You have less time than you think to cash in on the federal home buyer tax credit.
Unless legislation extends the deal, you'll have to close escrow by Nov. 30 to take advantage of the maximum $8,000 tax credit available for first time home buyers.
But given the 30 to 45 days -- or longer -- it takes to close escrow -- especially on some distressed properties -- you can't wait until Nov. 30 to buy a home.
"You can't be casual about this right now. You have to on it. Committed, very serious, with lots of time available," said Jean Manner Schwimmer, a real estate agent with Coldwell Banker Gay Dales in Salinas area.
The federal tax credit for 2009 is only for first-time home buyers -- people who've had no ownership interest in a home in the three years prior to the purchase. Single and head of household tax payers can earn no more than $75,000. There's a $150,000 ceiling for married couples filing a joint return.
A tax credit is a big deal because, unlike a tax deduction which reduces your taxable income, a tax credit reduces the taxes you owe, dollar-for-dollar.
This home buyer tax credit can also net you a rebate if the credit is more than the taxes you owe. The rebate is the difference. If you owe no taxes, your rebate can be a maximum $8,000.
It's also a big deal because it's spurred home sales and that's helped boost the economy.
The California Association of Realtors says nearly 40 percent of first-time home buyers credit the tax credit with prompting them to buy a home this year.
(California's own tax credit is already over budget.)
To cash in on the credit you should already have signed a contract and be in escrow now or on the verge of doing so any day now.
While buyers should never rush into the decision to buy a home, if the tax credit is a motivating factor, there is a deadline.
"You need to be pre-approved for a mortgage. We are down to just two months and its hard to get an escrow in less than 30 days," said Stephen R. Pearson, a real estate agent with Century 21 Classic Properties in Watsonville.
Pre-approval gives buyers an edge in a market that includes investors looking for bargains. A pre-approved mortgage gives the holder proof he or she has money in the pipeline to actually buy a home.
Kim DiBenedetto, president of the Monterey County Association of Realtors says, given that many properties are distressed properties buyers should be working with both a local real estate agent, mortgage broker or loan officer and title and escrow company familiar with the details of the fractured housing market.
She said FHA loans, for example, come with more requirements mandating that the home is in good condition.
"Make sure the utilities are on. I had a listing go into escrow and the utilities were on. By the time the inspection was due the owner had let the bills go and the utilities weren't on. That costs time. One day can make a huge difference," said DiBenedetto, also a real estate agent with Coldwell Banker Del Monte Realty in Carmel.
With fall comes travel bargain rates but don't take a vacation just yet. Stay available for escrow details that can crop up in a moment's notice.
Serious buyers need to be flexible with what they want in a home and have their nose to the listings to be ready to pounce when the right property comes along.
"Your really need to be Johnny-on-the-spot when listings come up. The internet makes this easy, but you have to be available and watching," said Pearson.
Those already under contract, likewise, should be imminently available.
"If you are in escrow, be involved and aware of the time frame element. Deadlines are my responsibility and if we are approaching some contingency I'm going to inform the client," said Schwimmer.
Most Economists See Recovery Beginning
By MAE ANDERSON, APNEW YORK (Oct. 12) - More than 80 percent of economists believe the U.S. recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist. That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday. "The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines," said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University. The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through the next year. Forecasters now expect the U.S. economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010. Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious. The unemployment rate rose to 9.8 percent in September from 9.7 percent, the Labor Department said earlier this month, the highest point in 26 years. Forecasters expect the unemployment rate to continue to rise, to 10 percent in the first quarter of next year, before edging down to 9.5 percent by the end of 2010. The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs. More job cuts were announced last week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs. Worries about unemployment are likely to continue to constrain household spending. Personal consumption spending likely began rising in the second half of this year, but is expected to remain low in 2010. Still, Americans aren't expected to save as much as they have in past decades. The savings rate is expected to be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s. The housing recovery is one bright spot. Forecasters expect 2010 to be the first year since 2005 that the housing sector will contribute to overall growth. Home prices are expected to rise 2 percent in 2010, but panelists do not believe that will stifle the housing recovery. Inflation is expected to remain low due to the weak labor market and other factors. Thus, the NABE panel — which consists of 44 economists surveyed Sept. 2 through Sept. 24 — expects the federal funds rate to remain at its current record low near zero until late next spring, before a gradual rise begins. "The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," said Reaser.
