President Bush Signs Economic Recovery Act of 2008

Are you a first time home buyer on the fence deciding if you should buy a new home? Well there is now more incentive for first time buyers to purchase a new home before July 1st of next year. A $7,500 savings on your taxes that is. Today President Bush singed the “Economic Recovery Act of 2008.” This bill helps provide incentive for first time home buyers by giving them a $7,500 tax credit. It also helps foreclosure victims by making it easier to refinance with FHA loan products, and makes it easier to get financing on more expensive homes by increasing the FHA loan limits for Freddie Mac and Fannie Mae Jumbo Loans.

The $7,500 tax credit is only available to first time home buyers, or people who have not owned a home in atleast three years who make less than $75,000 if single or $150,000 if married. So, nearly all Utah first time home buyers would qualify for this tax credit. The big catch on on this “tax credit” is that if you keep the house for a long time, and gain equity, then you have to repay it; 500 a year for 15 years. If you have no equity when you sell the house you bought receiving the tax credit you don’t have to repay it. It’s really just an interest free government loan.

There is plenty of housing inventory in Utah right now and a lot of motivated sellers who are slashing prices. This winter could be a great time to get a house for way less than list price and save $7,500 on your taxes.

Utah Foreclosures More Than Double in Q2

According to Realty Trac, Foreclosures in Utah more than doubled during the second quarter. Last year at this time Utah had the lowest rate of foreclosure. During the second quarter of this year Utah ranked 14th nationally for foreclosure filings. Even though it ranks 14th as a state, the actual number of foreclosure filings is substantially below the national average. Utah had a foreclosure filing for 1 in every 226 households vs. the national average of 1 in every 171 households.

The foreclosures filings in Utah has largely increased because home values have gone down this year. People with financial difficulties last year almost always had equity in their homes, because of the rapid appreciation of real estate values. They were able to sell their homes or postpone the foreclosure by refinancing when they were no longer able to make payments. Now the majority of people facing foreclosure don’t have enough equity to pay the usual selling costs, and homes just aren’t selling very fast right now.

St. George had the worst rate of foreclosures in Utah, 1 in every 86 households. This isn’t a big surprise as its real estate market jumped the same time the Las Vegas Real Estate market did. Currently 1 in every 35 Las Vegas Homes had a foreclosure filing. The Provo/Orem Metro beat the national average, and lead northern Utah with foreclosure filings in 1 out of every 163 Utah County Homes.

For more information on National Q2 foreclosure stats visit Realty Trac Foreclosure Report

Rents in Utah are Going Way Up

We know that home sales in Utah have gone way down this year, but Utah is still growing. People have to live somewhere and according to this Deseret News article rents are going up in double digits in the major metro areas.Utah occupancy rates lead the nation, and the Salt Lake and Provo Metros average rents went up by more than 10%. The article claims that Utah rental rates are increasing partially because of increased difficulty to getmortgage loans and an increase in foreclosures. read more | digg story

Cut Your Mortgage Term in Half

Depending on your interest rate, you will pay 2-3 times your mortgage amount over the life of a 30 year fixed mortgage. The principle is simple, if you pay extra principal on your mortgage, your mortgage length and the amount of interest you pay will be drastically reduced. Most people understand that by paying extra principal early you will literally save years and tens of thousands in interest. The hard part is the discipline and motivation to actually do it.

Last week Ernst and Young honored United First Financial, U-First, as one of the Entrepreneurs of the year. Basically, they developed a software and system to help you better manage your finances and pay off your mortgage loan or other debt early. The software is apparently really easy to use and helps give the coaching and discipline needed to become truly debt free. In the uncertain financial times we’re in, people should probably learn to rely a little less on debt.

Find out more information about U-First, the Money Merger Account, and if it is right for you.

Utah Job Growth for May 2008

Job Growth is slowing in Utah, but it is still growing and unemployment is still low in Utah despite fears of recession. This is good news for the housing market as people with jobs are a lot more likely too buy real estate than those without.

read more | digg story

Utah Housing to appreciate 30% to 50% over the next five years.

