I hope you enjoy the following “By the Number$” summary provided by mortgage consultants Eleanor and Steve Thorne. If you or someone you know needs help with home financing, give them a call at 919.649.5057.

1) THE WHITE HOUSE AND WALL STREET - A presidential election will be held next year on 11/04/08. In the last 20 presidential elections (dating back to 1928), Democratic and Republican candidates have split the final results with each party winning 10 times . Republican victories have occurred in election years where the S&P 500 has gained +14.8% (total return) on average, while Democratic wins have taken place in years where the S&P 500 has gained +10.4% on average. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

2) ACTUAL vs. AVERAGE - The actual returns of the S&P 500 over the last 50 years ( i.e., 50 separate 1-year returns produced from 1957-2006) has fallen outside of a range defined as “plus or minus 10%” from the index’s average annual return 62% of the time (source: BTN Research).

3) OH REALLY - Former Fed Chairman Alan Greenspan predicted on Friday 9/14/07 that the Fed will have to raise rates to double-digit levels in the future to fight inflation. The last time the Fed funds rate was at least 10% was November 1984. The current rate is 4.75% after last Tuesday’s rate cut (source: USA Today, Federal Reserve).

4) WE OWE, THEY COLLECT - Fiscal year 2007 (i.e., 10/01/06 to 9/30/07) has just 1 month still to be reported. Through 11 months of the current fiscal year, the government has collected $2.3 trillion of revenue (i.e., tax receipts), an amount that is greater than the yearly revenue totals from every fiscal year in the history of the country except for 1 year (source: Treasury Department).

5) A LONG LIFE, BUT NOT THE LONGEST - The life expectancy of a new-born American baby is 77.9 years today, an increase of more than 8 years in the last 50 years. However, the USA ranks only 42nd in terms of life expectancy at birth among all countries (source: Center for Disease Control, AP).

6) AT THE END - 27% of Medicare expenses are paid during an individual’s final 1-year of life (source: USA Today).

7) I THINK IT’S MINE - The Pension Benefit Guaranty Corporation is holding $133 billion in unclaimed pension benefits on behalf of 32,000 American workers who have lost track of the retirement benefits owed to them. The largest single unclaimed benefit is $611,000 (source: Pension Benefit Guaranty Corporation).

8) A HELPING HAND - 5 out of every 6 employer-sponsored 401(k) plans has some form of employer match for the elective deferrals invested by participating employees (source: Vanguard).

9) ALL TALK, NO ACTION - More than 33 years ago, President Richard Nixon announced the following to American citizens in his January 1974 State of the Union address: “At the end of this decade, in the year 1980, the US will not be dependent on any other country for the energy we need to keep our transportation moving” (source: Association for the Study of Peak Oil and Gas – USA).

10) LESS OF OURS, MORE OF THEIRS - In the last 27 years (i.e., since 1980), the daily amount of oil produced in the USA has fallen 40% while foreign oil imports has climbed +92% (source: Department of Energy).

11) THE BILL HAS COME DUE - As adjustable rate mortgages are reset from the lower introductory rates paid in the early years of the loans, American borrowers are expected to spend $42 billion in higher mortgage payments in 2008 than they’ll spend in 2007 (source: Fortune).

12) GROSS AND NET - In the last 5 years, the gross value of real estate owned by Americans has gone up +62%. Over the same period, the outstanding debt from home mortgages has grown +79% (source: Federal Reserve).

13) FOR SALE - In March 2005, there were 2.3 million existing homes for sale . In July 2007, the number of existing homes for sale had risen to 4.6 million, or twice as many as the total from 28 months earlier (source: NAR).

14) THEN AND NOW - 52 economists surveyed in early September 2007 believe the chances of the USA falling into a recession within the next 12 months are slightly greater than 1 in 3 (36%). A different group of 56 economists surveyed in late January 2007 believed the chances of a recession occurring in 2007 were only 1 in 25 or just 4% (source: Wall Street Journal, USA Today).

15) GOLF - 31-year old Tiger Woods won the first ever PGA playoffs on 9/16/07, pocketing a $10 million deposit into a self-directed pre-tax retirement account. If Tiger was to earn +8% on the winnings until he reaches age 59 ½, the winnings would compound to $85 million. This calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

In the midst of a mortgage meltdown, the Fed cut rates today to 4.75% from 5.25%. This cut was the first since June 2003 and is being seen by many as acknowledgment from the central bank that the mortgage meltdown may have negative effects on the economy.

