An effort by the NATIONAL ASSOCIATION OF REALTORS® to spur home sales through a mortgage-interest rate buydown appears to be gaining traction.
Reports in major news media like the Washington Post and Wall Street Journal today quote sources familiar with a meeting between U.S. Treasury officials and NAR in November in which the buydown proposal was discussed.
"Treasury officials told the REALTORS® that the [buydown] plan could be a more effective way to help home owners than focusing solely on borrowers who are struggling to meet their monthly payments," the Washington Post story says.
Under the Treasury plan, lenders would sell newly issued mortgage-backed securities to the government provided the interest-rate on the loans collateralizing the securities was no higher than 4.5 percent. Although NAR supports a buydown, it does not take a position on how low interest rates should go.
To pay for the plan, Treasury would issue bonds at 3 percent, creating a 1.5-percent spread that it could use for buying the securities. Those securities would then be purchased by secondary mortgage market companies Fannie Mae and Freddie Mac, which are under federal conservatorship.
NAR has been calling for a buydown and other measures to help stimulate housing sales as part of a four-point plan it showcased at its annual meeting in Orlando last month.
To date, tens of thousands of REALTORS® have sent letters to their members of Congress asking for quick action to help housing, which is widely considered a crucial first step to a broader economic recovery.
Other parts of the four-point plan include making 2008 high-cost conforming loan limits, which are now $729,750, permanent, and improving the home buyer tax credit by expanding it to all buyers, not just first-timers, and eliminating the repayment requirement.
Some analysts have calculated that an interest-rate buydown could help as many as 2.5 million households.
"We strongly encourage the Treasury to move quickly with its plan to lower interest rates to encourage current buyers to act rather than continue to wait," said NAR President Charles McMillan in a public statement on the Treasury's most recent action with the plan. "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."
Source: REALTOR® Magazine Online
About Me
- Shielamarie Suttle, ASP CNE REALTOR®
- I am a Licensed REALTOR dedicated to providing the highest level of service to buyers and sellers. I strive to be known by other real estate agents as a true professional and a pleasure to do business with. My mission is to treat each and every client as an individual and to always put that client's needs first. My goal is to get the job done with as little hassle as possible. I am aware that most clients want even more than just a no hassle transaction, what they really want is someone who will listen to their needs and desires. That is what I am great at! I have been an Arizona resident for over 22 years and am deeply familiar with most every area across The Valley. I specialize in servicing Mesa, Gold Canyon, Apache Junction, Gilbert, Higley, Queen Creek and Chandler. Most importantly, I am a full-time, full-service real estate professional. Our real estate market is ever-changing and working with an agent like me who is embedded in the industry on a daily basis will ensure a winning experience when buying or selling your next home.
Monday, December 8, 2008
Mortgage Rates Take a Big Dip
For the week ended Dec. 3, Freddie Mac reported the lowest interest on 30-year fixed home loans since late January.
The rate came in at an average of 5.53 percent, down from 5.97 percent the previous week and 5.96 percent a year ago; while 15-year fixed mortgages settled at 5.33 percent compared to 5.74 percent last week and 5.65 percent in the year-earlier period.
Borrowing costs for short-term loans also were lower, with one-year adjustable-rate mortgages dipping to 5.02 percent from 5.18 percent a week ago and 5.46 percent a year ago.
Five-year hybrid ARMs, meanwhile, fell to 5.77 percent from 5.86 percent last week and 5.75 percent during the same period of last year.
Source: Realty Times (12/05/08)
The rate came in at an average of 5.53 percent, down from 5.97 percent the previous week and 5.96 percent a year ago; while 15-year fixed mortgages settled at 5.33 percent compared to 5.74 percent last week and 5.65 percent in the year-earlier period.
Borrowing costs for short-term loans also were lower, with one-year adjustable-rate mortgages dipping to 5.02 percent from 5.18 percent a week ago and 5.46 percent a year ago.
Five-year hybrid ARMs, meanwhile, fell to 5.77 percent from 5.86 percent last week and 5.75 percent during the same period of last year.
