30-Year Rates at Lowest in 4 Years
Freddie Mac reports a decline in the 30-year fixed mortgage rate to 5.47 percent during the week ended Dec. 11 from 5.53 percent last week and 6.11 percent a year ago.
Some lenders are locking in even lower rates as they build on momentum started when the Federal Reserve announced plans last month to purchase a substantial number of mortgage-backed securities. HSH Associates and Inside Mortgage Finance are reporting interest on 30-year fixed loans at 5.33 percent and 5.09 percent, respectively.
Freddie Mac chief economist Frank Nothaft says mortgage rates also were driven downward by the recession and rising unemployment.
Source: The Washington Post, Dina ElBoghdady (12/12/08)
© Copyright 2008 Information Inc
Yeah rates are low but are the lenders lending? Yes for the buyers with good credit. Buyers with not-so-good credit may have to jump thru hoops and actually, gasp, bring money to closing! I would suggest all potential buyers check with their preferred lender before you even start looking. Find out what youcan afford before getting your heart broken when you find out you have champagne tastes on a beer budget. There is nothing wrong with slowly, through the course of your life, working up to a bigger nicer home every several years. You have to crawl before you can walk. Being realistic as a buyer is very important. Do you want to buy your dream house to only live in it one year before losing it? In this case I do no think it is better to have loved and lost! Mark
Posted at 03:40PM Dec 15, 2008 by Mark Brian in Real Estate |
Study Shows Housing Values Have Climbed
News reports have been packed with stories about declining home values, but a recent government report shows that the situation is not nearly so dire as some reports make it sound.
Despite big loses in some areas of the country, the majority of markets continue to show growth in home value over the last five years.
According to the third-quarter survey released by the Federal Housing Finance Agency, out of 292 metropolitan markets, 273 showed positive net home values in the last five years. Only 19 percent were negative.
While home values declined 4 percent on average in the last year, values were up nearly 29 percent over the past five years.
According to the Federal Housing Finance Agency, markets that gained the most over the last five years were:
- Honolulu: up 78.7 percent
- Virginia Beach: 72.6 percent
- Flagstaff, Ariz.: 66.5 percent
- Bellingham, Wash.: 65.6 percent
- Wilmington, N.C.: 62.1 percent
- Baltimore: 60.6 percent
Source: The Washington Post Writers Group, Kenneth R. Harney, (12/06/08)
I know values in my area have held steady, but if this is true in more areas across the country, why all the Doom-N-Gloom? Of course, any study can be made to show whatever results the person conducting the study wants it to. But at least the Upstate didn't experience an unrealistic rise invalues to only have them fall today. Our values are steady, we never had the speculation in housing at the levels other areas had.
Posted at 03:32PM Dec 15, 2008 by Mark Brian in Real Estate |
NAR: Pending Home Sales Holding Steady
Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September. It is 1 percent below October 2007 when it was 89.8.
“Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” says Lawrence Yun, NAR chief economist. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”
Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets; Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas.
By the Region
Here's what the PHSI showed across the country:
- South: jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago.
- Northeast: rose 0.6 percent to 68.1 but is 14.1 percent below October 2007.
- Midwest: declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago.
- West: fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.
The Economic Forecast
New-home sales: for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.
Existing-home sales: looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.
Home prices: “Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun says. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.” NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.
Unemployment rate: is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009.
Inflation: as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.
GDP: Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery.
“Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he says.
Could a Drop in Interest Rates Help?
The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6 percent by the end of 2009, and average 6.2 percent in 2010.
NAR President Charles McMillan says he’s hopeful about considerations by the U.S. Treasury to help the housing market.
“Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan says. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”
Source: NAR
Posted at 03:26PM Dec 15, 2008 by Mark Brian in Real Estate |
Tips for Protecting Your Pets During the Holidays
By Denise Flaim
RISMEDIA, Dec. 15, 2008-(MCT)-Lost in the holiday shuffle are usually the family critters, and maybe just as well, lest anyone get the bright idea of making them wear faux reindeer antlers.
