With all the doom and gloom in the housing market, you might have missed this nugget of good cheer: 30 year, fixed mortgage rates have fallen below 5 percent—to 4.96 percent—for the first time ever, according to Freddie Mac. Lower rates have already triggered a wave of refinancing applications and could work to spark some much-needed demand in the housing market. Here's five things you need to know about the trend:
1. Uncle Sam is behind the dive: Fixed mortgage rates have been falling in recent months for a number of reasons, such as lower inflation and investors' flight to quality, which has helped drive down yields on 10-year treasuries. (Fixed mortgage rates typically track the yields on 10-year T-bills.) More important, the Fed has recently undertaken an initiative to purchase hundreds of billions of dollars in Fannie Mae and Freddie Mac debt and mortgage-backed securities. The Fed also has suggested that it may begin buying long-term treasuries directly. Both moves have been big factors in the decline.
[Check out Mortgage Rates in 2009: 7 Things You Need to Know.]
2. The long-term outlook remains favorable: Although rates could certainly increase from these record-breaking levels, they should remain attractive for the rest of the year. Thirty-year fixed mortgage rates will "wax and wane" in the 5½-to-6 percent range before closing out the year somewhere between 6 and 6¼ percent, Keith Gumbinger of HSH Associates, told me recently. "That's still very attractive," he said. "There is no reason to think that rates are going to go up so substantially so as to erode the marketplace." CLICK HERE TO VIEW THE ENTIRE ARTICLE
Friday, January 16, 2009
Friday, January 9, 2009
Low Interest Rates, Low Housing Prices and Lower Down Payments
The home buying stars have aligned, and they’re telling you to take advantage.
1. Mortgage interest rates have dropped to the lowest they’ve been in 50 years. With mortgage rates at historic lows, the number of people applying for mortgages has hit near record highs. (If you've never been one to jump on the bandwagon, now's a good time to start.)
2. Low housing prices. This isn't "new" news by any means, but it's an important part of the equation (which equals 'perfect time to buy a home'). Housing values have fallen steadily over the past two years and in turn, so have their sale prices.
3. Low down payments are available on FHA loans. FHA loans (safe, government-backed loans) let you purchase a home with 3.5% down. Let's consider this: If you're buying a $200,000 home, your down payment (not including closing costs, taxes, etc.) is only around $7,000. That's a goal that doesn't seem quite as far out of reach. Click here for the entire article.
1. Mortgage interest rates have dropped to the lowest they’ve been in 50 years. With mortgage rates at historic lows, the number of people applying for mortgages has hit near record highs. (If you've never been one to jump on the bandwagon, now's a good time to start.)
2. Low housing prices. This isn't "new" news by any means, but it's an important part of the equation (which equals 'perfect time to buy a home'). Housing values have fallen steadily over the past two years and in turn, so have their sale prices.
3. Low down payments are available on FHA loans. FHA loans (safe, government-backed loans) let you purchase a home with 3.5% down. Let's consider this: If you're buying a $200,000 home, your down payment (not including closing costs, taxes, etc.) is only around $7,000. That's a goal that doesn't seem quite as far out of reach. Click here for the entire article.
Tuesday, January 6, 2009
New Year, Great Mortgage Rates
As a new year dawns, we already have great news to report: Mortgage rates are at historic lows. The news on the economic front may continue to be dismal, but this is actually great news for homebuyers and homeowners looking to refinance.
The big financial headline for the first business day of the year was the release of the ISM Manufacturing index, a key economic indicator.
Numbers released today showed that the performance of manufacturing activity fell even more than expected in December. In fact, the index fell from 36.2 points in November to 32.4, its lowest level since 1980.
So what is the ISM index?
ISM stands for the Institute for Supply Management, and these numbers are released on the first business day of the month, with data from the prior month. It takes into consideration new orders, employment, inventories, production and five other indicators. And number less than 50 indicates contraction. For the entire article click here.
The big financial headline for the first business day of the year was the release of the ISM Manufacturing index, a key economic indicator.
Numbers released today showed that the performance of manufacturing activity fell even more than expected in December. In fact, the index fell from 36.2 points in November to 32.4, its lowest level since 1980.
So what is the ISM index?
ISM stands for the Institute for Supply Management, and these numbers are released on the first business day of the month, with data from the prior month. It takes into consideration new orders, employment, inventories, production and five other indicators. And number less than 50 indicates contraction. For the entire article click here.
Monday, December 22, 2008
Mortgage Rates Hit 37-Year Low
By STEVE KERCH
The benchmark 30-year fixed-rate home mortgage in the U.S. fell to a national average of 5.17% this week, the lowest since Freddie Mac began its weekly rate survey in 1971.
With the Federal Reserve cutting its interest rates to near 0% and a continued decline in rates on the long-term Treasury notes that mortgages closely track, rates on other types of mortgages dropped again, though not as much as the 30-year.
"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac chief economist. "The decline was supported by the Federal Reserve announcement on Dec. 16, when it cut the federal-funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."
The 30-year mortgage fell for a seventh consecutive week, from 5.47% a week ago. A year ago the 30-year averaged 6.14%.
The 15-year fixed-rate mortgage averaged 4.92%, down from last week when it averaged 5.20%. A year ago the 15-year loan averaged 5.79%. The 15-year mortgage hasn't been lower since April 1, 2004, when it averaged 4.84%. Click HERE to view the whole article.
The benchmark 30-year fixed-rate home mortgage in the U.S. fell to a national average of 5.17% this week, the lowest since Freddie Mac began its weekly rate survey in 1971.
