The Great Recession is not the great American equalizer after all. It's been widely reported recently that this recession hit middle and low income families the hardest, while the wealthy have continued to prosper. It may be chic to save and everyone brags about coupon clipping, but the idea that "we are all in this together" may not actually be the case.

According to the Associated Press, incomes have declined across all demographics, but at a greater percentage for middle and lower income groups. "Median income fell last year from $52,163 to $50,303, wiping out a decade's worth of gains to hit the lowest level since 1997." In fact, the gap between the rich and the poor has widened to the point that the wealthiest ten percent of Americans earned 11.4 times those below the poverty line earning $12,000 a year. Previously, the highest earning difference was 11.22 times higher in 2003.

The unemployment rate stands at a thirty year high of 9.7 and a great majority of those job losses have been lower income ones, particularly in construction and manufacturing. While wealthier Americans have had reductions in executive pay, far more of the middle and lower income earners have lost their jobs. This disparity between the rich and the poor is more pronounced in larger cities, like Atlanta, New York and Chicago.

The recession seems to be coming to a close with signs that the economy is finally growing. The Commerce Department reported that the economy shrank less than expected, with gross domestic product dipping just 0.7 percent from April to June, after dropping 6.4 percent in the first quarter of the year (AP). Measuring the value of all goods and services, the GPD is a good barometer of the health of the economy.

The better than anticipated numbers are attributed to businesses and consumers spending more than expected. The better news is largely credited to the government's $787 billion stimulus package and programs like Cash for Clunkers. What is not expected to improve anytime soon is the unemployment rate, which analysts believe will reach 10 percent by the end of the year.

As hiring in most sectors remains stagnate and layoffs continue, the gap between the haves and have-nots is likely to widen. Congress is considering ways to regulate executive pay and this along with The Great Recession is not the great American equalizer after all. It's been widely reported recently that this recession hit middle and low income families the hardest, while the wealthy have continued to prosper. It may be chic to save and everyone brags about coupon clipping, but the idea that "we are all in this together" may not actually be the case.

According to the Associated Press, incomes have declined across all demographics, but at a greater percentage for middle and lower income groups. "Median income fell last year from $52,163 to $50,303, wiping out a decade's worth of gains to hit the lowest level since 1997." In fact, the gap between the rich and the poor has widened to the point that the wealthiest ten percent of Americans earned 11.4 times those below the poverty line earning $12,000 a year.

The unemployment rate stands at a thirty year high of 9.7 and a great majority of those job losses have been lower income ones, particularly in construction and manufacturing. While wealthier Americans have had reductions in executive pay, far more of the middle and lower income earners have lost their jobs. This disparity between the rich and the poor is more pronounced in larger cities, like Atlanta, New York and Chicago.

The recession seems to be coming to a close with signs that the economy is finally growing. The Commerce Department reported that the economy shrank less than expected, with gross domestic product dipping just 0.7 percent from April to June, after dropping 6.4 percent in the first quarter of the year (AP). Measuring the value of all goods and services, the GPD is a good barometer of the health of the economy.

The better than anticipated numbers are attributed to businesses and consumers spending more than expected. The better news is largely credited to the government's $787 billion stimulus package and programs like Cash for Clunkers. What is not expected to improve anytime soon is the unemployment rate, which analysts believe will reach 10 percent by the end of the year.

As hiring in most sectors remains stagnate and layoffs continue, the gap between the haves and have-nots is likely to widen. Congress considering ways to regulate executive pay along with President Obama suggesting higher taxes on the wealthy as one the ways to pay for health care reform, the resentment between the two ends of the income spectrum may also increase. While the Great Recession is the worst state the economy has been in since the Great Depression, some Americans are faring better than others.


Ki's real estate business is based in Austin, Texas. His website gives comprehensive information on Austin real estate. His website provides future home buyers with a free search of homes in the Austin MLS along with a blog with statistics and commentary on Austin Texas real estate.

So are sub 5.0 rates gone forever? The short answer is probably yes. While rates might briefly fall below 5 in the next month for the most part the era of sub 5.0 rates is over. Mortgage rates rose for the third straight week. The thirty year rate rose from 5.00 to 5.03. The 15 year rate rose from 4.43 to 4.46. The 5 and 1 year rates rose from 4.40 to 4.42 and 4.54 to 4.57. Its interesting to note that the 1 year arm has had a higher rate than the 5 year arm for the last few weeks. Below are rates for the last few weeks.

Oct 29, 2009
30-yr 5.03 15-yr 4.46 5-yr ARM 4.42 1-yr ARM 4.57

Oct 22, 2009
30-yr 5.00 15-yr 4.43 5-yr ARM 4.40 1-yr ARM 4.54

Oct 15, 2009
30-yr 4.92 15-yr 4.37 5-yr ARM 4.38 1-yr ARM 4.60

Oct 08, 2009
30-yr 4.87 15-yr 4.33 5-yr ARM 4.35 1-yr ARM 4.53

Oct 01, 2009
30-yr 4.94 15-yr 4.36 5-yr ARM 4.42 1-yr ARM 4.49

Apr 02, 2009
30-yr 5.05 15-yr 5.13 5-yr ARM 5.00 1-yr ARM 4.78

The only two mortgage products that are interesting is the 30 year and the 15 year fixed rates. With 1 year rates higher than the 5 year arm they are obviously pointless. And with current rates low compared to historical mortgage rates the lower rates of the 5 year arm (compared to the 30 year rate) don't seem worth the risk. In addition to mortgage rates lets look at mortgage payments. Taking today's rates we can translate them into a payment for a 200k mortgage. We did the same thing with rates from October 15th (2 weeks ago) and April 2 (6 months ago).

Oct 29
30-yr $1077.31
15-yr $1525.9
5-yr ARM $1003.88
1-yr ARM $1021.7

Oct 15
30-yr $1063.88
15-yr $1516.73
5-yr ARM $999.16
1-yr ARM $1025.28

Apr 02
30-yr $1079.76
15-yr $1595.16
5-yr ARM $1073.64
1-yr ARM $1046.91

A mortgage payment is about $13 more than 2 weeks ago and about $2 less than it was six months ago.

So why are rates rising? Although its a weak recovery, the economy by most accounts is experiencing a recovery. In addition, the government has lowered the amount of mortgage backed securities it was buying which was keeping rates artifically low.

So what is our advice to people interested in buying a house? It might seem obvious but I would lock in now instead of waiting. Almost all signs point to mortgage rates rising over the next few months. The real question is will the strengthing real estate market be able to withstand higher rates? We will have to wait to find out.


Ki writes frequently about the mortgage industry and mortgage rates. He caters to the real estate market in Austin. His site www.escapesomewhere.com www.escapesomewhere.com has information on historical mortgage rates along with a free mortgage widget.

