Home sales prices continue to rise

CLIVE, IOWA (Feb. 13, 2014)-According to the Iowa Association of Realtors® (IAR) home sales dipped slightly in January, however home prices continued to rise. 

In the January 2014 Housing Trends Report, IAR reports that the average sale price increased by another 6 percent and the median sale price was up 3.4 percent.  The average sale price was $136,489 in January 2013 and $144,724 in January 2014.  The median went from $116,000 in January 2013 to $120,000 in January 2014.  Twenty-nine of the 44 local Realtor® boards in the state reported increases in the average sale price, and twenty-eight had increases in the median sale price. 

Sales across the state saw a decrease of 9 percent from last year at this time with 176 fewer homes being sold in January of this year.  The report shows that 1,954 homes were sold in January 2013, while 1,778 homes were sold in January 2014.  Eighteen boards saw increases in sales in their respective areas last month.  

The average days on the market (DOM) was 94 days, down 8 days or 7.8 percent from last January.  Twenty-eight of the local boards saw a decrease in DOM.  

Kathy Miller, IAR 2014 President says, “We continue to feel optimistic about the housing market given the decrease in DOM and increase in sales price.  However, being the 9^th coldest winter in the past 121 years has proven to be a hindrance on sales throughout the state. Like many Iowans, Realtors® are looking forward to warmer temperatures!”

The information used to create the IAR January 2014 Housing Trends Report was current as of February 12 at 8:07 a.m. The information is subject to change due to the dynamic nature of the IAR’s housing statistics system, which is updated hourly based on information present in local participating MLS (multiple listing service) systems. 

The term Realtor^® is a registered trademark, which identifies real estate professionals who follow a strict code of ethics as members of the National Association of Realtors^®. The Iowa Association of Realtors^® is the state’s largest real estate professional organization representing more than 6,400 members and affiliates. The IAR releases a Housing Trends Report each month. Data is collected from local Realtor^® boards through their multiple listing service (MLS), which tracks sales activities in the board area. The IAR compiles all of the local board data into the statewide report each month. Reports are available online to IAR members and affiliates with a login and password. Anyone is eligible to become an IAR affiliate. For membership information, visit www.iowarealtors.com.

First time homebuyers, receive a federal tax credit up to $2000

The Iowa Finance Authority (IFA) is pleased to announce the launch of the 2014 Take Credit! Mortgage Credit Certificate (MCC) Program. The IFA Board of Directors has approved an allocation of approximately $75 million of private activity bond volume cap to be used for issuing MCCs in calendar year 2014, which is estimated to assist 585 new home buyers through the program.    Funds will be available for reservation by Take Credit! Participating Lenders starting on February 3, 2014. At that time, funds may be reserved on behalf of qualified borrowers making new purchases. Only borrowers with a written Commitment Notice from IFA prior to closing will be eligible to receive an MCC.  2014 Take Credit Program Overview Take Credit! allows a participating home buyer to claim 30% of their mortgage interest, up to a maximum of $2,000 as a federal income tax credit each year for the life of the mortgage, up to a maximum of 30 years. Eligible financing is limited to 30-year, fixed-rate, fully amortizing mortgage loans. Applicants must meet applicable federal income limits for Iowa, which vary by county. Applicants must meet ONE of the following: be a first-time home buyer OR purchase a home in a Targeted Area OR be a military veteran. The purchase price of the home may not exceed $305,000, if located in a Targeted Area or $250,000, if located in a Non-Targeted Area. The property must be a newly financed purchase closing after the effective date of the 2014 Program. The property must be purchased as a primary residence and intended for occupancy by the applicant immediately following closing. The full 2014 Take Credit! Program Guide is now available on the IFA web site.

UIU students clean Volga River

UIU students took to the Volga River at Klock's Island Park in Fayette. They were cleaning the river banks as part of UIU's annual Fayette Appreciation Day. Two kayakers pull a county sign post out of the river.