Source: Realty Times (12/05/08)
Monday, November 3, 2008
Reverse Mortgages Get Boost from Uncle Sam
Starting on Nov. 1, the limit on FHA-backed reverse mortgages, dubbed Home Equity Conversion Mortgages (HECMs), will rise to $417,000 nationwide.
The new rules also will institute a 2-percent cap on origination fees for the first $200,000 of the loan amount or a 1-percent ceiling for higher amounts, with a $6,000 inflation-adjustable limit.
Additionally, seniors will be allowed to use such loans to purchase a new property and extract equity from co-operative properties, and lenders will no longer be allowed to sell annuities and other financial products along with the mortgage.
Presently, 99 percent of new reverse mortgages are HECMs.
Source: Christian Science Monitor, Margaret Price (10/27/08)
The new rules also will institute a 2-percent cap on origination fees for the first $200,000 of the loan amount or a 1-percent ceiling for higher amounts, with a $6,000 inflation-adjustable limit.
Additionally, seniors will be allowed to use such loans to purchase a new property and extract equity from co-operative properties, and lenders will no longer be allowed to sell annuities and other financial products along with the mortgage.
Presently, 99 percent of new reverse mortgages are HECMs.
Source: Christian Science Monitor, Margaret Price (10/27/08)
Monday, October 27, 2008
Mortgage Market Still Open for Business
Lenders emphasize that loans continue to be available for a range of potential home buyers, not just those who are putting down 20 percent and have a credit score higher than 720.
Although credit underwriting is tougher and loan terms stricter, borrowers can still put down 3 percent (3.5 percent after Jan. 1) on an FHA-insured mortgage and 5 percent on some Fannie Mae and Freddie Mac loan programs with private mortgage insurance.
FHA standards are designed to help people with problem credit and those with scores in the upper 600s can still qualify for loans with reasonable rates offered by Fannie Mae and Freddie Mac.
Maximum loans in high-cost markets are capped at $729,750 through December. In June, they are expected to fall to approximately $625,000.
"I don't think consumers really know how free-flowing capital is right now in the residential mortgage market. There are no shortages, no breakdowns. People ought to be aware of that," says Jeff Lipes, president of Family Choice Mortgage.
Source: Washington Post Writer’s Group, Kenneth R. Harney (10/18/08)
Although credit underwriting is tougher and loan terms stricter, borrowers can still put down 3 percent (3.5 percent after Jan. 1) on an FHA-insured mortgage and 5 percent on some Fannie Mae and Freddie Mac loan programs with private mortgage insurance.
FHA standards are designed to help people with problem credit and those with scores in the upper 600s can still qualify for loans with reasonable rates offered by Fannie Mae and Freddie Mac.
Maximum loans in high-cost markets are capped at $729,750 through December. In June, they are expected to fall to approximately $625,000.
"I don't think consumers really know how free-flowing capital is right now in the residential mortgage market. There are no shortages, no breakdowns. People ought to be aware of that," says Jeff Lipes, president of Family Choice Mortgage.
Source: Washington Post Writer’s Group, Kenneth R. Harney (10/18/08)
NAR: Home Sales Rise as Affordability Improves
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August. Home sales are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.
“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri, and Rhode Island,” he says. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord says low home prices and low interest rates have helped attract buyers.
“This is the first time since November 2005 that home sales have been above year-ago levels,” Gaylord says. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun says there may still be market disruptions.
“The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac," Yun says. "Inventory remains high, and price declines are pressuring owners."
Yun says that an additional housing stimulus would stabilize prices more quickly and help bring faster stability to Wall Street.
"Removing the repayment feature on the [$7,500] first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory,” Yun says.
A Closer Look at the Numbers
* Total housing inventory: at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
* National median existing-home price: $191,600 in September, for all housing types. That's down 9 percent from a year ago when the median was $210,500.
“Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions," Yun says. "These are pulling the median price down because many are being sold at discounted prices. The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
* Single-family home sales: increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
* Existing condominium and co-op sales: were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.
By Region
Here's a breakdown across the country of existing-home in September:
* West: sting-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. Median price: $253,600, down 18.5 percent from a year ago.
