Wednesday, September 28, 2011

Mortgage News


The number of mortgage applications filed in the U.S. last week rose 9.3% from the prior week, the Mortgage Bankers Association said Wednesday, as interest rates continued to slide following the Federal Reserve's latest stimulus measure.

Refinance activity climbed 11%, according to the MBA's weekly survey, which covers more than three-quarters of all U.S. retail residential mortgage applications. Purchasing grew by a seasonally adjusted 2.6% during the week ended Friday.

Borrowers have reacted cautiously to extremely low interest rates over the past few months, while tighter lending requirements continue to pressure new applications. But mortgage activity picked up last week after the Fed's latest move, dubbed Operation Twist, helped push rates even lower. The move was designed to help lower long-term interest rates by buying up more mortgage-backed securities.

The share of applications filed to refinance an existing mortgage rose to 79.7% of total applications from 78.3% the previous week. It was the highest share since the survey changed its benchmark in January.

The four-week moving average for all mortgage applications is up 1.96%.

Adjustable-rate mortgages made up 6.1% of activity last week, down from 6.7% a week earlier.

The average rate on 30-year fixed-rate mortgages with conforming loan balances edged down to 4.25% from 4.29%, while rates on similar mortgages with jumbo loan balances decreased to 4.51% from 4.55%. The average rate on FHA-backed 30-year fixed-rate mortgages slipped to 4.05% from 4.07%.

Meanwhile, the average for 15-year fixed-rate mortgages ticked up to 3.47% from 3.46%. The 5/1 ARM average decreased to 2.95% from 2.96%.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;

Wednesday, September 14, 2011

Bright Spots in Real Estate.



September 14, 2011

5 bright spots in real estate recession

Mood of the Market

By Tara-Nicholle Nelson

Inman News™

Share ThisThe real estate market meltdown was much more severe and has lasted much longer than even the most bearish housing market observer would ever have predicted. Rather than values taking a dip, they've taken a double dip in many places; and the housing sector drama has infected the job market and the entire world's economy.

Yet, there are some very shiny silver linings to this whole mess -- a handful of ways in which our mindsets, habits, behaviors and approaches to money, mortgage and even life decision-making -- have been changed by this real estate market debacle. As I see it, here are the five best things about this otherwise terrible housing recession:

People now buy for the long term. Even Jeff Lewis, that reality TV house flipper extraordinaire, has declared that he's tapped out of the flipping business for the foreseeable future, trading in his real estate wheeling and dealing for the design business.

Recently, he mentioned having lost six homes in the real estate market crash. While Lewis flipped homes as his business, just five years ago, many Americans -- homeowners and investors alike -- took a short-term view on their homes, buying them with the idea that they could count on refinancing, pulling cash out or even reselling them anytime they wanted, at a profit.

Reality check -- those days are gone. Now, buyers know they'd better be prepared to stay put for somewhere between seven and 10 years (shorter in strong local markets, longer in foreclosure hot spots) before they buy if they want to break even. And this is causing them to take mortgages they can afford over time, and make smarter, longer-term choices about the homes they buy.

Dysfunctional properties are being weeded out and creatively reused. Municipalities like Detroit and Cleveland are demolishing blighted and decrepit properties in dead neighborhoods en masse, intentionally shrinking their cities to match their shrinking populations. These efforts are also eliminating breeding grounds for crime, and focusing resources on the neighborhoods that have a better chance of surviving and thriving in the long term.

In the so-called "slumburbias" of central California, Nevada and Arizona, McMansions are being repurposed into affordable housing for groups of seniors, artist communities and group homes.

American housing stock is getting an energy-efficient upgrade. The news would have you believe that every American has lost his or her home, walked away from it, or is now renting by choice. In fact, the vast majority of homeowners have simply decided to stay put.

Instead of selling and moving on up, homeowners are improving the homes they now plan to stay in for a long(er) haul. And this generation of remodeling is focused less on granite and stainless steel, and more on lowering the costs of "operating" the home and taking advantage of tax credits for installing energy-efficient doors, windows, water heaters and more. And while the first-time homebuyer tax credit is a thing of the past, the homeowner tax credits for energy-optimizing upgrades are in effect until the end of this year.

People are making more responsible mortgage decisions, and building financial good habits in the process. Buyers are buying far below the maximum purchase prices for which they are approved. They are reading their loan disclosures and documents before they sign them. And, thanks to the stingy mortgage market, they are spending months, even years, in the planning and preparation phases before they buy: paying down their debt; saving up for a down payment (and a cash cushion, so that a job loss wouldn't be disastrous); being responsible and sparing in their use of credit to optimize their FICO scores; and creating strong financial habits in one fell swoop.

Our feelings about debt and equity have been reformed. Americans no longer use their homes like ATM machines, to pull out cash, pay off their credit cards and then start the whole overspending cycle over again. Many can't, because their homes are upside down and cannot be refinanced in any event -- much less to pull cash out.

Others have been reality-checked by the recession, and are dealing with their non-mortgage debt the old fashioned way: by ceasing the pattern of spending more than they make, and applying the self-discipline it takes to pay their bills off.

Home equity, in general, is no longer viewed as an inexhaustible source of cash. Rather, we see it as a fluctuating asset to be protected and increased -- not so much through the vagaries of the market, but through the hard work of paying the principal balance down. Many of those refinancing into today's lower rates aren't doing it to pull cash out, as was the norm at the top of the market; instead, they are refinancing into 15-year loans to pay their homes off sooner than planned, or reducing their required payment so their extra savings can be applied to principal.

Of course, it remains to be seen how lasting these changes will be if and when home prices go up and mortgage guidelines loosen up. But since neither of these things look likely to happen in the short term, hopefully there's a chance that these behavior shifts will become part of a permanent mindset reset for American housing consumers.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Ask her a real estate question online or visit her website,

Contact Tara-Nicholle Nelson:

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Copyright 2011 Tara-Nicholle Nelson


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Tuesday, September 13, 2011

Time to buy a home?

I started my career in home construction and real estate in 1978. Home sales were brisk until the early 1980's when mortgage interest went up to as high as 18%. Talk about a challenge, try convincing someone that 18% was a good rate to pay for a home loan. Hign interest rates, high unemployment, and high inflation eventually bought the real estate market to a grinding halt.

Consider mortgage rates today, 9-13-11. You can get a 15 year mortgage for 3.33% if you have good credit. In North Carolina you can get a new 2000 square foot home for 200,000. If you borrowed $180,000 for 15 years at 3.33%, your payments, principle and interest, would be around $1271.81. You could rent a home for a comparable amount so which way should you go?

In my opinion, if you are going to be in a home only 2 or 3 years you might want to rent. Any longer buying might be the better option as we all know long term real estate will go up. It might be a few more years before the sub prime meltdown plays out but it will eventually work out and home prices will start to rise again.

Monday, September 12, 2011

Stupid Low interest rates

As someone that has been in the Real Estate business for over 30 years never thought I would see these interest rates.

Freddie Mac's Primary Mortgage Market Survey®

Avg. Fees & Points

Copyright 2011, Freddie Mac. Averages are for conforming mortgages with 20% down.

30YR FRM 4.12 0.7

15YR FRM 3.33 0.6

5YR ARM 2.96 0.6

1YR ARM 2.84 0.6