U.S. Economy
Sales of new homes plunged in August by the largest amount in nine months as the nation's housing industry continued to flash mixed signals about whether the boom is starting to fade. The Commerce Department reported that new-home sales declined by 9.9 percent last month to a seasonally adjusted annual rate of 1.24 million units. Even with the slowdown in sales, the median sales price rose 2.5 percent from July, to $220,300.
The bigger-than-expected drop in new home sales could be an indication that the nation's housing market is beginning to slow, but reports so far are mixed. On Monday, the National Association of Realtors® (NAR) said sales of previously owned homes rose by 2 percent in August to 7.29 million units, the second-highest level on record. The 9.9 percent decline in new-home sales was more than double what analysts had been expecting. The government also revised the July sales pace lower, to an annual rate of 1.37 million units, still a 5.3 percent increase from June. The decline in sales in August was the biggest drop since a 10 percent fall in November 2004.
Some economists think that rising mortgage rates are finally starting to affect the housing market. They are still forecasting that sales this year will set all-time highs, the fifth straight year that sales of both new and existing homes will have set records.
Real Estate Watch
Industry Raises Nearly $12M for Hurricane ReliefThe real estate industry has responded swiftly and generously to the devastation caused by Hurricane Katrina, contributing close to $12 million in cash donations toward relief efforts over the past month. That estimate doesn't include countless volunteer hours and donations of shelter and supplies made by real estate professionals, companies, and REALTOR® associations throughout the country.
Perhaps because those who work in the real estate industry so keenly understand the vast rebuilding required of neighborhoods and professional lives, they have reached out in extraordinary ways to those in need. Many opened their wallets and contributed directly to the American Red Cross, Salvation Army, or the REALTORS® Relief Foundation, administered by the NAR. Others helped by holding unique fund-raisers, such as a hot-air balloon ride raffle, or by turning their office into a drop-off site for Hurricane Katrina food drives. Although it’s impossible to fully tabulate all money raised by members of the real estate industry, a tally of published donations shows that the amount exceeds $11.7 million. The figure is even greater when you add in the volunteer hours and non-money donations contributed by real estate professionals to date.
Sources: Washington Post, Realtor Magazine Online, Associated Press
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