September 29, 2009 from Realty Times
Real Estate Outlook: Mortgage Rate Dip Impacts Housing by Kenneth R. Harney
You may have seen the headlines last week about the Federal Reserve continuing its policy of keeping interest rates low to stimulate the economy. But you might have missed a major byproduct of that move that's certain to have a direct impact on home real estate: Thirty-year fixed mortgage rates slipped below the five percent mark for the first time in nearly half a year, dipping to 4.9 percent.
Fifteen year fixed rates are just 4.4 percent.
Now, there's nothing more stimulating for home buyers than mortgage money at rates that are about as low as they go. And sure enough, applications for new mortgages jumped by nearly 6 percent last week, according to the Mortgage Bankers Association.
Applications to buy homes using FHA financing soared to the highest share in the history of the Mortgage Bankers' index - which goes back to 1990.
Meanwhile, existing home sale closings took a breather from the rapid increases of the past several months, according to the National Association of Realtors. Sales in August declined by 2.7 percent, but remained 3.4 percent higher than they were in August of 2008, said Lawrence Yun, chief economist for the Realtors.
He attributed the slightly lower rate of closed sales in part to clogs in the system -- more contracts being written, but longer wait times to go to closing, leading to a higher rate of fallouts.
In other key developments:
The index of leading economic indicators, which is produced by the Conference Board and forecasts economic activity three to six months down the road, was up again last month -- by six tenths of a percent.
That was the fifth straight month of higher readings for the index, and would have been higher had unemployment not held it back, according to analysts.
Home prices continued their slow gains, according to the Federal Housing Finance Agency. Its home price index, which is based on Fannie Mae and Freddie Mac transactions, found prices up by three tenths of a point nationwide in the latest survey month.
That coincides with most private price indexes, which have found that we're past bottom and headed back up in most parts of the country.
Finally, the private mortgage insurance industry, which virtually eliminated low-downpayment financing opportunities in many markets during the past year by declaring them "declining" or "distressed," has begun reversing course.
Genworth Mortgage Insurance Company last week removed 63 of its 68 previous designations of "declining markets." That should open up non-FHA cash-out refinancings and low-downpayment home purchase mortgages to thousands of people who'd been squeezed out under the old rules.
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, September 29, 2009
Monday, September 21, 2009
TAX CREDIT CHANGES
September 21, 2009 From Realty Times
Washington Report: Tax Credit Changes by Kenneth R. Harney
The first major change to the $8,000 home buyers tax credit began moving through Congress last week, giving hope to real estate and building groups pushing for extension of the entire program before it expires Nov. 30.
House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the “Service Members Home Ownership Act of 2009” late last week, with a floor vote expected this week.
The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.
During their absence, they are not occupants of their houses, and sometimes have to rent them out or sell. Any of these events make them ineligible to retain the $8,000 credit under current law. Ineligible buyers must then repay the credit to the IRS.
Oregon Congressman Earl Blumenauer, sponsor of one of the bills consolidated into Rangel's, said “it is absurd that thousands of Americans serving our country, away from friends and family ... must choose between their service work and home ownership.”
The Ways and Means committee's bill would waive the repayment requirement when a service member must sell a home within the 36 month period because of a transfer to a new duty station or overseas, and would count service-related absences toward the 36 month requirement.
Another provision in the bill would extend the $8,000 credit for another year for personnel who may have missed out on claiming the credit because they thought they wouldn't qualify due to an overseas posting.
The credit for these individuals would be extended to November 30, 2010 from November 30, 2009, provided the served outside the U.S. for at least 90 days during calendar year 2009.
The bill, which has bipartisan support, could be sent to the Senate for action as early as next week, Congressional sources told Realty Times.
More important for the housing market overall, however, is the precedent set by the bill's extension of the credit for an extra year. It's not a far leap from that position to a general extension of the entire $8,000 credit program to the same date.
The National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association jointly sponsored an ad campaign last week aimed at convincing Congress to give the credit program another year.
Realty Times will keep you on top of this fast-moving issue as it develops.
Copyright © 2009 Realty Times. All Rights Reserved
Washington Report: Tax Credit Changes by Kenneth R. Harney
The first major change to the $8,000 home buyers tax credit began moving through Congress last week, giving hope to real estate and building groups pushing for extension of the entire program before it expires Nov. 30.
House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the “Service Members Home Ownership Act of 2009” late last week, with a floor vote expected this week.
The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.
During their absence, they are not occupants of their houses, and sometimes have to rent them out or sell. Any of these events make them ineligible to retain the $8,000 credit under current law. Ineligible buyers must then repay the credit to the IRS.
Oregon Congressman Earl Blumenauer, sponsor of one of the bills consolidated into Rangel's, said “it is absurd that thousands of Americans serving our country, away from friends and family ... must choose between their service work and home ownership.”
