Is the Housing Collapse Over?

By Chris Farrell, RISMEDIA, Monday, June 11, 2012— April may not be the cruelest month, at least when it comes to housing. The data strongly suggest that after six dreadful years, the real estate market is stabilizing.
The April 2012 numbers tell the story. Sales of existing homes rose by 3.4%, to an annual rate of 4.62 million, according to the National Association of Realtors. The median price of an existing home, at $177,400, was 10% above last year’s level.

Purchases of new homes in April rose by 3.3%, to an annual rate of 343,000 — up 9.9% from a year ago. The median sale price of a new home increased by 4.9% from a year ago, to $235,700. Housing starts improved by 2.6%, to an annual rate of 717,000—up by 50% from their April 2009 low. And in the first quarter of 2012, home prices were up by 0.5% over the same period last year, according to the Federal Housing Finance Agency’s purchase-only house price index.

Of course, any expression of economic optimism has to be tempered these days.

Company managements, policymakers and investors fear that the worsening European economies have put us on the verge of another global catastrophe.

The Organisation for Economic Co-operation and Development (OECD)—the Paris-based think tank for developed nations—recently projected that the euro zone will contract by 0.1% in 2012. China’s economy appears to be losing momentum. Washington remains paralyzed as high-stakes elections loom. And foreclosures, short sales and a large “shadow inventory” of homes—ones held off the market but waiting to be sold—weigh on the housing recovery.

Still, the combination of a slowly improving labor market, moderate economic growth and record-low mortgage rates is finally shoring up the housing market.

Other factors are behind a renewed appreciation of owning. For instance, the monthly cost of owning is less than renting in a majority of cities. In fact, at current mortgage rates, home prices would have to rise by 35% to get back to their average historic relationship to rents, according to calculations by Segal Rogerscasey, a global investment advisory firm headquartered in New York City.

Demographics enter into the equation as well. Household formation is expected to increase from the low level of approximately 600,000 in 2011 to one million households a year — a number more consistent with the historical average.

“People may postpone hitching up during uncertain times, but eventually hormones take over,” writes Warren Buffett in his latest annual letter to Berkshire Hathaway shareholders. “And while ‘doubling-up’ may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure.” (Buffett thought the market would recover last year, a prediction he’s carried over to 2012.)

Want to buy? No need to rush
Despite all the housing-market turmoil, it seems that Americans still like the idea of owning a home. And there’s a lot to like, from the freedom that comes from a place to call your own to multiple tax breaks. Is it time to buy? Prospective buyers still have time to mull the question. The housing-market recovery is likely to be a long, drawn-out affair. Most people know the lesson from the boom and bust is that it doesn’t pay to buy and own without conservative financing. For example, the figures that show owning is cheaper than renting on a monthly basis are based on the assumption of a 20% down payment. Forget buying if you can’t stay in the home for a long time—at least 5 years.

But the answer really lies with how secure your job, your career and your household income are. The greater your financial insecurity, the higher the odds that you might have to pick up stakes and move to another part of the country for work. A classic way to slash expenses after losing income is to downsize into a smaller place. Taken together, the more your job and career are at risk, the more renting looks good—and vice versa.

The past five years have been brutal on family incomes. The unemployment rate peaked at 10% in October 2009, and 35 months after the recession was officially declared over the rate is still at 8.1%. Most of us have been affected by—or witnessed, through a neighbor or a colleague—unemployment, under-employment, pay cuts and reduced benefits. Little wonder so many people are struggling to pay down debts and boost their savings.

Financial insecurity isn’t just a result of the Great Recession and slow recovery; it’s been a trend over the past three decades. As Corporate America has downsized, outsourced, reengineered and restructured the workplace — the price tag for the economic and social benefits of technological innovation and increased global trade and investment—the odds of suffering a big drop in income have increased.

Research by Peter Gosselin and Seth Zimmerman, of the Urban Institute, found that from 1974 to 1983, about one in seven individuals, ages 35 to 55 who lost a job or experienced a comparable income-threatening event lost 50% or more of their income. The figure rose to one in five from 1994 to 2003.

The idea that the trajectory and security of jobs and careers is of paramount importance when it comes to investing isn’t new. But an investment approach that focuses on your earning power — the return on your human capital — needs to be pushed to the forefront when evaluating any investment — stocks, bonds and, yes, a home.

Fun Arts Festival to Benefit Animal Shelter

Cobb Animal Control will present the inaugural Art, Barks and Purrs Festival 10 a.m.-3 p.m., Saturday, June 23, on the front lawn of the Animal Control Shelter, located at 1060 Al Bishop Drive, Marietta.

