Far Fewer Mortgage Borrowers “Deeply Under”

Far fewer mortgage borrowers ‘deeply underwater’

By Les Christie  @CNNMoney January 9, 2014: 7:13 AM ET

foreclosure las vegas underwaterLas Vegas still has more homeowners deeply underwater than any other city, leading to a lot of foreclosures.

NEW YORK (CNNMoney)

A growing number of mortgage borrowers are keeping their heads above water, according to a report from RealtyTrac.

The company reported Thursday that 9.3 million properties, or 19% of all homes with mortgages, were “deeply underwater” in December, meaning borrowers owed at least 25% more on their mortgage than the home was worth. That’s down significantly from 26% of all homes with mortgages, or 10.9 million properties, last January, RealtyTrac reported.

A recovery in home prices has certainly helped to turn around the fortunes of many homeowners. The averageU.S. home price jumped nearly 14% year-over-year through October (the latest data available), according to the S&P/Case-Shiller home price index. That has added thousands of dollars to the average home’s value.

An increase in home equity typically means fewer foreclosures, said Daren Blomquist, a spokesman for RealtyTrac. “Negative equity is the foundation that foreclosures are built on, but you need another event — a job loss or illness, for example — to trigger a foreclosure,” said Blomquist.

Related: Was my home a good investment?

The more deeply underwater borrowers are, the more likely they are to conclude that it makes little sense to continue to pay off their loans when money is tight. “It takes away their motivation to save their properties,” said Blomquist.

They also have one less financial asset to tap into should they hit a financial rough patch.

And it makes it harder to sell the home. Borrowers typically have to do a “short sale,” which is subject to the approval of their lender. If they can’t get a short sale approved, they could end up in foreclosure.

Even though far fewer people are underwater on their homes than last year, it doesn’t mean the foreclosure crisis is completely over.

Related: 5 Biggest housing market comebacks of 2013

“There are still millions of homeowners who are in such a deep hole that it will take years for them to regain their equity,” Blomquist said. “The longer these homeowners remain in a negative equity position, the more likely that foreclosure will become the path of least resistance for them.”

2014 economy will ‘return to normal’

The states with the highest percentage of deeply underwater homes in December were Nevada with 38%, Florida (34%), Illinois (32%), and Michigan (31%). Metro areas where borrowers are still struggling to get above water include Las Vegas (41%), Orlando, Fla., (36%), Detroit (35%), Tampa, Fla., (35%), Miami (33%), and Chicago (33%).

Related: Million-dollar housing markets

On the other end of the spectrum, the number of equity-rich homeowners — those with at least 50% equity in their homes — grew significantly by the end of 2013. Blomquist said the number of equity-rich homes rose to 9.1 million, or 18% of all mortgaged homes, in the last quarter of 2013 compared with 7.4 million, or 16% of homes, three months earlier.

In Hawaii, 36% or mortgage borrowers were in this equity-rich position. New York, California, Montana, and Maine also claimed a high percentages of these borrowers. To top of page

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DOW Above 16,000!!

NEW YORK (Reuters) – Shares of Boeing led the blue chip Dow index above the 16,000 level on Monday while the S&P 500 topped 1,800 for the first time in history.

Boeing Co shares gained 2 percent to $138.77 after the U.S. planemaker, at the Dubai Airshow on Sunday, announced commitments for a total of 259 of its new 777 jets. Worth about $100 billion at list prices, it is the largest combined order in Boeing’s history.

While the Nasdaq Composite was less than 20 points away from 4,000, a level it hasn’t seen since September 2000, the tech heavy index was down for the day, pressured by social media stocks including Facebook and Zulily.

The round numbers on major levels could provide some technical resistance at first, but clearing them could prompt more buying from investors eager to chase performance.

“The current technical backdrop remains positive with more evidence of a supportive rotation taking hold within the equity market,” said Robert Sluymer, analyst at RBC Capital Markets in New York.

“We would need to see evidence that negative momentum and relative performance divergences (in different sectors) are in place to conclude a correction is developing.”

Social media stocks were among the day’s top decliners with Facebook down 4.4 percent at $46.83, Twitter down 5.4 percent at $41.58 and Yelp down 5.5 percent at $66.87. Twitter got hit by a downgrade by Wunderlich Securities. Zulily Inc shares fell 3.2 percent to $36.50.

