Real Estate Industry News

Fannie and Freddie Set Timeline Requirements for Short Sales

Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines recently that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.

Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).

Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.

The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.

According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale.  All decisions must be made within 60 days.

In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days.  The servicer must then respond within 10 business days of receiving the borrower’s response.

The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.

Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.

“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales.  ”There is no question that this will help short sales and the market as a whole.”

Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009.  Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.

By: Carrie Bay, www.dsnews.com

Real Estate Industry News

Vacation Homes Beckon to Bargain Shoppers

Splurging on a vacation home shortly after the housing market meltdown was not an easy decision for Kathy and Dan Nikolai.

The couple, who live in California’s San Fernando Valley, wanted a nearby escape that would accommodate their teenage son’s busy schedule and allow the family to ski in the winter and to enjoy water sports in the summer.

But even after they found what they wanted — a lakefront property about two hours’ drive away — they spent a lot of time revisiting the Big Bear Lake home online and in person before they took the plunge.  The timing finally seemed right.

“We believe the market for prime real estate has settled enough that the house would retain its value,” Kathy Nikolai said.  And with the overall economy improving, “We felt like we were in a financial position to do so.”

Buyers like the Nikolais are returning to the U.S. vacation home market in large numbers.  Second-home sales soared in 2011 to their highest level since 2005, to 1.72 million homes sold, according to a survey done in March by National Association of Realtors.  Investment-home sales surged 64.5 percent over 2010 levels, while vacation-home sales rose 7 percent.  Half of investment-home buyers plan to make another purchase within two years, while one-third of vacation-home buyers do.

Miami’s red-hot luxury sector saw prices rise 19 percent year-over-year in December, according to real estate consultancy Knight Frank.  Transactions in posh ski resort Aspen climbed 25 percent last year.  Even in Phoenix, where the real estate bubble burst dramatically with price declines of 70 percent over the last six years, inventories have begun to tighten.

Anecdotally, brokers report more traffic than they have seen in years.  ”There’s a confidence now that we’ve been through the worst,” said Paul Suding, president of the Santa Barbara Association of Realtors.  ”People are ready to buy again.”

In fact, added Allison Turk, an agent with Miami Beach’s Esslinger Wooten Maxwell Realtors, “Buyers feel a sense of urgency to get into this market.”

A Strong Buyers’ Market

Consumers are taking advantage of bargain-basement prices, desperation sales of distressed properties and anxious sellers to snag dream vacation properties.  ”Affordability is at an all-time high,” said housing economist Celia Chen of Moody’s Analytics.

But this new round of vacation home purchases looks different from ones that occurred during the height of the real estate bubble.  Now, despite record-low interest rates, more second-home buyers are using cash.  Cash purchases were up for the second straight year in 2011, making up half of investment-home sales and 42 percent of vacation-home sales, according to the NAR study.

Those buyers should not be expecting to flip their vacation homes for outsized profits anytime soon, said Chen.  She suggests that prices may continue to drop in 2012, but will start to crawl up slowly in 2013 or 2014.

Vacation home shoppers who have the money and are willing to stay put for at least a few years may find 2012 to be the year of opportunity.  Here’s why.

The median vacation-home price in 2011 was $121,300, down 40 percent from 2006, according to NAR.  Distressed properties — those in foreclosures or short sales — are continuing to come on to the market in many resort communities.  Sellers, fed up with waiting for prices to rise, are often willing to deal.

Many properties that were once attainable only by the very wealthy are now in range for the merely well-heeled.  In Vail, Colorado, for example, a four-bedroom property listed at $2.8 million in 2009 recently sold for $1.35 million.

The same applies to less-expensive homes.  A four-bedroom home in South Lake Tahoe, California, changed hands in early March for $540,000, after having sold for $875,000 in 2004.  Two other popular second-home destinations, Las Vegas and Tampa, Florida, saw average home prices hit new lows in December, according to the Standard & Poor’s/Case-Shiller index.