“This festival is part of a new program to raise awareness of the many homeless animals in Cobb County and encourage the public to visit our shelter,” said Tom Flynn, field services manager and acting facility operations manager. “We want people to know that we are not the old-fashioned ‘dog pound,’ but a place for new beginnings for the cats and dogs who ended up here through no fault of their own.”

Vendors at the festival will feature handcrafted animal-related art, including jewelry, bird feeders and houses, housewares, animal clothing, collars and leashes, pet portraits and pottery. For more information about the event, call Tom Flynn at 770-590-5601. For more information about Cobb Animal Control, visit

Obama Administration Releases May Housing Scorecard

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury has released the May edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market.

Data in the May Housing Scorecard show promise as indicators continue to show signs of stability, though officials caution that the overall outlook remains mixed.

Sales of existing homes rose 2.4 percent in April, increasing in every region of the U.S. In addition, the inventory of newly constructed houses increased for the first time since April 2007. Since sales outpaced inventory levels, the supply of homes on the market dipped to 5.1 months from 5.2 months in March and a peak of 12.2 months in January 2009. Distressed sales remain a key factor, however, as the impact of serious delinquencies and underwater mortgages continue to temper market gains. The full report is available online at

HUD Acting Assistant Secretary Erika Poethig said, “This month’s indicators show promise – more than 180,000 borrowers took advantage of our enhanced Home Affordable Refinance Program in the last quarter alone and foreclosure starts are declining as more homeowners secure mortgage relief – but with so many households still struggling to make ends meet it’s clear that we have more work ahead.” Poethig continued, “That is why we are asking the Congress to approve the President’s refinancing proposal so that more homeowners can receive assistance.”

Included in this month’s “Making Home Affordable Program Report” are detailed assessments for the largest mortgage servicers participating in the program with results from the first quarter of 2012. The Servicer Assessments – first introduced in June 2011 and published quarterly – have set a benchmark for disclosure around servicer efforts to assist struggling homeowners.

The First Quarter 2012 assessments show that the largest servicers continue to demonstrate broad improvement in implementation of the Making Home Affordable Program, and have focused attention on remediating past areas of need identified by Treasury through ongoing program reviews. For the second consecutive quarter, no mortgage servicer was found to be in need of substantial improvement.

“The Administration’s programs have established critical standards and accountability for mortgage servicers that have compelled the industry to provide higher quality assistance to struggling homeowners; however, servicers still have more work to do,” said Treasury Assistant Secretary for Financial Stability Tim Massad. “This month, expanded eligibility for the Making Home Affordable Program becomes available to help more families benefit from the program’s sustainable assistance and homeowner protections.”

Since inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their processes through ongoing program reviews. The Servicer Assessments summarize performance on metrics in three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance.

For the first quarter of 2012, three servicers were found to need only minor improvement with respect to the specific metrics evaluated. Six servicers were found to need moderate improvement. All servicers must continue to demonstrate progress and program compliance through ongoing reviews. Treasury continues to retain the right to withhold program incentives from mortgage servicers in future periods if necessary.

The release of the First Quarter 2012 Servicer Assessments coincides with the availability of expanded program eligibility for the Making Home Affordable Program announced by Treasury in January. The new criteria expand program eligibility to include homeowners with a debt-to-income ratio below 31 percent, properties occupied by a tenant and vacant properties which the borrower intends to rent. As of June 1, 2012, servicers have informed Treasury that they have begun accepting HAMP Tier 2 modification requests from homeowners.

As the Administration continues to push servicers to provide more effective assistance to struggling homeowners, the ongoing recovery of the housing market demonstrates the need for the Administration’s continuing efforts. The May Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

• The Administration’s foreclosure programs are providing relief for millions of homeowners as the housing market continues to recover from an unprecedented crisis. More than 1.1 million homeowner assistance actions have taken place through the Administration’s Making Home Affordable Program, while the Federal Housing Administration (FHA) has offered more than 1.3 million loss mitigation and early delinquency interventions. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals nearly 2.9 million proprietary mortgage modifications through April.

• Homeowners entering HAMP demonstrate a high likelihood of long-term success in the program. As of April, more than one million homeowners have received a permanent HAMP modification, saving approximately $535 on their mortgage payments each month, and an estimated $12.7 billion to date. Eighty-six percent of homeowners entering the program in the last 22 months have received a permanent modification, with an average trial period of 3.5 months. Seventy percent of non-GSE customers entering HAMP in recent months have received some form of principal reduction with their modification. Those participating in the HAMP Principal Reduction Alternative (PRA) have seen a median principal reduction of $68,267 – or 31 percent. View the Making Home Affordable Program Report with data through April 2012 .

