfy the requirements for funding under EESA.
-Funding will help support innovative foreclosure prevention efforts and help for unemployed homeowners.

2. Accountability and Transparency
-All funded program designs will be posted online.
-To create accountability for results, program effectiveness measures and results will be published online.
-Program activity will be subject to effective oversight under EESA.

3. Allocation Caps
-Allocation caps have been determined in proportion to the number of people in these five states living in counties with high unemployment, resulting in the following allocation caps:

State                      Allocation Camp (millions)
North Carolina       $159
Ohio                       $172
Oregon                   $88
Rhode Island         $43
South Carolina      $138

Illustrations of the Types of Programs that May be Funded in the States

The HFA Hardest Hit Fund is designed to allow the maximum possible flexibility to HFAs in designing programs that are tailored to the needs of each participating state. To be eligible for Troubled Asset Relief Program (“TARP”) funds, all programs must promote the purposes of EESA and be consistent with its requirements. Section 2 of EESA provides that the purposes of EESA are to restore liquidity and stability to the financial system and to use TARP funds in a manner that, among other things: Protects home values; Preserves homeownership and promotes jobs and economic growth; and Provides public accountability.

The objective of the HFA Hardest Hit Fund is to allow HFAs to develop creative, effective approaches that consider local conditions. To provide guidance to HFAs in designing programs, Treasury has outlined some of the possible types of transactions that would meet the requirements of EESA. States are encouraged to submit proposals that provide targeted relief to areas or localities with high concentrations of economic distress, but each state should respond to local conditions:

Unemployment Programs – Programs may provide for assistance to unemployed borrowers to help them avoid preventable foreclosures.

Mortgage Modifications – Programs may provide for modification of mortgage loans held by HFAs or other financial institutions or provide incentives for servicers/investors to modify loans.

Mortgage Modifications with Principal Forbearance – Programs may provide for paying down all or a portion of an overleveraged loan and taking back a note from the borrower for that amount in order to facilitate additional modifications.

Short Sales / Deeds-In-Lieu of Foreclosure – Programs may provide for assistance with short sales and deeds-in-lieu of foreclosure in order to prevent avoidable foreclosures.

Principal Reduction Programs for Borrowers with Severe Negative Equity – Programs may provide incentives for financial institutions to write-down a portion of unpaid principal balance for homeowners with severe negative equity.

Second Lien Reductions – Programs may provide incentives to reduce or modify second liens.

This is not meant to be an exhaustive list of acceptable transactions. Other innovative ideas and transaction types (including innovations related to the Making Home Affordable Program) will be evaluated on a case-by-case basis for compliance with EESA. Treasury may publicly announce additional types of transactions that would meet the requirements of EESA.

For programs designed to help individual homeowners, the target population should be limited to residences with unpaid principal balances equal to or less than the current government sponsored enterprise (GSE) conforming limit of up to $729,750. HFAs may target low and moderate income borrowers at their discretion consistent with that HFA’s state enabling legislation.

Latasha Hall never envisioned herself a homeowner. But by the end of the month, she will be. Just in time.

With the soon-to-expire tax credit for first-time buyers as an assist, the single mother plans to close on a $166,650 three-bedroom house in Clifton Heights, Pa. “If it hadn’t been for the credit, I wouldn’t have done it,” Hall said.

To be eligible for the federal tax credits—up to $8,000 for qualified first-timers and up to $6,500 for certain repeat buyers—houses must be under contract by April 30, with settlement by June 30, 2010.

With those deadlines in sight, some real estate agents say they are relishing their first busy days in months.

For some buyers, a tax credit is an added perk in an already-friendly market with good inventory and low mortgage rates.

For those like Hall, who is working toward her bachelor’s degree in behavior and addictions counseling and who works two jobs, it’s the last piece that fits the puzzle. In January, Hall visited Weichert Realtors for help finding a rental home after her landlord’s lender foreclosed.

Steve Madonna, a loan officer with Weichert, looked at her income (about $54,000) and her credit score (which needed some work, but not much) and suggested she buy instead. Madonna connected Hall with a state loan program that would provide $5,000 of the $8,000 credit up front, for use on closing costs or maintenance on the house. Hall set to work paying off two past-due bills and bugging the credit bureaus—sending weekly faxes and calling often—to update her score quickly. “If I hadn’t heard about this credit, I wouldn’t have worked so hard to get it done,” she said. “This is my time to go out and do what I have to do. I kept thinking about my kids.”