The Ways and Means committee's bill would waive the repayment requirement when a service member must sell a home within the 36 month period because of a transfer to a new duty station or overseas, and would count service-related absences toward the 36 month requirement.
Another provision in the bill would extend the $8,000 credit for another year for personnel who may have missed out on claiming the credit because they thought they wouldn't qualify due to an overseas posting.
The credit for these individuals would be extended to November 30, 2010 from November 30, 2009, provided the served outside the U.S. for at least 90 days during calendar year 2009.
The bill, which has bipartisan support, could be sent to the Senate for action as early as next week, Congressional sources told Realty Times.
More important for the housing market overall, however, is the precedent set by the bill's extension of the credit for an extra year. It's not a far leap from that position to a general extension of the entire $8,000 credit program to the same date.
The National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association jointly sponsored an ad campaign last week aimed at convincing Congress to give the credit program another year.
Realty Times will keep you on top of this fast-moving issue as it develops.
Copyright © 2009 Realty Times. All Rights Reserved
Friday, September 18, 2009
FIRST TIME BUYER TAX CREDIT
This is an excellent article by RISMedia (The leader in Real Estate Information Services). It addresses the details of the Tax Credit system, some warnings about timing and comments on the possible extension of the program.
The Clock Is Ticking
If you are planning on taking advantange of the program, you better get started now!
The Clock Is Ticking
If you are planning on taking advantange of the program, you better get started now!
NEW JOBS AVAILABLE
You may have heard Clark Howard on the radio talking about a broad range of subjects affecting our daily lives.
This article by Clark really got my notice - "300,000 New Jobs on the way". I think he is on to something:
CLARK HOWARD VIDEO
This is definately a place you want to consider if you are among the many unemployed.
I wish you the best of luck - be one of the 300,00!
This article by Clark really got my notice - "300,000 New Jobs on the way". I think he is on to something:
CLARK HOWARD VIDEO
This is definately a place you want to consider if you are among the many unemployed.
I wish you the best of luck - be one of the 300,00!
Thursday, September 17, 2009
NEWS OF NOTE
Items gathered from several places:
The median home price in the Phoenix area reportedly rose for the first time in 2 years. The median price was over $120,000. No doubt the 1st Time Homebuyer program has something to do with that. The inventory of homes in the $100,000 price range in nearly non-exsistant in even Maricopa and Johnson ranch, and even the next range step up to $150,000 is small at best. Most remaining in that market are short-sales which have less appeal to most buyers today.
There were over 8,000 sales in the Phoenix market in August, offset somewhat by 12,000 new listings. The Foreclosure Pipeline is approaching 50,000, but one hopes a large percentage of those will be resolved by loan modifications. You may have read about the judge that brought a Senior VP from a major bank to Phoenix for 2 days of grilling on why modifications are only in the 2 to 3% range? Workload seems to have been the answer - when new loans stopped, people were laid off. How about we hire some back?
Related issue, credit cards.
Some rules that just kicked in the Credit Card industry mean that:
-Card issuers must mail credit card bills at least 21 days before their due dates. That's up from 14 days. Issuers were"banking" on the fact that consumers would make a payment late and incur a $35 late fee.
-Card issuers must give you the option to avoid future interest rate increases and pay off any outstanding balance under your current rate. If you take this option, you won't be able to make additional charges on that card, and you must pay off the balance within five years the bank can cancel the card and make you pay it off under your old terms, but with a higher minimum payment, according to Consumers Union. "Your new payment could be double your old minimum payment, or higher, if needed, to pay off the card in five years."
-Card issuers must give you at least 45 days' notice before making major changes in terms, such as changing your interest rate or the fees they charge. That's up from 15 days. Other card changes that require at least 45 days' notice include an increase in your minimum payment and switching your fixed rate to a variable rate.
After seeing their housing and personal wealth hammered by the recession, U.S. consumers are saving more and paring down their debts, a trend that the new law could reinforce.
For the three months that ended June 30, U.S. households on average carried a credit card balance of $7,987, down from a high of $8,529 in the third quarter of last year, according to Moody's Economy.com.
For Information on getting a new credit card if you're current terms are undesirable visit Bankrate.com
Oh, by the way, the Feds announced today that savings in the U.S. rose by 3%. Why is my head spinning?
Hang in there!
The median home price in the Phoenix area reportedly rose for the first time in 2 years. The median price was over $120,000. No doubt the 1st Time Homebuyer program has something to do with that. The inventory of homes in the $100,000 price range in nearly non-exsistant in even Maricopa and Johnson ranch, and even the next range step up to $150,000 is small at best. Most remaining in that market are short-sales which have less appeal to most buyers today.
There were over 8,000 sales in the Phoenix market in August, offset somewhat by 12,000 new listings. The Foreclosure Pipeline is approaching 50,000, but one hopes a large percentage of those will be resolved by loan modifications. You may have read about the judge that brought a Senior VP from a major bank to Phoenix for 2 days of grilling on why modifications are only in the 2 to 3% range? Workload seems to have been the answer - when new loans stopped, people were laid off. How about we hire some back?