* Midwest: sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. Median price: $152,500, which is 7.9 percent lower than September 2007.
* South: sales rose 2.2 percent in September to a pace of 1.9 million but remain 7.8 percent below September 2007. Median price:$167,200, down 4.1 percent from a year ago.
* Northeast: sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. Median price: $246,800, down 5.4 percent from September 2007.
Source: NAR
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August. Home sales are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.
“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri, and Rhode Island,” he says. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord says low home prices and low interest rates have helped attract buyers.
“This is the first time since November 2005 that home sales have been above year-ago levels,” Gaylord says. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun says there may still be market disruptions.
“The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac," Yun says. "Inventory remains high, and price declines are pressuring owners."
Yun says that an additional housing stimulus would stabilize prices more quickly and help bring faster stability to Wall Street.
"Removing the repayment feature on the [$7,500] first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory,” Yun says.
A Closer Look at the Numbers
* Total housing inventory: at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
* National median existing-home price: $191,600 in September, for all housing types. That's down 9 percent from a year ago when the median was $210,500.
“Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions," Yun says. "These are pulling the median price down because many are being sold at discounted prices. The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
* Single-family home sales: increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
* Existing condominium and co-op sales: were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.
By Region
Here's a breakdown across the country of existing-home in September:
* West: sting-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. Median price: $253,600, down 18.5 percent from a year ago.
* Midwest: sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. Median price: $152,500, which is 7.9 percent lower than September 2007.
* South: sales rose 2.2 percent in September to a pace of 1.9 million but remain 7.8 percent below September 2007. Median price:$167,200, down 4.1 percent from a year ago.
* Northeast: sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. Median price: $246,800, down 5.4 percent from September 2007.
Source: NAR
Monday, October 20, 2008
10 Ways to Cut Energy Bills This Fall
Staying warm doesn't have to cost a fortune. Here are some ideas from the U.S. Department of Energy for conserving heat and saving money.
When the leaves start falling, you know that the heating bills are about to start rising. But keeping your home warm and cozy on chilly autumn nights doesn't have to break the bank.
The U.S. Department of Energy offers these simple tips and relatively inexpensive home improvements that will help ensure cold gusts stay out and your furnace doesn't have to work harder than it should.
The goal: Conserve energy and keep more of your hard-earned dollars in your pocket.
Share these ideas with customers and use them for your own house. After all, who doesn't need to save a little money these days?
1. Plug air leaks with caulking, sealing, or weather stripping. Save 10 percent ($190 per year) or more on energy bills. Focus on windows, doors, outlets or switch plates on exterior walls.
2. Properly maintain the heating system. Heating accounts for half the average family's energy bill (approximately $950 per year). Make sure the furnace or heat pump receives professional maintenance each year. The small cost (about $75-100 for most service calls) will pay back in better performance all year long.
3. Install a programmable thermostat. Programming the thermostat from 72ºF to 65ºF for eight hours a day while no one is home, or everyone is tucked in bed, will cut the heating bill up to 10 percent ($90 per year), paying for a basic unit in less than a year.
4. Seal and insulate heating ducts. A system can lose up to 60 percent of its warmed air before it reaches the register (wasting $570 in warmed air per year) if ducts are not properly insulated in unheated areas such as attics and crawlspaces.
5. Insulate, insulate, insulate. Adequate insulation in the attic, ceilings, exterior and basement walls, floors, and crawlspaces can save up to 30 percent on home energy bills ($630 per year). Focus on the attic. (Heat rises.) Most homes should have between R-30 and R-49 insulation in the attic. Learn more at www.eere.energy.gov/consumer.
6. Close fireplace dampers when not in use. When in use, reduce heat loss by opening dampers in the bottom of the firebox (if provided) or open the nearest window about an inch, close doors to the room, and lower thermostat setting to 50-55ºF.
7. Let the sun shine in. Open curtains on south facing windows during the day to allow sunlight to naturally heat the home, and close them at night to reduce the chill from cold windows.
8. Stay out of hot water. Water heating accounts for 15 percent of household energy use. Reduce water heating costs by lowering the water heater’s thermostat setting. Each 10ºF reduction can save between 3-5 percent in energy costs. Also insulate the hot water heater and hot water pipes.