If you are having trouble keeping up with your mortgage payments, you're not alone. If you are three months or more behind in your mortgage payments, then you are one in an estimated 3 million or more who are currently in one state or another of default.

In this situation, however, what are your options for avoiding foreclosure?

Regardless of where you are right now with your mortgage payments, the most important thing you can do is to contact your lender when you first realize you are having problems. Never ignore communication from your loan servicer.

It is to the lender's advantage to work out a solution with you if at all possible. Discuss options with your lender. Initially, most lenders will not discuss options available until you complete and submit to them a workout packet. A workout packet includes a detailed letter as to how you arrived at your situation, an income and expense statement and other information specified by your lender.

Some workable options may be a loan modification, which modifies the payment and even sometimes lowers the interest rate of your existing mortgage. The intent is to make it more affordable for you to make the payments. Typically, the result is a mortgage payment at 31 percent or below your current total household income.

In the meantime, respond to all communication from your lender. Become familiar with your rights. Read your loan agreement and find out what steps are built into your home loan regarding default.

Research your state's foreclosure laws and the relative timeframes, since laws differ from state-to-state. Information should be available online; however, you may also want to contact your State Government Housing office directly for details. The Department of Housing and Urban Development (HUD) is a great point-of-contact for information.

HUD housing counseling agents are on-hand to assist in this type of situation. You may contact one by calling 1-800-569-4287. You may also access resources in your state via the HUD website.

Once you understand the timeframes and obtain all the information you can regarding your situation, you may want to find a good bankruptcy attorney just in case your lender does not provide you with a feasible option, or does not provide you with a feasible option in time to avoid foreclosure.

In the midst of all your activity to prevent foreclosure, a primary consideration should be to modify your spending. It's amazing how much you can trim when looking at alternatives to entertainment and other purchases.

In the case of job loss or other reasons for reduced income, families often find it difficult to stop the prior cycle of spending. Even if a previous family budget was kept, it's critical to restructure the budget according to the new net income and eliminate any unnecessary spending in order to modify spending habits.

If brands were important before, ditch the brand name and opt for generic or less expensive brands. Hold off on buying clothing and accessories. If you just have to purchase such items, make sure you build a minimal amount into your monthly budget for items that can easily blend into your existing wardrobe. Look for alternative entertainment, like $1.00 video rentals at a local Redbox.

There actually could be a silver lining to this cloud in working with your family members to reduce spending. With input from all family members, you might be surprised at the savings. In addition, if you opt for a weekly eat-in family theme night, instead of that expensive dinner and movie you were used to, a greater sense of bonding might be the result. Also, ask everyone the question, "Are there assets we have that could be sold?" Again, input from all family members could result in some unexpected revenue.

Another benefit found serendipitously through a layoff is that some who have lost jobs have found other opportunities they never would have looked for had they never been laid off.

Finally, stay away from foreclosure rescue companies and schemes. You don't need to spend money that could be used toward your mortgage in trying to save it. Note that all avenues necessary to avoid foreclosure cost you nothing if you access the appropriate resources, unless you have to go into bankruptcy to save it.

Ki lives, in central Texas and works in the Austin real estate market. His website brings a free search of Austin homes for sale to future homebuyers. There is detailed information about Austin real estate along with a mortgage widget.

Austin is one of 79 metro areas across the country to be officially out of the recession, according to Moody's. Although the state of Texas is still considered to be suffering the constraints of the recession, Austin and seven other Texas cities have been given the all clear. This determination was based on an index that included employment, housing starts and home prices.

In fact, the latest poll of economist says that at least 80 percent of them agree that the recession is over. Unfortunately that piece of good news may not mean whole lot as the American economic landscape looks completely different than it did two years ago. The survey by the National Association for Business Economics released recently said to expect a slow recovery. Here are some reasons the recession recovery may be slow:

Unemployment
There seems to be little doubt that the unemployment rate, which is currently 9.8 percent, will reach 10 percent by the first part of next year. Even with the number of new jobless claims down for the fourth week in the last five, layoffs continue. Federal Reserve Chairman Ben Bernanke has warned that unemployment is likely to remain above nine percent through 2010.

Consumer Spending
Worries over unemployment affect consumer spending habits, even of those Americans who have jobs and job security. The personal saving rate is up for the first time in two decades and the cautious spending that began during the height of the recession has not changed appreciably in recent months. For example, when gas prices hit the $4 per gallon mark in the summer of 2008, people significantly changed driving habits. The annual American Community Survey showed that the numbers of Americans commuting to work, a habit stared during the high gas prices, remains the highest number in more than a decade. People are generally not eating out as much or making as many big purchases. It remains to be seen if holiday spending this season will help revive the suffering retail sector.

Real Estate
The economists surveyed expect housing in 2010 to contribute to the overall growth of the economy for the first time since 2005. However, the census data shows that less people are moving these days, with population trends to the sunbelt states actually being reversed. Real Estate prices nationwide are down and the percentage of Americans owning homes dropped to 66.6 percent this year from the high of 67.3 percent in 2006.

Credit
Even with the Dow Jones industrial going over 10,000 and banks reporting billion dollars profits, credit remains tight. A recent report from the Federal Reserve shows that households have reduced their borrowing for the seventh straight month, while at the same times banks are lowering credit limits. Banks seem to be enemy number one when it comes to this recession, yet they have to play an integral part in the recovery. Until credit for both businesses and individuals starts flowing again, employment and housing is likely to remain stagnant.


Ki lives, and works, in Austin, Texas. His site provides potential homebuyers a free search of the Austin MLS. He also provides detailed information about Austin real estate on this site along with profiles of neighborhoods like Westminster Glen in central Austin.

No matter what profession you are in, you will be impacted by real estate in some form or another. Whether you own, rent or sub-let, your life is impacted by real estate and the professionals or individuals that sell, manage or own it.

With that in mind, it would make sense that you just might be interested in people who have made it big in real estate. There are a select few in the entire world who have made their tremendous mark on the real estate landscape. Although, there were many struggles along the way, they arrived at that coveted spot of being a famous real estate tycoon.

Sarah Beeny is a developer and a host of Property Ladder, a British television program in the U.K. Beeny is a die-hard optimist and proponent for incorporating energy efficiency into building or remodeling.

Tim Blixseth is an American real estate mogul and billionaire businessman. He made a promise early on in his investment life to only collect assets, not liabilities, for the remainder of his life. He says he's stuck to that promise.

Donald Bren, according to Forbes.com, is the wealthiest real estate tycoon on the planet with a $12 billion net worth. He currently owns hundreds of office buildings, along with 90 apartment complexes.

Conrad Hilton is the founder of Hilton Hotels. Hilton was known as a tremendous philanthropist who believed charity was a basic requirement for humanity.

Stanley Ho is one of the richest people in Asia. He's a Macau and Hong Kong billionaire and casino mogul.