The new Clifton Heights neighborhood is safer, she said, and it’s just two blocks from the school her 9-year-old son attends. The credit has been “a blessing,” Hall said.

To Realtors like Daren Sautter, it’s a relief. “It’s nice to be busy,” he said.

Sautter, of Prudential Fox & Roach in Cherry Hill, N.J., watched showings and Internet leads triple in the first three weeks of March.

He expects to be slammed through the April 30 deadline, then figures he’ll see a lull before the spring market picks up some. “If you don’t sell a house in April,” Sautter said, “you’re not selling it.”

Sellers likely will be thinking the same thing, Realtors said, and listing prices could drop this month.

Sautter recently helped Pat Poole price her four-bedroom Cherry Hill house to sell. At $290,000, it went after just one day on the market. Recently divorced, Poole was looking to downsize. She sold the house to a young couple who used the repeat-buyer credit. Her next task: finding a new house for herself and her 17-year-old son in time to secure her own tax credit. “I’m going to get in under the wire,” Poole said.

A flurry of activity is noticeable in areas with a strong inventory of homes affordable to young families, Realtors said.

But some brokers are seeing a “trickle-up” effect. Would-be buyers are able to sell their homes, aided by the rush for the tax credit, and upgrade to communities with better school systems or more historic charm.

In Haddonfield, N.J., the proximity to Philadelphia and access to the PATCO High-Speed Line were big draws for Jeff Minors and Amy Henry. Minors will commute to his job as a financial-news editor in New York City. The couple, longtime renters, were looking to move to southern New Jersey from Norwalk, Conn., with their 2-year-old son. They recently moved into a four-bedroom home in Haddonfield that cost about $575,000. The first-time-buyer credit was an added bonus, Minors said. “We were more concerned about finding the right house at the right price,” he said. “But it’s definitely a nice benefit.”

RISMEDIA, April 16, 2010—According to a new Move, Inc., survey, interest in real estate as an investment has more than tripled in the past year. In fact, 17.2% of potential home buyers today say they plan to purchase a home in the near future as an investment compared to just 5.6% in March 2009.

The survey also found just over ten percent (12.3%) of Americans planning to purchase investment property in the near future say they will pay for the property using 100% cash, and 12.8% will use cash for more than 50% of the purchase price and finance the rest. Almost half (49.2%) say they will buy the property with less than 50% cash down and finance the remainder. The U.S. Census Bureau reported that one in three U.S. homes are owned free and clear, without a mortgage.

Nearly half of these potential real estate investors (46.5%) say they plan to own the property for six or more years, 16% expect to hold the property between two and five years, while 10.6% plan to own the property between six and 24 months.

While interest by potential home buyers in purchasing a foreclosure to live in themselves has dropped 31.1% in the past five months to 26.5%, this newest Move survey found interest in purchasing a foreclosure as an investment is on the rise. In fact, interest in purchasing a foreclosure as an investment to fix it up and resell it rose from 11.3% in October 2009 to 16% in March 2010, a 42% increase.

Economy and lifestyle needs to trigger transactions with buyers and sellers
The Move Homeownership survey also found approximately half (49%) of all homeowners would buy another home today if they could sell their current home for what they paid for it or more. This is especially true for homeowners ages 25 to 34 (68.2%).

Some of the most important reasons influencing homeowners’ decisions to sell their current home with the intention of purchasing another include the need to lower monthly expenses because of financial hard times (25.4%), their growing family needs more space (20%), or the desire for their children to attend a better school (14.1%). Moving closer to important daily conveniences (12.3%) or work (10.9%) and the desire to improve their lifestyle by purchasing a nicer or larger home because they’re doing well (10%) were also among the most important reasons homeowners would purchase a different house once they sell their current home.

“Real estate and housing today face many of the same challenges other major industries are experiencing as a result of our national economy,” says Move Chief Revenue Officer, Errol Samuelson. “Concerns around employment and their overall economic situation are causing many people to wait until the economy improves before they commit to one of the largest purchases they’ll most likely make in their lives. The findings of this newest survey make it clear the desire and motivation to be a homeowner remains strong, and as the economy continues to strengthen and improve, so will the housing market.”

