Tuesday, January 27, 2009
Downtown St.Paul: Hot For This Market
Downtown St. Paul managed a 6 percent increase in the median sale price for a home during 2008, making the district a Twin Cities oddity alongside Edina and two sections of Dakota County in posting price gains, compared with the previous year. Overall, the median price in the 13-county metro dropped 13 percent this past year, with declines being posted in the majority of districts defined by Realtors. The new data had St. Paul civic leaders boasting about the joys of downtown living and agents offered a variety of explanations for the uptick, ranging from size of the condos sold to a small number of downtown foreclosure properties.
Tuesday, January 20, 2009
Nation: National: Long-Term Rates Fall For Eleventh Consecutive Week
Long term interest rates fell again in the week ending January 15th, according to Freddie Mac's Primary Market Mortgage Survey. Rates are the lowest they have been since Freddie Mac begin the PMMS in 1971
Monday, January 12, 2009
LONG-TERM RATES FALL FOR TENTH CONSECUTIVE WEEK SETTING YET ANOTHER NEW LOW
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.01 percent with an average 0.6 point for the week ending January 8, 2009, down from last week when it averaged 5.10 percent. Last year at this time, the 30-year FRM averaged 5.87 percent. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.
The 15-year FRM this week averaged 4.62 percent with an average 0.7 point, down from last week when it averaged 4.83 percent. A year ago at this time, the 15-year FRM averaged 5.43 percent. The 15-year FRM has not been lower since June 13, 2003, when it averaged 4.60 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.49 percent this week, with an average 0.7 point, down from last week when it averaged 5.57 percent. A year ago, the 5-year ARM averaged 5.63 percent.
One-year Treasury-indexed ARMs averaged 4.95 percent this week with an average 0.5 point, up from last week when it averaged 4.85 percent. At this time last year, the 1-year ARM averaged 5.37 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Interest rates for 30-year fixed-rate mortgages fell for the tenth week to a fourth consecutive record low due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," said Frank Nothaft, Freddie Mac vice president and chief economist. "On November 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June of this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of September 30, 2008.
"Since the end of October 2008, these rates have declined by almost 1 1/2 percentage points, or payment savings of about $184 a month for a $200,000 loan – an additional $11 dollars from last week."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
The 15-year FRM this week averaged 4.62 percent with an average 0.7 point, down from last week when it averaged 4.83 percent. A year ago at this time, the 15-year FRM averaged 5.43 percent. The 15-year FRM has not been lower since June 13, 2003, when it averaged 4.60 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.49 percent this week, with an average 0.7 point, down from last week when it averaged 5.57 percent. A year ago, the 5-year ARM averaged 5.63 percent.
One-year Treasury-indexed ARMs averaged 4.95 percent this week with an average 0.5 point, up from last week when it averaged 4.85 percent. At this time last year, the 1-year ARM averaged 5.37 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Interest rates for 30-year fixed-rate mortgages fell for the tenth week to a fourth consecutive record low due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," said Frank Nothaft, Freddie Mac vice president and chief economist. "On November 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June of this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of September 30, 2008.
"Since the end of October 2008, these rates have declined by almost 1 1/2 percentage points, or payment savings of about $184 a month for a $200,000 loan – an additional $11 dollars from last week."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Monday, January 05, 2009
Nation: 4 Facts About Down Payments In Today's Market
There is some misinformation in the media lately about the required size of a down payment for a mortgage in today's market. According to the National Association of Realtors, here are the facts: There is some misinformation in the media lately about the required size of a down payment for a mortgage in today's market. According to the National Association of Realtors, here are the facts:
An individual may be required to put down 20 percent based on that person's financial situation but that's not a requirement for all buyers.
A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with famly help) can become a homeowner.
An individual may be required to put down 20 percent based on that person's financial situation but that's not a requirement for all buyers.
A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with famly help) can become a homeowner.
Monday, December 29, 2008
Record low mortgage rates toss housing a lifeline
With the $500 of monthly savings Jim Hennessy of San Diego gained by cutting the rate on his $417,000 mortgage, he plans to rebuild his beaten-up retirement account and maybe even take a cruise.
This is the outcome the U.S. government was driving at when it said it would pump hundreds of billions of dollars into buying mortgage bonds, freeing up lenders to make new loans and lower-rate refinancings that spur consumer spending and the economy.
"Maybe there's a vacation in our future, maybe a cruise because those rates have come down so much," said Hennessy, managing director of a marketing firm.