But holiday hazards loom, and here are some to anticipate and avoid:
Read the entire article here
I have 3 cats and they mean the world to me. I normally keep only Real Estate info on my blogs but felt this was too important not to pass on. Mark
Posted at 02:58PM Dec 15, 2008 by Mark Brian in General |
Rainy Day News for 12-11-2008
So once again, NAR is working to help America & all Americans by keeping the housing market stable. Understanding the hard work NAR, of which I am a proud member, should help to move the public's opinion to a more positive slant. If you have questions regarding buying or selling real estate in Upstate South Carolina please feel free to contact me!
Mark Brian
Silver Star Real Estate
Cell 864-353-1253 Email markrbrian@bellsouth.net Website markbrian.directhomes.com
[Read More]Posted at 12:59PM Dec 11, 2008 by Mark Brian in Real Estate |
Great Commercial Location on Hwy 123
This tract of land for sale in Seneca is a fantastic commercial location with 60K traffic count per day owner. 1.32 acres with Block building with 2 kitchens & 2 baths. Located right beside the old Tiger Tails location which is being developed today! Motivated seller will consider all serious offers! To find out more please visit Seneca South Carolina Commercial Real Estate
Posted at 02:37PM Dec 10, 2008 by Mark Brian in General |
Real Estate News 12-08-2008
Are Sweeping Changes Coming for Mortgage Finance?
By Kevin G. Hall
RISMEDIA, Dec. 8, 2008-(MCT/RISMedia)-Adding to a mounting chorus in the nation's capital that the Bush administration must do more to reverse the nationwide housing slump, Federal Reserve Chairman Ben Bernanke on Thursday spelled out several aggressive steps that government could take to fix the main cause of the recession. Despite good-faith efforts by both the private and public sectors, the foreclosure rate remains too high, with adverse consequences for both those directly involved and for the broad economy, Bernanke said, addressing a Fed conference on the housing and mortgage markets. More needs to be done. His comments came the day after reports surfaced that the Treasury Department is weighing new steps that could knock some mortgage rates below 5%, and a day before the Mortgage Bankers Association reported record mortgage delinquencies and foreclosures from July to September.
"We are pleased to see that the leadership of the Treasury Department is seriously considering the actions we discussed to lower interest rates. The result of such action will help the nation's economic recovery and bring stability to the housing market" said 2009 National Association of Realtors® President Charles McMillan in a statement. NAR estimates that lowering the mortgage interest rate by 1 to 2 percentage points can result in up to an additional 800,000 home sales.
Housing has always led our economy out of downturns and lower interest rates are key to bringing home buyers back to the market. According to the MBA, the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99% of all loans outstanding at the end of the third quarter of 2008, up 58 basis points from the second quarter of 2008, and up 140 basis points from one year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 2.97%, an increase of 22 basis points from the second quarter of 2008 and 128 basis points from one year ago. The percentage of loans in the process of foreclosure set a new record this quarter. The percentage of loans on which foreclosure actions were started during the third quarter was 1.07%, down one basis point from last quarter and up 29 basis points from one year ago on a non-seasonally adjusted basis. The seasonally adjusted total delinquency rate continues to be the highest recorded in the MBA survey. The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida. The 30 day delinquency percentage remains below levels seen as recently as 2002.
What's more, while much of the mortgage problem in some states continues to be overbuilding, poor underwriting and incorrect credit pricing, fundamental economic factors are becoming more important, said Jay Brinkmann, MBA's Chief Economist and Senior Vice President for Research and Economics. The 30-day delinquency rate is still lower than it was in the 2001 recession, but job losses are mounting. We have not gone into past recessions with the housing market as weak as it is now so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past.
Usually, the job of the Fed chairman is to fight inflation and ensure that the economy is growing. However, problems in housing have contaminated financial markets and the broader economy, and they help explain why Bernanke took the unusual step of calling for aggressive steps to end the housing slump. Significant efforts have been taken in this direction, but more can be done he said. Here's a closer look at the housing mess and Bernanke's fixes:
Q. Why is Bernanke worried about housing?
A. The Fed chairman said that as many as 20% of homeowners now might be underwater or have negative equity; that is, they owe more than their homes are worth. In addition, he said, lenders are expected to have started 2.25 million foreclosures this year, a staggering number when compared with the pre-crisis average of fewer than 1 million foreclosures a year.
