Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac.
Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week.
Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Source: Reuters, Julie Haviv (1/15/09)
Saturday, January 17, 2009
Friday, December 19, 2008
6 Things to Know About the Fed Rate Cut
The Federal Reserve on Tuesday cut its federal funds target rate by more than three-quarters of a percentage point to a range of between 0 and .25 percent. The decision signals that Fed Chief Ben Bernanke is more concerned with the rapidly deteriorating economy--which has been mired in a recession since December of last year--than the prospect of stoking inflation. “Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined,” the rate-setting Federal Open Market Committee said in its statement. “Financial markets remain quite strained and credit conditions tight.”
Here’s how the Fed’s actions affect you:
1. Fixed mortgage rates: Today’s rate cut will have little if any impact on 30-year fixed mortgage rates, which are determined by factors that operate largely outside of the Federal Open Market Committee’s reach, says Keith Gumbinger of HSH Associates. “Any change in the rate has little to do with long-term mortgage rates,” he says. But in its statement the Fed said it could expand a recently announced program to buy up debt and mortgage-backed securities from Fannie Mae and Freddie Mac that has already driven mortgage rates down to a very attractive 5.28 percent, according to HSH Associates. It also reiterated that it was looking at the possibility of buying long-term Treasury bonds. Both of these announcements could work to bring rates even lower.
2. Prime rate: The real impact of today's cut will be felt by consumers with products that are tied to the prime rate, a benchmark rate that typically moves in lock step with the federal funds rate. "The only place where you would see a concrete impact at the consumer level would be things that are directly tied to prime," says Mike Larson, a real estate analyst at Weiss Research. Many home-equity lines of credit and certain credit cards with variable interest rates are tied to prime rate. As such, borrowers with these products could see their interest rates decline.
3. Home-equity savings: Home-equity lines of credit averaged 5.5 percent in October but dropped to 5.26 percent in November following the Fed's half-point cut. Gumbinger says he expects average rates on home-equity lines of credit to experience similar declines this time around--but not everyone will be able to take advantage of them. That's because many of the interest rates on these products are already at their minimums and are contractually prohibited to go any lower. So check the terms of your home-equity line of credit to see if you are eligible to cash in on the decline.
4. Target vs. effective: When credit markets are functioning normally, Fed rate cuts reduce banks’ cost of funding, which allows them to widen profit margins and pass along savings to consumers in the form of lower interest rates. But today’s credit conditions have changed all that. Although the Fed’s target rate stood at 1 percent before today’s cut, such funds were actually being traded in the market at much less than that--just 0.18 percent as of yesterday before the Fed’s action. Although the Fed can usually control the effective rate by buying and selling government securities, the credit crisis has eroded its ability to do so. “Any juice that you would get from a funds rate cut in a normally functioning market, you’re not really going to get that here,” Larson says. “It’s not going to lower the banking industry’s cost of funds, because the banking industry’s cost of funds is already below the target rate anyway.” That means that interest rates tied to the federal funds rate won’t decline as much as they otherwise would have.
5. Now what? Nariman Behravesh, chief economist at IHS Global Insight, expects rates to go all the way to zero in a matter of weeks. “The Fed has already cut the federal funds rate to 1 percent and is likely to take it all the way to zero by the end of January,” Behravesh said in a recent report, issued before today’s announcement. “Once the overnight rate is at zero, the Fed may have to engage in ‘quantitative easing’ [direct purchases of long-term Treasuries].” Even if it doesn’t bring rates all the way to zero, the Fed signaled Tuesday that it’s not about to push rates higher anytime soon. “The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the Fed said in the statement.
6. Expect more unexpectedness. With only less than a quarter of a percentage point left to cut, look for the Fed to get even more creative in its efforts to revive the financial markets. New programs to support different corners of the credit market could certainly be introduced in 2009. “The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity,” the Fed said in the statement.
taken from C.A.R. article
Here’s how the Fed’s actions affect you:
1. Fixed mortgage rates: Today’s rate cut will have little if any impact on 30-year fixed mortgage rates, which are determined by factors that operate largely outside of the Federal Open Market Committee’s reach, says Keith Gumbinger of HSH Associates. “Any change in the rate has little to do with long-term mortgage rates,” he says. But in its statement the Fed said it could expand a recently announced program to buy up debt and mortgage-backed securities from Fannie Mae and Freddie Mac that has already driven mortgage rates down to a very attractive 5.28 percent, according to HSH Associates. It also reiterated that it was looking at the possibility of buying long-term Treasury bonds. Both of these announcements could work to bring rates even lower.