Tesla also extended losses, down 8 percent at $124.50, giving up about 22 percent for the month so far.

A number of U.S. Federal Reserve speakers offered more insights into the central bank’s stimulus. The latest was Charles Plosser, president of the Philadelphia Fed, who said improved economic and labor market conditions suggest the Fed should set a fixed dollar amount on its current bond-buying program and end the program when that amount is reached.

William Dudley, the president of the Federal Reserve Bank of New York, said on Monday that he was becoming “more hopeful” about the U.S. economy.

But with intervention from the Fed likely to keep interest rates near zero for the foreseeable future, equities are expected to continue to attract yield-seeking investors, even after the Fed begins to scale back its asset purchases.

The Dow Jones industrial average was up 61.84 points, or 0.39 percent, at 16,023.54. The Standard & Poor’s 500 Index was up 2.31 points, or 0.13 percent, at 1,800.49. The Nasdaq Composite Index was down 2.78 points, or 0.07 percent, at 3,983.19.

The S&P 500 had earlier hit 1,802.33 and the Dow touched 16,030.28, their highest levels ever. On Friday, both closed at record highs in their sixth straight week of gains.

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Why You Should Sell Your Home During the Holidays…

We all know that the upcoming holiday season will be filled with family, fun and craziness.  With trips to the stores, malls and airports, and with family coming and going…it certainly can be a hectic time.  What many homeowners do not know, is that selling your home during the holidays may be the best time of the year to attract buyers and to receive the highest possible price.  Here are some reasons why Gallagher & Gallagher suggest you list your home for sale during this time:

  • People who look at your home over the holidays are serious buyers
  • Serious buyers have fewer homes to choose from over the holidays as most sellers take their homes off the market
  • Since the supply of homes will drastically increase come January, there will be less demand for your particular home.  Less demand = less money
  • Houses show better when they are decorated over the holiday season
  • Buyers are more emotional during the holidays and tend to spend more money on getting what they want
  • Buyers have more time to look over the holidays and can come during the weekdays
  • Some buyers need to close by the end of the year for tax purposes!
  • January is traditionally a month where employers have to move, so they cannot wait until Springtime.  They have to buy now so listing your home now will capture that segment of the market
  • You are still in control of your home and can choose to delay or hold off on showings when you need to
  • You can sell now for more money and provide a way for you to delay the closing and extend your occupancy until next year
  • By selling now, you have the opportunity to be a non-contingent buyer for the next year when houses are selling for less.  You will have more opportunities to choose from

 

We wish you and your family a fun, safe and very happy holiday season!!!

 

Gallagher & Gallagher, a professional real estate team

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Five Women Worth Talking About in Rancho Santa Fe

Sitting at a traffic light in Encinitas, while the turn signal flashed on my dashboard, I had the distinct feeling that if I didn’t make that appointment, I might be missing out on a golden opportunity. That meeting just happened to be with the publisher of The Rancho Santa Fe News. Luckily, my instincts served me well.  I remember sitting with Jim Kydd discussing my column. We bounced ideas back and forth to each other, and he liked the idea and wanted to run the column, if the editor approved.

As you might have guessed, two weeks later, “Machel’s Ranch” appeared, and I’ve been sharing stories with you ever since that almost ill-fated rainstorm moment. I’ll never know what might have happened if I hadn’t made it. I do know that sometimes you can’t make up a for moment and if you miss it, it’s gone for good. Seven years in Hollywood taught me that lesson all too well.

Four years later and many things  have changed with time but there are a few constants that have stayed the same — those few women who appear regularly in my column. These women  have been making an appearance in “Machel’s Ranch” since the beginning. After really thinking about it, I figured out Rancho Santa Fe has the making of its own reality show that doesn’t have anything to do with the word “desperate.” This town is full of winners, families, moms and moguls. Only the eucalyptus trees are privy to the secret lives of some of the Ranch locals — unless you happen to be a girl with a camera and a pen and paper to document these happenings.  After four years of  “Machel’s Ranch,” I am introducing the cast of these chic women that bring verve and flavor to the inside pages of the Rancho Santa Fe News.