Banks Bite The Bullet on Loans
A new report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision shows that the portion of loan modifications in the second quarter that involved reducing the principal increased to 10 percent from 3.1 percent in the first quarter.
While strategies such as lowering interest rates or extending mortgage terms can temporarily help borrowers struggling to make payments, reports show that often times borrowers redefault because the modifications do not lower payments to a truly affordable level. Of loans modified in the first quarter of 2009, 28 percent were in default again within three months, according to the Office of the Comptroller of the Currency. Among those modified in last year’s second quarter, 56 percent were in default again a year later.
Banks are beginning to reduce mortgage principal due, in part, to prodding from the Obama administration, whose housing plan includes financial incentives for mortgage-servicing firms that modify loans. At the same time, banks now have more flexibility to modify loans because of their success in stabilizing their balance sheets and, in some cases, raising fresh capital.
While strategies such as lowering interest rates or extending mortgage terms can temporarily help borrowers struggling to make payments, reports show that often times borrowers redefault because the modifications do not lower payments to a truly affordable level. Of loans modified in the first quarter of 2009, 28 percent were in default again within three months, according to the Office of the Comptroller of the Currency. Among those modified in last year’s second quarter, 56 percent were in default again a year later.
Banks are beginning to reduce mortgage principal due, in part, to prodding from the Obama administration, whose housing plan includes financial incentives for mortgage-servicing firms that modify loans. At the same time, banks now have more flexibility to modify loans because of their success in stabilizing their balance sheets and, in some cases, raising fresh capital.
Home Buyer Tax Credit Likely to be Extended..
Aides: Home Buyer Tax Credit Extension Likely Extending the First-Time Home Buyer Tax Credit, due to expire at the end of November, is high on the Democratic Congressional to-do list, legislative aides said.
After Wednesday’s meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should “continue efforts to strengthen the housing market by extending the home buyer tax credit.”
Mark Zandi, chief economist at Moody’s Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.
Also, on Thursday, the House is expected pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.
Source: The New York Times, Jackie Calmes (10/07/2009)
After Wednesday’s meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should “continue efforts to strengthen the housing market by extending the home buyer tax credit.”
Mark Zandi, chief economist at Moody’s Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.
Also, on Thursday, the House is expected pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.
Source: The New York Times, Jackie Calmes (10/07/2009)
Tax Help For Short Sale Sellers
Congress continues to make changes in the tax code in response to the housing crisis. A key change helps millions of homesellers who owe more on their mortgages than their dwellings are worth. These sellers have negative equity — a condition known colloquially as being upside down or underwater. Legislation that went on the books at the start of 2007 significantly benefits some upside downers and does absolutely nothing for others.
This is how the break works. Suppose Sela Sellers disposes of her residence in a lender-okayed short sale that erases the unpaid part of her mortgage. Or suppose the lending company forecloses on the dwelling, subsequently sells it and cancels a portion of her debt. Generally, the tax code calls for Sela to report partially or entirely forgiven amounts on her 1040 form. Not any more. The Mortgage Forgiveness Debt Relief Act of 2007 includes a provision that allows homesellers like Sela to exclude as much as $2,000,000 of canceled debt.
Sela excludes (sidesteps) taxes only if she satisfies two stipulations. First, the security for her mortgage is her principal residence, meaning the place she ordinarily lives most of the year. Second, she incurs the debt to buy, build or substantially improve her principal residence. There is no relief for Sela’s home equity loans or cash-out refinancings, except to the extent that she uses the proceeds to make improvements. Other fine print prohibits relief if her lenders forgive debts on vacation homes and other second homes or rental properties.
Long-standing rules generally require debtors to report all forgiven debts on their 1040 forms, just the same as income from salaries or investments. The Internal Revenue Service taxes forgiven amounts at the rates for ordinary income from sources like salaries. Some forgiven debts sidestep taxes. The law specifies several carefully hedged exceptions. They include bankruptcies and insolvencies.
The exception introduced in 2007 benefits people whose debts are reduced or cancelled in arrangements that are known as loan modifications, foreclosures, deeds in lieu of foreclosure and short sales. This last category is the term for an owner who -- with lender approval -- sells for a net sales price (gross sales price minus legal fees, broker’s commission and other costs) that is insufficient to cover all of the outstanding debt.