Then there are the mortgage deals.  For buyers who do not want to pay cash, today’s cheap financing may be too good to pass up.  Getting a good low rate on a mortgage can lower monthly payments more than shaving some money off the purchase price, said Arthur Welch, a Phoenix real estate agent.

Financing still remains hard to get for those without impeccable credit.  Homeowners with second mortgages are almost twice as likely to be “underwater,” according to mortgage tracker CoreLogic, and many banks have moved to tighten borrowing standards.  Lenders today frequently ask for 25 to 35 percent down, brokers report, and the median down payment for second-home buyers was 27 percent in 2011, said the NAR.

Furthermore, Washington plans for post-election tax legislation threatens the deductions for mortgage interest paid for second homes.

You Can Rent to Own

The typical vacation-home buyer in 2011 was 50 years old, according to the NAR data.  About one-third of the people who buy vacation homes plan to use them as a primary residence in the future, usually after retirement.

To make some money while they wait for that move, many buyers plan to rent out their new properties, said Andy Twisdale, a real estate agent in Hilton Head, South Carolina.  Brokers generally have a rule of thumb: a week of peak rental income should cover a month of mortgage expenses.

“People forget a second home has most of the same expenses as a first one, but add in travel,” says Scott Kaminsky, a certified financial planner in Philadelphia.  ”You have to plan for the worst-case scenario and be sure you can pay for it.”  Those worst-case scenarios can include damage from floods, snows and renters.  Vacation homes also can come with higher landscaping, maintenance, security and condominium association costs, and rental agents can charge as much as 20 percent to manage the property when the owners are away.

There are some tax breaks for vacation homeowners who rent out their properties.  The rules are complex, so homebuyers might also budget for a good accountant.  Generally, homeowners can offset their taxable rental income with deductions for their expenses.

Investment profits and taxes are rarely top-of-mind for most vacation-home buyers today.  Roughly 80 percent of them, like the Nikolais, just want to have fun.  ”They want to be close by, to be able to go for a weekend or easily take care of any maintenance issues that come up,” says Walter Molony, a spokesman for the Realtors’ group.

History says prices are likely to rise.  By not acting now, certain buyers run the risk of being priced out down the road.  Indeed, said Suding, some are already asking, “Wait, did we miss it?”

By: Kathleen Kingsbury, www.reuters.com

Chicago real estate entrepreneurs built city’s largest brokerage firm and fastest growing firm on the North Shore with innovative marketing, training and community service

Chicago, Illinois (PRWEB) May 03, 2012

Chicago real estate brokerage firm @properties today announced that company co-founders Michael Golden and Thaddeus Wong were named finalists in the Ernst & Young Entrepreneur Of The Year® 2012 program in the Midwest.

The award recognizes outstanding entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance and commitment to their communities. Golden and Wong were selected from a large pool of nominations by a panel of independent judges. Awards will be presented at a special gala on June 21 at the Hilton Chicago Hotel.

@properties was established in 2000, and has grown to become the largest real estate firm in the city and the second largest and fastest-growing brokerage firm on the North Shore. Despite the challenging Chicago real estate market of the past four years, the company has thrived and expanded by differentiating its service to brokers and clients through innovative marketing and professional development.

“We’re honored to be among the Midwest finalists for the Ernst & Young Entrepreneur of the Year® award. It is one of the most prestigious awards an entrepreneur can receive, and it’s an honor to be among such an impressive list of companies,” said Golden.

Now in its 26th year, the Entrepreneur Of The Year Program has expanded to recognize business leaders in more than 140 cities in more than 50 countries throughout the world.

Following the gala, regional award winners are eligible for consideration for the Ernst & Young National Entrepreneur Of The Year Program. Award winners in several national categories, as well as the Ernst & Young National Entrepreneur Of The Year Overall Award winner, will be announced at the annual awards gala in Palm Springs, California, on November 17, 2012. The awards are the culminating event of the Ernst & Young Strategic Growth Forum, the nation’s most prestigious gathering of high-growth, market-leading companies.

Sponsors
Founded and produced by Ernst & Young LLP, the Entrepreneur Of The Year Awards are nationally sponsored in the United States by SAP America and the Ewing Marion Kauffman Foundation.

