Home buyers should be prepared for a bundle of extra costs beyond the mortgage payment.

“Some people walk away from closing with a nickel and a stick of gum, and that’s probably not going to be a good idea,” says Dale Robyn Siegel, president of Circle Mortgage Group, in Harrison, N.Y.

People whose only previous experience is renting often don’t realize how costly water, heating and air conditioning, taxes, and general maintenance can be, says Allan Glass, owner of ASG Real Estate Inc. in Los Angeles.

He estimates that buyers should have at least 1 percent of the purchase price of their home set aside for improvements and other expenses.

Source: MarketWatch, Amy Hoak (12/28/2009)

Check out the latest from the respected Economists of the National Association of Home Builders:

The Economy and Housing Show Some Life

More emerging data is signaling that the economy is in the early stages of recovery from a long, hard recession. The second estimate of third quarter gross domestic product (GDP), based on more complete data than what was available for the “advance” estimate issued last month, showed that GDP advanced 2.8% from the second quarter at a seasonally adjusted, annual rate.

While down from the 3.5% reported in the advance estimate, this was the first rise in this measure after four quarters of decline.

Residential construction, which has been a drag on GDP since the first quarter of 2006, subtracting roughly 1% growth from overall GDP each quarter (on an annualized, seasonally adjusted basis) on average for the last three and a half years, contributed a half percentage point of growth to overall GDP growth.

Retail sales have risen in four of the last six months. Excluding auto sales, which were affected by the “cash for clunkers” program, retail sales have risen in five of the last six months. Auto sales, which averaged 9.7 million units in the first half of the year, have averaged 11.4 million units over the last five months (July through November). (more)

First-Time Home Buyer Tax Credit Does Its Work

Single-family housing starts have generally been rising since early this year. They hit a low of 357,000 in January and February of this year (seasonally adjusted, at an annual rate), their lowest level since current records of housing starts began in 1959. There was one stumble when starts fell in August from July, yet they still averaged almost 500,000 at an annual rate in the third quarter. But in October, single-family housing starts fell to 476,000 from September’s 511,000. (more)

Inventories of Unsold Homes Continue to Fall

As of the end of October, the inventory of new homes for sale had fallen to 239,000, the lowest it has been since May 1971 when it stood at 236,000. October’s months’ supply — the amount of time it would take to sell the current inventory of homes based on the month’s sales rate — fell to a respectable 6.7 months from 7.4 months in September and was down considerably from the historic high of 12.4 months in January this year. (more)

Multifamily Construction Struggles

Multifamily units (in buildings with two or more units) were started at a seasonally adjusted annual rate of just 53,000 in October, their lowest level since starts began to be reported in 1959. Multifamily starts, which are notoriously volatile from month to month, averaged 142,000 in the first half of the year and averaged 80,000 from July through October. (more)

Housing Prices Show Some Life

The S&P/Case-Shiller national house price index rose in the third quarter, the second increase in a row. The index rose by 1.8% and 1.9% in the second and third quarters, respectively, on a seasonally adjusted basis. (more)

Housing Still Faces Significant Headwinds

Although the economic environment for housing is improving and the extended and expanded home buyer tax credit will provide a much-needed boost to housing (for information on the credit, go to www.federalhousingtaxcredit.com), the housing market still faces significant headwinds, even as there are signs that these challenges may be starting to recede. (more)