New tax credit for Iowa home buyers

 Mortgage Credit Certificates may provide Iowa home buyers with up to $2,000 in annual federal income tax credits 

(DES MOINES) – Gov. Branstad and Lt. Gov. Reynolds were accompanied by Iowa Finance Authority Executive Director Dave Jamison today to announce that eligible Iowans can now buy a home and reduce their federal income tax liability by up to $2,000 a year for the life of their mortgage. The Take Credit! Mortgage Credit Certificate program is available as of January 1, 2013 and approximately 1,000 Iowa home buyers may benefit from the program. The program is administered by the Iowa Finance Authority, (IFA). 

“Iowa home sales are currently up by more than twelve percent over 2011, according to the Iowa Association of Realtors and today’s announcement of another resource for Iowa home buyers supports an even greater uptick in home sales, and that is good news for Iowa,” said Branstad. “The Take Credit mortgage credit certificate program will provide an added incentive for Iowans to purchase a home, which leads to a healthy, stable economy and also provide Iowa families to keep more of their hard-earned income, income that would otherwise be spent on federal income taxes.” 

After an eligible homeowner has closed a mortgage loan with an IFA Take Credit! Participating Lender, IFA will issue the homeowner a mortgage credit certificate for pre-approved applicants. The homeowner in turn may apply the credit against their federal income tax liability on an annual basis for the life of their mortgage. The credit may be claimed on IRS Form 8396. 

“Through the program, fifty percent of eligible homeowners’ mortgage interest becomes a tax credit that can deduct dollar-for-dollar from federal income tax liability,” said Reynolds. “For example, a family with a $70,000 four percent fixed interest, thirty year mortgage would receive a tax credit of $1,388.78 in the first full year of homeownership. I encourage Iowans to look into this valuable resource provided by the Iowa Finance Authority.” 

Eligible home buyers must be approved for a mortgage and meet federal requirements, including income limits, maximum home sale price, limited prior homeownership interest and purchasing the home as a primary residence. More information including a Participating Lender list and eligibility quick check tool are available at IowaFinanceAuthority.gov. 

3.8% real estate tax won't affect most

Beginning January 1, 2013, a new 3.8 percent tax on some investment income

will take effect. Since this new tax will affect some real estate transactions, it is

important for sellers. to clearly understand the tax and how it could impact their sale. It’s a complicated tax, passed by Congress in 2010 with the intent of generating

an estimated $210 billion to help fund President Barack Obama’s health care

and Medicare overhaul plans.

Understand that this tax WILL NOT be imposed on all real estate transactions,

a common misconception. Rather, when the legislation becomes effective in 2013,

it may impose a 3.8% tax on some (but not all) income from interest, dividends,

rents (less expenses) and capital gains (less capital losses). The tax will fall only

on individuals with an adjusted gross income (AGI) above $200,000 and couples

filing a joint return with more than $250,000 AGI. Most people are not in this category. However, the capital gain on the sale of real estate will be added to your AGI. If you have a large gain on the sale of your real estate, it could push you up into the higher category.

This new tax was never introduced, discussed or reviewed until just hours before the final debate on the massive health care legislation. That legislation was enacted on March 23, 2010, more than a year after the health care debate began. This new tax was put forward after Congress was unable to agree on changes to current law that were sufficient to pay for the proposed changes to the Medicare program and increased subsidies to individuals and businesses. The new tax raises more than $210 billion (over 10 years), representing more than half of the total new expenditures in the health care reform package. NAR expressed its strongest possible objections, but the legislation passed on a largely party line vote. The new tax is sometimes called a “Medicare tax” because the proceeds from it are to be dedicated to the Medicare Trust Fund. That Fund will run dry in only a few more years, so this tax is a means of extending its life.

A second new tax, also dedicated to Medicare funding, is imposed on the so-called “earned” income of higher income individuals. This earned income tax has a much lower rate of 0.9% (0.009). This additional or alternative tax is based on adjusted gross income thresholds of $200,000 for an individual and $250,000 on a joint return. Like the 3.8% tax, this 0.9% tax is imposed only on the excess of earned income above the threshold amounts. 