2. Prime rate: The real impact of today's cut will be felt by consumers with products that are tied to the prime rate, a benchmark rate that typically moves in lock step with the federal funds rate. "The only place where you would see a concrete impact at the consumer level would be things that are directly tied to prime," says Mike Larson, a real estate analyst at Weiss Research. Many home-equity lines of credit and certain credit cards with variable interest rates are tied to prime rate. As such, borrowers with these products could see their interest rates decline.
3. Home-equity savings: Home-equity lines of credit averaged 5.5 percent in October but dropped to 5.26 percent in November following the Fed's half-point cut. Gumbinger says he expects average rates on home-equity lines of credit to experience similar declines this time around--but not everyone will be able to take advantage of them. That's because many of the interest rates on these products are already at their minimums and are contractually prohibited to go any lower. So check the terms of your home-equity line of credit to see if you are eligible to cash in on the decline.
4. Target vs. effective: When credit markets are functioning normally, Fed rate cuts reduce banks’ cost of funding, which allows them to widen profit margins and pass along savings to consumers in the form of lower interest rates. But today’s credit conditions have changed all that. Although the Fed’s target rate stood at 1 percent before today’s cut, such funds were actually being traded in the market at much less than that--just 0.18 percent as of yesterday before the Fed’s action. Although the Fed can usually control the effective rate by buying and selling government securities, the credit crisis has eroded its ability to do so. “Any juice that you would get from a funds rate cut in a normally functioning market, you’re not really going to get that here,” Larson says. “It’s not going to lower the banking industry’s cost of funds, because the banking industry’s cost of funds is already below the target rate anyway.” That means that interest rates tied to the federal funds rate won’t decline as much as they otherwise would have.
5. Now what? Nariman Behravesh, chief economist at IHS Global Insight, expects rates to go all the way to zero in a matter of weeks. “The Fed has already cut the federal funds rate to 1 percent and is likely to take it all the way to zero by the end of January,” Behravesh said in a recent report, issued before today’s announcement. “Once the overnight rate is at zero, the Fed may have to engage in ‘quantitative easing’ [direct purchases of long-term Treasuries].” Even if it doesn’t bring rates all the way to zero, the Fed signaled Tuesday that it’s not about to push rates higher anytime soon. “The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the Fed said in the statement.
6. Expect more unexpectedness. With only less than a quarter of a percentage point left to cut, look for the Fed to get even more creative in its efforts to revive the financial markets. New programs to support different corners of the credit market could certainly be introduced in 2009. “The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity,” the Fed said in the statement.
taken from C.A.R. article
Thursday, December 18, 2008
It's a great time to buy!!
Interest Rates have dropped which make it a great time to buy!
30 year fixed rates today for a $250,000 loan:
5.250 at 0 points
4.813 at 1 point
This information is from our local Loan Officer or Mortgage Advisor.
I encourage all inquiries to be directed to me.
It's a Great time to buy!
30 year fixed rates today for a $250,000 loan:
5.250 at 0 points
4.813 at 1 point
This information is from our local Loan Officer or Mortgage Advisor.
I encourage all inquiries to be directed to me.
It's a Great time to buy!
Monday, November 24, 2008
C.A.R. Mortgage Update
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) has created consumer information sheets detailing the various mortgage modification programs available through the larger lenders and government entities, and also has created an easy-to-use reference chart about available programs.
· The consumer sheets contain information such as eligibility requirements; who to contact to apply; costs associated with the program; and other vital data. In general, the loan modification programs on the chart and consumer information sheets are intended for primary residences only.
· Mortgage loan modifications typically are handled on a case-by-case basis. Homeowners having difficulty meeting their mortgage obligation or interested in finding out more about a loan modification program should start by contacting their lender. Prior to calling a lender or loan servicer, homeowners should have the following information available: loan number; income information and documentation; most recent mortgage statement; bank statements; and a letter demonstrating financial hardship.
To download the mortgage modification sheets, please visit:
http://www.car.org/legal/mortgage-workout-programs/?view=Standard
reprinted from C.A.R. article
· The consumer sheets contain information such as eligibility requirements; who to contact to apply; costs associated with the program; and other vital data. In general, the loan modification programs on the chart and consumer information sheets are intended for primary residences only.
