Aug. 31, 2006 - Mortgage rates up a bit, snapping 6-week fall

Long-term mortgage rates went up for the first time in six weeks, but not by much.

By Holden Lewis,  Bankrate.com

The benchmark 30-year fixed-rate mortgage rose 1 basis point to 6.49 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.36 discount and origination points. One year ago, the mortgage index was 5.8 percent; four weeks ago, it was 6.65 percent.

The 15-year fixed-rate mortgage stepped up 1 basis point to 6.2 percent. The 5/1 adjustable-rate mortgage fell 2 basis points to 6.22 percent.

This week's survey was conducted Tuesday, one day earlier than usual, because Tropical Storm Ernesto threatened to disrupt communications at Bankrate's Florida offices on Wednesday.

Weekly national mortgage survey

Results of Bankrate.com's Aug. 29, 2006, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

Rates were at a near standstill because there wasn't much economic news to move them in either direction. In large part, bond markets are watching the Federal Reserve, trying to guess the central bank's next move. And most bond traders believe the Fed will remain on the sidelines at its next meeting, Sept. 20.

In a market commentary, Freddie Mac's chief economist, Frank Nothaft, notes that the futures market forecasts a 10 percent chance of another Fed rate hike in September and a little over a 40 percent chance it will raise rates at all this year. "This perception takes upward pressure off mortgage rates," he says.

Potential for excitement
The economic calendar promises a little more action later in the week. Wednesday brings the the Commerce Department's estimate of gross domestic product in the second quarter. Friday, the economic calendar holds an even bigger mover of interest rates: the employment report for September.

Among economists surveyed by Briefing.com, the consensus is that the employment report will show that 125,000 net jobs were created in August. If that estimate is unduly optimistic, and it turns out that fewer than 100,000 jobs were created in August, mortgage rates are likely to fall. If the report says that nonfarm payrolls grew by a lot more than the estimate -- 150,000 or more -- mortgage rates are likely to rise.

The early signs point to a decline. The Conference Board's consumer confidence index for August was much lower than forecast. It fell to 99.6 from 107 in July; the economic pundits had expected a softer decline to about 102 or 103.

This week's upward blip in the rate on the 30-year fixed was the first rise since a 2-basis-point rise July 19. The rate on the 30-year fixed mortgage -- still the most commonly held mortgage loan despite the proliferation of exotic variants -- rate has fallen almost half a point since June 28, when it climbed to 6.93 percent.

Aug. 25, 2006 - Personal Press Release

Aug. 18, 2006 - As Sales Slow, Sellers Give Property Auctions a Try

As Sales Slow, Sellers Give Property Auctions a Try

More sellers are putting their homes on the auction block in hopes of getting a quick sale.

"We do for real estate what a Fourth of July sale does for retailers," says Lynn Gardner, the owner of Homeland Auctions Inc. in Leesburg, Va., which auctioned 57 homes in this year's first half, up from 11 in the last six months of 2005.

Larger auction firms — including Sheldon Good of Chicago, Williams & Williams of Tulsa, Okla., J.P. King of Gadsden, Ala., and Pacific Auction Exchange of Bakersfield, Calif. — also report rapidly rising demand from individual sellers as well as home builders and investors stuck with excess inventory, and banks with foreclosed property to sell.

Auction services aren't cheap. Commissions and marketing fees often exceed 10 percent of the home's value. Sellers generally pay upfront for all or part of the costs of newspaper ads, mailings and other marketing used to drum up interest.

Home sellers tend to show more interest in using auctions when the housing market is weak. The last time auctions were popular was in the late 1980s and early 1990s when home prices fell sharply in many parts of the country.

But Chris Mayer, a professor of economics and real estate at Columbia University’s Business School, says sellers have it backward. Auctions work best in strong markets when there are plenty of determined bidders to push the price up.

Source: The Wall Street Journal, James R. Hagerty and Michael Corkery (08/16/2006)

Aug. 18, 2006 - To Rent or Buy - Which is Right for You

To Rent or Buy - Which is Right for You
 
Should you sign another lease or take the plunge and buy a place of your own? Millions of Americans ask themselves that question everyday. To make a wise decision consumers should consider a few factors, such as their lifestyle and financial situation. There is no right or wrong answer when trying to make a decision to rent or buy. A good decision is one that is right for you. However, there are advantages and disadvantages to both.
Although most Americans own their homes, homeownership is not for everyone. If you move around frequently, have credit problems or if you cannot afford the home you want or simply do not want the responsibility of owning a home, you could be better off renting. Usually when renting, the landlord or owner of the property generally pays for the cost of any work or repairs that are done to the property. And, there is generally less up-front cash needed to move in.

