July Round Up: Rates Rise Slightly

In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 5.25 percent with an average 0.7 point for the week ending July 30, 2009, up from the previous week when it averaged 5.20 percent. Last year at this time, the 30-year FRM averaged 6.52 percent.

The 15-year FRM this week averaged 4.69 percent with an average 0.7 point, up slightly from the previous week when it averaged 4.68 percent.A year ago at this time, the 15-year FRM averaged 6.07 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.75 percent this week, with an average 0.6 point, up slightly from the previous week when it averaged 4.74 percent. A year ago, the 5-year ARM averaged 6.07 percent.

One-year Treasury-indexed ARMs averaged 4.80 percent this week with an average 0.5 point, up from the previous week when it averaged 4.77 percent. At this time last year, the 1-year ARM averaged 5.27 percent.

"Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields," said Frank Nothaft, Freddie Mac vice president and chief economist.

"For instance, the Federal Reserve reported in its July 29th regional review that residential real estate markets in most of its districts remained weak, but many reported signs of improvement. In addition, it noted that entry-level homes continued to perform relatively well in part due to the first-time homebuyer tax credit.

"Other economic reports confirm that the housing market may indeed be bottoming out. New home sales rose for the third consecutive month in June to an annual pace of 384,000 homes, the most since November 2008 and the number of new houses on the market fell to the lowest amount since February 1999, according to the Department of Commerce. Sales of existing homes also showed a three-month gain to 4.89 million, the most since October 2008, and the share of distressed homes fell to 31 percent compared to almost half at the beginning of the year, the National Association of Realtors® (NAR) reported."

First-Time Buyers: Hurry For $8,000 Tax Credit

It’s time to remind first-time home buyers that in order to qualify for the government’s $8,000 gift in the form of a tax credit, the deal must close by Dec. 1.

Buyers should have a purchase contract signed by early October, so they have 45 to 60 days to arrange financing and safely close the deal.

Even if you are not a recent first-time home buyer, it is important that you know about the tax credit availability. It may be the key factor to facilitate the sale of your home, or that of other homes in your community. It is an excellent time for a first-time home buyer to buy, with historic low rates, a plentiful supply of homes, lower prices in some markets, and the federal tax credit. Communities benefit from strong levels of home ownership.

Positive Growth

There was an important piece of economic news last month that has huge significance for real estate and housing, but it got minimal coverage on TV and in print.

The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.

That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.

That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.

There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.

The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.

Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.

Good Landscaping Draws in Buyers

In this challenging real estate market, curb appeal is particularly important for a home seller. Here are some tips for hiring a landscaper who will do a good job at a reasonable price.

* Review a portfolio. A neighbor's recommendation is a good starting point, but it is also worthwhile to examine other jobs the landscaper has done and ask for references. Hiring someone who isn't reliable, doesn't finish the job or who uses unhealthy plants is a costly mistake.

* Consider maintenance. Asking for a low-maintenance design will ensure that even if the home owner isn't able to spend hours on the task, the lawn will continue to look good.

* Know what good landscaping is worth. It can't hurt to let a potential buyer know what the value of the trees and shrubs are. The North Carolina-based Horticultural Asset Management specializes in assessing the value of landscape plants. For instance, it puts the worth of a healthy 60-foot-tall European beech at $50,000.

This article appeared in Realty Times
Written by: Realty Times Staff

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