Also featured this month is the Administration’s Housing Scorecard Regional Spotlight on market strength in Cincinnati, Ohio and surrounding communities. The Cincinnati metro area was one of the hardest hit areas in the nation following the housing market downturn and an area where the Administration’s broad approach to stabilizing the housing market has been very active.

“The fragile signs of stability that the national data show for the broader housing market are even more delicate in the Cincinnati market,” said Poethig. “The Administration is working hard to help all homeowners who have been hit hard during the crisis and, as this Regional Spotlight shows, our efforts have helped nearly 34,000 Cincinnati households to avoid foreclosure. A modest local economic recovery is underway, but we have much more to do to reach the many households who still face trouble and to help the Cincinnati market recover.”

The bi-monthly Housing Scorecard Regional Spotlight features data on the health of the Cincinnati housing market and impact of efforts to help homeowners at the local level including:

• The challenges in the far-spanning Cincinnati housing market have been more severe than those in most areas of the nation, as a high percentage of distressed mortgages and many severely underwater mortgages contribute to continued fragility. Sales of bank-owned properties and short sales remain high at 30 percent of existing home sales in the Cincinnati market compared to 29 percent nationally, which contributes to continued weakness in local home prices. Moreover, 25 percent of mortgages in the Cincinnati area are currently underwater – compared to 23 percent nationally – representing additional homeowners and loans potentially at risk.

• More than 34,000 Cincinnati households have received mortgage modifications, many directly through Administration programs. Since April 1, 2009 more than 34,000 mortgage assistance interventions have been offered to homeowners in the Cincinnati metropolitan area. Nearly 20,000 interventions were offered through HAMP and the FHA loss mitigation and early delinquency intervention programs. An estimated additional 14,000 proprietary modifications have been offered through HOPE Now Alliance servicers. While some homeowners may have received help from more than one program, the number of times assistance has been offered in the Cincinnati MSA is nearly double the number of foreclosures completed during this period (17,900).

• The Administration’s Hardest Hit Fund and Neighborhood Stabilization Programs have fueled local foreclosure prevention efforts and market stability. Ohio has received approximately $570 million through the Hardest Hit Fund to implement local solutions to mitigate borrower mortgage defaults and address the range of factors that contribute to a family’s financial problems. Moreover, approximately $52.7 million has been awarded to five jurisdictions through the Neighborhood Stabilization Program to help purchase or redevelop residential properties and address the effects of abandoned and foreclosed housing. Both programs have helped provide stability to the Cincinnati housing market.


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Foreclosures Down for 20th Straight Month

The foreclosure reboot is still on hold. Filings in May were still down 4% from one year ago but spiked in some areas of the country. Most of the foreclosures started in May will likely end up as short sales instead of REO.

Servicers started more foreclosures in May from the month before but filings were still down 4% from last year, according to RealtyTrac.

“U.S. foreclosure activity has now decreased on a year-over-basis for 20 straight months including May, but the jump in May foreclosure starts shows that it’s going to be a bumpy ride down to the bottom of this foreclosure cycle,” said RealtyTrac CEO Brandon Moore.

The market expected more foreclosures after the $25 billion settlement was struck in March over past abuses and documentation problems. But most of the foreclosures started in May will likely end up as short sales instead of REO, Moore said.

In the first quarter, homes sold before foreclosure netted the bank $27,000 more on average than a traditional REO.

“More banks are now recognizing that treating the problem of delinquent mortgages with short sales rather than bank repossessions can help them minimize their losses and also avoid taking on more REOs, which they then have to manage, maintain and market for sale,” Moore said.

Still, the process in some areas began to restart. The more than 205,000 filings in May nationally is the first time above the 200,000 level since February.

Keller Mackie, a partner at the Texas foreclosure firm Mackie Wolf Zientz & Mann, said at HousingWire’s REO Expo Wednesday that foreclosure filings in the Lone Star State picked up 25% to 30% since the settlement was signed.

For the first time since 2006, the highest foreclosure rate in the country belonged to Georgia, where filings increased 32% from April, according to RealtyTrac.


Improving Foreclosure Prices Help Drive Recovery

Significant price increases in bank-owned foreclosures are driving gains at the national, regional and local levels, helping home prices turn the corner with small quarterly and yearly gains.