Lee Shau Kee is recently most famous for losing around $8 billion in net worth just in the past two years. Even with the huge losses, Kee continues to be noted as a real estate magnate as owner for Henderson Land Development. China's greater region still considers Kee as one of the area's richest people.

Ray Kroc is a entrepreneur who founded the McDonald's Corporation franchise. Kroc purchased all rights to the McDonald's name from the founding brothers Richard and Maurice McDonald. He took the franchise internationally to Japan and Germany in 1971.

Akira Mori is a famous Japanese real estate tycoon and billionaire. He's one of the richest men in the world. President and CEO of Mori Trust, his family's company owns real estate and hotels in Tokyo and all over Japan.

Minoru Mori is also a famous Japanese tycoon and billionaire. He and his brother Akira are sons to Taikichiro Mori.

Donald Trump is a famous television celebrity and billionaire real estate developer. Although his investments fluctuate with the waves of the sea, he always seems to come out on top.

Steve Wynn is a well-known Las Vegas casino and resort developer who developed some of the most opulent casinos and resorts in the City of Las Vegas.

Sam Zell's net worth exceeds $6 billion. He is ranked 68th on Forbes' list of richest Americans. He co-founded Equity Group Investments LLC that launched Equity Residential and Equity Office Properties.

Ki worked on 6th street in college. Today he has a business focused on Austin Texas real estate in the older neighborhoods of central Austin.. He also has a website, which encourages buyers to search the Austin MLS. Potential buyers can keep up with the market from afar by following his blog filled with statistics on Austin real estate.

Mortgage Rates Fell yet again this week. The 30 year fell from 5.04 to 4.94. This marks the 5th week in a row where mortgage rates have either fallen or held steady. For the most part rates have been slowly falling. In fact this week accounts for half of the total fall in the last five weeks. So how does 4.94 look in a historical context. It is the lowest rate we have seen since May 28th. More importantly though it is lower than any rate we have seen prior to March 26, 2009 in the 40 years we have been compiling reliable data on average mortgage rates.

In addition to the 30 year rate the other major mortgage products fell as well. The 15 year fixed fell from 4.46 to 4.36. The 5 and 1 year arm fell from 4.51 to 4.42 and 4.52 to 4.49 respectively. Below are rates from the last few weeks.

Oct 01, 2009
30-yr 4.94 15-yr 4.36 5-yr ARM 4.42 1-yr ARM 4.49

Sep 24, 2009
30-yr 5.04 15-yr 4.46 5-yr ARM 4.51 1-yr ARM 4.52

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Mar 05, 2009
30-yr 5.15 15-yr 4.72 5-yr ARM 5.08 1-yr ARM 4.86

So why are rates falling. The fed has been buying mortgage backed securities to keep rates low. But the expectation is that interest rates cannot stay this low forever. Historically rates are abnormally low and at some point they are going to start moving back up. One thing to watch is the government's buying of mortgage backed securities. To stop inflation from getting out of control the fed needs to stop buying securities once the economy starts improving and recently the fed has started to pull back on the volume of mortgage securities they are purchasing.

In addition to rates its also helpful to look at actual mortgage payments to provide perspective. We translated today's rates into a payment on a 200k mortgage. We also did the same thing with rates from September 17th and February 26th.

Oct 01
30-yr $1066.32
15-yr $1515.71
5-yr ARM $1003.88
1-yr ARM $1012.18

Sep 17
30-yr $1078.53
15-yr $1526.92
5-yr ARM $1014.55
1-yr ARM $1022.89

Feb 26
30-yr $1082.21
15-yr $1548.44
5-yr ARM $1080.98
1-yr ARM $1050.53

Looking at the 30 year rate a mortgage payment is pretty similar to 2 weeks ago and 6 months ago. A 200k mortgage 6 months ago would have been 1.46 percent less or $15.89 less a month.

So what is going to happen moving forward. I would expect rates to stay around 5 for the time being. As long as the government continues buying mortgage backed securities we should see rates at historically low levels. Once the market starts to improve rates will start to increase. If the government is careful and avoids inflation rates should likely rise to 6-8 percent. If the government loses control of inflation we could see rates move up into the double digits.

Ki studied at UT. He hosts a website with a graphical Austin home search. His site also has a graph showing mortgage rate trends along with several mortgage widgets.

Marshalls are preparing to put Madoff's mansions on the market, and victims of his ponzi scheme are hoping to cash in big time. Based on court records, the FBI is revving up to sell an estimated $30 million in real estate and property, all of which will go to his victims. The three homes on the way to market are a penthouse in Manhattan, a Montauk beach house on Long Island and a waterfront Palm Beach retreat.

Vacation real estate Madoff owned in Côte d'Azur that was seized by the feds back in March has since been sold. The chic three-bedroom Cap d'Antibes home netted $1.48 million noted the Justice Department. Funds from the sale are being held at the U.S. Marshall's office.

Marshalls opened the doors to Madoff's Manhattan luxury penthouse earlier in September giving the public a glimpse into the lifestyle of the previously rich rip-off artist. The two-story apartment was the location of Madoff's confinement during his house arrest.

Four fireplaces, a baby Steinway piano, antique rugs, custom-made furniture and other fine furnishings must have made Madoff quite comfortable while carrying out his Ponzi scheme. U.S. Marshall Roland Ubaldo said that the Manhattan penthouse was the crown jewel of all Madoff's properties seized by the government. It's easy to see why with all the lavish decorations and furnishings.

A wraparound terrace provides a stunning view of southern Manhattan. His and her closets contain Madoff's handmade Belgian shoes and boxes of designer clothing that are all packed away and awaiting auction. His den does not disappoint, either, with cherry paneling and a leather bull - his personal trademark.

According to court filings, the apartment was valued at $7.5 million by the FBI. One New York appraiser has his doubts about the appraisal. Miller Samuel appraiser, Jonathan Miller, said that what he'd seen of it so far would be considered fairly modest, in his opinion. He cited that it was not actually a Park Avenue duplex, which is what the press coverage had been calling it. Its address is on 64th Street and it sits a block east on the corner of Lexington.

The Montauk beach house with 3,000 square feet of living space sits on a one-and-a-half acre prime lot atop a bluff overlooking an ocean beach. It sits closer to the water's edge than would be allowed today due to earlier more lax zoning regulations.

Feds estimate its worth at $7 million, but tax assessments indicate its value at $3.3 million. Regardless, one real estate agent noted that the history and high-profile of the home may cause it to sell for as much as $10 million. Purchased in 1980, the Madoffs originally only paid $250,000 for the home.

Listed under Madoff's wife's name, the Palm Beach hideaway is valued at $7.5 million. Featuring a pool, 8,753 square feet of living space, five-bedrooms and seven-bathrooms, the two-story home sits on a waterfront half-acre plot. Included in the property is a boat dock where Madoff parked his now-seized yacht, the Bull. It is a 55-foot fishing vessel reportedly worth $1.5 million.