4th Anniversary “Around Town”

In 1999, I met Jill Sorge. Big, fat and pregnant, I wasn’t one of those beautiful skinny women that could show a bit of their mid-drift with a black pair of leggings. Due to some complications, I ended up looking more like a linebacker in a jean jumper. Needless to say I was horrified. Just when I thought fatness and loneliness had taken me down the black hole, I met Ranch resident, Jill Sorge.

A former model and soap opera actress, Jill and I hit it off immediately. Her beautiful face, and kind words of “Don’t worry, you lose the weight,” helped me see the light. Jill had had three kids and looked fabulous. If she can do it, I can, too, type attitude bonded us together for life. Jill has been appearing in this column from the beginning. From her many activities associated to Santa Fe Christian — all three of her children go there — and other events, Jill’s schedule of  running two homes in San Diego could give any of these featured reality show regulars a run for their money. A consummate friend and an amazing human being, God answered a prayer when I met Jill.

In 2001, I met Meredith MacDonald at a Gymboree class in Solana Beach. As each mom went around in the baby circle describing their day, when Meredith spoke up about her wants and needs, “I can’t wait for my baby to go to sleep and have some fun again.” You could say my ears perked up immediately. “Me, too!” I thought. Well since then, Meredith and I have had some fun times, laughs and silly moments.

With a personality like Elizabeth Taylor, you know the type that attract the attention when they enter the room, you could say being friends with Meredith was like being back in Hollywood again. Everywhere we would go felt grandiose and exciting. Always dressed glamorously with the perfect Prada bag and  her million dollar smile, Meredith MacDonald has more zest and flavor than Kyle or Kim. (If you watch these show, you will know the reference.)

In 2005, I met Krista Lafferty, while working in the newspaper publishing business. Krista is tall and has a  slender build with deep blue eyes. With  her can-do attitude, she has always been a “force to be reckoned with” in personal and professional settings. I was immediately drawn to her ambitiousness and dedication the the newspaper industry. Krista has been featured in “Machel’s Ranch” as one my closest friends and co-workers around town.

From Thyme in the Ranch lunches to our Mille Fleurs moment, Krista’s youth and vibrant attributes have added much delight to these pages and excitement along the way. At my bridal shower, I credited Krista for helping me meet my husband Robin. I was with her when we met at Mille Fleurs in 2006. And, in case you didn’t know, Krista will be getting married in September of this year, too!

In 2006, I met Karian Forsyth at Mille Fleurs with her husband Tom. I can still remember thinking, “Who is that glamorous couple out on the patio?” Well you could say that Karian and I became fast friends. From her impeccable style to her powerhouse personality, Karian Forsyth when you meet her gives you the feeling she stepped off a chartered jet from Aspen and you can’t wait to find out what’s been going on in her glamorous world.

The featured spa parties that have become one of my favorites in Rancho Santa Fe are hosted by Karian at her house in The Crosby. Rumor has it around town that she recently turned down Matchmaking reality show because her life is already filled to the brim. Karian Forsyth has been a constant since the very beginning of “Machel’s Ranch.”

In 2008, I met Elaine Gallagher at Delicias. I remember thinking, “Wow a beautiful blonde with a perfect smile, who is she?”  Well, we soon became friends. I do think I pursued Elaine you could say. Her beauty is actually second to her kind spirit and good heart-warming soul. Her stories have added heart and glamour to these pages.

As a savvy real estate agent—Gallagher & Gallagher—and a mother of a successful son that directs movies in Hollywood, Elaine makes it all look so easy, with upbeat attitude and sweet soul. I’m sure you’ve seen her zooming around town in her beautiful Black convertible Bentley. I instantly loved Elaine from day one. I am so glad we are such good friends.

 

Elaine-150x150

Elaine Gallagher is a powerhouse hitter in the Real Estate business in Southern California.  With over 25 years of local real estate experience, Elaine is the agent people trust and go to when it is time to buy or sell a home.

 

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San Diego Housing Prices Continue to Rise

Housing prices in San Diego rose 21.5 percent from August 2012 to August 2013, says the latest report from Case-Shiller. Photo: Diana McCabe
Housing prices in San Diego rose 21.5 percent from August 2012 to August 2013, says the latest report from Case-Shiller. Photo: Diana McCabe

Home prices in San Diego County continue to rise, but the pace is slowing.

The S&P Case-Shiller Home Price Index showed Tuesday that from July to August, prices grew 1.8 percent, which is down from 2 percent from June to July, and 2.8 percent from May to June.

