From Realty Times of December 22, 2008
Washington Report: Treasury Department Sidesteps by Kenneth R. Harney
It was the biggest housing mystery in Washington last week: What happened to the Treasury Department's much-ballyhooed plan to cut mortgage rates to four and a half percent to stimulate home buying?
Under the plan, Fannie Mae and Freddie Mac would buy loans at four and a half percent and the Treasury would subsidize the difference between that and market rates.
But last Tuesday, in an interview on the CNBC cable network, Treasury Secretary Henry Paulson basically said: Who me? We never announced any such plan. It got leaked prematurely.
Paulson also hinted that he would be reluctant to launch such an ambitious and potentially costly program without having the tacit support of the incoming Obama administration's Treasury team.
The National Association of Realtors, which had proposed the rate buydown concept to Treasury weeks ago, again called for the federal government to find a way to lower rates to four and half percent.
Meanwhile, new reports surfaced that a second plan was being considered: Under this alternative, the 12 Federal Home Loan Banks around the country would offer cut-rate mortgages using money raised by bond issuances at 3 percent by the Treasury.
According to the Reuters news service, this concept is being pushed aggressively by the president of one of the banks -- Alfred DelliBovi of New York -- and is under active consideration by the bank system's top regulator, James Lockhart, director of the Federal Housing Finance Agency.
The net effect of either plan would be the same to consumers: Sharply lower monthly mortgage costs. For example, here's what a four and a half percent rate does to principal and interest payments compared with a note rate of five and half percent: On a $200,000 mortgage, the one point difference would reduce payments by $122 a month.
One a $300,000 loan, the savings would go to $183 a month. And on a $400,000 mortgage, costs would be lowered by $244 a month.
In his comments on CNBC, Paulson said his department would like to cut home buyers' payments: "We're continuing to look at (that)," he said, "and we wouldn't be doing our jobs if we didn't look at other ideas to reduce mortgage interest rates."
Meanwhile, with market rates tumbling to five percent and below, a half point rate buydown could cost the government much less than originally estimated.
Then again -- there's always the possibility that to stimulate a REALLY big round of home buying, rates could be cut to 4 percent.
After all, it's the holiday gift season … and the housing industry could sure use one.
--------------------------------------------------------------------------------
Copyright © 2008 Realty Times. All Rights Reserved.
.
Monday, December 22, 2008
Sunday, December 21, 2008
Lowest Home Loan Rates Ever!
I have received a mailing from a local mortgage representative that states that " ....home loan rates dropped to the lowest levels that have ever been seen....".
If you would like to receive a copy of the entire mailing, please send me an email address to which I may send it. The article is too long to be reproduced here and I do not wish to violate any coyright laws by quoting pieces of the article.
Go get one of those loans!
.
If you would like to receive a copy of the entire mailing, please send me an email address to which I may send it. The article is too long to be reproduced here and I do not wish to violate any coyright laws by quoting pieces of the article.
Go get one of those loans!
.
Thursday, December 18, 2008
Best Interest Rates in 50 Years,
By Mary Trupo mtrupo@realtors.org for NAR
Fed Action Creates Best Interest Rates in 50 Years,
Realtors® Report WASHINGTON, December 17, 2008
The National Association of Realtors® applauds the actions of the Federal Reserve Board in lowering interest rates for home buyers and homeowners who need to refinance. This will significantly impact housing sales, home valuations, and the nation’s overall economy.
The Federal Reserve is purchasing large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.
“NAR has been aggressively calling for mortgage rate reductions, and the Fed’s action to slash interest rates, coupled with the actions by the Federal Housing Finance Agency and the Department of the Treasury, has driven down interest rates to make the dream of homeownership once again attainable for thousands of Americans,” said NAR President Charles McMillan.
Mortgage rates, which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country. “That is the lowest rate in nearly 50 years and will bring buyers back to the market,” McMillan said. “We are pleased that the government heard our message and responded to our call for action.”
NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes. “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market.” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
NAR continues to call on the federal government to maintain the higher loan limits passed in the economic stimulus bill earlier this year and to expand the $7,500 tax credit for first-time home buyers to all buyers and to eliminate the credit repayment requirement. “Together, all of these actions will stimulate and stabilize the housing market and begin an overall economic recovery,” McMillan said.
© Copyright NATIONAL ASSOCIATION of REALTORS® | Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500
.
Fed Action Creates Best Interest Rates in 50 Years,
Realtors® Report WASHINGTON, December 17, 2008
The National Association of Realtors® applauds the actions of the Federal Reserve Board in lowering interest rates for home buyers and homeowners who need to refinance. This will significantly impact housing sales, home valuations, and the nation’s overall economy.
The Federal Reserve is purchasing large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.
“NAR has been aggressively calling for mortgage rate reductions, and the Fed’s action to slash interest rates, coupled with the actions by the Federal Housing Finance Agency and the Department of the Treasury, has driven down interest rates to make the dream of homeownership once again attainable for thousands of Americans,” said NAR President Charles McMillan.
Mortgage rates, which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country. “That is the lowest rate in nearly 50 years and will bring buyers back to the market,” McMillan said. “We are pleased that the government heard our message and responded to our call for action.”
NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes. “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market.” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
NAR continues to call on the federal government to maintain the higher loan limits passed in the economic stimulus bill earlier this year and to expand the $7,500 tax credit for first-time home buyers to all buyers and to eliminate the credit repayment requirement. “Together, all of these actions will stimulate and stabilize the housing market and begin an overall economic recovery,” McMillan said.
© Copyright NATIONAL ASSOCIATION of REALTORS® | Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500
.
Tuesday, December 16, 2008
Real Estate Outlook: Affordability Dramatically Improved
December 16, 2008
from Realty Times
--------------------------------------------------------------------------------
Real Estate Outlook: Affordability Dramatically Improved
by Kenneth R. Harney
How you see the real estate market at the moment depends on what parts you look at. If you focus primarily on mortgage rates and core affordability measures, you may see the country in a recession, but there are some very positive forces at work in the housing sector.
On the other hand, if you look at widespread employment losses -- 530,000 last month alone -- along with rising personal and business bankruptcies, mortgage delinquencies and foreclosures at levels not seen since the 1930's, you might ask: How can housing rebound if the overall economy is mired in such a mess?
And of course housing can't bounce back significantly unless national and regional economic fundamentals begin to improve. But there's at least an outside chance that housing could help in that whole process -- and begin to get healthier as a result.
Here's why: Number one -- affordability has dramatically improved since the end of the boom.
Thanks to severe price rollbacks and near-record low interest rates, homes are more affordable to households with average incomes than they've been for almost a decade. Standard and Poor's economist David Wyss calls affordability a major bright spot, and that's confirmed by the Housing Affordability Index compiled by the National Association of Realtors.
Mortgage rates are an important part of that equation, and they dropped again last week -- this time below five and half percent for 30 year fixed rate loans, according to the Mortgage Bankers Association.
Add onto this the Treasury Department's reported plan to cut fixed mortgage rates for home purchasers to four and a half percent through a "buy-down" program, and you've got the potential underpinnings for serious increases in home buying just over the horizon.
Some economists project an increase in sales of 500,000 to 700,000 homes in the coming 12 months if mortgage rates are cut by a point, AND if the new Congress agrees to include a non-refundable tax credit of up to 10 percent of the purchase price of a home in the economic stimulus package expected in January.
The idea here is to stoke up housing sales and construction -- and dozens of other industries through housing's well-documented multiplier effect -- the stimulus it gives through ripple effects into building materials, appliances, furniture among others.
This has worked before. Congress took precisely these two steps -- interest rate reductions plus tax credits for home purchases - in the 1970s, and the program had far-reaching positive effects on jobs and the economy as a whole.
It could happen again -- even if, on any given day, the picture looks a little grim.
--------------------------------------------------------------------------------
Copyright © 2008 Realty Times. All Rights Reserved.
Mortgage rates in the Phoenix area hit below 6% APR last week - still waiting?
.
from Realty Times
--------------------------------------------------------------------------------
Real Estate Outlook: Affordability Dramatically Improved
by Kenneth R. Harney
How you see the real estate market at the moment depends on what parts you look at. If you focus primarily on mortgage rates and core affordability measures, you may see the country in a recession, but there are some very positive forces at work in the housing sector.
On the other hand, if you look at widespread employment losses -- 530,000 last month alone -- along with rising personal and business bankruptcies, mortgage delinquencies and foreclosures at levels not seen since the 1930's, you might ask: How can housing rebound if the overall economy is mired in such a mess?
And of course housing can't bounce back significantly unless national and regional economic fundamentals begin to improve. But there's at least an outside chance that housing could help in that whole process -- and begin to get healthier as a result.
Here's why: Number one -- affordability has dramatically improved since the end of the boom.
Thanks to severe price rollbacks and near-record low interest rates, homes are more affordable to households with average incomes than they've been for almost a decade. Standard and Poor's economist David Wyss calls affordability a major bright spot, and that's confirmed by the Housing Affordability Index compiled by the National Association of Realtors.
Mortgage rates are an important part of that equation, and they dropped again last week -- this time below five and half percent for 30 year fixed rate loans, according to the Mortgage Bankers Association.
Add onto this the Treasury Department's reported plan to cut fixed mortgage rates for home purchasers to four and a half percent through a "buy-down" program, and you've got the potential underpinnings for serious increases in home buying just over the horizon.
Some economists project an increase in sales of 500,000 to 700,000 homes in the coming 12 months if mortgage rates are cut by a point, AND if the new Congress agrees to include a non-refundable tax credit of up to 10 percent of the purchase price of a home in the economic stimulus package expected in January.
The idea here is to stoke up housing sales and construction -- and dozens of other industries through housing's well-documented multiplier effect -- the stimulus it gives through ripple effects into building materials, appliances, furniture among others.
This has worked before. Congress took precisely these two steps -- interest rate reductions plus tax credits for home purchases - in the 1970s, and the program had far-reaching positive effects on jobs and the economy as a whole.
It could happen again -- even if, on any given day, the picture looks a little grim.
--------------------------------------------------------------------------------
Copyright © 2008 Realty Times. All Rights Reserved.
Mortgage rates in the Phoenix area hit below 6% APR last week - still waiting?
.
Subscribe to:
Posts (Atom)