The worst housing slump since the Great Depression has crippled top international banks and has tipped the world's biggest economies into recession.
Hennessy cut his mortgage rate by a full percentage point by refinancing 11 days ago into a 5-1/2 percent 30-year loan.
That will help to pay college tuition for his children, and "we'll probably put more into savings and try to have some semblance of a retirement," he said.
Hennessy is just one example of borrowers aiming to reduce their home loan payments or buy a home as a result of government actions to push mortgage rates to new lows.
The average 30-year U.S. mortgage fell more than 1/4 point in the week ended December 18, to 5.19 percent, the lowest since Freddie Mac started its weekly survey 37 years ago.
It was the seventh straight weekly decline and brought rates down from about 6-1/2 percent in October.
The decline was also the result of the Federal Reserve cutting its benchmark federal funds rate target to a record low this week.
"Being baby boomers, we're looking down the road at retirement, and are making every effort to be as debt free as possible," Hennessy said.
Deep stock market losses and two years of home price declines have shredded wealth for many homeowners who may be able to restore some of their losses with cheaper borrowing.
Rodney Anderson, managing partner of Rodney Anderson Lending Services, a unit of Supreme Lending, in Plano, Texas, said mortgage applications are starting to flood in.
"We're seeing pre-approvals in the amount comparable to 2003, and July 2003 was my biggest month ever in mortgage history," he said. "I closed 287 loans that month and we're already seeing closings occurring in December and our January pipelines are just starting to launch."
Swapping high-rate home loans for more affordable mortgages is driving most of the demand, but purchases are also starting to revive, he said.
"With current low gas prices and the amount of money people save on refinancing, this is an opportunity for the economy to start making moves in the right direction," Anderson said.
MULTIPLE CHOICES
An overabundance of unsold homes has been one of the biggest thorns in this housing crisis. In addition, much lending froze amid huge write-downs by banks on soured mortgages and record foreclosures.
The latest interest rate cuts may be enough to entice some buyers who were waiting for even lower prices. Borrowers with strong credit have plenty of homes from which to choose.
Keith Freeman, a director at a technology consulting firm who now rents in Atlanta, plans on moving to Miami and has made a bid on a house there. Despite some trepidation that rates could fall still further, he said, "Rates are historically low, let me just bite on something."
It makes it easier that he doesn't have to sell a home, a stumbling block for many buyers in a struggling market.
"I'm not concerned about myself," Freeman said. "I have phenomenal credit, money in the bank, a good-paying job, I can put 20 percent-plus as a down payment. I know I'm a candidate that lenders will probably drool over and I can close in a minimal amount of time."
But borrowers without pristine credit and easily documented income will have a harder time. Stringent lending standards could mean that at least a third of those who apply to refinance will fail to win approval, several analysts said.
Many owners also have mortgages that are higher than their homes' value, and won't be able to refinance.
"Don't count your chickens before they've hatched," advised John Murray of Realty Executives Prestige Properties in Boston.
"Historically speaking, if we saw a half-a-point rate drop we would expect a 10 percent rise in sales," he said. "There's a lot of desire, but we have yet to see if that yields fruit."
This is the outcome the U.S. government was driving at when it said it would pump hundreds of billions of dollars into buying mortgage bonds, freeing up lenders to make new loans and lower-rate refinancings that spur consumer spending and the economy.
"Maybe there's a vacation in our future, maybe a cruise because those rates have come down so much," said Hennessy, managing director of a marketing firm.
The worst housing slump since the Great Depression has crippled top international banks and has tipped the world's biggest economies into recession.
Hennessy cut his mortgage rate by a full percentage point by refinancing 11 days ago into a 5-1/2 percent 30-year loan.
That will help to pay college tuition for his children, and "we'll probably put more into savings and try to have some semblance of a retirement," he said.
Hennessy is just one example of borrowers aiming to reduce their home loan payments or buy a home as a result of government actions to push mortgage rates to new lows.
The average 30-year U.S. mortgage fell more than 1/4 point in the week ended December 18, to 5.19 percent, the lowest since Freddie Mac started its weekly survey 37 years ago.
It was the seventh straight weekly decline and brought rates down from about 6-1/2 percent in October.
The decline was also the result of the Federal Reserve cutting its benchmark federal funds rate target to a record low this week.