Still, over the past 12 months San Diego County home prices have jumped the most in more than eight years. Prices rose 21.5 percent from August 2012 to August 2013, trailing just three cities in Case-Shiller’s 20-city index. San Diego beat the national average of 12.8 percent.

“That’s summer buying season,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University.

Goldman noted that prices increased in August despite the 30-year-fixed mortgage rising to 4.58 percent (they’ve since fallen to 4.13). He said the 20 percent year-over-year gain is making up for the 50 percent drop prices took in the Great Recession. Still, he said he believes the annual year-over-year increases are returning to a long-term trend of 3 percent annual growth.

“As the economy improves of course we’ll see housing prices continue to go up, but I’m not anticipating any rapid increases in the near future,” he said. “We’re returning to the mean.”

Goldman said there continues to be an inventory shortage in San Diego, keeping prices higher. But, he said, as interest rates rise, the price will compensate because people will only now be able to buy what they can afford, given today’s loan qualification restrictions.

David Blitzer, chairman of the index committee at S&P Dow Jones, said in a statement that the overall index shows that prices hit their peak in April.

“Since then home prices continued to rise, but at a slower pace each month,” he said. “This month 16 cities reported smaller gains in August compared to July. Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts.”

Las Vegas had the highest year-over-year gain on the index, a 29.2 percent jump from August to August. San Francisco and Los Angeles were the two other regions to beat San Diego’s gain.

The index works by comparing repeat-sales prices of single-family homes. In August, it reached 191.78, still below the peak of 250.34 in November 2005.

DataQuick, another home-price monitor, reported that the median price in the county September was $422,000, up 20.6 percent from the same time last year.

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San Diego Home Prices Back On the Rise (UT San Diego, October 16, 2013)

Homes in Carmel Valley, San Diego on a recent Friday.
Homes in Carmel Valley, San Diego on a recent Friday. — Hayne Palmour IV

San Diego County home prices ticked up in September after dipping slightly in August, but the number of transactions declined for the third straight month, DataQuick reported Wednesday.

The median price in the county last month was $422,000, up from $415,000 in August and $417,500 in July. Over the past 12 months, the county’s median price has risen 20.6 percent.

The number of sales, however, dropped 17.5 percent from August to September. Last month, 3,383 homes were sold in San Diego County, the first time since April there were fewer than 4,000 transactions. Still, sales were up 5.3 percent from September 2012.

The numbers show the market is leveling off, said John Walsh, president of DataQuick, a real estate tracking firm.

“We’ve seen a fairly normal downshifting in the housing market this fall,” he said in a statement. “Couple that with the rise in inventory, higher mortgage rates and the ongoing, gradual drop in purchases by investors and cash buyers and it’s no wonder prices have leveled off in recent months.”

Michael Lea, a real estate professor at San Diego State University, said the data show that San Diego’s housing market is in a long-term recovery mode.

“Distressed sales are falling, and from the standpoint of buyers a lot of the deals are gone,” he said.

Short sales comprised 14.3 percent of the market in September, down from 30.5 percent a year ago. Foreclosures were 4.4 percent of the market, down from 13.2 percent in September 2012.

Lea said the drop in distressed sales, plus the double-digit year-over-year price increases are taking some steam out of the market. Lea said a healthy annual appreciation would be 5 to 6 percent.

For non-cash buyers, borrowing is also getting more expensive.

Freddie Mac reported Oct. 10 that the average 30-year fixed mortgage rate was 4.23 percent. While that’s down slightly from last month, it’s higher than the 3.35 percent borrowers could get in May. Lea noted, however, that rates are still low by historic standards.

Separately, the Greater San Diego Association of Realtors reported that there were 6,838 active listings in September, up from 5,589 in September 2012. But inventory is still relatively low, as listings regularly exceeded 10,000 per month from the spring of 2010 through November 2011. As of Wednesday morning, there were 7,050 active listings in the county, the association reported.

In Southern California, San Bernardino County had the largest year-over-year median price increase, up 32.4 percent to $225,000.

Walsh in his statement noted that any effect on the housing market over political gridlock in Washington remains to be seen. The uncertainty would be reflected in future data.

“What’s not clear is how well the market can weather the job losses related to the federal government shutdown and the blow to consumer confidence caused by fears of a default in the national debt,” Walsh said. “Those impacts would start to show up in data released over the next couple of months.