Q. What's the Fed doing about it?
A. The Fed said last month that it would begin buying up to $100 billion in debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and would buy up to $500 billion in mortgage-backed securities issued by Fannie and Freddie, the mortgage finance giants that the government seized in September. These mortgage-backed securities are the pooled and packaged mortgages that are sold to investors in a secondary market. Since investors want no part of them, the government is stepping in as the buyer of last resort in hopes of thawing this frozen market.
Q. Is the executive branch doing anything?
A. The Federal Housing Administration is offering FHA Secure, which enables some homeowners with adjustable-rate mortgages that are about to jump to higher rates to get long-term, fixed-rate loans. Congress recently passed the Hope for Homeowners Act, which allows some troubled mortgages to be refinanced into FHA loans if the lenders are willing to take losses and write down the mortgage balances. The FHA Secure program is limited in reach, and Hope for Homeowners hasn't proved to be very attractive to lenders, who are unwilling to take losses.
Q. How about the Treasury Department?
A. Industry sources suggest that the Treasury is weighing an idea that would have Fannie and Freddie purchase new government-guaranteed mortgages that carry interest rates as low as 4.5%, a full percentage point below the current rate for 30-year fixed-rate mortgages. This could help borrowers take out larger loans at lower rates, potentially arresting the fall in home prices in areas such as California and the Northeast, where home prices are higher. The plan could prove to be controversial because it would exclude refinanced mortgages from these low rates.
Q. Could anything more be done? A. Bernanke called for more principal write-downs by lenders, on the presumption that more homeowners are finding themselves with negative equity the longer the national housing skid continues. He suggested changes to the Hope for Homeowners effort, such as lowering the upfront insurance premium that lenders pay, by law 3% of a home's principal value. Congress also could lower the 1.5% annual premiums that borrowers pay. In addition, he said, Congress could reduce the interest rates that borrowers would pay under the new Hope for Homeowners loan, now set at 8%. The rate is high because the mortgages are underlying collateral in securities issued by Ginnie Mae, and there's limited demand for this government-issued debt. The Treasury could buy the Ginnie Mae securities, thus creating space for lower mortgage rates.
Q. Aren't all these ideas expensive?
A. Bernanke didn't offer any price tags, but he signaled that any approach is going to be costly and probably will favor some homeowners over others.
Q. Isn't the Federal Deposit Insurance Corp. helping troubled borrowers?
A. Yes, and Bernanke thinks that this effort, too, can be expanded. The FDIC is modifying distressed mortgages held by the troubled banks its taken over, creating a standardized approach called Loan Mod in a Box. Although it's a limited universe of mortgages, the approach gets mortgage payments to within 38% or less of a borrower's monthly income, often by stretching a loan into a 40-year fixed-rate mortgage. FDIC Chairman Sheila Bair wants this to become a nationwide approach, but she faces resistance from the Treasury, which thinks it's too costly. Bernanke suggested that this effort could be expanded to have the lender modify the mortgage and reduce costs to 38% of income, and where necessary the government would eat the cost of reducing the loan-to-income ratio down to 31%. Bair and Bernanke seek to make existing loans more affordable so that homeowners stay out of foreclosure and don't drag their neighborhoods home values down further.
Q. Why doesn't the government just buy up all the troubled loans? A. That's yet another option suggested by Bernanke, who said the government could simply buy up all delinquent mortgages or those considered at risk because of sliding home prices in hard-hit areas. These loans would be bought at depressed market value and could make money for the government when home prices rebound. The Treasury already has studied this, the Fed chief said, since the original purpose of October's $700 billion Wall Street rescue was to help get bad mortgages off bank balance sheets.
© 2008, McClatchy-Tribune Information Services. RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com
New Low Mortgage Rates Out of Reach ?
By David M. Dickson
RISMEDIA, Dec. 8, 2008-(MCT)-Many of the would-be borrowers who have bombarded mortgage lenders with phone calls since interest rates dropped last week are finding they don't qualify for loans. Credit standards remain significantly tighter than they were two or three years ago. Some types of loans, such as adjustable-rate balloon mortgages, are difficult to obtain, and millions of homeowners cannot qualify for refinancing because they owe more on their current mortgages than their houses are worth. A dramatic tightening of underwriting standards and a rising number of underwater homeowners will eliminate more than half of the people who could benefit from the new lower rates, said Guy Cecala, publisher of Inside Mortgage Finance.