9. Install storm windows over single-pane windows or replace them with Energy Star qualified windows. Storm windows reduce heat loss by 25 to 50 percent, and storm windows with low-e coating that reflect heat back into the room during the winter months save even more energy. Look for the Energy Star label to maximize savings. Energy Star qualified windows reduce heating and cooling bills by an average of $345, but could be higher in cold and hot climates, compared with uncoated, single-pane windows. Can’t afford new windows just now? Tape clear plastic sheeting to the inside of window frames if drafts, water condensation, or frost are present.
10. Net big savings with a little label. When replacing appliances, light bulbs, electronics, or heating and cooling systems, cut energy bills by up to 30 percent ($600 per year) with Energy Star labeled products. Use compact fluorescent light bulbs (CFLs) in place of comparable incandescent bulbs. Find retailers at www.energystar.gov.
These and other improvements that impact the energy efficiency of a home can save home owners money in the short term and serve as a selling point to potential buyers later. Be sure to save receipts, documentation, and manufacturer’s information.
Not sure where to begin? Try the Department of Energy's online energy audit tool at www.hes.lbl.gov. In the long run, a whole-house energy audit is a fool proof way to make a plan to address wasted energy and make a home operate efficiently for years to come. Visit www.natresnet.org to find a qualified auditor in your neck of the woods.
(Source: REALTOR® magazine, Kelly Quigley)
When the leaves start falling, you know that the heating bills are about to start rising. But keeping your home warm and cozy on chilly autumn nights doesn't have to break the bank.
The U.S. Department of Energy offers these simple tips and relatively inexpensive home improvements that will help ensure cold gusts stay out and your furnace doesn't have to work harder than it should.
The goal: Conserve energy and keep more of your hard-earned dollars in your pocket.
Share these ideas with customers and use them for your own house. After all, who doesn't need to save a little money these days?
1. Plug air leaks with caulking, sealing, or weather stripping. Save 10 percent ($190 per year) or more on energy bills. Focus on windows, doors, outlets or switch plates on exterior walls.
2. Properly maintain the heating system. Heating accounts for half the average family's energy bill (approximately $950 per year). Make sure the furnace or heat pump receives professional maintenance each year. The small cost (about $75-100 for most service calls) will pay back in better performance all year long.
3. Install a programmable thermostat. Programming the thermostat from 72ºF to 65ºF for eight hours a day while no one is home, or everyone is tucked in bed, will cut the heating bill up to 10 percent ($90 per year), paying for a basic unit in less than a year.
4. Seal and insulate heating ducts. A system can lose up to 60 percent of its warmed air before it reaches the register (wasting $570 in warmed air per year) if ducts are not properly insulated in unheated areas such as attics and crawlspaces.
5. Insulate, insulate, insulate. Adequate insulation in the attic, ceilings, exterior and basement walls, floors, and crawlspaces can save up to 30 percent on home energy bills ($630 per year). Focus on the attic. (Heat rises.) Most homes should have between R-30 and R-49 insulation in the attic. Learn more at www.eere.energy.gov/consumer.
6. Close fireplace dampers when not in use. When in use, reduce heat loss by opening dampers in the bottom of the firebox (if provided) or open the nearest window about an inch, close doors to the room, and lower thermostat setting to 50-55ºF.
7. Let the sun shine in. Open curtains on south facing windows during the day to allow sunlight to naturally heat the home, and close them at night to reduce the chill from cold windows.
8. Stay out of hot water. Water heating accounts for 15 percent of household energy use. Reduce water heating costs by lowering the water heater’s thermostat setting. Each 10ºF reduction can save between 3-5 percent in energy costs. Also insulate the hot water heater and hot water pipes.
9. Install storm windows over single-pane windows or replace them with Energy Star qualified windows. Storm windows reduce heat loss by 25 to 50 percent, and storm windows with low-e coating that reflect heat back into the room during the winter months save even more energy. Look for the Energy Star label to maximize savings. Energy Star qualified windows reduce heating and cooling bills by an average of $345, but could be higher in cold and hot climates, compared with uncoated, single-pane windows. Can’t afford new windows just now? Tape clear plastic sheeting to the inside of window frames if drafts, water condensation, or frost are present.