In the Midwest region, sponsors include ManpowerGroup, Winston & Strawn LLP, Benefitdecisions, PNC Bank, Smart Business magazine and Becker Professional Education. Locally, the program is sponsored by the Chicagoland Entrepreneurial Center, WBBM Newsradio 780 and 105.9 FM and MK Communications.

About @properties
Established in 2000, @properties is the #1 real estate brokerage firm in Chicago and the fastest growing brokerage firm on the North Shore. @properties is also Chicago’s development sales leader having marketed more than 150 projects comprising more than 5,000 residential units valued in excess of $2 billion. The company has nine Chicago real estate offices: Bucktown, Lakeview, Lincoln Park, River North, Streeterville, Evanston, Winnetka, Lake Forest and (opening soon) Highland Park. For more information, visit http://www.atproperties.com.

About Ernst & Young Entrepreneur Of The Year®
Ernst & Young Entrepreneur Of The Year is the world’s most prestigious business award for entrepreneurs. The unique award makes a difference through the way it encourages entrepreneurial activity among those with potential, and recognizes the contribution of people who inspire others with their vision, leadership and achievement. As the first and only truly global award of its kind, Entrepreneur Of The Year celebrates those who are building and leading successful, growing and dynamic businesses, recognizing them through regional, national and global awards programs in more than 140 cities in more than 50 countries.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit http://www.ey.com.

This news release has been issued by Ernst & Young LLP, a US client-serving member firm of Ernst & Young Global Limited.

http://www.virtual-strategy.com/2012/05/03/michael-golden-and-thaddeus-wong-chicago-real-estate-firm-properties-named-ernst-young-en?page=0,0

Money Market Recap and Forecast

MMRecap for May 14

Last Monday looked like a “no news” day until the results of elections in France and Greece were reported.  Nicolas Sarkozy is out as president of France and Francois Hollande is in; that creates a problem.  Hollande is against the implementation of the austerity measures put in place in April to deal with Europe’s debt problems.

Greece also jumped ship regarding the belt-tightening plan.  The Greek government passed it in April, and part of the deal was that any new officials elected would have to enforce austerity measures.  Results of the recent election were split with none of the parties having anything close to a majority.  As of now, Greece might have to hold a follow-up election.

This sent stock prices down early on Tuesday, although they recovered a good percentage of their losses.  The 10-year note benefited only slightly, with the yield falling to 1.87% for a few hours.  It closed at 1.88%, the same as the previous Friday.  Yields, of course, move in the opposite direction of price.

Wall Street suffered through another horrendous day, as worries about Greece and its inability to form a coalition weighed heavily on the markets.  Greece’s center-to-right-wing party failed to form a coalition after last week’s elections, so the anti-austerity parties now have three days to accomplish that feat.  If they fail, new elections will be held in mid-June.  In addition, there is growing concern that Greece may be forced to leave the eurozone.

The Dow Jones was down almost 200 points at one point but recovered and ended only 76 points in the red.  On the other hand, Treasuries had a good day, with the 10-year yield dropping to 1.84%.

Wednesday began as a repeat performance.  Stocks fell 1% or more shortly after the markets opened.  Strong buying in Treasuries sent the 10-year yield down to 1.80%.  After a few hours stocks rebounded, giving up half of their losses.  The 10-year yield climbed back to 1.84%, where it closed.

The report on wholesale inventories for March went unnoticed.  They rose 0.3% versus 0.9% in February.  An increase of 0.6% was expected.  This was an unfortunate week to have so few economic reports as there was nothing to distract the U.S. markets from the problems in Europe.

Spain held an auction of 10-year notes, and the yield topped 6% for the first time in two weeks.  In addition, Greece has yet to gather a coalition.  There are questions regarding the feasibility of accomplishing this.  Worse yet, can Greece qualify for the next round of bailout money?  In the afternoon the Dow hit a rough patch and closed down by almost 100 points.