Well shaded by lots of large trees and a large second-floor veranda, the house sits just down the shore from a location where Madoff lured in many of his victims, the Palm Beach Country Club.

Madoff is making amends in his not-so-luxurious jail cell and the hope is that the victims he left as carnage will be reimbursed for some of their loss and suffering.

Ki lives in Central Austin. He works in the Austin real estate market. His website lets people search the Austin MLS. His site also has information on Austin real estate as well as a search for Homes in Pflugerville

Although the rich and famous are rich and famous, it doesn't mean that they are impervious to the popping of the real estate bubble. Many have succumbed to real estate woes as of late.

Ed McMahon had tabloids a talking when his real estate troubles became front page news last year. The now deceased celebrity attributed his dollar difficulties to alimony paid out to ex-wives and the economic downturn.

Aretha Franklin set the record straight about her exclusive Detroit suburban home. It went into foreclosure due to non-payment of property tax. She could have lost her $400,000 home to foreclosure due to $445 in back property taxes that accumulated into $20,000, since 2005. She said it was an oversight by her attorney. Once alerted of the situation, the Queen of Soul satisfied the debt.

Amber Frey, infamous ex-mistress of convicted murderer Scott Peterson lost her home northern California home to foreclosure. At auction, the asking price was over $200,000 less than the original purchase price. No one snatched up the deal at a low $305,000. She ended up surrendering the property to the bank.

Fantasia of American Idol fame came close to losing her home in Charlotte, North Carolina. The R&B singer settled with her Florida lender just days before the auction was scheduled to sell her pond-front home.

Extreme Makeover scandal hit the Harper family home in Atlanta, George when it went into foreclosure and would have been sold had it not been for ... even more ... generous donations. The most expansive Extreme Makeover ever seen was completed with much dedication, sweat and effort by volunteers, along with a deluge of donated dollars. Taking out a $400,000+ loan for a construction business that went belly up put the Harper's home in harm's way.

Laura Richardson, California Congresswoman, fell behind on property tax and mortgage payments in 2008. To the disdain of Sharon Helmar who sold it to her, the Long Beach home went into foreclosure and was sold. Neighbors noted that she did not keep up the lawn or take out her garbage.

Sports figures are not unfamiliar with foreclosure, either. Latrell "Spree" Sprewell, former NBA guard known for choking his then Coach P. J. Carlesimo, lost his 70-foot yacht and his Milwaukee home to foreclosure. Assessed at a mere $668,000, the home's value was nowhere near what most other sports professionals in his pay range own.

Jose Conseco experienced women woes, which caused him to lose his expansive 7,300 square foot Encino, California mansion. At least, that's his story. He said he lost $7 to $8 million on his two divorces that left him hard up for cash and was unable to pay his mortgage.

Not to anyone's surprise, Michael Vick's home was in foreclosure, since he was in prison and no longer could come up with the cash. Once NFL's highest paid player, the dog-fight diva was convicted and was to serve 23 months in prison. He was released earlier this year to serve out the rest of his sentence in home confinement.

Evander Holyfield, famous for his fight with Mike "I'll Bite Your Ear Off" Tyson, had his Fairburn, Georgia home in foreclosure. He was also behind on child support payments to a mother of one of his eleven children, and being sued for not paying $550,000 he loaned he owed to a consulting company.

Michael Jackson (King of Pop), MC Hammer (Hammertime fame), Veronica Hearst (Randolph Hearst widow), Scott Storch (previous hip-hop producer), Damon Dash (hip-hop mogul), Doug E. Fresh (rap icon), Vin Baker (former NBA star), Wyclef Jean (Fugees' frontman) and other famous actors, performers and sports professionals have all experienced foreclosure.

Ki graduated from UT with a CS degree. Now he works with Austin real estate. He has a website allowing buyers to search Austin MLS listings. He also keeps an updated blog on Austin Texas real estate.

There were some expectations that mortgage rates would fall this week. Instead rates not only did not rise but fell slightly this week. The 30 year rate fell from 5.08 to 5.07 hitting a new low for the summer. The 15 year rate fell from 4.54 to 4.50. The 5 year arm fell from 4.59 to 4.51 while the 1 year arm rose slightly from 4.62 to 4.64.

The continuing fall of the 30 year rate is good news for the national real estate market which is in the midst of a lukewarm recovery. The 5 year arm is seeing more activity now that it is significantly lower than the 30 year arm. Personally I still would heavily favor the 30 year arm with the possibility of seeing double digit interest rates in 5 years because of heavy government spending. The 1 year arm since moving above the 5 year arm has moved into no mans land with there being virtually no reason to get a 1 year arm at this point in time. Below are rates for the last few weeks.

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Feb 05, 2009
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

In addition to rates we like to look at actual mortgage payments to gain some more perspective on mortgage rate changes. Based on current mortgage rates we determined the mortgage payment for a 200k loan. We did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Sep 10
30-yr $1082.21
15-yr $1529.98
5-yr ARM $1014.55
1-yr ARM $1030.07

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Jan 29
30-yr $1085.89
15-yr $1560.82
5-yr ARM $1106.88
1-yr ARM $1061.45

Compared to 6 months ago the mortgage payment on a 200k loan is pretty much identical. The payment is $3.68 less a month or a third of one percent.

The real question of course is where mortgage rates are going. There are a few schools of thought. The first is that mortgage rates are going to skyrocket along with inflation caused by the massive government spending over the last few years. There is another school of that that mortgage rates should rise but only slightly and that massive inflation will be curbed by the Federal Reserve.

Either way no one is advocating that mortgage rates are going to fall much further. Therefore my advice would be to look at 30 year rates and to avoid 5 and 1 year arms like the plague. If the first school of thought is correct and mortgage rates rise they will probably not move dramatically until the economy recovers.

Ki lives in Austin Texas. He site has a graph showing historical mortgage rates. His site also has news and resources on real estate in Austin as well as a search of the Austin MLS.

In March of this year, the Obama Administration authorized a new federal program to help stabilize the housing industry. The feds poured a mere $75 billion into the Making Home Affordable (MHA) mortgage program intended to avert further foreclosures, assist responsible home owners in retaining their homes and stabilize the nation's communities.

Home Affordable Refinancing Program (HARP) and Home Affordable Modification Program (HAMP) are the two initiatives under the umbrella of the MHA that are being used to distribute the funding for the program. The programs fall under the U.S. Department of Housing and Urban Development (HUD) secondary mortgage market lenders, Fannie Mae and Freddie Mac. Through the MHA programs, certain homeowners are provided assistance whose loans are either owned or guaranteed by Fannie Mae and Freddie Mac.

Over the following three years, the program is on target to assist three to four million homeowners. Currently, over 230,000 trial modifications have been started; although, over 500,000 is the goal to have in process by November 1, 2009. What's interesting is that more than 85 percent of mortgage loans out there today are covered by participating service providers.