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What Homeowners Across the US Spend on Home Improvement

How much to remodel a kitchen in Springfield? The answer greatly depends on whether the Springfield is in Arkansas, New York, Minnesota—or any of the many Springfields in the U.S.

A recent survey commissioned by Houzz, a home-remodeling and design website, shows how spending on high-end home projects can vary substantially by region. Northeasterners shell out the most on complete home and kitchen remodels; constructing a custom home is priciest in the West; and Midwesterners pay top dollar for swimming pools.

Burdge & Associates ArchitectsBEFORE: A 10,000-square-foot Malibu, Calif., house before an extensive renovation by Doug Burdge of Burdge & Associates Architects.

Manolo LangisAFTER: The facade was overhauled, while the footprint remained much the same. The project also added a guest house and outdoor living spaces.

“You can have the same house, same remodel, but two different areas in the U.S. can have very different costs,” says Adi Tatarko, co-founder and CEO at Houzz.

The findings are based on a survey taken by 106,383 registered users of Houzz’s website in mid-January to mid-February 2013. Users were asked how much they spent on materials and labor for each completed project. Edge Research, an Arlington, Va.-based market-research firm that conducted the survey, released the findings in March.

Labor costs tend to be higher in California compared with other areas because of the state’s higher cost of living, says Doug Burdge of Burdge & Associates Architects based in Malibu, Calif. “A project here could easily cost $400 per square foot while another one outside of the state could be $200,” Mr. Burdge says.

In the Midwest, Jon Kogan, founder and owner of Highgate Builders in Glencoe, Ill., says pool prices tend to be higher because there are fewer pool companies and less competition. “There are only four months when you can use it, so there are obviously less swimming pools being built,” says Mr. Kogan, adding that his company installs three or four pools a year.

The Northeast tops Houzz’s survey with the most-expensive home remodels. Homes in the area tend to be older and lack the open floor plans that are popular—but expensive to create, says John DaSilva, design principal at Polhemus Savery DaSilva Architects Builders in Chatham, Mass. “Virtually all of the major renovations that we do have the same issues. The living spaces are closed off to the light and views. The rooms are closed off from one another. They don’t reflect the way people like to live today,” he says.

Big-ticket items include installing ductwork for air-conditioning, insulation, plumbing and electrical changes, and permit costs, says Daniel Steinkoler, founder and president of Superior Home Services Inc. in Washington, D.C. “When you renovate older homes that are 80 to 100 years old, you definitely need to budget more money on the unknowns because you’ll find them,” he says.

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More Del Mar Racing, Breeder’s Cup in Sight (UT San Diego, 2013)

SACRAMENTO — Could the Breeders’ Cup drop in where the “surf meets the turf?”

Gov. Jerry Brown on Monday signed legislation that ensures an extended horse racing season at the Del Mar track and at the same time helping lure the prestigious Breeders’ Cup World Championships.

Assembly Bill 1074 puts into law a California Horse Racing Board decision to divide up dates that will become available when Hollywood Park closes down at the end of the year.

“Horse racing fans from all over Southern California have traveled to Del Mar since before Bing Crosby sang

about where the surf meets the turf,” said Assemblywoman Toni Atkins, D-San Diego, who carried the measure.

“My bill would position Del Mar to compete for the coveted Breeder’s Cup. This would be exciting for horse racing fans and a tremendous boon to our local economy.”

Del Mar was awarded new dates in the fall of 2015 that correspond with the running of the Breeders’ Cup. described as the “Super Bowl” of horse racing.

Regardless of where the Breeders’ Cup lands, the extra days will be a major benefit to the track and local businesses, according to earlier reports from the Del Mar Thoroughbred Club.

The new 2014 dates at Del Mar run Nov. 5 to Dec. 7. For 2015, the track has also been allocated an extra week in the summer, effectively doubling its racing calendar.

The Breeders’ Cup is a two-day event that features one of racing’s largest purses and is estimated to bring as much as $60 million into the local economy, according to Atkins.

The track at the Del Mar Fairgrounds has a storied history. It was founded in 1937 by a partnership that included among a number of Hollywood celebrities. Among those, Atkins said, were Bing Crosby, Pat O’Brien, Gary Cooper, Joe E. Brown, and Oliver Hardy.