After a three-day drought of economic news, first-time claims for the week ended May 5 showed a decline of 1,000 to 367,000.  Although claims were a little higher than expected, it was positive news.  The more accurate four-week average fell by 5,250 claims to 379,000.  Treasuries sold as stocks climbed.  This pushed the 10-year yield back up.

The takeaway from this week is that mortgage rates have fallen to record lows, according to a Freddie Mac release.  However, the same problems exist, with Greece still unable to pull together a coalition government and Spain continuing to sell bonds with yields higher than 6%.

Thursday’s other reports focused on trade and did not affect the markets.  The U.S, trade deficit in March expanded to $51.8 billion, but that was lower than expected.  The price indices on foreign trade in April were down from the previous month.  Import prices (excluding oil) rose 0.1% versus 1.3% the previous month; export prices (excluding agriculture) were up 0.2% versus a 0.5% gain in March.

Thursday ended a six-day string of losses for the Dow Jones and the S&P 500.  The 10-year note yield closed at 1.88%, a couple of basis points off its high for the day.

On Friday morning stock prices plunged at opening due a report that JPMorgan Chase is due to lose $800 million by the end of the 2^ndquarter.  CEO Jamie Dimon said the loss was due to “errors,” “sloppiness” and “bad judgment.”  Even so, the financial stocks were hit hard.  No fear that the bank is in financial trouble, however; it earned $5.4 billion in the first quarter of this year.

Two encouraging economic reports led stocks into positive territory by noon.  Ten-year yields, which rose during the Wall Street sell-off, dipped a little but remained below Thursday’s close.

The first report showed the producer price index (PPI) dipping by -0.2% in April versus a 0.0% reading in March.  That was the largest decline since October.  The move was credited to the drop in gas prices.  The PPI looks for signs of inflation at the wholesale level.  The core rate, which excludes food and energy prices, rose 0.2% as opposed to the 0.4% reading in March.  The results signal loud and clear that inflation is not a problem in this level.

The second good piece of news came from the Thomson-Reuters/University of Michigan preliminary consumer confidence survey for April.  It jumped from 76.4 to 77.8, the highest reading since January 2008.  Declining gasoline prices were a big factor in the downward move.  The survey also revealed that current economic conditions were assessed to also be the best since January 2008.

The yield on the 10-year note closed at 1.84%

Low mortgage rates continue to bring out buyers, according to the Mortgage Bankers Association.  During the week ended May 4, requests for purchase apps rose 3.4% from the previous week, while refis were up 1.8%.

This week is much more active, with 11 economic indicators due between Tuesday and Thursday.  And as we know, market-moving news from Europe can strike at any time.

Tuesday opens with a report on retail sales.  If projections are correct, Treasury yields could dive.  Analysts expect no change in April sales, after seeing them rise 0.8% in March.  Excluding autos, sales are expected to fall 0.1% after a 0.8% gain the previous month.  This does not bode well for economic growth, since consumer spending is responsible for about 70% of GDP.

The consumer price index, which looks for inflation in retail pricing, should also be well-received by bond traders.  It is expected to come in at 0.0% for April after rising 0.3% the previous month.  The core rate — which eliminates food and energy costs — should rise 0.2% as it did in March.  Inflation is important to the bond markets because it can shrink the value of long-term fixed assets.

The NY Empire State index on manufacturing conditions, which had been edging up for the past three months, fell almost 14 points to 6.6 in April.  Manufacturing has not shown the resilience of other economic sectors of late.  There are no estimates, but it is unlikely that the index will regain its previous loss.  These regional indices impact trading — if the moves are substantial in either direction.

Last, and least, are business inventories for March and the NAHB house market index.  The homebuilders’ index should rise to 26 from 25 but has little impact on trading.  Nor do business inventories, because the results of the three main components have been released previously.

Wednesday could see stocks rise, which should boost Treasury yields.  Industrial production is expected to rise 0.7% in April, after coming in flat in March.  Capacity utilization (the percentage of factories, mines and utilities working at maximum strength) should rise to 79.1% from 78.6%.