Perceptions on affordability improve, first-time buyers prepare to buy
Despite today’s challenging economy, demand for homeownership remains strong and first-time buyers make up a significant number of all potential buyers. One in five consumers (21%) report they plan to purchase a home in the next 12 months to five years, with 7.9% planning to purchase in the next two years. Of those planning to purchase a home in the near future, half (50.7%) are first-time buyers, with men (55%) somewhat more interested in entering the housing market as a first-time buyer than women (45%).

The survey also found that while housing has become more affordable in the past nine months, most Americans are still unaware of how affordable homes are today. Based on survey results, 41.5% of Americans think a family making the median income of $52,029 can afford nearly half (45.7%) of all the available homes for sale in their area. In June 2009, more than three-quarters (76.4%) of Americans said they thought a family earning the national median income could afford 50% or fewer of the homes for sale in their area.

In fact, a median income family today can afford approximately 70% of the homes for sale on the Move Network, a leader in online real estate.

Dreams delayed not lost
According to this newest survey, the economy has forced some homeowners to make serious sacrifices or changes to their lifestyle as they wait for conditions to improve. Just over two-thirds (69.1%) of homeowners who have delayed selling their home reduced their daily living expenses in order to pay their mortgage, 35.4% have downsized to a smaller home, and 33.5% have delayed expanding their family as planned.

Approximately one-third (36%) of homeowners not in a position to sell their home and purchase a home that better fits their needs, report they couldn’t purchase a different home in a more upscale neighborhood as a result. This was especially true for women (45.1%) compared to men (27.2%). In addition, 24% of homeowners say they’ve not been able to move closer to work or a desired school (21.9%), purchase a second vacation home or retirement home (21.9%), or buy a rental property as an investment (21.5%) as a result of their current situation.

Real estate remains high on consumer radar
Real estate remains top of mind with Americans as more than half (55.1%) say they’re paying more attention to home values today as compared to a year ago. Only 10.8% say they’re paying less attention to home values this year. In the past year, monthly unique visitors on the Move Network, a leader in online real estate, have increased by 7.6% percent from 7.8 million in February 2009 to 8.4 million in February 2010. In February 2010, the top ten most popularly searched MSAs on the Move Network in order of popularity were Chicago, Los Angeles-Long Beach, Detroit, Dallas, Philadelphia, Tampa-St. Petersburg-Clearwater, Phoenix-Mesa, Boston, Atlanta, and Las Vegas.

