The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same.

              It was the highest level since October 2007.

              “Unfortunately, consumer confidence is still extremely vulnerable to a reversal, as occurred in the past two years,” survey director Richard Curtin said in a statement.

              “While their most optimistic expectation for job growth could go unfulfilled without much harm, if the recent slowdown in job growth persists in the months ahead, it could form the basis for a third retreat in confidence.”

              Half of all consumers said the economy had improved during the past year, while buying plans for vehicles and household durables also improved. The gauge of buying plans rose to 132 from 126.

              Higher income households anticipated a 2 percent income increase in the year ahead, while lower income households expected just a 0.3 percent gain.

              The survey’s barometer of current economic conditions jumped to 87.2 from 82.9, while its gauge of consumer expectations improved to 74.3 from 72.3.

              The indexes were at their highest levels since January 2008, and July 2007, respectively.

              The survey’s one-year inflation expectation eased to 3.0 percent from 3.2 percent, while the survey’s five-to-10-year inflation outlook dipped to 2.7 percent from 2.9 percent.

http://news.yahoo.com/may-consumer-sentiment-highest-more-4-years-142300756–business.html

According to the latest Legislative and Political Forum held at the Realtors 2012 Midyear Legislative Meetings and Trade Expo, housing will play a large part in deciding the outcome of the 2012 presidential election.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “We believe efforts that help creditworthy homebuyers obtain mortgage financing and allow more people to stay in their homes or avoid foreclosure through streamlined short sales are important for a housing and economic recovery.”

For the majority of Americans, their home is their largest asset and the foundation of their familial stability. Taking steps to ensure homeowners keep their homes helps those not only those owners but also home values across the nation.

Federal Reserve Governor Elizabeth Duke also commented on the need for a healthy real estate recovery. She noted that the health of housing is the strength of the overall recovery.

When would-be buyers are worried about job security they aren’t thinking of buying. When potential buyers can’t access credit they can’t buy homes.

“Unfortunately, some buyers who would like to purchase a home are unable to do so because they cannot obtain a mortgage,” said Duke. She said the tightening of credit standards is apparent in the credit scores of borrowers, noting that the median credit score of borrowers rose from 700 in 2006 to 760 in 2009, where it remains today.

Duke added that tight credit standards have made obtaining a mortgage particularly difficult for first-time home buyers, since they tend to be younger than other homebuyers, and have lower credit scores and fewer financial assets.

http://realtytimes.com/rtpages/20120521_realestateoutlook.htm

New-home sales rose 3.3 percent in April and were up 9.9 percent year-over-year, according to new Commerce Department housing data released Wednesday.

The increase in April sales activity is in line with other important housing measures that have shown continued, gradual improvement from the first quarter as more consumers look to take advantage of today’s low interest rates and affordable home prices,” says Barry Rutenberg, chairman of the National Association of Home Builders. “In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes.”

New-home sales rose the most in the Midwest, by 28.2 percent in April, and by 27.5 percent in the West. The Northeast saw new-home sales rise by 7.7 percent in April, while the South posted a 10.6 percent decline last month.

The inventory of new-homes remains historically low at a 5.1-month supply at the current sales pace. But housing experts say the record low inventories may prove an eventual boost for future housing prices.

Home prices for new-homes are up nearly 5 percent compared to a year earlier, with the median price at $235,700 from April, the Commerce Department reported.

In another optimistic sign at recovery for the housing market: The National Association of REALTORS® reported Tuesday that sales of existing homes also increased in April, rising 3.4 percent in April compared to March and increasing 10 percent year-over-year.

http://realtormag.realtor.org/daily-news/2012/05/24/new-home-sales-inch-up-optimism-builds#.T7657WJTo-A.facebook

Some analysts are finally suggesting that we may be headed for recovery.  If you have a secure job, plan to stay put and feel this is the right time for  you to buy a home, consider the following.

In most places in the country, home prices are still declining. It has  only been recently that the market picked up and it’s too soon to know if this  will result in a sustainable increase in prices.

The recent home sales in areas around California’s  Silicon Valley defy the norm. Significant job  growth in the area combined with a low inventory of good homes for sale has  resulted in multiple offers with buyers bidding the price up sometimes hundreds  of thousands of dollars over the asking price.

In other high-demand, low-inventory areas, you may find yourself bidding  against other buyers, perhaps even more than once. This doesn’t necessarily  mean that the price will be bid up significantly over the asking price. This  will vary from one listing to the next depending on property location,  condition and price.

It’s important to research the local community where you want to buy.  Find out what homes are selling for, if multiple offers are common and if listings  are selling for more than the asking price. This will help you make a realistic  offer that might be accepted when you find a home you’d really like to buy. It  helps to work with an experienced local real estate agent.

Some sellers in high-demand niche markets intentionally list their home  at a low price hoping to stimulate multiple offers. If you see such a listing  and there are a lot of buyers wanting to make offers, you will be better able  to know how high your offer would need to be to win the contest if you have  done your due diligence.

HOUSE HUNTING TIP: Whether you’re anticipating competition or not, you  should be preapproved for the mortgage you’ll need to complete the purchase  before you write an offer. In competition, this will make a big difference,  particularly if everyone else who is offering is preapproved. It also lets you  know what you can afford. And, it puts you in a good bargaining position with  the seller.

Buyers aren’t the only participants in the housing market that have  heard the news that the market has improved. Some sellers are putting their  homes on the market because they’ve been waiting for a better time to sell.  This is good news for buyers looking in low-inventory markets.

You should expect that you will have to negotiate. Many of today’s  sellers are selling for less than they paid. Even though the market has  improved a bit, sellers may be disappointed with the current market value of  their home. Be prepared to negotiate, not just the initial price, but after  inspections are completed if items come up that you hadn’t anticipated.

Include realistic contingency time frames in your purchase contract for  loan and appraisal approval if you’re applying for a mortgage. The recent  uptick in the market means that lenders are suddenly overwhelmed.

In mid-March, buyers in Oakland,   Calif., who were seeking approval  for a jumbo loan were told they could close a transaction in 21 days. Not only  could they not close in 21 days, it took more than 21 days for loan approval  due to lender backlog.

THE CLOSING: Underwriters could require that additional conditions be  met before you can be approved. Act quickly to avoid further delay.

http://lowes.inman.com/newsletter/2012/05/16/news/188001

We have had great recognition of our local public schools by buyers moving into the area.  Add our train line and convenient location near Routes 78 & 287, and our quality of life, and you have a great formula for keeping demand steady for the Somerset Hills towns.