In tax lingo, the exclusion is for income from the discharge of QPRI, short for qualified principal residence indebtedness. This means mortgages taken out by owners to buy, build, or substantially improve their principal residences. And the residences are the securities for the debts.
There also is an exclusion for debt reduced through mortgage restructuring, as well as for debt used to refinance QPRI. Here, there is relief, but only up to the amount of the old mortgage principal, just before the refinancing.
Another constraint is that the exclusion does not help homeowners who took advantage of the run up in real estate prices to do "cash-out" refinancing, in which they did not use the funds for renovations of their primary residences. Instead, they used the funds to pay off credit card debts, tuition charges, medical expenses, or certain other expenditures.
Published: October 8, 2009
This is how the break works. Suppose Sela Sellers disposes of her residence in a lender-okayed short sale that erases the unpaid part of her mortgage. Or suppose the lending company forecloses on the dwelling, subsequently sells it and cancels a portion of her debt. Generally, the tax code calls for Sela to report partially or entirely forgiven amounts on her 1040 form. Not any more. The Mortgage Forgiveness Debt Relief Act of 2007 includes a provision that allows homesellers like Sela to exclude as much as $2,000,000 of canceled debt.
Sela excludes (sidesteps) taxes only if she satisfies two stipulations. First, the security for her mortgage is her principal residence, meaning the place she ordinarily lives most of the year. Second, she incurs the debt to buy, build or substantially improve her principal residence. There is no relief for Sela’s home equity loans or cash-out refinancings, except to the extent that she uses the proceeds to make improvements. Other fine print prohibits relief if her lenders forgive debts on vacation homes and other second homes or rental properties.
Long-standing rules generally require debtors to report all forgiven debts on their 1040 forms, just the same as income from salaries or investments. The Internal Revenue Service taxes forgiven amounts at the rates for ordinary income from sources like salaries. Some forgiven debts sidestep taxes. The law specifies several carefully hedged exceptions. They include bankruptcies and insolvencies.
The exception introduced in 2007 benefits people whose debts are reduced or cancelled in arrangements that are known as loan modifications, foreclosures, deeds in lieu of foreclosure and short sales. This last category is the term for an owner who -- with lender approval -- sells for a net sales price (gross sales price minus legal fees, broker’s commission and other costs) that is insufficient to cover all of the outstanding debt.
In tax lingo, the exclusion is for income from the discharge of QPRI, short for qualified principal residence indebtedness. This means mortgages taken out by owners to buy, build, or substantially improve their principal residences. And the residences are the securities for the debts.
There also is an exclusion for debt reduced through mortgage restructuring, as well as for debt used to refinance QPRI. Here, there is relief, but only up to the amount of the old mortgage principal, just before the refinancing.
Another constraint is that the exclusion does not help homeowners who took advantage of the run up in real estate prices to do "cash-out" refinancing, in which they did not use the funds for renovations of their primary residences. Instead, they used the funds to pay off credit card debts, tuition charges, medical expenses, or certain other expenditures.
Published: October 8, 2009
Where is San Jose in Rankings based on Income..
Area ranking based on income:
1. Bridgeport-Stamford-Norwalk, Conn. Metro AreaMedian Family Income: $105,132Estimated Population: 895,030
2. San Jose-Sunnyvale-Santa Clara, Calif. Metro AreaMedian Family Income: $103,164 Estimated Population: 1,819,198
3. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. Metro AreaMedian Family Income: $101,590Estimated Population: 5,358,130
4. San Francisco-Oakland-Fremont, Calif. Metro AreaMedian Family Income: $94,236Estimated Population: 4,274,531
1. Bridgeport-Stamford-Norwalk, Conn. Metro AreaMedian Family Income: $105,132Estimated Population: 895,030
2. San Jose-Sunnyvale-Santa Clara, Calif. Metro AreaMedian Family Income: $103,164 Estimated Population: 1,819,198
3. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. Metro AreaMedian Family Income: $101,590Estimated Population: 5,358,130
4. San Francisco-Oakland-Fremont, Calif. Metro AreaMedian Family Income: $94,236Estimated Population: 4,274,531
Historic Time To Buy a Home!
Young people just starting to invest and buying their first homes are potentially the winners in this recession.
First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®
"This is a historic time," says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. "It's a great opportunity to make some great gains in the future."