However, when you are renting a property, you are waving good-bye to your money each month. Renting a home does not provide tax advantages to the renter. Any and all tax advantages go to the landlord or property owner. Also, monthly payments for renters can be unpredictable, depending on the lease.

Owning a home is a big responsibility. Not only does it mean paying a mortgage each month, but it also involves other costs associated with the home, such as, the cost of insurance, taxes, repairs and general maintenance. First-time homebuyers are often startled by the investment associated with purchasing a house. The down payment required can be as much as 20 percent. You also have to consider other fees, such as lawyer's fees, points, escrow costs, appraisals, and credit checks.

In spite of the risks and responsibilities, millions of people enjoy the rewards of home ownership. Purchasing a home is generally a sound investment. As you pay down your home loan, you are building equity. And unlike many things you buy, a home can actually increase in value over time.

Home ownership does offer tax advantages. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your income, thereby reducing your tax liability.

There is not much doubt that for most people owning a home is better over the long term than renting. When you have made the decision to buy, do your homework. Know how large a mortgage you can afford. If possible, get "pre-qualified" for a loan. When you find a home you like, carefully give it your own personal inspection. If you have questions, seek the advice of a professional. And, contact the Better Business Bureau for a reliability report on the mortgage company that you decide to do business with.
4/18/2003

© 2003 Council of Better Business Bureaus, Inc.
 

Aug. 18, 2006 - Overall Sales Down, But 20 States Show Increase

Overall Sales Down, But 20 States Show Increase

Existing-home sales, including single-family houses and condos, were down in the second quarter compared with the record set in the same period in 2005, according to the NATIONAL ASSOCIATION OF REALTORS®.

Despite the overall decline, 20 states showed increases in sales activity from the year earlier period.

The quarterly report on total state existing-home sales shows the seasonally adjusted annual rate was 6.69 million units in the second quarter, down 7 percent from the record 7.19 million-unit level in the second quarter of 2005.

The biggest increase was in Alaska, where existing-home sales rose 48.6 percent from the second quarter of 2005. In Arkansas, the second-quarter resale pace rose 17.9 percent from a year earlier, while Texas experienced the third-strongest gain, up 11.3 percent. Twenty-eight states and the District of Columbia experienced declines. Complete data for two states was not available.

Local Conditions Vary

David Lereah, NAR’s chief economist, says two sets of market conditions are apparent in the report.

“When you look at states with high housing costs or that have experienced a prolonged period of rapid price gains, you typically see slower home sales,” he says. “By contrast, states with moderately priced areas that have experienced healthy job creation are seeing sales gains. The economic backdrop remains favorable for the housing market, which is helping home sales to level out.”

According to Freddie Mac, the national average commitment rate on a conventional 30-year, fixed-rate mortgage was 6.6 percent in the second quarter, up from 6.24 percent in the first quarter; it was 5.72 percent in the second quarter of 2005.

NAR President Thomas M. Stevens from Vienna, Va., says interest rates have been trending down in recent weeks. “This is good news for buyers who have been on the sidelines; now there is a window of opportunity in the market,” says Stevens, senior vice president of NRT Inc.

Last week, Freddie Mac, reported the average rate on a conventional 30-year, fixed-rate mortgage was down to 6.55 percent.

Regional Data: South is Strongest

Regionally, the South reported an existing-home sales pace of 2.6 million units in the second quarter, down 4.2 percent from a year ago. After Arkansas and Texas, the next strongest increase in the South was in North Carolina, up 11 percent from the second quarter of 2005, while resales in South Carolina rose 9 percent; six other Southern states also posted sales gains.

In the Midwest, existing-home sales declined 4.7 percent to a 1.54 million-unit annual sales level from the second quarter of 2005. The strongest increase in the region was in Indiana, up 4.8 percent from a year earlier, followed by Iowa, up 3.8 percent, and Missouri, with an increase of 0.8 percent.

The Northeast saw an existing-home sales pace of 1.15 million units in the second quarter, which was 5.2 percent below the year earlier period. Sales activity in Vermont rose 9.1 percent from the second quarter of 2005, while Maine increased 1.5 percent.

In the West, the existing-home sales level of 1.41 million units was 14.7 percent lower than the second quarter of 2005. After Alaska, the best performance in the region was in New Mexico where existing-home sales rose 6.2 percent from a year earlier; Wyoming sales increased 5.7 percent while Montana rose 5.2 percent.

— NAR

Copyright© 2006, by the NATIONAL ASSOCIATION OF REALTORS®