National average prices for bank-owned foreclosures (REO) were up 8.1 percent over a year ago on a median price-per-square-foot basis, according to May data from Clear Capital, and have outpaced non-REO price declines of -0.7 percent by 8.8 percentage points.

“Strength in REO-only price trends as well as some early indications of price gains spreading from low tier sectors to the mid, and higher-priced homes is helping confirm that the country continues to make progress on its recovery, and we are expecting to see improvements extend over the next several months,” says Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital.

Clear Capital reported today that in May national median home prices grew on both a quarterly and yearly basis for the first time since August 2010. Regional performance improved across the board with the West, South and Northeast also seeing quarterly and yearly gains. However, the Midwest sustained declines, but milder since last.

“National real estate prices in May have finally moved past the continued losses of the last few years. The subsequent stabilization pattern seen in recent months has progressed into the start of moderate growth,” says Villacorta.

Short-term quarterly price trends picked up slightly at the national level, with appreciation of 0.4 percent turning into the first quarterly gain since November of 2011. The positive move at the broader market level is a reflection of the increasing strength at the regional level.

Helping to support growth at the national level, the West saw a notable jump in prices over the quarter, taking the lead over all the regions with growth of 2.7. The South recorded home price appreciation of 1.2 percent quarter-over-quarter, doubling the small gains of 0.6 percent reported on last month. Similarly, the Northeast matched the national level gains of 0.4 percent over the quarter, showing a modest uptick over the gains of 0.2 percent reported last month.

The Midwest continued to absorb price declines. With prices declining only -2.0 percent over the quarter the magnitude of the declines are subsiding, as compared to last month’s quarterly losses of -2.7 percent.

While growth in REO-only prices is driving broader market gains for most of the regions, the impact on overall prices depends on the level of REO market saturation. For example, the Northeast has seen incredible growth in the REO-only sector shown above, yet has only recorded 1.6 percent gains year-over-year in overall prices. Because the Northeast has a mere 10 percent REO saturation, the lowest level across all regions, even substantial growth in the REO-only price segment hasn’t swayed overall prices significantly. Additionally, the Northeast’s REO-only prices are more sensitive to shifting demand, fueling the seemly high annual gains, says Villacorta.

The Midwest is the only region that continues to see REO-only price declines on a year over year basis. While REO-only price growth has led the other regions into broader based growth, the Midwest has yet to receive assistance from this sector on overall progress. It’s worth noting that the Midwest’s REO saturation levels are still the highest of all the regions. As such, price weakness in the REO-only segment has been harder for the market to shake off, resulting in sustained declines at the broader level, as seen in overall yearly declines of -3.1 percent.

However, each of the three regions now seeing gains in REO-only prices first saw long term reductions in REO saturation rates. And while the Midwest continues to face declines, it has achieved a reduction in its REO saturation rate over the last several years, from a high of 45 percent in 2009, down to 37 percent in May.

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Article printed from RISMedia: URL to article: Posted By susanne On June 6, 2012 @ 3:38 pm In Business Outlook,Consumer News and Advice,Finance and Economy,Home Owner News,Real Estate Information,Real Estate News,Real Estate Trends,Today’s Marketplace,Today’s Top Story

June Lawn and Garden Tips

Pike Nurseries is always a great resource for learning how to garden without the guesswork. Every month, they publish a list of lawn and garden advice.

Below are some great tips from Pike Nurseries on what do in your garden this month and even some advise on what to feed the birds!


In the Garden

  • Plant More Garden Color. Plant Hydrangeas and Crape Myrtles now.  They are blooming, so it is easy to see what color you are planting! Continue planting Gladioli bulbs each week, through mid-June, for a succession of blooms.
  • Fresh Herbs for Cooking. Plants herbs in a sunny spot close to your kitchen door.  Basil, Oregano, Thyme and Rosemary are easy to grow and great for cooking.
  • Keep the Veggies Going. In the vegetable garden pull spent plants, re-till the soil and plant your second crops.  Water well as needed.
  • More Color Please. Fertilize flower beds with Green Light Super Bloom to keep the blooms going.
  • Keep it Clean by Pruning. Prune arborvitaes, junipers, yews and hemlocks and clean up spent foliage of spring bulbs once the foliage has completely died back. Cut back bearded iris and divide.
  • Mulch, Mulch, Mulch. Mulch to keep weeds down and increase water retention in the garden.
  • A Beautiful Garden with Less Water. During dry weather, be sure to keep the garden adequately watered.  A weekly deep, thorough soaking is more beneficial than a daily light sprinkling. Water between 6-10am to avoid evaporation.