In the afternoon, the Fed will release the minutes of its April 25 meeting.  After that meeting, it was announced that no changes in rates would be made and low rates would be kept in place through 2014.  While the Committee members agreed that the economy is improving a bit, growth is not improving enough to change the stimulus policy.  This disappointed the markets; but now that they know where the Fed stands on stimulus, the release of the minutes should not come as a surprise.

Thursday’s reports include first-time unemployment claims for the week ended May 12.  Last week a decline of only 1,000 jobs sent stock prices up.  Of course, Treasury yields rose, too.  There are no predictions available, but it appears as if it won’t take much movement either way to affect Treasuries.

The Philly Fed index for May, which carries more weight than the one from the Empire State, is predicted to rise to 11.0 from 8.5.  If on target, that would be a substantial gain, but how it would affect the markets is difficult to say.  If first-time claims are low, Treasury prices would likely be up, and this lesser manufacturing data would probably not sway trading.

The final report of the week is leading economic indicators.  This report attempts to look at the economy six to nine months down the line.  It’s expected to have edged down 0.2% in April from 0.3%.  But this indicator seldom impacts trading.

Money Market Recap and Forecast 

MMRecap for May 7

April was a good month for Treasuries.  The benchmark 10-year note yield, which moves in the opposite direction of price, closed at 2.19% on the first trading day and closed at 1.91% on the final day of April.  Continued economic problems in Europe and indicators that, for the most part, showed the U.S. economy slowing kept buying in Treasuries humming.

Last Monday was no different.  The first report showed consumer spending taking a dive.  It rose 0.3% in March, but that was down from a 0.9% increase in February.  Consumer income rose 0.4% from the previous 0.3%, while the PCE, a major inflation gauge, edged up to 0.2% from 0.1%.

That report was followed by the April Chicago PMI, which looks at manufacturing conditions in the upper Midwest.  It slid to 56.2, a 29-month low, from 62.2 in March.  Low production and a lack of new orders were responsible for the decline.  Europe’s woes keep multiplying with Spain now officially in recession and Holland and France heading that way.  These problems sent stock prices downward, but the 10-year yield held at 1.91%.

The 10-year note yield opened low on Tuesday, but a couple of good reports turned Treasury buyers into sellers, sending the yield up.  The ISM index on nationwide manufacturing rose to 54.8 in April from 53.4, with increases in the new orders and employment leading the way.  This was welcome news from the struggling manufacturing sector.  The Dow Jones responded by closing at 13,279 — its highest level since December 2007.

Construction spending rose 0.1% in March.  No biggie, except it was the first increase in three months, so it was welcome news.  A 0.5% gain had been anticipated.  The bad news is that February numbers were revised downward.  A 1.6% drop in state and local construction put that component at its lowest level since 2006.  This revision will negatively affect 1^stquarter GDP, but that could send investors to Treasuries.

Those two reports pushed the yield on the 10-year note up five basis points to close at 1.96%.

What a difference a day makes!  On Wednesday payroll processor ADP reported that a mere 119,000 jobs were added to private sector payrolls in April.  This was considerably lower than what other market analysts were saying, and stock prices plunged on the news.  The yield on the 10-year note returned to 1.91%.

The second report, factory orders for March, fell 1.5% — a big drop from February’s 1.1% increase.  But a 1.8% decline was predicted, so the results were better than expected.

Also lifting bonds and weighing on stocks are fears of a possible recession in China.  Their most recent GDP-equivalent reading was 6.2%; that sounds great, but for China any number below 6% would be akin to a negative GDP in the U.S.  In addition, the European debt crisis has moved to the front burner, and the U.S. economy can’t seem to move out of neutral.

Later in the session more positive corporate earnings lifted the Dow Jones, but not high enough to avoid a negative close.  The move, however, did impact Treasuries.  Buying eased a bit, and the 10-year yield closed at 1.92%.

First-time claims for the week ended April 28 delivered on Thursday morning.  They fell to 365,000, lower than the 375,100 expected but far fewer than the revised 392,000 claims the prior week.  That was the only good news.