A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains. For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5 percent.
"We need to be shouting from the rooftops that this is not the time to get out of the market if you're young," says Christine Fahlund, a senior financial planner with T. Rowe Price. "This is the time to be in the market."
Source: The Associated Press, Chip Cutter (10/05/2009)
First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®
"This is a historic time," says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. "It's a great opportunity to make some great gains in the future."
A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains. For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5 percent.
"We need to be shouting from the rooftops that this is not the time to get out of the market if you're young," says Christine Fahlund, a senior financial planner with T. Rowe Price. "This is the time to be in the market."
Source: The Associated Press, Chip Cutter (10/05/2009)
Real Estate Outlook
We've got a bumper crop of positives this week for housing, starting with pending home sales, which jumped by 6.4 percent in August.
That was the seventh straight month of increases in the National Association of Realtors' forward-looking index -- the longest streak since 2001.
The pending sales index measures signed contracts heading for closing, and is an important indicator of where the real estate market is headed in the coming couple of months.
Regionally, pending sales were up by 8.2 percent in the Northeast, 7.6 percent in the Midwest, by just less than one percent in the South, and up a stunning 16 percent in the Western states.
But pending sales are hardly the only bright spot this week: New home sales were also up in the latest month -- by seven tenths of one percent nationwide, according to the Commerce Department.
Even home prices, which had been on the negative side in dozens of areas for most of 2008 and into early 2009, have now turned around and are rising just about everywhere. The Case-Shiller 20-city price index took its biggest jump in four years last month, up by 1.6 percent.
Prices were positive coast to coast, with Los Angles and Washington D.C. up 1.8 percent, San Francisco 3.3 percent, Chicago 2.7 percent and Minneapolis up an extraordinary 4.6 percent for the month.
And remember: the Case-Shiller index has been the darkest, gloomiest measure of the real estate market's direction for years, and the last major index to turn around this year. So it's a very welcome change we're looking at here.
Mortgage rates continued to be helpful as well last week, with rates continuing their slide. Average 30-year fixed rates dipped to 4.9 percent, according to the Mortgage Bankers Association, while fifteen year rates dropped to 4.3 percent.
If rates slip just a few more notches, they'll be approaching 40-year low points ... and we could see not only a spike to home sales, but a refinancing boom as well.
Now of course, the news never all bright in any given week. We saw a surprise drop last week in a key measure of consumer confidence -- the Conference Board's index, which slipped by 1.4 points after months of generally improving outlook among consumers.
Analysts attributed widespread worries about future job layoffs and a national unemployment rate close to 10 percent -- and much higher rates in some major local markets -- to the drop in confidence.
Unemployment is obviously sobering, and no doubt is restraining the housing sector. But all in all, that sector looks very promising at the moment.
Published: October 6, 2009
That was the seventh straight month of increases in the National Association of Realtors' forward-looking index -- the longest streak since 2001.
The pending sales index measures signed contracts heading for closing, and is an important indicator of where the real estate market is headed in the coming couple of months.
Regionally, pending sales were up by 8.2 percent in the Northeast, 7.6 percent in the Midwest, by just less than one percent in the South, and up a stunning 16 percent in the Western states.
But pending sales are hardly the only bright spot this week: New home sales were also up in the latest month -- by seven tenths of one percent nationwide, according to the Commerce Department.
Even home prices, which had been on the negative side in dozens of areas for most of 2008 and into early 2009, have now turned around and are rising just about everywhere. The Case-Shiller 20-city price index took its biggest jump in four years last month, up by 1.6 percent.
Prices were positive coast to coast, with Los Angles and Washington D.C. up 1.8 percent, San Francisco 3.3 percent, Chicago 2.7 percent and Minneapolis up an extraordinary 4.6 percent for the month.
And remember: the Case-Shiller index has been the darkest, gloomiest measure of the real estate market's direction for years, and the last major index to turn around this year. So it's a very welcome change we're looking at here.
Mortgage rates continued to be helpful as well last week, with rates continuing their slide. Average 30-year fixed rates dipped to 4.9 percent, according to the Mortgage Bankers Association, while fifteen year rates dropped to 4.3 percent.
If rates slip just a few more notches, they'll be approaching 40-year low points ... and we could see not only a spike to home sales, but a refinancing boom as well.