"Being baby boomers, we're looking down the road at retirement, and are making every effort to be as debt free as possible," Hennessy said.
Deep stock market losses and two years of home price declines have shredded wealth for many homeowners who may be able to restore some of their losses with cheaper borrowing.
Rodney Anderson, managing partner of Rodney Anderson Lending Services, a unit of Supreme Lending, in Plano, Texas, said mortgage applications are starting to flood in.
"We're seeing pre-approvals in the amount comparable to 2003, and July 2003 was my biggest month ever in mortgage history," he said. "I closed 287 loans that month and we're already seeing closings occurring in December and our January pipelines are just starting to launch."
Swapping high-rate home loans for more affordable mortgages is driving most of the demand, but purchases are also starting to revive, he said.
"With current low gas prices and the amount of money people save on refinancing, this is an opportunity for the economy to start making moves in the right direction," Anderson said.
MULTIPLE CHOICES
An overabundance of unsold homes has been one of the biggest thorns in this housing crisis. In addition, much lending froze amid huge write-downs by banks on soured mortgages and record foreclosures.
The latest interest rate cuts may be enough to entice some buyers who were waiting for even lower prices. Borrowers with strong credit have plenty of homes from which to choose.
Keith Freeman, a director at a technology consulting firm who now rents in Atlanta, plans on moving to Miami and has made a bid on a house there. Despite some trepidation that rates could fall still further, he said, "Rates are historically low, let me just bite on something."
It makes it easier that he doesn't have to sell a home, a stumbling block for many buyers in a struggling market.
"I'm not concerned about myself," Freeman said. "I have phenomenal credit, money in the bank, a good-paying job, I can put 20 percent-plus as a down payment. I know I'm a candidate that lenders will probably drool over and I can close in a minimal amount of time."
But borrowers without pristine credit and easily documented income will have a harder time. Stringent lending standards could mean that at least a third of those who apply to refinance will fail to win approval, several analysts said.
Many owners also have mortgages that are higher than their homes' value, and won't be able to refinance.
"Don't count your chickens before they've hatched," advised John Murray of Realty Executives Prestige Properties in Boston.
"Historically speaking, if we saw a half-a-point rate drop we would expect a 10 percent rise in sales," he said. "There's a lot of desire, but we have yet to see if that yields fruit."
Monday, December 22, 2008
Weekly market activity update
As the holidays loom, activity in the the Twin Cities housing market that isn't lender-mediated (i.e. foreclosures and short sales) is quieting down quickly, while the lender-mediated market is plugging along with no discernable effect from the usual seasonal ebbs and flows.
For the week ending December 13 there were 1,240 total new listings and 556 pending sales, which are up 2.2 percent and 36.3 percent, respectively, from the same week in 2007. Of these new listings, 48.0 percent of them are lender-mediated, while a hearty 60.0 percent of pending sales are. The market share comprised of these lender-mediated homes has been growing steadily every week for the last several months and should either hold steady or continue to grow through the rest of 2008. Traditional sellers always pull back this time of year—banks do not.
For the week ending December 13 there were 1,240 total new listings and 556 pending sales, which are up 2.2 percent and 36.3 percent, respectively, from the same week in 2007. Of these new listings, 48.0 percent of them are lender-mediated, while a hearty 60.0 percent of pending sales are. The market share comprised of these lender-mediated homes has been growing steadily every week for the last several months and should either hold steady or continue to grow through the rest of 2008. Traditional sellers always pull back this time of year—banks do not.
Monday, December 15, 2008
Minnesota:Why Are Property Valuations Up?
In this economic downturn, with home prices down,then your taxes for next year should go down, right? Homeowners showing up at truth-in-taxation hearings around the state are finding that is not necessarily the case and grappling with the fact that their property taxes will actually go up in 2009! Last night's hearing in St. Paul got a little heated with Christopher Rocco of St. Paul asking for an explaination of his taxes. The county has assessed the value of his home at $120,000 but he says that seven of the 21 units in his complex are in foreclusure. "They're selling for $20,000 apiece, so if they're trying to tell me that they're going to tax me on a $120,000 home, I'm not going to stand for that." Homeowners who want to appeal their property valuations need to do so in the spring, not December. Last spring, about 3,000 people contested their home values in Ramsey County and that figure could double next year. Says Gordon Folkman who directs the property tax division for the state's Revenue Department, "The primary reason that taxes change is that it's a function of a budget decision by cities, counties and school districts.
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