Related issue, credit cards.
Some rules that just kicked in the Credit Card industry mean that:
-Card issuers must mail credit card bills at least 21 days before their due dates. That's up from 14 days. Issuers were"banking" on the fact that consumers would make a payment late and incur a $35 late fee.
-Card issuers must give you the option to avoid future interest rate increases and pay off any outstanding balance under your current rate. If you take this option, you won't be able to make additional charges on that card, and you must pay off the balance within five years the bank can cancel the card and make you pay it off under your old terms, but with a higher minimum payment, according to Consumers Union. "Your new payment could be double your old minimum payment, or higher, if needed, to pay off the card in five years."
-Card issuers must give you at least 45 days' notice before making major changes in terms, such as changing your interest rate or the fees they charge. That's up from 15 days. Other card changes that require at least 45 days' notice include an increase in your minimum payment and switching your fixed rate to a variable rate.
After seeing their housing and personal wealth hammered by the recession, U.S. consumers are saving more and paring down their debts, a trend that the new law could reinforce.
For the three months that ended June 30, U.S. households on average carried a credit card balance of $7,987, down from a high of $8,529 in the third quarter of last year, according to Moody's Economy.com.
For Information on getting a new credit card if you're current terms are undesirable visit Bankrate.com
Oh, by the way, the Feds announced today that savings in the U.S. rose by 3%. Why is my head spinning?
Hang in there!
Friday, September 4, 2009
NEW APPRAISAL AND LOAN PROBLEMS
The Home Valuation Code of Conduct(HVCC)went into effect on May 1, 2009. HVCC establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. Realtors® and mortgage brokers are prohibited from selecting appraisers except for In House staff appraisers.
To date, only Fannie Mae and Freddie Mac have agreed to adopt the Code. There is a strong feeling in the Real Estate Industry that the new system has created manor negative results in the home sales environment. In one long sentence, sales fall through due to delays and bad appraisals, Appraisers are given less time to complete their work and get paid less, many appraisers have left the business, and the system even sends appraisers from another state to work in unfamiliar territory. One or more appraisers from California were sent to Tucson to perform appraisel work?
To date HUD, who administrates FHA, has declined to accept the HVCC. Suddenly, FHA is becoming the lender of choice in our floundering Real Estate Market.
A few facts from recent news releases and information offered on radio programs:
1) Approximately 1/3 of all home owners in the U.S. are upside down on their homes (i.e. their loan is greater than the current value of their home!)
2) An estimated 75 to 80% of those loans are sub-prime loans.
3) And for the first time in history, over 7% of those loans are prime loans!
4) In Phoenix, the national 33% estimate becomes 51% of homeowners that owe more than their house is worth.
An Arizona judge recently forced Wells Fargo Senior Vice President Joe Ohayon to Phoenix for 2 days to explain why so few loan modifications had been granted and why they failed to communicate with those seeking help?
The customer that filed the case that prompted this judicial action said they never told her there was a problem with her request paperwork, they failed to tell her they had turned her down on her request for help, and she states she is now about to lose her home of 15 years. Nice job, Wells Fargo.
For those facing the potential for foreclosure, please see my last blog, "Mortgage Help". I wish you success in overcoming the barriers that seem to persist.
To date, only Fannie Mae and Freddie Mac have agreed to adopt the Code. There is a strong feeling in the Real Estate Industry that the new system has created manor negative results in the home sales environment. In one long sentence, sales fall through due to delays and bad appraisals, Appraisers are given less time to complete their work and get paid less, many appraisers have left the business, and the system even sends appraisers from another state to work in unfamiliar territory. One or more appraisers from California were sent to Tucson to perform appraisel work?
To date HUD, who administrates FHA, has declined to accept the HVCC. Suddenly, FHA is becoming the lender of choice in our floundering Real Estate Market.
A few facts from recent news releases and information offered on radio programs:
1) Approximately 1/3 of all home owners in the U.S. are upside down on their homes (i.e. their loan is greater than the current value of their home!)
2) An estimated 75 to 80% of those loans are sub-prime loans.
3) And for the first time in history, over 7% of those loans are prime loans!
4) In Phoenix, the national 33% estimate becomes 51% of homeowners that owe more than their house is worth.
An Arizona judge recently forced Wells Fargo Senior Vice President Joe Ohayon to Phoenix for 2 days to explain why so few loan modifications had been granted and why they failed to communicate with those seeking help?
The customer that filed the case that prompted this judicial action said they never told her there was a problem with her request paperwork, they failed to tell her they had turned her down on her request for help, and she states she is now about to lose her home of 15 years. Nice job, Wells Fargo.
For those facing the potential for foreclosure, please see my last blog, "Mortgage Help". I wish you success in overcoming the barriers that seem to persist.
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