Sunday, April 24, 2011

Trends show promise for new-home market

Metro Phoenix's surge in home sales during March even gave the more expensive new-home market a little boost.

Both new-home sales and building permits increased last month, according to the "Phoenix Housing Market Letter." The gains aren't huge but are an improvement over several dismal months of sales.

Last month, there were 645 new-home construction permits issued in the region, compared with 435 in February and 358 in January.

During March, 581 new homes sold in the Phoenix area, compared with 433 in February.

The uptick could continue based on contracts written for new-home purchases, the best leading indicator for the homebuilding market. The Housing Market Letter, published by real-estate analysts RL Brown and Greg Burger, reports 766 new-home contracts in March, compared with 653 in February.

Investors looking for deals on short sales and foreclosure resales continue to dominate the existing-home market in Phoenix. But first-time buyers are homebuilders' top customers now. Research from Brown and Burger shows nearly three-fourths of all new homes in the region are being purchased by first-time buyers using Federal Housing Administration loans.

Fannie Mae incentive

This incentive won't affect the housing market like last year's homebuyer tax incentive, but it could entice more buyers to purchase foreclosure homes. Mortgage giant and government entity Fannie Mae is offering to cover 3.5 percent of closing costs for homebuyers who close before June 30. The catch is that the homes have to be foreclosure properties that are part of Fannie's HomePath program, but there are some great deals to be found in that inventory.

Buyers who are eligible for the HomePath program are offered low-down-payment mortgages and can skip mortgage insurance and appraisal requirements.

Shopping in the Valley

Potential homebuyers are definitely shopping in the Valley. New data from shows metro Phoenix is the fifth-most-popular area in the nation for homebuyer searches. Chicago is No. 1, followed by Detroit, then Los Angeles and Las Vegas at No. 4. Tucson was listed at No. 82.

by Catherine Reagor The Arizona Republic Apr. 20, 2011 12:00 AM

Trends show promise for new-home market

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