HARP assists homeowners who are current on their mortgage payments, but are not able to refinance their loans due to a decrease in their home's market value. Homeowners may be afforded the opportunity to refinance their mortgage to a lower interest rate and to a lower-risk loan solution, both of which are part of the program.

General requirements to be eligible for HARP are as follows:

* Must be the owner of a one- to four-unit home
* Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
* Must be current on mortgage payments throughout the previous 12 months, which means that you've not been more than 30 days late on any mortgage payment within the previous year
* Amount due on your first mortgage is not more than 125 percent of the current market value of your home

HAMP offers options for homeowners that may potentially reduce their monthly mortgage payments, or provide other alternatives that can assist them in keeping their homes. The program helps homeowners who are in the following situations with their mortgage:

* Current, but have experienced recent significant hardship, including hardship that will inhibit their ability to pay mortgage payments going forward
* Delinquent on their mortgage payments
* Currently in the foreclosure process

For full details regarding the MHA, visit the MHA website.

Both sites offer a self-service lookup tool that tells you whether your home loan is owned by either. To find out more about the Fannie Mae or Freddie Mac MHA programs, or to see if your home loan is owned by either, see the information below:

* Fannie Mae
* Phone - (800) 7FANNIE (Hours - 8am to 8pm EST)
* Freddie Mac
* Phone - (800) FREDDIE (Hours - 8am to 8pm EST)

Ki's website includes a searchable map of homes in the Austin MLS. His site is focused on helping Austin real estate buyers. In addition to information on the Austin market, his site also provides a mortgage widget that shows current interest rates.

For the most part mortgage rates held steady this week after dropping sharply last week. The 30 year rate rose slightly from 5.12 to 5.14 after dropping from 5.29 the week before. The 15 year rate rose from 4.56 to 4.58. The 1 year arm held steady at 4.69 and the 5 year rate (the only mortgage product that saw much movement) rose from 4.57 to 4.67.

The general consensus is still that rates are going to eventual move up rapidly when the economy recovers. As long as the economy stay in the doldrums there is a decent chance rates will stay below 5.5. To put today's rates in historical context the all time low for the 30 year rate is 4.81 (reached in April 2009). So the 30 year rate is still very close to its all time low. Below are mortgage rates for the major mortgage products for the last few weeks and from January 22 (6 months ago).

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jan 22, 2009
30-yr 5.04 15-yr 5.12 5-yr ARM 4.80 1-yr ARM 5.24

For the most part mortgage rates have stayed low in spite of some encouraging signs with the economy. In addition to rates we can also look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also translated rates from August 13th (2 weeks ago) and January 22 (6 months ago) into a mortgage for a 200k loan.

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Aug 13
30-yr $1109.36
15-yr $1548.44
5-yr ARM $1043.29
1-yr ARM $1039.68

Jan 22
30-yr $1078.53
15-yr $1594.11
5-yr ARM $1049.33
1-yr ARM $1103.16

As we saw with mortgage rates the mortgage payments are relatively stable from 2 weeks ago.

So what do we expect over the next few months? As long as the economy stays down barring other developments in the financial sector mortgage rates should stay low. When the economy starts to rebound though mortgage rates are generally expected to start rising.

What is our advice to people considering getting a loan? Basically it's the same as it has been for the last few months. I would avoid getting a 5 or 1 year arm if at all possible. Since rates should be higher in the future it makes sense to lock into long term rates while they are low. It's also a good idea to start the loan process before starting your home search. We are still in one of the strictest lending environments we have seen in decades. Minor credit issues that were ignored before are stopping loans from going through today. Starting the loan process early on can give a potential borrower time to clear up any issues on their credit report.


Ki has a comprehensive website focusing on Austin Tx real estate. Buyers can use it to search the Austin MLS. It also provides a graph showing updated mortgage interest rates.

With real estate vacancies on the rise and new construction having taken a sharp downturn, many cities across the nation are coming up with some clever and creative methods to entice new building construction into their respective areas.

Although home sale numbers may be resurrecting in some cities, this is not the case for most. Not only are home sales down, but new home construction has hit rock bottom in many major cities.

Commercial vacancies are also steadily climbing, which have caused the lending industry to raise the bar in obtaining new construction loans. Builders are now struggling more than ever with a variety of costs, and are much more hesitant in a down economy to begin new projects.

Insightful U.S. cities are noticing the significantly diminished number of new building permits, and are responding. In order to kick start the slumping industry, many cities are cutting various impact fees typically charged to builders. Generally, impact fees are one-time fees charged on new construction to pay for infrastructure for the new development, like roads, sewer systems, curbing, lighting, schools, parks and other community needs.

The hope is that the savings will entice developers to complete or build-out existing construction and encourage new residential and commercial development.

Earlier this year, the City of Harrisburg, Oregon, cut in half what are called the city's Systems Development Charges. These are the fees the city bills home builders pay per house. City officials stated that the reduction in fees saved new home builders nearly $5,000 per house, a savings that is supposed to be passed along to the buyer. The city's program ended August 1.

Following suit with numerous other local California governments, Riverside County reduced their impact fees to builders just this month. The California Building Industry Association says it's a growing trend that's paying off. Riverside officials voted to cut development fees by 50 percent for one year effective August 15. That adds up to a savings of about $2,100 per single-family dwelling. In addition, the Western Riverside Council of Governments will consider a reduction in the Traffic Uniform Mitigation Fee (TUMF) that currently cost builders $10,000 per home.

Naples, Florida, made history in cities that are considering the reduction of impact fees. Known to charge the highest impact fees in the state, the city was one of the first to consider lowering impact fees in January of this year. The county's commissioners voted to suspend certain impact fees for two years. Benefactors of the suspended fees will primarily be existing commercial property owners who change the use of commercial space listed on the building permit.

Arizona state government initially rejected, and then subsequently approved, a budget that included a two-year suspension for impact fees assessed by city governments relative to construction sales and building codes, along with reduced assessments for commercial property tax. The National Association of Office and Industrial Properties (NAIOP) and Home Builders Association of Central Arizona (HBACA) had been petitioning for a three-year moratorium on impact fees.

In attempts to bolster commercial development, Meridian, Ohio has also jumped into the fray. Officials have waived impact fees for fire and police for all commercial building permits through September 30, 2009.

Boise, Idaho Mayor Dave Bieter has deferred fees for building permits and inspections for new construction. The fees are not due until the occupancy permit is issued by the city. In addition, impact fees for fire, police and parks are being deferred.

The trend seems to be catching fire throughout the nation; although it is unclear as to what extent these deferred, reduced or eliminated impact fees will benefit the community in the long-run.

Ki has been interested in Austin real estate since graduating from the University of Texas. His website has a graphical search for Austin homes for sale. His website has statistics and information on Austin real estate and commercial real estate.