Now of course, the news never all bright in any given week. We saw a surprise drop last week in a key measure of consumer confidence -- the Conference Board's index, which slipped by 1.4 points after months of generally improving outlook among consumers.
Analysts attributed widespread worries about future job layoffs and a national unemployment rate close to 10 percent -- and much higher rates in some major local markets -- to the drop in confidence.
Unemployment is obviously sobering, and no doubt is restraining the housing sector. But all in all, that sector looks very promising at the moment.
Published: October 6, 2009
Insulating your wallet with home insulation
Heating and cooling for an average home account for 50 percent to 70 percent of a homeowner's energy usage. If your home isn't adequately insulated that can mean added costs that deplete your wallet each month.
The Energy Efficient Codes Coalition (EECC) strives to achieve an initial 30 percent boost in the energy efficiency of the 2009 International Energy Conservation Code (IECC) over its 2006 counterpart. The EECC writes on its Web site, "Because homes and other buildings are the largest sectors for US energy and electricity consumption, using 40 percent of US energy and 71 percent of its electricity, respectively and, at 37 percent, the largest single source of American's greenhouse gas emissions, they represent the nation's last great frontier of wasted energy.
The move toward building more energy-efficient homes is increasing. According to the 2006 McGraw-Hill Construction Residential Green Building SmartMarket Report, by 2010 green homes will make up 10 percent of new home construction; that's up from just 2 percent in 2005.
Actor Brad Pitt has given his time and energy to bring awareness to the energy-efficiency movement by taking ownership of efforts that build green homes through his foundation. In the aftermath of Katrina the community of homes being built under the "Make It Right New Orleans" housing charity is considered "the largest and greenest community of single-family homes in the world", according to U.S. Green Building Council President, CEO & Founding Chair, Rick Fedrizzi. Four years after the devastating hurricane struck, green houses are rising from the wreckage. So far there are only about 15 homes completed in the Lower 9th Ward, but Pitt says that there will be 150 by the end of 2010. He claims that the families living in these homes are paying significantly reduced electrical and utility bills.
But energy-efficient homes still remain the exception. There are approximately 45 million homes in the U.S. that lack the proper levels of Insulation.
That causes not only higher household utility expenses but also more health hazards. According to the Harvard University School of Public Health, thermal insulation not only helps with energy efficiency but also contributes dramatically to public health. Studies show that increasing insulation reduces energy usage and emissions which result in fewer deaths and instances of respiratory and cardiovascular ailments that are often associated with air pollution.
Experts say that homes under 10-years old could be lacking the proper amount of insulation. Taking steps to adequately insulate your home can help your current financial picture (federal tax credits and incentives may apply). Increased insulation can also be considered a very valuable benefit when it comes time to sell. If you've already upgraded your insulation and are listing your home on the market, it's a good idea to make that known in marketing materials. Insulation is a hidden advantage. It's not as easy as showing off a newly remodeled kitchen, however, it can be a big influencer for buyers—especially if you educate them about the upgrades that you've made and how that transfers to savings for them once they're living in the home.
Published: October 2, 2009
The Energy Efficient Codes Coalition (EECC) strives to achieve an initial 30 percent boost in the energy efficiency of the 2009 International Energy Conservation Code (IECC) over its 2006 counterpart. The EECC writes on its Web site, "Because homes and other buildings are the largest sectors for US energy and electricity consumption, using 40 percent of US energy and 71 percent of its electricity, respectively and, at 37 percent, the largest single source of American's greenhouse gas emissions, they represent the nation's last great frontier of wasted energy.
The move toward building more energy-efficient homes is increasing. According to the 2006 McGraw-Hill Construction Residential Green Building SmartMarket Report, by 2010 green homes will make up 10 percent of new home construction; that's up from just 2 percent in 2005.
Actor Brad Pitt has given his time and energy to bring awareness to the energy-efficiency movement by taking ownership of efforts that build green homes through his foundation. In the aftermath of Katrina the community of homes being built under the "Make It Right New Orleans" housing charity is considered "the largest and greenest community of single-family homes in the world", according to U.S. Green Building Council President, CEO & Founding Chair, Rick Fedrizzi. Four years after the devastating hurricane struck, green houses are rising from the wreckage. So far there are only about 15 homes completed in the Lower 9th Ward, but Pitt says that there will be 150 by the end of 2010. He claims that the families living in these homes are paying significantly reduced electrical and utility bills.