In the House

  • Water While You’re Away. Add SoilMoist to pots.  The granules absorb water and release it as needed.
  • Feeding Time. Continue feeding your houseplants monthly.

For the Lawn

  • Water in the AM. Water your lawn in the early morning.  Turf will have time to dry off before night, preventing disease.
  • Lay Sod. Now is the perfect time to sod your entire yard or replace deadpatches.
  • Move it Up and Keep It Sharp. Raise the mower blade up a notch and sharpen the blade. Taller grass can withstand dry weather and a grass blade with a clean cut needs less water.
  • Keep it Green. Continue to fertilize Bermuda lawns.


For the Birds

  • Bath Time. Keep birdbaths clean and full, especially this time of year.
  • Food Please. While the garden provides a good amount of food for the birds, supplement their meals by keeping feeders full.

Atlanta Makes List of Markets Where Housing Inventories Have Dropped Most in Last Year

The number of homes on the market continues to become a shrinking pool. Inventory of for-sale single-family homes, condos, townhomes, and co-ops dropped 20 percent in May compared to year-ago levels, according to data from of 146 markets.

Inventories in May declined in all but two — Philadelphia and Shreveport-Bossier City, La. — of the 146 markets tracked by

While inventories were on the decline, the median national list price was on the rise, inching up 3.17 percent in May compared to May 2011.

“These key indicators continue to suggest that the housing market is steadily moving along a path of stabilization and gradual recovery,” notes.

12 Markets Where Inventories Have Dropped the Most

California metro areas are seeing some of the largest drops in inventories of for-sale homes.

From May 2011 to May of this year, the following metro areas have posted the highest drops in the country with their housing inventories, with inventories falling 35 percent or more in the last year. Those metros are:

  1. Oakland, Calif.: -56.60%
  2. Fresno, Calif.: -48.76%
  3. Bakersfield, Calif.: -48.59%
  4. Phoenix-Mesa, Ariz.: -44.71%
  5. Seattle-Bellevue-Everett, Wash.: -42.65%
  6. San Jose, Calif.: -40.80%
  7. Tampa-St. Petersburg-Clearwater, Fla.: –39.76%
  8. Stockton-Lodi, Calif.: -39.25%
  9. Atlanta: -39.19%
  10. San Francisco: -38.90%
  11. Riverside-San Bernardino, Calif.: -37.43%
  12. Sacramento: -35.92%

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Visit HGTV Green Home on June 19th to help Atlanta Pet Rescue & Adoption!

If you are a fan of HGTV, you are probably already aware that the 2012 Dream Green home is being built just outside of Atlanta in a community called Serenbe. This special community is just 30 minutes southwest of the airport.

Visiting Serenbe is reason enough to leave the hustle and bustle of the city. But this Spring, HGTV is showing off their Dream home and offering you the opportunity to help a local organization do some good!

The HGTV house is helping out Atlanta Pet Rescue & Adoption. Tours of the home cost just $20 and we get 50% of the proceeds collected on Tuesday June 19th.  Please sign up for this specific day.   To purchase advanced tickets, click HGTV Green Home. 

Please help spread the word, come down and see the house, and plan a fun day in the community of Serenbe. After you tour the HGTV house, stick around Serenbe to walk the nature trails, enjoy lunch, shop around in local stores and pet the animals at the farm.

U.S. Housing Market Finally Reaches a Turning Point

RISMEDIA, Monday, June 11, 2012—Home valuations will start to climb again while adjacent consumer industries will capture significant new growth opportunities in 2012 and beyond as the U.S. housing market finally turns the corner, concludes a major new study recently released by The Demand Institute. The recovery of the housing market will have far-reaching impacts in the coming years across the U.S. and international markets as U.S. consumers increase their spending on buying, renovating, furnishing and maintaining their homes.Launched in February 2012 and jointly operated by The Conference Board and Nielsen, The Demand Institute is a non-profit, non-advocacy organization with a mission to illuminate where consumer demand is headed around the world.The new report, “The Shifting Nature of U.S. Housing Demand,” predicts that average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent. From 2015 to 2017, the study projects annual increases between 3 and 4 percent. This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years.

“In these initial years, the prime driver of recovery won’t be new home construction, but rather demand for rental properties,” says Louise Keely, chief research officer at The Demand Institute and a co-author of the report. “This is a remarkable change from previous recoveries. It is a measure of just how severe the Great Recession has been that such a wide swath of Americans had to delay, scale back, or put off entirely their dreams of homeownership.”