10. Net big savings with a little label. When replacing appliances, light bulbs, electronics, or heating and cooling systems, cut energy bills by up to 30 percent ($600 per year) with Energy Star labeled products. Use compact fluorescent light bulbs (CFLs) in place of comparable incandescent bulbs. Find retailers at www.energystar.gov.
These and other improvements that impact the energy efficiency of a home can save home owners money in the short term and serve as a selling point to potential buyers later. Be sure to save receipts, documentation, and manufacturer’s information.
Not sure where to begin? Try the Department of Energy's online energy audit tool at www.hes.lbl.gov. In the long run, a whole-house energy audit is a fool proof way to make a plan to address wasted energy and make a home operate efficiently for years to come. Visit www.natresnet.org to find a qualified auditor in your neck of the woods.
(Source: REALTOR® magazine, Kelly Quigley)
New Stimulis Package Under Discussion
Capitol Hill legislators are busy hammering out another economic stimulus plan to help ordinary Americans. But their chances of gaining support from the president and lawmakers on both sides of the aisle is not certain.
The problem is that Democrats and Republicans have very different views of how a stimulus package should be structured, and the White House has signaled its opposition to some of the key ideas now being circulated.
Senate Majority Leader Harry Reid (D-Nev.) took the wraps off a $150 billion package similar to a stimulus proposal made by Democratic presidential nominee Sen. Barack Obama (D-Ill.) earlier in the week.
That proposal includes spending on infrastructure projects, providing energy assistance to low-income families, and a mandate for the federal government to be more aggressive in using its authority to push lenders to reduce foreclosures by renegotiating mortgage loans.
Republicans, by comparison, favor suspending the capital gains levy, lowering the corporate tax rate, and providing federal guarantees on interbank lending.
[Editor's note: The National Association of REALTORS® has called on Congress to pass a new stimulus bill during the lame-duck session of Congress later this year and to include four consumer-oriented housing provisions in the bill that would:
1. Make the temporary high-cost conforming loan limit of $729,750 permanent.
2. Eliminate the repayment requirement in the $7,500 homeownership tax credit and also expand eligibility for that tax credit to all buyers, not just first-timers.
3. Ensure the $700 billion in federal assistance to Wall Street gets filtered to lenders for new loan originations and refinancings, and not just be used to shore up investment banks' bottom lines.
4. Permanently keep banks out of real estate brokerage and management to ensure long-term protection of consumers.]
Source: Los Angeles Times, Jim Puzzanghera and Richard Simon (10/16/08)
The problem is that Democrats and Republicans have very different views of how a stimulus package should be structured, and the White House has signaled its opposition to some of the key ideas now being circulated.
Senate Majority Leader Harry Reid (D-Nev.) took the wraps off a $150 billion package similar to a stimulus proposal made by Democratic presidential nominee Sen. Barack Obama (D-Ill.) earlier in the week.
That proposal includes spending on infrastructure projects, providing energy assistance to low-income families, and a mandate for the federal government to be more aggressive in using its authority to push lenders to reduce foreclosures by renegotiating mortgage loans.
Republicans, by comparison, favor suspending the capital gains levy, lowering the corporate tax rate, and providing federal guarantees on interbank lending.
[Editor's note: The National Association of REALTORS® has called on Congress to pass a new stimulus bill during the lame-duck session of Congress later this year and to include four consumer-oriented housing provisions in the bill that would:
1. Make the temporary high-cost conforming loan limit of $729,750 permanent.
2. Eliminate the repayment requirement in the $7,500 homeownership tax credit and also expand eligibility for that tax credit to all buyers, not just first-timers.
3. Ensure the $700 billion in federal assistance to Wall Street gets filtered to lenders for new loan originations and refinancings, and not just be used to shore up investment banks' bottom lines.
4. Permanently keep banks out of real estate brokerage and management to ensure long-term protection of consumers.]
Source: Los Angeles Times, Jim Puzzanghera and Richard Simon (10/16/08)
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