The measure was supported by the Del Mar Thoroughbred Club, the California Thoroughbred Breeders Association, and Thoroughbred Owners of California.

Hollywood Park opened for racing in 1938 in Inglewood and drew some of the biggest names in the industry, including Sea Biscuit. However, the park will close to make way for a new retail and residential development. Gov. Jerry Brown on Monday signed legislation that ensures an extended horse racing season at the Del Mar track and at the same time helping lure the prestigious Breeders’ Cup World Championships.

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Home Prices Rising at Fastest Pace Since of Bubble (Wall Street Journal)

Home prices rose faster during the first seven months of 2013 than any year since 2004, the year that marked the beginning of the home-price bubble.

The S&P/Case-Shiller home price index for 20 major metro areas released Tuesday offers the latest sign of runaway price inflation earlier this year, amid short supplies of homes for sale, heavy demand, and very low mortgage rates.

Prices tend to slow down after June, but the July report showed still strong price gains. Prices rose by 1.8% from June, the largest June-to-July increase in the 14-year history of the 20-city index.

The year-to-date gains, however, are the most eye-opening. Prices in July stood 11.2% above the level of December 2012. By contrast, prices in the same period last year were up 5.8%. In 2004, prices rose by 11.3% year-to-date through July.

The Case-Shiller index tracks home prices on a three-month moving average; Tuesday’s report measured prices on home sales that were recorded in the May-to-July period, and buyers would have closed on contracts to buy those homes one or two months before then.

Rising mortgage rates could ultimately slow the pace of price gains, though the supply of homes for sale still remains quite tight in many parts of the country.

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Homes Prices Up 12.4%, Most in 7.5 Years (Associated Press, September 24, 2013)

WASHINGTON — U.S. home prices rose 12.4 percent in July compared to a year ago, the most since February 2006. An increase in sales on a limited supply of available homes drove the gains.

The Standard & Poor’s/Case-Shiller 20-city home price index reported Tuesday improved from June, when it rose 12.1 percent from a year ago. And all 20 cities posted gains in July from the previous month and compared with a year ago.

Still, the month-over-month price gains shrank in 15 cities in July compared with the previous month, indicating prices may be peaking. And the month-over-month gains in the 20-city price index have slowed for three straight months.

In San Diego County, the index showed a 20.4 percent increase from a year ago, the fourth largest increase among the 20 cities surveyed. The largest increase was in Las Vegas, where home prices soared 27.5 percent from a year earlier. San Francisco’s 24.8 percent jump was the second largest.

San Diego prices were up 2 percent from June, a continued slowing of month-to-month gains. In June, prices were up 2.8 percent from May.

The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The July figures are the latest available. They are not adjusted for seasonal variations, so the monthly gains reflect more buying activity over the summer.

Since bottoming out in March 2012, home prices have rebounded about 21 percent. They remain about 22 percent below the peak reached in July 2006.

Stan Humphries, chief economist for real estate data provider Zillow, said home price should continue to rise but at a slower pace. Mortgage rates have increased more than a full percentage point since May. And more homes are being built. That should ease supply constraints that have inflated prices in some markets.

“This ongoing moderation is good for the market overall,” Humphries said.

The housing market has been recovering over the past year, helped by steady job growth, low mortgage rates and relatively low prices.

Sales of previously occupied homes rose in August to a seasonally adjusted 5.5 million annual pace, according to the National Association of Realtors. That’s a healthy level and the highest in more than six years.

But the realtors’ group cautioned that the August pace could represent a temporary peak. The gain reflected closings and largely occurred because many buyers rushed to lock in mortgage rates in June and July before they increased further. The Realtors said buyer traffic dropped off noticeably in August, likely reflecting the higher rates.

The average rate on a 30-year fixed mortgage was 4.5 percent last week. That’s near a two-year high. It’s still low by historical standards.

Rates rose in May after Chairman Ben Bernanke suggested the Federal Reserve could slow its bond purchase program before the end of the year.

But the Fed surprised markets last week by deciding against reducing the $85-billion-a-month in bond buys, which have kept longer-term interest rates low. The Fed said a key reason for its decision was the sharp increase in mortgage rates and other interest rates.

The Fed’s decision could ease rates temporarily, although many economists expect the Fed will ultimately slow the purchases, perhaps as early as December. Rates would likely rise after that.

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