New home sales expected to rise 2.6 pct

First-time buyers are taking advantage of low mortgage rates, discounted prices and a tax credit of up to $8,000 if the deal is completed by the end of November. That's provided a big lift to the market, with home resales climbing more than 9 percent in September, the largest amount in more than 26 years.

To keep the housing rebound going, Congress is considering extending the tax credit through March 31 and gradually phasing it out over the rest of next year. A vote on that plan could come later this week.

Supporters can point to worrying economic data like Tuesday's report that consumer confidence fell unexpectedly in October. The Consumer Confidence Index, released by The Conference Board, sank to its second-lowest reading since May.

"If they don't extend it, then I think the pullback could be quite significant," said Brad Hunter, chief economist with Metrostudy, a real estate research firm.

Even if it does get extended, Hunter said, sales are bound to slip a bit. That's because buyers who would have bought homes early next year were enticed into making that decision sooner to take advantage of the tax incentive.

RealtyTrac: S. Fla. foreclosures fall in Q3

First, the bad news: Cities in Florida, Nevada and California accounted for the 10 highest foreclosure rates among larger metropolitan areas in the third quarter, according to RealtyTrac.

Now, the good news: Five of those areas reported decreased foreclosure activity compared to the third quarter of 2008, according to the Irvine, Calif.-based online real estate marketplace.

The Miami-Fort Lauderdale-Pompano Beach metropolitan statistical area ranked No. 15 out of 203 markets, with 53,710 properties with foreclosure filings for the quarter. That translates to one in every 45 units falling into foreclosure.

Mortgage applications continue to decrease

The number of filed mortgage loan applications decreased for the week ending Oct. 23, by 12.3 percent, according to the Mortgage Bankers Association's weekly applications survey. The association's refinance index also saw a drop of 16.2 percent week-over-week, while the percentage of refinance applications fell to 62.3 percent of the total number from 65 percent the previous week. Meanwhile, the average 30-year fixed mortgage rate increased to 5.04 percent from 5.07 percent and one-year adjustable-rate mortgages, or ARMS, decreased to 6.79 percent from 6.86 percent.

New home sales drop unexpectedly

New home sales took a surprising turn downward last month, according to newly released government figures.

The Commerce Department reported on Wednesday that new home sales fell 3.6 percent in September to a seasonally adjusted rate of 402,000 units.

In the meantime, the number of unsold new homes fell for the 29th straight month to 251,000. The supply of new homes at current sales rates remained unchanged at 7.5 months.

The median time it takes to sell a home also remained unchanged at 13 months.

The number of completed new homes for sale fell to 109,000 units.

Patrick Newport, a U.S. economist for IHS Global Insight, said September’s decline is hard to explain.

“One possibility is that inventory has fallen so low that builders do not have enough completed homes on hand, and are losing sales to the market of existing homes,” Newport said in a news release. “A second possibility is that September's reading was simply an aberration, just like the August drop in existing home sales was an aberration, and that sales will take off in October.

MBA: Home loan demand falls again

Despite a dip in interest rates, demand for new home loans continues to fall, according to the Mortgage Bankers Association.

The news is a potentially ominous sign for the housing market, which has shown signs of recovery, but faces an ongoing wave of foreclosures.

The group said its Market Composite Index, which measures loan application volumes, fell 12.3 percent in the week ended Oct. 23.

Applications to refinance also were down 16.2 percent from the previous week.

The news comes as the deadline for the first-time homebuyer tax credit looms closer.

The refinancing share of mortgage activity decreased to 62.3 percent of total applications from 65 percent the previous week. However, the adjustable-rate mortgage share of activity increased to 6.9 percent from 6.4 percent of total applications from the previous week.

The average interest rate for 30-year fixed-rate mortgages decreased to 5.04 percent from 5.07 percent, with points increasing to 1.25 from 1.13.

The average interest rate for 15-year fixed-rate mortgages increased to 4.53 percent from 4.51 percent, with points decreasing to 0.78 from 0.96.

The average interest rate for one-year ARMs decreased to 6.79 percent from 6.86 percent, with points decreasing to 0.29 from 0.31.

On Tuesday, the Case-Shiller home price index showed home prices in 20 U.S. markets, including Miami, rose in August.