With the Federal Reserve cutting its interest rates to near 0% and a continued decline in rates on the long-term Treasury notes that mortgages closely track, rates on other types of mortgages dropped again, though not as much as the 30-year.
"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac chief economist. "The decline was supported by the Federal Reserve announcement on Dec. 16, when it cut the federal-funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."
The 30-year mortgage fell for a seventh consecutive week, from 5.47% a week ago. A year ago the 30-year averaged 6.14%.
The 15-year fixed-rate mortgage averaged 4.92%, down from last week when it averaged 5.20%. A year ago the 15-year loan averaged 5.79%. The 15-year mortgage hasn't been lower since April 1, 2004, when it averaged 4.84%. Click HERE to view the whole article.
Tuesday, December 16, 2008
Fed Cuts Target for Key Rate to Record Low
WASHINGTON (AP) -- The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.
The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.
The Fed's aggressive move was greeted enthusiastically by Wall Street. The Dow Jones industrial average rose about 350 points in late-afternoon trading.
The Fed's action and statement made clear that economic conditions have worsened since its last meeting in October.
Federal Reserve Chairman Ben Bernanke and his colleagues said they will use unconventional methods to try to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. For example, the Fed last month said it planned to purchase up to $600 billion in direct debt and mortgage-backed securities issued by big financial players including Fannie Mae and Freddie Mac in an effort to boost the availability of mortgage loans.
That move was one of a series the central bank has taken to increase its loans by hundreds of billions of dollars as a way to deal with the worst financial crisis to hit the country in more than 70 years.
The Fed on Tuesday also made clear that it intends to keep the funds rate at extremely low levels.
"The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time," the central bank's panel that sets interest rates said in a statement.
Even before the announcement of a lower target, the funds rate has been trading well below the old target of 1 percent. For November, the funds rate had averaged 0.39 percent. Analysts said it was likely to fall further with the Fed setting the new target as low as zero.
The Fed's decision was matched by a reduction in the prime lending rate, the benchmark rate for millions of business and consumer loans. Banking giant Wells Fargo and Co. said it was cutting its prime rate to 3.25 percent, down from 4 percent before the Fed action. Other banks are expected to quickly match Wells Fargo's move. To View the whole article CLICK HERE
The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.
The Fed's aggressive move was greeted enthusiastically by Wall Street. The Dow Jones industrial average rose about 350 points in late-afternoon trading.
The Fed's action and statement made clear that economic conditions have worsened since its last meeting in October.
Federal Reserve Chairman Ben Bernanke and his colleagues said they will use unconventional methods to try to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. For example, the Fed last month said it planned to purchase up to $600 billion in direct debt and mortgage-backed securities issued by big financial players including Fannie Mae and Freddie Mac in an effort to boost the availability of mortgage loans.
That move was one of a series the central bank has taken to increase its loans by hundreds of billions of dollars as a way to deal with the worst financial crisis to hit the country in more than 70 years.
The Fed on Tuesday also made clear that it intends to keep the funds rate at extremely low levels.
"The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time," the central bank's panel that sets interest rates said in a statement.
Even before the announcement of a lower target, the funds rate has been trading well below the old target of 1 percent. For November, the funds rate had averaged 0.39 percent. Analysts said it was likely to fall further with the Fed setting the new target as low as zero.
The Fed's decision was matched by a reduction in the prime lending rate, the benchmark rate for millions of business and consumer loans. Banking giant Wells Fargo and Co. said it was cutting its prime rate to 3.25 percent, down from 4 percent before the Fed action. Other banks are expected to quickly match Wells Fargo's move. To View the whole article CLICK HERE
Friday, December 12, 2008
Mortgage Rates Fall for 6th Straight Week
The average 30-year fixed home loan rate falls to 5.47%, a four-year low, in a sign that the government's efforts to break up the credit market logjam are working.
By Tom Petruno December 12, 2008
Mortgage rates are down for a sixth straight week, a sign that the government's latest efforts to break up the credit market logjam are working.The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said. Click Here for the full article.
By Tom Petruno December 12, 2008
Mortgage rates are down for a sixth straight week, a sign that the government's latest efforts to break up the credit market logjam are working.The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said. Click Here for the full article.
Wednesday, December 10, 2008
Winterizing Your Home
(CBS) If you’re feeling a chill in the air, it’s a good time to think about winterizing your home to reduce your heating bills. Danny Lipford, host of “Today’s Home Owner,” has five cash-saving tips for viewers of The Early Show that he says can really add up. Lipford says inspecting insulation, sealing gaps, and maximizing the heating and hot water systems all will save money. According to the Dept. of Energy, the cost to heat an average home is approximately $1,400. Lipford says you can save close to 50 percent of that, if your home is winterized the right way. Lipford uses a total home approach and looks at various areas where heat may escape or not be used efficiently. Whether you live in one of the coldest areas of the country or in a milder climate, any or all of the following steps will help reduce heating bills. Inspect Your Insulation Since warm air rises, the single most effective way to save on heating is to have adequate attic insulation. If you don't know how to tell, look for your ceiling joists. If you can see them, you need more insulation. Lipford uses the new "Miraflex Insulation" for homes. It is the first new glass-fiber insulation to be developed in nearly 60 years. Traditional insulation, known for being scratchy and irritating to the skin, costs approximately 25 cents per square foot. Miraflex is about twice as much, but Lipford estimates the yearly savings from using it could be as much as $150 to $200. Click HERE to view the complete article.
Subscribe to:
Posts (Atom)
