The predictions may sound dire, but the forward-looking indicators are falling in line. Mortgage applications have been falling for the past month. Applications to purchase a home are down 28 percent in the past month and up only 4.5 percent from a year ago. They should be up far higher, given that prices and demand are rising so fast. Signed contracts to buy existing homes jumped unexpectedly to a six-year high in May as rates started to rise; there’s your rush.

At a brokers open house in Northern Virginia this week, real estate agents said they are already seeing the effects of higher rates on the ground and in the homes they’re trying to sell.

(Read More: Apartments Reap Rewards of Rising Rates)

“It has gotten a lot quieter, which is a shame because historically the rates are still very low,” said Ruth Griel with Prosperity Mortgage.

“It’s having a kind of chilling effect on the market,” said Mark Beardsley, a Realtor with Long and Foster. “What’s happening is we are pricing down. If they were qualified for 600, now we’re looking at 550 and below.”

Mortgage rates going from 3.5 to 5 percent is roughly a 15 to 20 percent decrease in what the average buyer can afford. They can move to different loan products, like an adjustable rate loan, but ARMs are harder to qualify for and require far more documentation.

Article source: http://www.cnbc.com/id/100876300

The predictions may sound dire, but the forward-looking indicators are falling in line. Mortgage applications have been falling for the past month. Applications to purchase a home are down 28 percent in the past month and up only 4.5 percent from a year ago. They should be up far higher, given that prices and demand are rising so fast. Signed contracts to buy existing homes jumped unexpectedly to a six-year high in May as rates started to rise; there’s your rush.

At a brokers open house in Northern Virginia this week, real estate agents said they are already seeing the effects of higher rates on the ground and in the homes they’re trying to sell.

(Read More: Apartments Reap Rewards of Rising Rates)

“It has gotten a lot quieter, which is a shame because historically the rates are still very low,” said Ruth Griel with Prosperity Mortgage.

“It’s having a kind of chilling effect on the market,” said Mark Beardsley, a Realtor with Long and Foster. “What’s happening is we are pricing down. If they were qualified for 600, now we’re looking at 550 and below.”

Mortgage rates going from 3.5 to 5 percent is roughly a 15 to 20 percent decrease in what the average buyer can afford. They can move to different loan products, like an adjustable rate loan, but ARMs are harder to qualify for and require far more documentation.

Article source: http://www.cnbc.com/id/100876300

The predictions may sound dire, but the forward-looking indicators are falling in line. Mortgage applications have been falling for the past month. Applications to purchase a home are down 28 percent in the past month and up only 4.5 percent from a year ago. They should be up far higher, given that prices and demand are rising so fast. Signed contracts to buy existing homes jumped unexpectedly to a six-year high in May as rates started to rise; there’s your rush.

At a brokers open house in Northern Virginia this week, real estate agents said they are already seeing the effects of higher rates on the ground and in the homes they’re trying to sell.

(Read More: Apartments Reap Rewards of Rising Rates)

“It has gotten a lot quieter, which is a shame because historically the rates are still very low,” said Ruth Griel with Prosperity Mortgage.

“It’s having a kind of chilling effect on the market,” said Mark Beardsley, a Realtor with Long and Foster. “What’s happening is we are pricing down. If they were qualified for 600, now we’re looking at 550 and below.”

Mortgage rates going from 3.5 to 5 percent is roughly a 15 to 20 percent decrease in what the average buyer can afford. They can move to different loan products, like an adjustable rate loan, but ARMs are harder to qualify for and require far more documentation.

Article source: http://www.cnbc.com/id/100876300

“Rapid price appreciation is not good news for home buyers,” said Lawrence Yun, chief economist for the NAR. “Wages are up just 2-3 percent, while prices are rising 4-5 times that.”

(Read More: Home Resales Hit 3-Year High but Miss Forecasts)

With the increase in supplies came a return of all-cash investors, who had been moving out of the market, causing sales of homes on the low end to plummet. Investors made up 22 percent of home buyers in February, according to the Realtors, up from 19 percent in January. All-cash sales hit 32 percent, up from 28 percent, and distressed home sales also increased to 25 percent of all sales, from 23 percent.

Low inventory has kept first-time home buyers, who largely seek lower-priced homes, out of the market. Newlyweds Brian and Ali Earle have been looking for a home in Northern Virginia for almost a year.

“There’s not a lot out there,” Brian said. “It’s actually amazing. We see houses go under contract in a day or two, and so we really have to be on top of the game and be willing to drop everything and run and go check out a house, or it’ll be gone.”

Article source: http://www.cnbc.com/id/100577800

“Industry tailwinds look to be gaining steam, but we believe Toll has one very large impediment to cross: The sequester,” said housing analyst Stephen East at ISI Group. “With a large portion of its sales in the Mid-Atlantic area, the next few months order streams will be extremely important as the sequester knife is falling hard on well-paying defense industry jobs.”

Sequestration could even slow the improvement in the nation’s foreclosure rate. It would result in 75,000 fewer households receiving foreclosure prevention, pre-purchase, rental or other counseling through HUD grants, according to the government agency.

(Read More: The Inside Story of America’s Economic Crisis)

“This counseling is crucial for middle class and other families who have been harmed by the housing crisis from which we are still recovering, and are trying to prevent foreclosure, refinance their mortgages, avoid housing scams, and find quality, affordable housing,” said Secretary Donovan. “Studies show that housing counseling plays a crucial role in those two efforts. Distressed households who receive counseling are more likely to avoid foreclosure, while families who receive counseling before they purchase a home are less likely to become delinquent on their mortgages.”

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100474955

The 2012 Home Listing Report compares the average home listing price of more than 72,000 four-bedroom, two-bathroom properties listed on coldwellbanker.com between January and June 2012.

Of the 48 markets surveyed in Virginia, Arlington topped the list. Here, the average price of a four-bedroom, two-bathroom home was $678,486. Northern Virginia certainly isn’t a stranger to high home prices. Vienna, Alexandria, Ashburn and Fairfax rounded out the top five in the Coldwell Banker report.

On the other end of the spectrum, Danville was ranked most affordable in Virginia. There, the average price of a comparable home was $153,957.

Nationally, the five most expensive markets were all in California — four in the San Francisco Bay area. Los Altos, Calif., is the most expensive market in the country, according to the report. The average listing there? $1,706,688.

Of 2,479 markets surveyed nationally, Arlington ranked 85th most expensive.

The most affordable market in the country is Redford, Mich., where a comparable piece of property goes for $60,490.

The average listing price of a four-bedroom, two-bathroom home in the United States is $292,152, according to the report.

Coastal states are home to the majority of the country’s most expensive markets, the report states.

Article source: http://arlington-va.patch.com/articles/report-arlington-real-estate-market-the-most-expensive-in-virginia