· Mortgage loan modifications typically are handled on a case-by-case basis. Homeowners having difficulty meeting their mortgage obligation or interested in finding out more about a loan modification program should start by contacting their lender. Prior to calling a lender or loan servicer, homeowners should have the following information available: loan number; income information and documentation; most recent mortgage statement; bank statements; and a letter demonstrating financial hardship.
To download the mortgage modification sheets, please visit:
http://www.car.org/legal/mortgage-workout-programs/?view=Standard
reprinted from C.A.R. article
Tuesday, October 21, 2008
The Kaufman House updated
After the Harrises divorced, the home was supposedly sold on May 13, 2008 for $15 million at auction by Christie's as a part of a high-profile sale of contemporary art.[2]; The house had a presale estimate of $15 million to $25 million.[1] The sale later fell through, as the bidder breached terms of the purchase agreement *.
The restoration was critically lauded. Today, most critics place the Kaufman House amongst the 'five most important houses of the 20th century', with the likes of Fallingwater, Robie House, Gropius House and the Gamble House, all located in the United States.
reprinted from Wikipedia
The restoration was critically lauded. Today, most critics place the Kaufman House amongst the 'five most important houses of the 20th century', with the likes of Fallingwater, Robie House, Gropius House and the Gamble House, all located in the United States.
reprinted from Wikipedia
Wednesday, May 14, 2008
From an article in the newyorktimes.com, 5/14/08
Considering that a painting went for more than $50 million, the Kaufmann House, in Palm Springs, Calif., a 1946 Modernist landmark in glass, steel and stone designed by the architect Richard Neutra, was a veritable bargain. It was being sold by Brent Harris, an investment manager, and Beth Edwards Harris, an architectural historian, who are divorcing.
The home, which was originally commissioned as a desert retreat by Edgar J. Kaufmann, the Pittsburgh department store magnate for whom Frank Lloyd Wright built Fallingwater in Pennsylvania a decade earlier, met its low $15 million estimate (or with commission, $16.8 million).
After the sale, Marc Porter, Christie’s president in America, said the buyer, whom he declined to name, exercised an option to purchase an orchard adjacent to the property for an additional $2.1 million that includes three cacti that were a present from Frank Lloyd Wright to Mr. Kaufmann on his first visit to the home.
It isn’t the first time a Modernist house has been sold at auction. Over the years both Christie’s and Sotheby’s have offered such architecturally important dwellings as Mies van der Rohe’s Farnsworth House and a 1950 town house on East 52nd Street that Philip Johnson designed as a guest house for Blanchette Rockefeller, the wife of John D. Rockefeller III.
The home, which was originally commissioned as a desert retreat by Edgar J. Kaufmann, the Pittsburgh department store magnate for whom Frank Lloyd Wright built Fallingwater in Pennsylvania a decade earlier, met its low $15 million estimate (or with commission, $16.8 million).
After the sale, Marc Porter, Christie’s president in America, said the buyer, whom he declined to name, exercised an option to purchase an orchard adjacent to the property for an additional $2.1 million that includes three cacti that were a present from Frank Lloyd Wright to Mr. Kaufmann on his first visit to the home.
It isn’t the first time a Modernist house has been sold at auction. Over the years both Christie’s and Sotheby’s have offered such architecturally important dwellings as Mies van der Rohe’s Farnsworth House and a 1950 town house on East 52nd Street that Philip Johnson designed as a guest house for Blanchette Rockefeller, the wife of John D. Rockefeller III.
Wednesday, May 7, 2008
C.A.R. GREEN TIP OF THE WEEK: KILL A WATT AND SAVE A BUCK
Your office probably has machines or plugs that "suck" electricity or use electricity on a constant basis with no benefit to the company, i.e., printers, chargers for portable devices, etc. One way to identify these amperage-sucking "vampires" is to connect these devices to the Kill-a-Watt TM Electricity Usage Monitor (retails for approximately $24).The Kill-a-Watt TM unit's large LCD display counts consumption by the kilowatt-hour, the same as your local utility. You can calculate your electrical expenses by the day, week, month, or year. You'll know if it's time for a new refrigerator in the office break room or if that old air conditioner is cost-efficient. Available from Amazon.com or other online vendors.C.A.R.'s "Green Tips" are a new feature of "C.A.R. Newsline" and are part of the Association's effort to raise member awareness about environmentally sound practices and offer REALTORS® ideas for greening their business practices and better serving their green-minded consumers. For more green real-estate-related tips and discussion, visit C.A.R.'s green blog: http://www.car.org/blogs/index.php
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