“The tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth,” said the Fed. According to their statement, the intend of the rate cut is to counteract some of the negative effects on economy and to promote moderate growth over time.

The federal funds rate is a lending rate that banks charge each other and is significant in that it influences the amount of interest consumers pay for various types of debt including home loans and credit cards. The cut is great news to current home owners dreading the rise of their ARMs and new home buyers who want the best rate possible.

Although the rate cut is great news, market experts caution that this doesn’t end the credit crisis.

“People should not assume that the economy’s problems are over. That would be a mistake. They are significant and they are widespread,” said Larry Smith, CIO with Third Wave Global Investors, a Greenwich, Conn.-based investment advisor with about $400 million in assets.

The Fed’s next monetary policy decision is scheduled to take occur at the end of a two-day meeting October 31st, and its last meeting of 2007 is set for December 11th. Many sources are speculating that the Fed will cut rates at least one more time before year’s end.

Following national trends, home prices for Q2 in the Wilmington area are up compared to last year while overall sales are down. In New Hanover County, 1152 homes sold between April 1 - June 30, down 23% from 2006.

Nationally home sales slid 10.8 percent; North Carolina as a whole slid just 4.5%, according to a NAR report released Wednesday. The biggest drop in sales was in Florida (41.3%) followed by Nevada (37.5%).

The median sales price in Wilmington is up 6% from Q2 2006, and the numbers are as follows:

Nationwide, 97 out of 149 metropolitan areas showed year-over-year increases in median existing single-family home prices, including nine areas with double-digit annual gains; 50 had price declines; and two were unchanged.

For specific data based on zip code, please check out the reports here.

Forbes last week reported “troubling trends” in the national housing market. The national inventory rose 5.0% at the end of May, to 4.43 million, which puts the US total inventory level at 8.9 months.

Locally, the inventory level for Wilmington (New Hanover County excluding the beaches) rose 8.0% in the last 30 days, to 2651 listings, putting the inventory level at 8.3 months. Inventory including the beaches is 10.4 months.

Home sales have weakened in part thanks to ongoing problems with subprime mortgages, according to Forbes. These mortgages, which are made for buyers with lower credit scores, have begun defaulting increasingly higher rates over the several year. Because of this, lenders have tightened mortgage requirements, which cuts off the cash needed to buy homes for large chunks of the population.

In Wilmington, we’ve noticed a slow in sales due to relocating buyers who are coming from markets softer than ours. Often we hear “I love that house and want to buy but need to wait for my home in Long Island/Ohio/Florida/etc to sell.”

And then of course there’s the 2nd home buyers. While these buyers don’t have the challenge of selling a home, they are not under a time constraint and thus are less motivated.

In short, there’s a lot of inventory out there. If you need to sell, it’s imperative to price your home UNDER market value. If you need to buy, I’m sure that last sentence made you smile.

For a second there, it looked like New Hanover County’s absorption rate jumped to over 50%. Is this an early sign of a changing market? Unfortunately no. After digging deeper, we discovered the recent hike was a reflection of increased expired and withdrawn listings rather than sales. Here are the expired and withdrawn numbers:

For details about which homes are expiring, check out the Total Market Overview (TMO™) located here.

Wilmington’s absorption rate increased to 42% in May, a 33% increase from last month! The hike in sales is consistent with increases experienced during this time in previous years- most likely due to seasonal trends. What’s exciting is our inventory level dropped to 7.7 months, a sign that our market is still as healthy as ever.

Well, activity sure feels like it’s up, especially with well-priced homes. The key for home owners is not to sell unless you have to. And if you do have to, try to be as realistic about the price of your home as possible. Look at what’s selling in your neighborhood compared to what’s sitting. If you’re not sure about the numbers, ask us!

March had a 37% absorption rate, much lower than March of previous years. What’s interesting is the absorption rate increased from February to March of this year whereas it decreased from February to March in previous years. We’re on the edge of our seats to see how April’s numbers shape up!

February had a 30% absorption rate, much lower than previous months. This signifies a strong buyers’ market with growing inventory. New Hanover County including the beaches has over 16 months of listing inventory available. When excluding the beaches, Wilmington alone has just over 13 months of inventory. This is a great time to buy!