Another way of thinking about these new taxes is to think of the 3.8% tax as being imposed on a portion of the money that you make on your money — your capital (sometimes referred to as “unearned income”). The 0.9% tax is imposed on a portion of the money you make on your labor — your salary, wages, commission and similar income related to earning a livelihood.

8 steps to speedy credit score repair

Use credit cards properly and correct information reported to credit bureaus

If your credit score is 760 or above, move on, you're already getting the best interest rates. Anywhere below that, however, read on and improve your score.

1. Get a credit card if you don't have one.

Having and using a credit card or two can build your scores. Look for a card that reports to all three bureaus: Equifax, Experian and TransUnion. If you don't qualify for a regular credit card, consider a secured credit card, where the issuing bank gives you a credit line equal to your deposit. 

2. Add an installment loan.

You'll get the fastest improvement in your credit scores by also showing you're responsible with installment loans (personal, auto, mortgage, student). If you don't have any, add a small personal loan to pay back over time. Make sure it's reported to all three bureaus.

3. Pay down your credit cards.

Lenders like to see a big gap between the credit you're using and your available limits. Getting your balance below 30% of the credit limit on each card helps; getting balances below 10% is better. Pay down the cards closest to their limits 1st, rather than the highest rate cards.

4. Use your credit cards lightly.

Big balances can hurt your scores, even if you pay your bills in full each month. Spread the load around among your cards, and pay balances before the closing date to reduce the amounts reported to the credit bureaus.

5. Check your limits.

Your lenders might be showing a lower limit than you actually have, which will lower your scores. Your credit card issuers will update the information when you ask them.

6. Dust off an old card.

The older your credit history, the better. But if you don't use a card, it won't be weighted as heavily in the credit score formula. Charge a recurring bill to an old card or use it once per month.

7. Cash in some good-will.

If you've been a good customer, a lender might agree to erase that one late payment from your history. Ask for it in writing. For a more troubled account, ask that it be re-aged, which erases previous delinquencies once you've made a year of on-time payments.

8. Pick your battles.

Here's what's worth correcting:

- Late payments, charge-offs and collections that aren't yours.

- Credit limits reported as lower than they actually are.

- Accounts listed as "settled", "paid derogatory," "paid charge-off," or anything other than "current" or "paid as agreed."

- Accounts that still are listed as unpaid that were included in a bankruptcy.

- Negative items older than 7 years (10 in the case of bankruptcy) that should have automatically fallen off your credit reports.

Mortgage Rates Sink to New Lows Again

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 28, 2012

Mortgage rates were back to breaking records for the second consecutive week. All mortgage products, except for the 5-year adjustable-rate mortgage, averaged a new record low, Freddie Mac reports in its weekly mortgage market survey.

For those who can qualify, the low rates are helping to keep home buyer affordability high and refinancing strong, Freddie Mac reports. 

"Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve's purchases of mortgage securities, and should support an already improving housing market,” says Frank Nothaft, Freddie Mac’s chief economist.

The Fed recently announced it would purchase $40 billion in mortgage-backed securities every month until the economy shows more improvement. The move is expected to send rates lower. 

Here’s a closer look for the national average rates for the week ending Sept. 27:

• 30-year fixed-rate mortgages: averaged a new record low of 3.40 percent this week, with an average 0.6 point, dropping from last week’s previous record low of 3.49 percent. A year ago at this time, 30-year rates averaged 4.01 percent. 
• 15-year fixed-rate mortgages: averaged a new low of 2.73 percent, with an average 0.6 point, dropping from last week’s previous record low of 2.77 percent. A year ago, 15-year rates averaged 3.28 percent. 
• 5-year adjustable-rate mortgages: averaged 2.71 percent, with an average 0.6 point, dropping from last week’s 2.76 percent average. Last year at this time, 5-year ARMs averaged 3.02 percent. 
• 1-year ARMs: averaged a new low of 2.60 percent this week, with an average 0.4 point, dropping from last week’s 2.61 percent average. A year ago, 1-year ARMs averaged 2.83 percent. 

Source: Freddie Mac