State and local governments across the nation are gearing up to spend federal stimulus funds. The U.S. Department of Housing and Urban Development (HUD) birthed the Neighborhood Stabilization Program (NSP) that provides federal stimulus dollars to assist neighborhoods hardest hit by the home foreclosure crisis. The NSP falls under the umbrella of the American Recovery and Reinvestment Act (ARRA).

HUD's intent for the NSP is to provide assistance to more than 500 communities, cities and counties across America in the form of rent relief, for homeless prevention and to assist low-income families to buy homes. Organizations that are eligible for NSP funding are cities, non-profit agencies and housing authorities.

St. Lucie and Martin Counties in Florida hope to receive some $7.5 million in stimulus dollars. The counties recently applied for the funds through the state's Department of Community Affairs. Both counties intend on buying foreclosed homes, renovating them and selling them to low-income homebuyers. The other initiative for the funding will be to weatherize neighborhood homes.

Fresno County, along with the City of Fresno, has received a total of $18 million in NSP funding to address the abundance of local area foreclosed homes. Officials have already interviewed several developers that will be hired to buy, renovate and sell or rent the homes to low-income families.

Blighted areas will benefit the most from the funds. A byproduct of the dollars will be construction jobs associated with renovating the properties.

Massachusetts may see some activity soon in many of their local cities and neighborhoods, since the state applied for funds in the total of $54 million. Boston Community Capital, alone, applied for $50 million in NSP funds in order to broaden the organization's ability to assist the state's residents who are facing foreclosure on their homes. The group has already committed $4 million in assistance to purchase abandoned property, loan funds to small developers renovating vacant properties and assist struggling homeowners in keeping or buying back their homes.

Connecticut has thrown their hat into the ring for $45 million in NSP dollars, which will target the state's four most hard hit cities. The Connecticut Consortium falls under the state's Department of Economic and Community Development (DECD), and will be responsible for allocating the funds to local communities. Low- to middle-income families will be the primary beneficiaries of the program.

Chicago received $5.4 million in stimulus funds earlier this year. The city's goal is to reinvest profits made from selling renovated properties back into other foreclosure properties.

Ohio was allocated $45 million NSP dollars to jump start the housing market in blighted neighborhoods. The intent is to allocate the stimulus money quickly, so that communities will be enabled to attack the growing numbers of abandoned and boarded up homes.

Kentucky was awarded $44 million, Evanston, Illinois applied for $39.4 million and Virginia received $45 million. Brad Pitt even entered the fray with his Make It Right Foundation. If funding is approved, it will benefit New Orleans and a project the group will launch in Newark, NJ. His organization, as part of a consortium of non-profits, is asking for $65 million.

Ki works to help buyers searching for Austin Texas real estate. He has worked in real estate for almost a decade. He maintains a searchable Austin MLS directory on his website. His site has current information on mortgage rate trends.

Mortgage rates fell this week to the lowest point since May 28, 2009. Whether May 28, 2009 is the summer is open to some debate. The summer solstice usually is considered the technical beginning of summer which occurred on June 21st this year. Some consider Memorial Day the beginning of summer which was May 25th. Either way this is the lowest we have seen the 30 year mortgage rate in the last 3 months.

The question of course is why mortgage rates are falling. Generally once the economy starts improving interest rates should rise. I think what has happened is that while the actual economy has improved the expectations about the economy have fallen. During the last 2 months people thought the economy might experience a V shaped recovery. Basically once the economy turned around it would recover quickly.

But since that time more people are now expecting a U shaped recovery. Basically the economy is going to recover but it's going to occur more slowly. On the positive side these lower expectations could be lowering mortgage rates. Here are mortgage rates for the last few weeks.

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

As we can see for the last few weeks the 30 year mortgage rate has been hovering from 5.20 to 5.29 until this week when it abruptly fell to 5.12. In addition to rates we like to look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also did the same thing with rates from August 6 (2 weeks ago) and rates from January 15 (6 months ago).

Aug 20
30-yr $1088.35
15-yr $1536.12
5-yr ARM $1021.7
1-yr ARM $1036.07

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

As we can see there is some savings compared to 2 weeks but nothing too substantial. Compared to 6 months ago a mortgage payment would be 1.83 percent more. So basically we are seeing rates and mortgage payments slightly higher than 6 months ago and slightly lower than the last few months.

What we are going to see moving forward depends on the economy. If we experience a V shaped recovery we should expect mortgage rates to move up quickly. This is because the massive amount of money the US government has poured into the economy during the recession should lead to inflation when the economy recovers. But if the economy experiences a U shaped recovery and continues to lurk around in the doldrums we should see low interest rates for the next few months.


Ki lives in central Texas and works in the real estate market in Austin. His website escapesomewhere provides a mortgage rate widget along with a mortgage calculator widget.

Everyone has felt some of the impact of slumping real estate prices over the past two and a half years, from homeowners trying to tap into shrinking equity to commercial property investors seeing smaller returns and greater vacancies. As 2009 reaches the halfway mark, however, the case for real estate's turnaround is becoming more and more apparent. By 2010, home and commercial property prices will have stabilized further, and interest rates will certainly have risen somewhat. As a result, the next three to six months may be the best opportunity to lock in an attractive mortgage rate, while still reaping the benefits of the best buyer's market in decades.

Many factors influence the real estate market during a recession. However, in the United States, geography plays a much larger role in deciphering statistics which tend to be quoted as national averages. When home prices fall across the country, there is legitimate cause for concern. But the recently released Case-Shiller index provides some promising clues that suggest otherwise. In 7 of the 20 surveyed areas, prices increased between March and April. In several other metropolitan areas the decrease in prices was much smaller than in previous month-on-month comparisons. Most importantly, the nationwide aggregate pace at which home prices have fallen is slowing, with the difference between April and March prices falling a meager .78 points.

This trend points towards stabilization across the board, even as several regions continue to experience contraction. These parts of the United States experienced increased growth throughout the "bubble period," which gained momentum after the dot-com bust, culminating in the spectacular drops seen throughout mid-to-late 2007. This period was marked by two unusual phenomena: the context in the real estate market of speculative and historically high home prices, combined with artificially low interest rates and under-regulated financial products.

These factors are essentially risk-based, and as the financial sector melted down the risk was priced into the record write-downs and subsequent contraction. The extent to which this effect will reinforce any further nominal decreases in home prices remains somewhat uncertain. Their effects will still likely be minimal and take more time to observe. In some of the more adversely affected areas, foreclosures are still high, but no longer the record-setting numbers seen in previous quarters. In addition, any government measures that may be implemented may stem foreclosures further and reduce potential risk to a marginal level.