But energy-efficient homes still remain the exception. There are approximately 45 million homes in the U.S. that lack the proper levels of Insulation.
That causes not only higher household utility expenses but also more health hazards. According to the Harvard University School of Public Health, thermal insulation not only helps with energy efficiency but also contributes dramatically to public health. Studies show that increasing insulation reduces energy usage and emissions which result in fewer deaths and instances of respiratory and cardiovascular ailments that are often associated with air pollution.
Experts say that homes under 10-years old could be lacking the proper amount of insulation. Taking steps to adequately insulate your home can help your current financial picture (federal tax credits and incentives may apply). Increased insulation can also be considered a very valuable benefit when it comes time to sell. If you've already upgraded your insulation and are listing your home on the market, it's a good idea to make that known in marketing materials. Insulation is a hidden advantage. It's not as easy as showing off a newly remodeled kitchen, however, it can be a big influencer for buyers—especially if you educate them about the upgrades that you've made and how that transfers to savings for them once they're living in the home.
Published: October 2, 2009
30-Year Fixed-Rate Mortgage Lowest in Four Months, Nearing All-Time Low Set in Survey in March
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.94 percent with an average 0.7 point for the week ending October 1, 2009, down from last week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.10 percent. The last time the 30-year FRM was below 5 percent was the week ending May 28, 2009, when it averaged 4.91 percent.
The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.46 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, down from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 6.00 percent.
The one-year Treasury-indexed ARM averaged 4.49 percent this week with an average 0.5 point, down from last week when it averaged 4.52 percent. At this time last year, the 1-year ARM averaged 5.12 percent.
"Low mortgage rates are helping to stabilize home sales," said Frank Nothaft, Freddie Mac vice president and chief economist. "New home sales in August rose to the highest annualized pace since September 2008 and the inventory of unsold houses fell to the lowest level since February 1983."
Although existing home sales fell somewhat in august, it was still the second strongest showin in 23 months. Furthermore, house prices increased for the second month in a row in July, after adjusting for seasonality, based on the 20-city composite S&P/Case-Shiller Home Price index. Moreover, the increases were more broad-based in July with house prices rising in 17 of these metropolitan areas, compared to 16 in June.
Published: October 2, 2009
The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.46 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, down from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 6.00 percent.
The one-year Treasury-indexed ARM averaged 4.49 percent this week with an average 0.5 point, down from last week when it averaged 4.52 percent. At this time last year, the 1-year ARM averaged 5.12 percent.
"Low mortgage rates are helping to stabilize home sales," said Frank Nothaft, Freddie Mac vice president and chief economist. "New home sales in August rose to the highest annualized pace since September 2008 and the inventory of unsold houses fell to the lowest level since February 1983."
Although existing home sales fell somewhat in august, it was still the second strongest showin in 23 months. Furthermore, house prices increased for the second month in a row in July, after adjusting for seasonality, based on the 20-city composite S&P/Case-Shiller Home Price index. Moreover, the increases were more broad-based in July with house prices rising in 17 of these metropolitan areas, compared to 16 in June.
Published: October 2, 2009
Recovery is on it's way...
Which Cities Will See Biggest Rebound? Which cities are likely to be the hottest post-economic downturn destinations for young, brilliant, and highly mobile workers?
The Wall Street Journal surveyed six trend-spotting experts and they chose cities based on economic diversity, lifestyle and their own personal prejudices.
Here’s the top-10 list:
1. Washington, D.C. (tied with 1. Seattle)
2. New York
3. Portland, Ore.
4. Austin, Texas
5. San Jose, Calif.
6. Denver
7. Durham, N.C.
8. Dallas
9. Chicago
10. Boston
Source: The Wall Street Journal, Sue Shellenbarger (09/30/2009)
The Wall Street Journal surveyed six trend-spotting experts and they chose cities based on economic diversity, lifestyle and their own personal prejudices.
Here’s the top-10 list:
1. Washington, D.C. (tied with 1. Seattle)
2. New York
3. Portland, Ore.
4. Austin, Texas
5. San Jose, Calif.
6. Denver
7. Durham, N.C.
8. Dallas
9. Chicago
10. Boston
Source: The Wall Street Journal, Sue Shellenbarger (09/30/2009)
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