Building permit applications dropped by 4.9% after two months of strong increases, but Burt White, chief investment officer for LPL Financial, said the disparity between the figures is likely a weather-related anomaly. Despite the volatility in housing data, the improvement points to a stronger economic backdrop. “It’s a good indication that Americans are beginning to reinvest again,” said White. “The biggest investment people make is in their homes.”

According to a national FHA mortgage company, real estate financing continues to be supported by government loan programs like FHA, VA and Home Path, to name a few. Current mortgage interest rates remain at record levels with 30-year fixed rate mortgages still available below 5%. While the consumer won’t be at the fore of this recovery, housing starts did hit their highest level in six months–an indication that consumers are becoming more confident and comfortable with spending.

L.A., Miami, Phoenix Start to Rebound?

Meanwhile 18 cities registered May-to-June price increases. Just as telling: the hard hit metro-areas registered price gains: Los Angeles, up 1.1 %; Miami, up 0.5 %; Tampa, up 0.4 %; and Phoenix, up 1.1 %. Economists says that because the California, Florida, Arizona/Nevada regions sustained the largest and most extensive home price declines, they’ll probably snap-back first and telegraph the start of the broader U.S. housing sector recovery.

Also, nationally, U.S. home prices increased 2.9 % in Q2 compared to Q1 — the first quarterly gain in two years, according to Case-Shiller data. On a seasonally adjusted basis, prices rose 1.4 % in Q2 compared to Q1.

Another data point to support the housing recovery thesis? U.S. new home sales increased in three U.S. regions in July, according to U.S. Commerce Department data. Sales surged 32 % in the Northeast, jumped 16 % in the South, and rose 1 % in the West; they fell 7.6 % in the Midwest, a region that, again, is still coping with large structural changes stemming from the U.S. auto sector’s downsizing and restructuring. 

A third metric supporting a housing rebound? Inventories of new homes fell to 271,000 in July, the Commerce Department said — a 35.4 % decline since July 2008. That’s a 7.5-month supply at the current sales rate, down from an 8.8-month supply in June. The 7.5-month supply is still above the normal three-to-five month supply, but economists and housing statisticians say the rate of inventory decline is just as important as inventory levels now. If inventories continue to drop by a 1-month supply each month, it won’t be long before home construction firms say ‘It’s time to start building some homes before our inventory gets too low and we lose sales because of lack of choice for customers.’

What’s driving the turnaround in home prices? Most economists say the federal government’s $8,000 income tax credit for first-time home buyers and comparatively low interest rates have played a role, but the large factor remains the market pricing mechanism. Home prices have dropped so much that, those home buyers with decent job security and good credit are calculating, given the slim chance of picking an absolute bottom for home prices, that now represents a decent time to purchase that home.

Housing Analysis: The $64,000 question – make that the $210,000 question, given the median price of a new U.S. home – is: should prospective home buyers purchase now?

Unless you’ve found your dream house or are otherwise forced to buy, I’d wait until late fall. Summer data typically distorts home sales to the upside, as many families move then, when school is out. The $8,000 tax credit, which applies to homes bought before November 1, also is aiding sales. In other words, prices could retrench. However, if home prices and sales continue to rise into the autumn season in your region of the U.S., that’s a sign that a housing bottom is forming, and a home purchase then would make sense, from a price standpoint.

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The real estate marketing company then utilizes a variety of marketing strategies to get in contact with motivated sellers.  Home selling prospects are pre-qualified by a detailed questionnaire and customer service representative, and only leads fitting the client’s target customer profile are delivered.  Sign up for related real estate news.  2010 is forecasted to see a significant market switch for selling and home-buying across the country.

Recent foreclosure news suggests that short sales and re-defaults from unsuccessful loan modification plans, may be misleading the severity of the foreclosure crisis in Southern California.

Los Angeles County’s median sales price of $320,000 was down 32% from December 2007, while Orange County’s median price fell 30% to $397,000. San Diego’s median price dropped 30% from December 2007, to $300,000. Ventura County’s $338,000 median December sales price was down 36% from the prior year.  Reduced sales prices drove the number of Southern California homes sold in December up by 51% over the previous year.  “It does look like the spigot is being opened a little bit, at least for low-cost home purchases,” said John Walsh, MDA DataQuick president.  The typical monthly mortgage loan payment that California homebuyers committed themselves to paying was $1,239 last month, down from a revised $1,380 for the previous month, and down from a revised $2,060 for December year ago. Read the complete LA Times article.

Declining prices put many homeowners “underwater” on their mortgage loans, owing more than their homes are worth, which makes them more likely to default.  And adding a flood of bank-owned homes to already slow markets further outstrips demand and dampens prices, creating a spiral of lower prices and higher foreclosures.  As a result, more homeowners who fall behind on their mortgage payments end up losing their homes, according to Jay Brinkman, the chief economist for the Mortgage Bankers Association.  Foreclosure news seems to arise daily as foreclosure rates rose 81% in 2008.

In California and Florida 80% of the homeowners who miss a loan payment end up in foreclosure, according to the MBA. That’s a much, higher percentage than in the past.  “The number of mortgages 30 days past due are still below what they were during the 2001 recession,” said Brinkman. But the proportion of those loans that went into foreclosure was much lower, he added – about 10%.  “Delinquency itself has become a much clearer predictor of foreclosure,” said Sharga.  If home prices keep plunging, the foreclosure scourge will likely continue.  And S&P’s chief economist, David Wyss, expects home prices to continue to decline, bottoming in early 2010 roughly 33% below their 2006 peak.

Watch this video to learn more about the real estate market reaching the low point. 

According to KMG president Jason Cardiff, “Timing the real estate market is very difficult.”  Cardiff continued, “Like the stock market, predicting the bottom can be a great way to make money quickly, but even most experts are unable to call the bottom.”  Sign up now and have the latest real estate news delivered to you as it is reported.

In a recent article, Kelly Media Group President, Jason Cardiff said, “2009 may see the housing sectors and mortgage refinance markets rebound after all.”  Cardiff continued, “The Federal Reserve showed their commitment with record low rate cuts to fight deflation and many believe the President Elect, Barrack Obama will be aggressive in an effort to stem the foreclosure mess.”  HUD continues to release new FHA loan products that offer solutions for mortgage refinancing with Hope for Homeowners and FHA Secure.  FHA continues promoting rehabilitation and home remodeling to foreclosed homebuyers with the 203k rehab loans.  FHA actually insures rehabilitation mortgages for owner-occupants and non-profit housing providers who finance the rehabilitation of an existing property or the purchase and rehabilitation of a property.