Facing millions of foreclosures and high unemployment, President Barack Obama recently announced a $1.5 billion fund to help unemployed homeowners and other struggling borrowers in a handful of states. “What we can do is help families that have done everything right to stay in their homes, and we can stabilize the housing market so that home values can begin rising again,” Obama said at a town hall meeting in a Las Vegas suburb. As part of the program, five states—Arizona, California, Florida, Michigan and Nevada—have home prices that have fallen enough to qualify for the additional assistance. Obama said that price declines in homes and high unemployment in these regions have created major challenges for families. He argued that too many lenders were too focused on “making a quick buck than acting responsible,” that “too many borrowers acted irresponsibly by taking on mortgages they couldn’t afford” and government regulators turned a blind eye to the problem.” State and local housing-finance agencies in states seeking assistance must submit program proposals to the Treasury Department, which will evaluate and decide if they qualify. The funds are allocated from capital set aside for housing from the $700 billion Troubled Asset Relief Program. States where the average price for all homeowners in the state have fallen more than 20% from their peak are eligible to participate. The average price for all homeowners in Nevada, for example, has fallen by more than 40% from its peak. According to Obama, three sorts of problems may be addressed with funding: unemployed borrowers, underwater borrowers and those with second mortgages on properties. “This fund is going to help out-of-work homeowners avoid preventable foreclosures. It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both borrowers and lenders alike.” Herb Allison, assistant secretary of the Treasury for Financial Stability, told reporters that the allocations are a modest step to stem the housing crisis. However, he added that the program is intended to encourage these states to foster innovative approaches to limit further foreclosures. “Local housing-finance agencies understand the local markets,” he said. “While the housing crisis is national, it takes on local characteristics, and these groups understand the situation on the ground. We want to put to work their creativity and their knowledge to come up with new ideas to test those ideas in their communities.” Allison added that he hoped the successful programs could help the Treasury Department come up with additional ideas for national programs to help troubled homeowners. “We can learn a great deal from this and see what works in local situations and how we can leverage that.” Obama announced the program in Nevada, one of the hardest-hit states, along with Senate Majority Leader Harry Reid and other lawmakers. Reid, a Nevada Democrat, is in a battle for re-election in his state, in part due to frustration over high unemployment. The program’s announcement comes two days after the Treasury Department reported that a one-year-old $75 billion program to help 3 million to 4 million homeowners modify their mortgages to avoid foreclosure has only aided a small fraction of those at need. The program, known as the Home Affordable Modification Program (HAMP), seeks to aid borrowers by allowing them to modify their mortgages and lower monthly interest rates through any participating lender. Under this plan, the lender voluntarily lowers the interest rate, and the government provides subsidies to the lender and borrower. The Obama program has so far only helped 116,000 troubled borrowers modify their mortgages from three-month temporary plans into more affordable permanent loans. The HAMP program, which is set to run through 2012, was announced on Feb, 18, 2009. Allison pointed out that about roughly a million homeowners have had their payments reduced, mostly as part of the trial three-month plans. He added that roughly half of those are eligible for permanent modifications. “We are on pace to help 3 million to 4 million homeowners by the conclusion of the program in 2012,” according to Allison. Henry Sommer, director at the National Association of Consumer Bankruptcy Attorneys in Philadelphia said he supported the idea of targeted taxpayer assistance to states that need it most. However, he was skeptical whether the vast majority of the $1.5 billion would ever be used. Sommer pointed out that the largest part of the $75 billion HAMP program so far hasn’t been allocated—in large part because only a small number of households have received permanent modifications, which is when the majority of incentive payments go out. “They are supposed to spend $75 billion, but aren’t using it,” he said. “I am concerned that even though they announced this program, that the funds in it won’t be used.” Sommer added that he was interested in seeing what kind of programs the Treasury would approve to be eligible for access to funds. A program to help troubled homeowners who have taken out second mortgages on their homes could be helpful, if it provides high-enough incentive payments to convince lenders to drop the second mortgages. Sommer recommends a regional program that gives banks “a few thousand dollars” to drop second mortgages. “Banks don’t want to give up the second mortgages because it is a big hit on their balance sheets,” he said. “However, they’re not worth anything if the homes are sold in foreclosure.” Federal funds for other state programs to help the unemployed stay in their homes and programs to help borrowers whose homes are worth less than their mortgages would also be helpful, according to Sommer. Sommer also expressed concern that some other states with high unemployment and massive foreclosure rates may not qualify for the additional assistance, because the average price for all homeowners there hasn’t fallen 20% or more from their peak. Rhode Island, for example, recorded a 12.9% unemployment rate in December 2009, according to the Bureau of Labor Statistics data as of Jan. 22. Sommer is hopeful that the Obama administration will focus additional attention and funds to a national program that could help struggling unemployed homeowners—a growing segment of borrowers that are facing foreclosure. Jaret Seiberg, an analyst at Concept Capital in Washington, said the White House is considering a program that would suspend mortgage payments for jobless homeowners for three months and give the borrower three opportunities to extend the payment deference for up to a year. The new targeted assistance comes after the Special Inspector General for the Troubled Asset Relief Program on Jan. 21 released a report warning that the Obama administration’s and the Federal Reserve’s policies to support the mortgage market could in fact be creating another dangerous housing bubble in some markets, while at the same time failing to do a good enough job to stabilize other markets.

RISMEDIA, February 3, 2010—Pending home sales have leveled from a market swing driven by response to the home buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in December 2009, increased 1.0% to 96.6 from 95.6 in November, and remains 10.9% above December 2008 when it was 87.1. In November, the monthly index had fallen by 16.4% from surging activity in preceding months.

Lawrence Yun, NAR chief economist, said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

The PHSI in the Northeast rose 2.3% to 76.1 in December and is 14.9% higher than December 2008. In the Midwest, the index increased 5.2% to 86.9 and is 8.7% above a year ago. Pending home sales in the South rose 2.2% to an index of 98.4, and are 5.5% higher than December 2008. In the West, the index fell 3.8% to 119.9 but is 18.6% above a year ago.

Yun projects the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.

He added that one of the greatest benefits of rising sales will be firming home prices. “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun said. “As a result, the housing wealth for many middle class families has begun to stabilize.”