Virginia Beach Real Estate

South Hampton Roads Real Estate Area Market Report

A modest gain in the level of home sales is possible over the next couple months, and an improvement is forecast for the second half of this year as more buyers are able to access affordable mortgages, according to the latest forecast by the National Association of Realtors^®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in April, rose 6.3 percent to 88.2 from a reading of 83.0 in March. It's the highest index since last October, but remains 13.1 percent lower than April 2007 when it stood at 101.5.

Lawrence Yun, NAR chief economist, said pending sales contracts have picked up notably in areas undergoing significant price drops. "Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it's unclear if they are investors or owner-occupants," he said.

Let's take a look at the South Hampton Roads real estate market activity, including Virginia Beach, Chesapeake, Norfolk, Suffolk and Portsmouth, Smithfield and Isle of Wight for this May.

South Hampton Roads May 2008 Sales Statistics

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Market Comment

Mortgage bond prices fell pushing Virginia Beach real estate mortgage interest rates higher. Inflation fears were fanned once again by Fed Chairman Bernanke with warnings that the Fed may have to begin raising rates sooner than most analysts expected. Stronger than expected retail sales figures piled on an already battered mortgage bond market pushing bond prices lower and rates higher. Oil prices remained volatile, which continued to fan inflation fears. For the week, interest rates on government and conventional loans rose over a full discount point.

The producer price index Tuesday will be the most important event this week. Housing starts, industrial production, capacity use, and leading economic indicators data may also move the market. Expect oil and stocks to continue to factor into trading, as inflation fears remain.

LOOKING AHEAD

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Mortgage bond prices fell pushing mortgage interest rates higher. Inflation fears were fanned by Fed Chairman Bernankes comments indicating "longer-term inflation expectations have risen in recent months, which is a significant concern for the Federal Reserve." Oil prices retreated to near $122 per barrel the early portion of the week only to bounce higher Friday with prices around $138 per barrel.

For the week, Virignia Beach mortgage interest rates on government and conventional loans rose by about 1/2 of a discount point.

The consumer price index Friday will be the most important event this week. Trade data and retail sales may also move the market. Expect oil and stocks to continue to factor into trading, as inflation fears remain a concern.

LOOKING AHEAD

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FHA Frequently Asked Questions

With FHA loans becoming more popular with Virginia Beach real estate mortgage borrowers due to the increased loan amounts, declining market issues, and changing MI guidelines, I have put together some FHA FAQs to cover some questions we've received concerning Virginia Beach FHA loans.

Is there a limit on the percentage of discount points that can be charged?

Per HUD requirements, discount points, origination fees, and other such fees cannot exceed two percent.  Keep in mind, only one percent in origination can be charged.  If the two percent limit is exceeded, the variation must be based upon actual fees or costs charged to the lender to make the loan. 

Is there a minimum Credit Score requirement for Virginia Beach real estate borrowers? 

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A flat pattern in Suffolk VA real estate sales activity could continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

Let's take a look at the Suffolk VA real estate market activity for this April to see how the spring is looking so far: 

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