This systemic and speculative risk has now largely been priced into the market at this point, as evidenced in recent data. Many investors have already begun buying into the markets which continue to grow quietly. This has been occurring in areas which prices have been more stable, such as the Northeast and in states like Texas, where places like Round Rock have continued to grow seemingly unabated. In fact, according to recently released census data, four of the fastest-growing cities in the US are in Texas. This is also reflected in the S&P Shiller index on Dallas home prices, which swung upward 1.7 points between March and April. Many other larger cities in New England and the Pacific Northwest have also continued to experience some growth despite the recession, albeit less than in boom years. These area's track records make them strong contenders for investment or home purchase.

In the broader picture, the Federal Reserve has forecasted a positive GDP in the last half of 2009, after which more competitive investment will end the current buyers market. Buying a home or commercial property will likely not be such a bargain for some time to come, as history shows cycles such as these tend to come every thirty years, with larger dips every sixty or so. That means if you're in for the long haul (or even if you're not) the time may have come to look at real estate once more.


Ki lives in Austin Texas and helps people looking to invest in Austin real estate. On the site, buyers can search for homes in the Austin MLS. He also publishes a monthly blog with trends and statistics on Austin Texas real estate.

News headlines throughout major U.S. cities note record-high commercial vacancies, along with a decrease in the asking price for commercial rental space. As was predicted by several major real estate statisticians earlier this year, the next real estate bubble to burst is commercial properties.

Based on statistics compiled by Cushman & Wakefield (C&W), the commercial vacancy rate hasn't been this high since mid-2005. C&W, a global commercial real estate brokerage and consulting firm, found that vacancy rates increased in 24 of the 32 major markets they surveyed.

Colliers International, a global commercial real estate service provider, noted that rental office space is becoming abundantly available. Nationally, office space vacancies in major business districts jumped from 12.5 to 13.74 percent in the second quarter of 2009. Suburban markets increased 1.95 percent to 16.28 percent. In addition, the firm found that the asking rent in major districts dropped by 3.2 percent during the quarter to an average of $38.25 per square foot. Average asking rent in U.S. cities overall, however, are now more often priced at around $25.00 per square foot.

Both firms note that the market has been pummeled by increased supply and a decline in demand due to the economic downturn. Executive Managing Director Maria Sicola asserted that elevated unemployment numbers translate into the reduced demand reflected in higher vacancy rates. More than 66% of 6.5 million square feet of newly constructed commercial space was still vacant at the end of the second quarter of 2009.

Michael Cohen, a research strategist for Property & Portfolio Research (PPR), stated that the firm's expectation was that vacancies would reach historic highs in office, apartment and warehouse space in 2009. According to ING Clarion Real Estate Managing Director David Lynn, the hospitality market has been dealt the biggest blow with major cutbacks in business and leisure travel.

Most cities across the nation are experiencing a rise in commercial vacancies. Phoenix has a 17.4 percent vacancy, Chicago's is at 15.4 percent, Washington, D.C. holds an 11.7 percent rate, Las Vegas exceeds 20 percent, Kansas City is higher than 18 percent, Providence, Rhode Island is now over 30 percent, and so on.

Along with the rise in commercial vacancies, insurance companies are becoming more concerned about liability associated with vacant real estate. Vacancies present additional risks not applicable to occupied real estate. Commercial insurance companies are encouraging owners of vacant real estate to minimize risk by implementing the following:

* Notify insurance company of vacancy, become informed and follow policy terms that apply to vacant property.
* Advise local authorities that property is vacant.
* Remove all combustibles, debris and any unnecessary materials from vacant property.
* Inform local fire department of materials left that could impair fire-fighting.
* Inspect property weekly, have someone watch the property or hire a guard service to daily drive by to observe property.

With real estate vacancy numbers not anticipated to see daylight for some time to come, this is wise advice, indeed.

Ki moved to Austin to attend college, and stayed to work in Austin real estate. He created a website encouraging buyers to search for Austin homes for sale. His site also has information on Austin Commercial real estate and general information and statistics on Austin real estate.

Mortgage Electronic Registration System (MERS) has been used by lenders nationwide to track mortgages via the system's database. Lenders who are members of the program are represented in the enforcement of a promissory note secured by a mortgage. A U.S. Bankruptcy Judge in Nevada ruled earlier this year that MERS could no longer represent lenders foreclosing on homeowners in bankruptcy unless the actual loan document could be produced.

Typically, a mortgage note goes through several iterations of sale to different mortgage lenders, which makes it difficult to produce original loan documentation. When lenders begin foreclosing on homeowners in bankruptcy, the original note is often not available.

MERS is a program that was initiated by several lenders over 20 years ago to simplify the complicated mortgage process. The system is designed to track mortgages and any associated sale of the note via a central database. Over 60 million mortgages are currently monitored by the program. Lenders who are members are represented by MERS throughout the foreclosure process.

Although the bankruptcy judge's ruling presents a roadblock for lenders in the foreclosure process, it is not the first time MERS was challenged in court. The same ruling was handed down in a Florida court; however, the company eventually won on appeal.

For homeowners who owe more than their home is worth, or are unable to pay their mortgage payments, the ruling may only delay proceedings for about a month or more. In attempts to further assist homeowners in default on their mortgage, a Nevada state representative introduced legislation to allow homeowners in financial hardship to ask for arbitration in their mortgage default process. This would overstep service providers like MERS, and require mortgage lenders to be involved, instead.

Even though it was handed down in Nevada, bankruptcy attorneys in other states have voiced appreciation in regards to the ruling. One noted Houston attorney stated that the new law could have a nationwide impact on the ability of lenders to enforce mortgage loans. In addition, it throws some negotiating leverage onto the playing field that was not available before for homeowners in foreclosure going through bankruptcy.

A deluge of complaints have been filed against service providers in regards to aggravating the excessive number of foreclosures initiated in the past two-and-a-half years. On the other hand, MERS argues that its services enable a broader range of home lending options for homebuyers.

The program maintains current mortgage information and ownership, and avoids the astronomical millions associated with recording fees, along with the associated paperwork. MERS officials noted verbiage from one Florida court decision that stated the program was "innovative."

Will the decision hold up? Regardless, as in the Florida case, MERS immediately appealed the judge's decision.

The bigger question, however, is whether the ruling will catch fire in other states. Also, it will be interesting to see if the Nevada statesman's proposed bill will be cause for pause for legislation in other states across the Union.

With all the twists and turns we're seeing in the courts of late, anything could happen.

Ki's company is located in Central Austin. He maintains a website allowing buyers to search for homes in the Austin MLS. He has worked with Austin real estate for almost 10 years. His site has information and graphs on historical interest rates.

The saying "No news is good news" might be applicable with the recent trend with mortgage rates. For the last 2 or 3 weeks for the most part rates have stayed pretty much unchanged. The reason why this could be considered good news is that the economy and stock market seem to be improving. There was a lot of discussion that an improving economy would lead to inflation and in turn higher interest rates. While I still think we are eventually headed to higher interest rates it's nice that at least that is not happening now. This week the 30 year mortgage rate dropped from 5.25 to 5.22. We also saw the 15 year rate drop from 4.69 to 4.63. The 5 year arm and 1 year arm both dropped .02 points this week (4.75 to 4.73 and 4.80 to 4.78 respectively). Below are rates for the last few weeks and from January 15th (6 months ago).