“In the long-term, we don’t expect homeownership rates to change,” says Bart van Ark, chief economist at The Conference Board and co-author of the report. “Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make. What will be intriguing to watch is how their aspirations around homeownership are affected by this period of extended austerity.”

Between 2006 and 2011, some $7 trillion in American wealth was wiped out when home prices dropped 30 percent after a dramatic climb in valuations during the housing bubble. Looking forward, the moderate growth expectations for coming years suggest a return to normalcy. As home prices continue to drop and interest rates fall further, first-time buyers and others who remained relatively cautious will be drawn back into the housing market.

“As the U.S. housing market strengthens, almost every consumer-facing industry will be impacted in the coming years,” says Mark Leiter, chairman of The Demand Institute. “Business and government leaders will benefit by fully understanding the nature of this recovery. In doing so, they will be better able to anticipate how consumer demand will evolve and to formulate critical business and policy decisions to lead their organizations.”

Key Findings in the Report 
-The recovery will be led by demand from buyers for rental properties, rather than, as in previous cycles, demand from buyers acquiring new or existing properties for themselves.

-Young people—who were particularly hard hit by the recession—and immigrants will lead the demand for rental properties.

-Rental demand will help to clear the huge oversupply of existing homes for sale. In 2011, some 14 percent of all housing units were vacant, while almost 13 percent of mortgages were in foreclosure or delinquent.

-The average size of the American home will shrink. The size of an average new home is expected to continue to fall, reaching mid-1990 levels by 2015.

-Despite the number of Americans who have been hurt financially by the housing crash, the desire to own a home remains strong. In fact, one survey has revealed that more than 80 percent of Americans recently thought buying a home remained the best long-term investment they could make.

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Some Must-Know Tips for Navigating the Housing Market

June is National Homeownership Month, an annual event that focuses on the long-standing tradition of homeownership serving as a symbol of prosperity and success in the U.S.

“Studies on homeownership prove that it enhances our lives in many ways, and among them is how we plant deeper stakes within the communities we call home,” notes John L. Heithaus, CMO of MRIS, a network of over 45,000 real estate professionals. “Since navigating the housing market has become more complex than ever – any potential homebuyer, whether a first time buyer or not, can benefit from solid professional advice in their pursuit of homeownership.” To that end, MRIS has compiled the following list of “must read” tips, reinforcing some of the best practices for ensuring that potential homebuyers are home-ready.

• Understand and update your FICO credit score. This single number plays a major role in determining the interest rate on your mortgage, so it’s vital to know what your FICO score is, address any discrepancies and take corrective action to improve your score if it’s below par. As of May 2012, 664 was listed as the national average, and the median was listed as 723. According to Heithaus, individuals with scores of at least 700 tend to get the best rates on a mortgage. Each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – are required to provide you with a free copy of your credit report, at your request, once per year. To order, visit

• Know what you can afford. Up to 12 months in advance of your desired home purchase, establish a relationship with a trusted mortgage lender who can help you identify your monthly payment goals, target purchase price and the types of loans you are qualified for based on your current financial situation.

• Boost your savings. After you have determined your monthly payment goals and target purchase price, make sure you have the cash on hand for when you are ready to buy. We suggest saving enough money for six months of mortgage payments, as well as a minimum of 3.5 percent of the purchase price to cover the down payment and closing costs. First-time and repeat homebuyers should also establish reserves for less visible expenses, such as closing costs, moving costs, home repairs, renovations and planned upgrades when saving for a home.

• Avoid making major purchases. When preparing to buy a home, it’s important to stay away from big-ticket items, such as purchasing a car, in order to keep your cash reserves high and show the lender that you’ll be able to service the mortgage debt more easily.

• Understand the micro-local real estate market. Homebuyers can save themselves money by watching the seasonal trends in their targeted area(s) and being financially prepared to make an offer when the time is right.

• Consult a real estate professional. Long before you are ready to buy, seek out and interview up to three real estate professionals who can prepare you to face the market by addressing questions, setting realistic expectations and providing valuable insight and expertise to the complex process of home purchasing. Heithaus advises that “This is no time to ‘go it alone,’ and an expert real estate professional can help navigate you through a successful purchase.

The tips above were provided with support by MRIS customers Teresa Tolson, Teri Deane , Colleen Minahan , and Debbie McKeen. Article reprinted from RISMedia: