New US home sales rise 0.7% in August

WASHINGTON -- New U.S. home sales posted a tepid 0.7 percent increase last month, missing Wall Street expectations and providing more evidence that the housing market recovery remains tentative.

The Commerce Department said Friday sales inched up to a seasonally adjusted annual rate of 429,000 from a downwardly revised 426,000 in July. Economists surveyed by Thomson Reuters had expected a pace of 440,000.

While it was the fifth straight increase and the strongest report in 11 months, sales were 4.3 percent lower than the same month last year. Sales have risen 30 percent from the bottom in January, but are off about 70 percent from the peak of four years ago.

The report was the second straight disappointing sign for the U.S. housing market, which is struggling to emerge from the most severe bust in generations. On Thursday, the National Association of Realtors said sales of previously occupied homes, which make up the bulk of the market, dipped 2.7 percent last month.

Builders continue to make severe cuts in prices to attract buyers. The median sales price of $195,200 was off 11.7 percent from $221,000 a year earlier, and 9.5 percent below July's level of $215,600. That was the largest monthly drop on records dating to 1963.

There were 262,000 new homes for sale at the end of August, down more than 3 percent from July and the lowest in nearly 17 years. At the current sales pace, that represents 7.3 months of supply -- the smallest amount since early 2007. The decline means builders have scaled back construction to the point where supply and demand are coming into balance.

Buyers, meanwhile, are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000 for first-time owners. Home sales must be completed by the end of November for buyers to qualify. Builders and real estate agents are pressing Congress for that credit to be extended.

Sales varied dramatically around the country. The best performance was in the West, where sales rose more than 12 percent, and the worst was in the Northeast, where sales sank more than 16 percent. They were unchanged in the South, and down nearly 6 percent in the Midwest.

Meanwhile, major builder KB Home posted a smaller third-quarter loss of $66 million on Friday as it reduced costs and said new home orders increased. Still, the results missed analysts' expectations.

Know the 8 Foreclosure Relief

Know the 8 Foreclosure Relief
Options

1.Forbearance– an agreement with the lender that temporarily allows the
homeowner to pay less than the full amount of their mortgage payment, or
perhaps even nothing at all, during the “forbearance period”. Lenders might
consider forbearance when you can prove to them that funds from a bonus, tax
refund, or other source will bring the homeowner’s mortgage payments current at
a specific date in the future.

2.Reinstatement- occurs when the homeowner pays the lender the total
amount they are behind in a lump sum, by the specific time in the future. A
reinstatement is often combined with forbearance.

3.Repayment plan– is an agreement with the lender that gives the homeowner
a fixed amount of time to repay the amount they are behind. They do this by
combining the homeowner’s delinquent portion along with their regular monthly
payment. At the end of the repayment period, the homeowner has paid back the
delinquent mortgage and is now current.

4.Loan modification– is a written agreement between the lender and the
homeowner that permanently changes one or more of the original terms of the
note. This makes the payments more affordable.



Common loan modifications include:

·Adding missed payments on top of the
existing loan balance.

·Turning an adjustable- rate mortgage
into a fixed mortgage

·Extending the number of years the
homeowner has to repay the loan.

5.Refinance – Refinancing requires income, credit, and equity to support
a new mortgage or deed of trust. If your current income cannot pay your present
mortgage, it may be difficult to convince another lender to offer you a loan
with a reasonable interest rate. Based upon the more stringent standards of
qualifying criteria for loan applications, refinancing in today’s market is
becoming less and less of a viable option.

6.Short – Refinance– This is the latest trend for lenders in working with
delinquent borrowers to avoid foreclosure. The lender agrees to refinance the
home with a reduction in the principal balance. Sometimes the lender will also
reduce the interest rate as well on the new loan. The borrower needs to provide
proof of a “hardship” and fully document the ability to pay the new mortgage.

7.Bankruptcy– A bankruptcy may allow the homeowner to discharge some
debt and reorganize others to keep the property, however, if homeowners do not
or cannot make the house payment after the bankruptcy, the home is foreclosed
on anyway. It is not recommended for real estate agents to list the property
and try to negotiate a short sale while the homeowner is going through this
process. Homeowners need to seek legal counsel if they want to pursue this
option.

8.Short Sale– If the sale proceeds are less than the total amount owed
the lender, the lender(s) may agree to short payoff or “short sale” and write
off the portion of homeowner’s mortgage that exceeds the net proceeds from the
sale.