According to Lawrence Yun, the chief economist for the National Association of Realtors, the housing market will improve in the Rocky Mountain region soon. He states that the housing market will improve in Utah and surrounding areas because there will be more growth here than most of the country. He said, “People are moving into the region: far more coming in than moving out. That’s always positive. That creates additional demand for housing, and anytime there’s demand for housing, that makes the market much more healthy.”

“Utah’s home prices have taken a breather in the past year, but when the fence-sitters get moving, that will change significantly…..five years from now, the market will be very healthy locally and home prices could be 30 to 50% higher than where they are now.”

1 in 25 Utah Homes predicted to be in Foreclosure.

According to the Pew Charitable Trust, 1 in 25 Utah homes are predicted to be in some stage of foreclosure during the next two years. Nearly 25% of all home loans given during Utah’s housing boom in 2005 and 2006 were given to subprime borrowers. Nationally, about 1 out of 10 subprime loans have experienced atleast the initial stages of foreclosure.

If these stats hold accurate it could have a severely negative impact on the Utah housing market and the economy. Utah’s previous high foreclosure rate was 2% in 2002. This would be double that amount.

On the positive, if Utah does receive a huge flux in the rate of foreclosures, housing prices will likely decline as inventory of available homes for sale will rise. This is also positive news for real estate investors looking for deals and ways to take advantage of distressed homeowners who may actually have equity.

Increased foreclosures further justify the recent changes the lending industry has made in required down payments and required documentation and credit status for getting mortgage loans. As many properties that are in distress are upside down with the recent decline in housing values along much of the Wasatch Front, banks will need to allow more short sales and loan modifications to reduce foreclosures.

This prediction also could prove to be completely inaccurate, and number of foreclosures will only slightly increase in Utah. All in all, this just the news of possible foreclosures in Utah gives a decrease in buyer confidence for the average potential home buyer. Buyers on the edge will not make the plunge if they believe that the value of the new property they will purchase will decline. It’s a buyers market in most of Utah, and when the interest rate is good real estate will still be a good long term investment.

Utah’s Job Growth Down - Blame it on construction and housing.

A recent article in the Deseret News gives evidence that the Utah economy and job growth is slowing. Much of this slowing is result of slow down in the construction and housing industry. Even with the slowdown, Utah is among the best nationally in job growth and low unemployment.

According to the article,

“Utah’s economy is being pulled down by this, and the first and most noted industry feeling its negative effects is construction,” he said. “The nation’s credit crunch has so negatively influenced the Utah housing market that new housing approvals over the past six months are below half of what normally is approved.”

According to the report, Utah lost 2,100 construction jobs in the past year. Knold said that Utah might easily shed 10,000 construction jobs over the next two years.

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US “Pending Home Sales” at all time low in February

An article in the Deseret News today stated that Pending Home sales were at an all time time low in the United States in February. Unlike last year, it appears that Utah is also in on the national home sale woes.

WASHINGTON — An industry group said Tuesday that pending U.S. home sales fell in February to the lowest reading since the index began, signaling the housing market distress is not yet over.

The National Association of Realtors’ seasonally adjusted index of pending sales for existing homes fell to 84.6 from January’s upwardly revised reading of 86.2. The index stood at 107.6 in February 2007.

Wall Street economists surveyed by Thomson/IFR had predicted the index would inch up to a reading of 86.3.

A reading of 100 is equal to the average level of sales activity in 2001, when the index started. The previous low was August’s reading of 85.8, recorded at the height of the credit crunch.

With house prices falling and credit continuing to tighten, many economists say the housing market is likely to worsen in the coming months, though some remain hopeful about a recovery in the second half of the year. Read More

Salt Lake City Named 15th best to “Live and Launch”

CNN Money ranked Salt Lake City, Utah as the 15th best city in which to live and launch a new business. Among there reasons were the beautiful scenery and grant programs and tax incentives for business start up. It ranked lower because Provo is growing faster. Doesn’t seem to make much sense to me, but Salt Lake is esteemed nationally to have a good economy conducive to business growth.read more | digg story