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Looking above the 30 year mortgage rate has only moved from 5.14 to 5.25 in the last month which is remarkably stable considering the changes in the economy and the mortgage industry. Rates are still higher than what we saw six months ago but the change is not huge. To illustrate this let's look at changes in actual mortgage payments. Using our free mortgage calculator we took today's rates and translated them into a payment for a 200k loan. We did the same thing with rates from July 23 (two weeks ago) and rates from January 15th, 2009 (6 months ago).

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jul 23
30-yr $1098.22
15-yr $1548.44
5-yr ARM $1042.08
1-yr ARM $1045.7

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

From two weeks ago we are see a change of $2.47. This is pretty insignificant. When mortgage rates first started dropping we saw a difference of $35 from one week to the next running this same calculation. Compared to 6 months ago we see a rise of $31.94 or 2.98 percent. Considering the time frame this is still a relatively small change.

First off what is my advice for people looking for a home and a mortgage? I would still avoid arms. Nothing has changed basically arm's offer a small benefit right now but with most experts predicting higher rates in the future it makes sense to look in for a longer period of time with a 30 year fixed mortgage. What is our prediction moving forward? Long term I would expect rates to move up perhaps to 10 percent or more. In the short term I have been saying that it's hard to know. Know with the economy improving I would expect to see higher rates than what we are currently experiencing a month from now. That is assuming the economy doesn't start sliding backwards.


Ki lives and works in central Texas. His website covers the Austin Texas real estate market. It also has information on historical mortgage rates along with a mortgage rates widget

Austin area home sales are down from a year ago, but prices are holding steady. There are many factors making now a good time to buy: low interest rates, tax incentives for first time buyers and cooperative sellers. As consumers change their spending habits, houses are once again being seen as a long-term purchase of a home and not a quick investment. While the days of the house-buying frenzy are long gone, plenty of serious home buyers remain.

Like the rest of the country, Austin's real estate market is still lagging behind other areas of growth in the economy. While local economists predict Austin will gradually recover from this recession in 2010, housing isn't expected to rebound as quickly. Jim Gaines, a research economist with the Real Estate Center at Texas A&M University recently told the Austin-American Statesman that he sees the housing market ending this year with numbers comparable to those in 2002 and 2003. He predicts the Austin area median home price will end the year down somewhere between 1 and 5 percent. Currently the median home price is down one percent from a year ago.

Nationally, home sales have grown at a slow but steady rate since the beginning of the year. According to the Associated Press, sales of previously occupied homes rose by 2.4 percent from April to May, marking the third consecutive increase this year. Foreclosures across the country are bringing out the bargain shoppers and account for about a third of home sales nationally. This has also lowered the national median home price 16.8 percent from where it was a year ago.

Austin certainly has seen a rise in the number of foreclosures over the last eighteen months, but they don't seem to be affecting home values. Foreclosed properties have dragged home values down significantly in some parts of the country, exacerbating the housing crisis even more. However, Austin area foreclosures represent a relatively small fraction of the supply of homes on the market.

Just like the rest of the news on the economy these days, the housing market falls into the category of "not as bad as expected" rather than actual gains. The Standard & Poor's/Case-Shiller index measuring home values in 20 major cities is down 18.1 percent, a decline for the third straight month. However, the decline was not a record low and better than analyst expected, according to the Associated Press. In fact, eight of the metro areas in the index posted price gains, including Dallas with the largest increase at 1.7 percent. Overall the index is off nearly 33 percent from the peak in home prices in the spring of 2006.

So, is it a good time to buy a house? All indications are that home prices are fairly stable overall in the Austin area. In fact, analysts like Gaines believe it's much more likely that prices will creep up rather than take a sudden plunge. That may not be good news for the bargain hunters, but it does mean that buying a home right now is a sound investment.


Ki began working with Austin Texas real estate a decade ago. He created a searchable website where buyers can search for Austin homes for sale. In his free time, Ki enjoys the Austin music scene. He also writes on his blog which covers news and statistics on the Austin real estate market

Imagine being able to save the environment and the car industry all in one fell swoop. Imagine being able to give that effort a catchy name and get it quickly through Congress, too. "Cash for Clunkers" is the latest inception from the Obama administration to help the struggling economy, the ailing auto industry and the future of the environment. That is an impressive Band-Aid.

But as CNNMoney points out, some caveats should come with that offer of help. This initiative is the Consumer Assistance to Recycle and Save Act, part of the Supplemental Appropriations Act of 2009 passed in Congress earlier in June. The bill allows individuals and businesses to trade in older cars and trucks for new more fuel efficient models.

"New" is the operative word here. The government is offering refund vouchers of $3,500 or $4,500 in place of the ordinary trade-in value of a vehicle to go toward the purchase of a new, not used, vehicle. As CNNMoney pointed out, if you drive a clunker worth less than $4,500, maybe you shouldn't be enticed to buy a new car that is sure to include a monthly car payment.

Here's how it works: The plan runs from August to November 2009 and offers passenger car owners a $3,500 voucher if they trade in a car getting 18 miles per gallon or less for a car getting at least 22 miles per gallon. There is the same voucher amount for owners of pickups, minivans and SUVs who trade in vehicles getting 18 mpg or less for a vehicle getting at least 2 mpg more than their old vehicle. Not an impressive win for the environment.

The government ups the ante to a $4,500 voucher, however, if car owners purchase a new car that gets 10 mpg better than the trade-in. Owners of pickups, minivans and SUVs can get the $4,500 voucher if they purchase a new vehicle that gets at least 5 mpg better than the traded-in vehicle. To check the miles per gallon for any vehicle go to www.fueleconomy.gov.

Some of the fine print includes the fact that participating auto dealers must ensure that the traded in vehicles are rendered inoperable by crushing or demolishing them to keep them off the road. Trade-ins must be drivable vehicles of a model year 1984 or later, insured and registered to the same owner for the previous year.

Who it helps: This program is a benefit if someone is considering purchasing a new car anyway. It's important to know the trade-in value of a vehicle before heading out the door to car shop. There are several websites that offer this type of information, such as Edmonds or Kelley Blue Book. If a car is worth more than the $3,500 to $4,500 voucher, then the cash for clunkers is not a good financial move. Also, the voucher shouldn't be confused with other incentives auto dealers may be offering. As CNNMoney puts it: "Be sure to negotiate the purchase price just as you always would."


Ki developed a clearinghouse website of Austin MLS listings. On the site, Austin real estate buyers are able to do customizable searches it also has information and statistics on neighborhoods like West Lake Hills.