To qualify for a conventional 30-year loan for $400,000 at a fixed rate of 5.5%, a consumer would need a credit score of 680, a down payment of 10% and a debt-to-income ratio of 45% or less, said Brian Bonnet, president of Signature Mortgage Services in Alexandria. While acknowledging that credit standards had tightened this year, Bonnet emphasized that a buyer with solid credit could obtain a Federal Housing Administration-insured loan of $625,000 bearing a 5.5% fixed rate and requiring a down payment as low as 3.5%.
Mortgage rates fell immediately Nov. 25 after the Fed announced its extraordinary plan to spend $600 billion purchasing debt and mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. This is as big as it gets, said Bob Walters, chief economist of Internet lender Quicken Loans. Mr. Walters reported that mortgage rates instantly dropped three-quarters to 1 percentage point, reaching 5.4% to 5.5%, after the Fed announced its program. Many lenders expect rates to keep dropping. Mortgage rates have been artificially high this year mostly due to panic and disruption in the credit markets, especially for anything with a mortgage label on it, said Cecala. A more appropriate rate for 30-year fixed rate mortgages would have been 5 percent or less, given how the rate on the Treasury 10-year note has plunged, Cecala said. Cecala expects rates to reach 5% by the end of the year.
For those who do qualify, the savings can be substantial, especially if their initial below-market teaser rate is scheduled to adjust upward in the near future. A 30-year, $350,000 mortgage bearing a fixed rate of 5.25% instead of 6.5% would save a borrower $280 per month. A half-percentage-point reduction to 5.5% would yield a monthly savings of $111. Many people have been sitting on the sidelines, and they are now the ones who can take advantage of this opportunity, said Mr. Walters. It's an early Christmas present!
Mortgage brokers in some areas of the country were quoting 30-year fixed rates as low as 5.25% late last week for borrowers with stellar credit and substantial equity in their homes. As recently as July and August, 30-year fixed-rate mortgages averaged about 6.5%, according to national surveys by Freddie Mac. Consumers should not be holding out for a lower interest rate, Bonnet cautioned. In the last 50 years, rates have not been appreciably lower than they are today, he said. Waiting for a lower rate could be a fool's game, especially given the extreme volatility that has characterized the mortgage market during the past year. Walters also cautioned against delay. You are betting against history if you are waiting for interest rates to go lower, he said.
Mortgage rates dropped a lot in a matter of a day, which is just what the Fed wanted, said Patrick Newport, an economist at IHS Global Insight who specializes in housing. However, it will only affect mortgages eligible to be purchased by Fannie and Freddie, Newport said. Although that is a huge market, it likely will exclude many of those who need the most help to avoid foreclosure. For example, subprime loans and many exotic mortgages, which required the homeowner to pay interest only for several years, will not be affected by the Fed's initiative, Newport said. Jumbo loans that are too big for Fannie and Freddie to buy (more than $730,000 for now, and more than $625,000 beginning Jan. 1) will continue to command interest rates in the neighborhood of 8%, analysts said. The interest-rate decline also will be of no benefit to millions of troubled homeowners who want to refinance their mortgages in states that have been hammered by the bursting of the housing bubble, including California, Florida, Arizona and Nevada, where housing prices have plunged by 30% to 40% in many markets. Adjustable-rate mortgages requiring little or no down payments were wildly popular during 2005 and 2006 in the bubble states, and many homeowners in these states are now under water, owing more on the mortgages than their houses are worth.
About 12 million U.S. homeowners are in that situation, said Mark Zandi of Moody's Economy.com. That's a big increase compared with the 6.6 million homeowners who owed more than their houses were worth at the end of last year. Only about 3 million homeowners were under water at the end of 2006, Mr. Zandi said.
Copyright © 2008, The Washington Times Distributed by McClatchy-Tribune Information Services. RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com
This only confirms the fact mortgages are harder to get for many. The bailout money may not help to get the credit flowing again. Today there are programs to help borderline people such as the Rural programs. But the days of anyone with a pulse getting funded are over. As they should be. Lenders cannot make the risky loans they did only to pass the buck along. And the average American cannot afford to pay to help corporations that are still giving HUGE bonus and perks for their executives.
Posted at 02:33PM Dec 10, 2008 by Mark Brian in Real Estate |