The April ISM index on the service sector, which includes workers in construction, financial services, health care and hospitality industries, took a dive, falling to 53.5 from 56 in March.  Not only was this below expectations, but the index hit its lowest level since December.  This report generally doesn’t move the markets, but stock prices dropped quickly.  Oddly enough, the yield on the 10-year held.

The ISM was followed by more bad news.  First-quarter productivity slid -0.5% from a previous 1.2% increase.  Costs dipped to 2.0% from 2.7% in the 4^thquarter.  In a perfect world, costs should be lower than products produced.  But the economy hasn’t been perfect for quite some time, and equations like this can lead to inflation.

The final less-than-uplifting news came from Challenger, Gray & Christmas, an outsource firm.  It reported that planned job cuts in April rose 7.1%, which represents 40,559 jobs.  Year-to-date, planned cuts have risen 9.8%.

Stocks fell during the session, but except for the NASDAQ, losses were small.  U.S Treasuries didn’t budge.  That means the 10-year yield again closed at 1.92%.

Friday’s disappointing employment report sent the yield on the 10-year note down when the markets opened.  Only 115,000 jobs were added to nonfarm payrolls in April — way below the forecast of 160,000 jobs.  The only good news was that the unemployment rate dropped to 8.1%, and upward revisions of 53,000 jobs were made in both the February and March reports.  We were also made aware that 342,000 people dropped out of the work force.

April’s pathetic numbers could have positive implications.  If the May employment report isn’t much improved, the markets hope the Fed will reinstate additional stimulus in the form of QE3.  The timing would work, as Operation Twist expires at the end of June.

For the most part, stocks continued to sell, while buying in Treasuries picked up.  The yield on the 10-year note closed at 1.88%.

Once again, homeowners and homebuyers took out more applications to purchase than to refinance, according to the Mortgage Bankers Association.  During the week ended April 27, purchase apps increased by 3.7%, while refis edged down 0.3%.

Economic reports slow down this week after ten action-packed days of trading.  In fact, it will be Thursday until any market-moving economic news is released.  But don’t get complacent.  You never know when Europe or China will rattle the cage and wake up the bulls or the bears.

Actually, there is one report Wednesday, but it doesn’t impact the markets.  Wholesale inventories rose 0.9% in February, but there are no projections for March.  The outcome has no reflection on consumer practices, so it is almost always overlooked by investors.

On Thursday, first-time unemployment claims for the week ended April 27 will be released and, as usual, this could influence trading.  Which way?  Who knows?

Also due is the U.S. trade balance for March.  In February, the deficit narrowed by almost $4 billion.  This was the result of the U.S. cutting back on imports.  Separately, in March the import (excluding oil) and export price (excluding agriculture) indices each rose 0.5%.

Friday features a couple of reports, including the producer price index for April.  It looks for inflation at the wholesale level, but even when there are hints of rising wholesale prices the markets seem to take them in stride.  In April the PPI is expected to rise 0.1% from 0.0% the previous month.  The core rate, which excludes food and energy prices, could edge up 0.2% from 0.1%.  No inflation worries there.

The report that could influence trading is the preliminary consumer sentiment survey for May from Thomson-Reuters/University of Michigan.  It is expected to fall to 75.7 from 76.4.  That is not a big dip, but it if comes in below expectations the 10-year note yield could benefit from the news.

By Les Christie @CNNMoney May 3, 2012

Several housing experts are predicting that this year will be the last chance for homebuyers to cash in on the weak housing market.

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services (PNC, Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”

Miami saw a 4.6% increase quarter-over-quarter through April, and Tampa, Fla., was up 4.4%, according to Clear Capital.

Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.

But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

Greater demand for loans will help fuel the increase, according to Lebda.

Even though mortgage rates have been cheap, borrowing for home purchases has been sluggish. The Mortgage Bankers Association estimates that homebuyers will take out mortgage loans totaling about $415 billion this year, an increase of less than 3% compared with 2011. Next year, however, it forecasts that amount will almost double to $706 billion.

As housing markets stabilize and prices stop falling, homebuyers will be even more confident about buying, said Humphries.

“People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.” 

http://money.cnn.com/2012/05/03/real_estate/home-buying/index.htm